These days, the Nifty Bank index frequently reaches new highs. Banking stocks have remained FII favorites, delivering substantial gains despite being unaffected by the global banking crisis.
In the fiscal year 2023, many Indian banks reported record profits.
Among them is IDFC ( Infrastructure Development Finance Company ) First Bank, which has delivered multibagger returns of 160% over the last year.
Shares of the bank have risen in value over the last month as reports suggest that it may be included in the MSCI Standard Index.
According to industry experts, IDFC First Bank may be included in the MSCI index in the next review, which is scheduled for August 2023.
On 14 June 2023, Shaktikanta Das, the Governor of the Reserve Bank of India (RBI), was named the ‘Governor of the Year’ for 2023 by Central Banking in London. Central Banking is a journal of international economic research. The prestigious award recognizes Das outstanding performance as RBI Governor in effectively managing inflation and navigating India’s banking system through difficult situations such as the COVID-19 pandemic and global turmoil.
According to the organizers, Das has played a critical role in implementing critical reforms and ensuring the smooth operation of India’s leading payment innovations as the RBI governor. He has shown exceptional leadership during difficult times, as evidenced by his ability to confidently steer India through crises and articulate solutions.
Das was nominated for this award in March 2023, recognizing his exceptional leadership during times of global turmoil and adversity. Throughout the COVID-19 pandemic and other significant events such as the Russia-Ukraine war, Das managed India’s central bank and the entire banking system with remarkable skill.
Shaktikanta Das took over as CEO in December 2018, just months before a major Non-Banking Financial Company (NBFC) in India declared bankruptcy, causing a liquidity crisis. This crisis exposed significant flaws in the business models of a number of mid-sized banks that relied heavily on NBFCs. Other banks, including Punjab and Maharashtra Co-operative Bank, followed suit. Despite these obstacles, Das used his leadership skills to effectively manage the situation.
V Vaidyanathan, CEO of IDFC First Bank, spoke about the achievement and highlighted a few key moments during Das’ tenure. “In 2018, India encountered a “Twin Balance-Sheet Problem,” with many capital-deficient lenders and cash-flow-deficient borrowers.” Now, capital adequacy exceeds 16%, and borrowers have strong cash flows, resulting in a “Twin Balance Sheet Advantage.”
He also discussed the changes that the RBI implemented during Covid-19, saying that “markets crashed, bond markets froze, and interbank lending choked; RBI moved in swiftly and introduced innovative and targeted measures to thaw the system and restore stability,” outlining some of the measures that the RBI implemented during this time, such as: extending the resolution period for stressed assets, lowering repo rates, lowering MSF, Moratorium 1.0 and 2.0, Restructuring 1.0 and 2.0, and the implementation of
The CEO cited the RBI’s innovative systems, such as UPI, ONDC, e-KYC, e-mandates, e-agreements, and others. He also mentioned how the RBI insisted on banks achieving both financial inclusion and strong asset quality.
“I once asked him how he manages to be independent and also never have an altercation with the government,” Vaidyanathan concluded his post. “Look, when I have to say No, I just say No politely and explain why,” he explained. Why would you fight? We work for the good of the country as a whole.” “I learned from the approach because it is so simple.”
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