Banking

A renewed debate over transparency in India’s banking system has emerged as the Central Information Commission (CIC) examines a dispute involving the Reserve Bank of India (RBI), commercial banks, and the disclosure of non-performing asset (NPA) data under the Right to Information (RTI) Act. At the heart of the matter is whether detailed borrower-level NPA information should be made public in the interest of accountability or protected to preserve financial stability and confidentiality.

Bandhan Bank posted a steady expansion in its lending portfolio in the December quarter, recording a year-on-year loan growth of about 10 percent. The increase reflects improving credit demand across select retail and microfinance segments, supported by cautious underwriting and tighter risk controls. While the broader banking system has seen strong credit growth, Bandhan Bank continued to prioritise asset quality and portfolio diversification over aggressive expansion.

Domestic equity markets posted a robust rally, with benchmark indices climbing sharply as buying interest returned to power and banking stocks. The Sensex and Nifty advanced decisively, reflecting renewed investor confidence after recent volatility. Strong performance by lenders, supported by expectations of steady credit growth, combined with gains in power companies amid optimism over infrastructure spending, provided momentum to the broader market.

The Reserve Bank of India has reported that 98.41 percent of Rs.2,000 banknotes issued since their introduction have now been returned to the banking system, signaling the near-completion of the withdrawal exercise. The development reflects widespread public compliance and effective coordination across banks nationwide. Only a marginal portion of the high-denomination notes remains outside the system, largely due to logistical or individual delays.

The Reserve Bank of India has decided to defer the second phase of its enhanced cheque-clearing framework, a move aimed at ensuring operational stability and adequate preparedness across banks. The proposed upgrade was designed to further reduce cheque realisation timelines under the Cheque Truncation System (CTS), building on gains achieved in earlier phases. However, feedback from stakeholders highlighted the need for additional testing, infrastructure alignment, and risk mitigation.

Union Bank of India has announced a reduction in home loan interest rates, enhancing affordability for borrowers and signaling a pro-growth stance in the housing finance sector. Concurrently, Vikran Engineering has secured a substantial order, reflecting robust demand in India’s infrastructure and renewable energy markets. Both developments underscore positive momentum in key economic segments—housing and industrial projects—driven by favorable policy measures, rising consumer confidence, and corporate expansion.

The government has approved an extension of tenure for Ashwini Kumar Tewari as Managing Director of State Bank of India, ensuring continuity in leadership at the country’s largest lender. The decision comes at a time when the banking sector is navigating a complex operating environment marked by credit growth, balance-sheet strengthening and evolving regulatory expectations. Market participants view the extension as a vote of confidence in Tewari’s leadership and execution capabilities.

The government has opened an Offer for Sale (OFS) to divest up to a 3% stake in Indian Overseas Bank (IOB), advancing its broader strategy to reduce holdings in state-owned enterprises and improve market efficiency. The move is aimed at enhancing public shareholding, strengthening capital buffers and aligning with disinvestment objectives. The OFS is expected to attract institutional interest, given IOB’s improving financial metrics and the banking sector’s gradual recovery.

The Government of India has announced plans to divest a significant stake in Indian Overseas Bank (IOB) through a strategic disinvestment, targeting proceeds of Rs. 2,100 crore. This move is part of the broader fiscal strategy to reduce public sector holdings in banking and generate resources for developmental initiatives. The sale aims to attract institutional and retail investors, improve governance, and strengthen the bank’s capital base. Analysts view this as a continuation of India’s financial sector reform agenda, promoting efficiency and competitiveness in state-owned banks.

State Bank of India has rolled out Yono 2.0, an upgraded version of its flagship digital banking platform, while simultaneously announcing plans to recruit 10,000 employees. The dual initiative reflects the lender’s strategy to strengthen its digital capabilities without diluting the importance of human resources. Yono 2.0 is positioned as a more scalable, customer-centric platform offering smoother navigation, deeper integration of financial services, and improved reliability.