2 august 2001
rbi not to allow banks to close branches
mumbaithe reserve bank of india (rbi) has directed public sector banks not to
close down branches due to shortage of staff. the strength of most public sector banks has
come down by 10 per cent and as many as 99,425 employees have opted for the voluntary
retirement scheme offered by the public sector banks with the total package having cost rs
10,073 crore to the banking sector.
due to the virtual exodus of employees banks are finding it difficult to manage wide
network of branches post vrs and are considering merging or closing down some of their
the rbi also asked banks to ensure that lending under various schemes in rural areas was
not adversely affected due to this scheme.
rbi is of the view that public sector banks introduced vrs with the objective to right
31 july 2001
rbi for capital infusion in ifci
new delhi--the reserve bank of india wants an
immediate infusion of rs 850 crore into ifci ltd to meet the stipulated capital adequacy
ratio of 9 per cent against the 6.7 per cent level at the end of march this year.
ifci has, however, sought a rs 1,000 crore bail-out package either through convertible
bonds, direct equity or long-term preference shares.
however, the stakeholders the financial institutions and state bank of india are not
agreeing to a capital infusion to bolster ifcis capital adequacy ratio. thus, a
meeting convened by finance secretary ajit kumar here today proved inconclusive. rbi also
attended the meeting.
ifci had been seeking an infusion of rs 400 crore since september 1998 as it is facing
liquidity problems in meeting its redemption and interest payment obligations to the tune
of rs 1,100 crore this month. the government so far has not agreed to its demand so
far. while expenditure secretary cm vasudev has been opposing the move for a budgetary
support, the stakeholders have repeatedly voiced their opinion against any capital
in wake of the liquidity and cash flow problems, rating agencies are closely monitoring
the institution for a possible downgrade.
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