NEWS & ADVICE : PERSONAL LOAN
PSBs to create Rs. 14,000 crore of provisions for pensions by 2013
By Vaibhav Aggarwal
Jun 6, 2012
Print    Email    RSS   

The public sector banks must create a provision of Rs. 14,000 crore for unamortized pension liabilities as per the Basel III norms, reported CARE. This must be done before the 1st January 2013 kick off of Basel III norms.

Unamortized liabilities are those for which the provisions aren't made. The PSBs now must write off this Rs.14, 000 crore off its books, which is around 12% of their net worth in the last fiscal. The profitability of the banks might be hit if the banks charge these liabilities to the profit and loss account stated the CARE report.

The banks must seek approval from the RBI if they were to charge the pension liabilities to the reserves account. Last year SBI wrote off Rs. 7,900 crore from reserves account after RBI nod.

PSB estimated salary escalation at 4.6% as against private banks' 5.1%. Any change in this figure would affect the profitability. Add to it, most of the PSBs are using the old and outdated mortality table of LIC, which further exposes them to pension fund investment risks.


 


(Comments Posted : 0) Post Your Comments
Show All Comments
COMPARE QUICKLY
 Select a product:
 

CALCULATE QUICKLY
 Select a product:
 

EDITORS' PICKS
Loans to assist people with bad credit scores
Carnival of Indian Personal Finance Blogs #4
Carnival of Indian Personal Finance Blogs #1
Glittering Ways of Investing in Gold
Loan against Securities: A viable...


HOTEL: CaℒL Giℛℒs In Kharar 09855660911...
Model Escoℛts Service In Pune 8888IOO484 Caℓℓ...
What is the outstanding Amount for my personal loan

NEWS THIS WEEK
LVB bank joined hands with NCML Feb 18, 2015
Syndicate Bank hiring 5000 new staff Feb 12, 2015
SBI donated Rs 8.6 cr as a part of CSR activity Feb 11, 2015
Canara Bank tied up with NHBC Feb 9, 2015
Hiring for Probationary clerks in South Indian Bank Feb 5, 2015
News Archive