ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Farmer Suicides in Punjab

The article is based on a primary survey carried out to ascertain the magnitude and determinants of deaths of farmers by suicide in six districts of Punjab. It recommends the provision of financial compensation to victim families, waiving of debt, and strengthening of public healthcare and education system as the main policy measures for addressing this tragic phenomenon.

Dissecting the Extraordinary Surge in Corporate Profits

Uneven profits across sectors, input cost pressures, and a rise in interest rates coupled with a weaker rupee could put the brakes on the pace of firms’ profits.

Impact of COVID-19 on the Indian Banking Sector

This article investigates the impact of COVID-19 on the banking sector through the trend analysis of return on assets and return on equity of the scheduled commercial banks. It covers both the pre- and post-lockdown periods. The results suggest that the governmental measures are helping ameliorate situations of bad quality loans and will improve future prospects of the banking industry.

Bailout Barometer for the State-owned Indian Banks

Using the disaggregated data covering 2007–20, the study estimates the bailout barometer for state-owned banks in India. The findings show that the magnitude of the bailout barometer, in 2020, was $400 billion or around 18% of the total liabilities at the upper end of the scale. The classifications by separate categories such as size, systemic importance, and interconnectedness show that the former two categories appear to exert the most perceptible impact in terms of bailout magnitude.

The Renewed Fear of Bad Debt

The evidence of a decline in the non-performing assets ratio in India’s banking system points to a significant improvement in the health of banks. However, this may have occurred partly through the use of write-offs that erode the capital base of banks and also because of the time-bound moratorium on debt repayments announced as part of measures to address the effects of the pandemic on small units and other selected borrowers. In the circumstances, even though new pandemic-linked lending to micro, small and medium enterprises was partly guaranteed by the government, a rise in the NPA ratios and further erosion of bank capital seem inevitable.

Mortgage Loans, Risky Lending, and Crisis

The link between the loan market and the housing market that works through mortgage loans is critically examined. Repayment of such mortgage loans depends on the future earning potential of the borrowers, which in turn depends on the overall state of the macroeconomy. Under buoyant macroeconomic conditions, all borrowers pay back their loans and both the loan market and the housing market function well. However, a temporary income shock in the economy, which undermines the repayment ability of the borrowers, may result in imprudent lending by banks thereby leading to a crisis. This calls for strict monitoring of mortgage loans by regulatory authorities.

Banking for the Poor

Bandhan: The Making of a Bank by Tamal Bandyopadhyay, Gurgaon: Penguin Books India, 2016; pp 304, ₹ 414.

Financial Reforms in an Endogenous Money Economy

An examination of the Reserve Bank of India's monetary policy leaves little doubt that India can be suitably characterised as an endogenous money economy. In an endogenous money environment, financial reforms will prove ineffective in stimulating credit supply to large commercial borrowers. They may, however, prove counterproductive by sharpening the credit constraints faced by agricultural and other petty producers in the economy.
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