The report on the financial stability of the market which was released this Thursday has told that the deterioration with the asset quality which is happening in current situation with the commercial banks usually called as SCBs will be continuing for another few quarters. The report has also mentioned that the rise in the new trend in the stressed advanced ratios of the SCBs is indicating nothing but the concern that is remaining over the weakness that prevails with the asset quality which is actually continued. The weakness is especially found with the public sector banks (PCBs)
The PSBs must have to boost up their provisions associated with the risk of credit from the present levels, so that it could meet up with the losses expected. This is to do, if the macroeconomic environment is getting to be deteriorated under a stressed scenario which was assumed. The fall in the margin profits and an acute decrease on the capabilities of repayment of debt which was taken by the corporate sectors has added to the bad loan concerns now. The report has clearly mentioned these scenarios in it and the concern was all about prevalence of bad loans.
RBI’s report has revealed many business and market scenarios of future
The report has told that India though being into tougher phase of market and economy, it is really well prepared for dealing with all such volatile nature of the market and economy. When compared to the previous episodes, the preparation that India and the marketers if India has undergone was really better to handle all such tougher phases and also some surplus conditions. The report which was actually released by the reserve bank of India this Thursday has also mentioned about the flow of foreign portfolio into the country. It was told that the flow on foreign portfolio into India was very strong in the past years.
It was noticed that the macroeconomic environments has faced a significant improvement and has been moving forward still. Hence the expectation regarding the performance of the market is little higher than any other years. But while in this situation, the external susceptibility has reduced to a lower extent and the progress was made with a regard to the fiscal consolidation.
Warning against algorithmic trading
The report released by the RBI has also given a warning alarm against the algorithmic trading and the high frequency trading. It has mentioned that the Indian market has gone through certain abnormal situations in the past and the market experts have actually told that the reason behind these abnormalities in the market was nothing but the Algorithmic trading and the High frequency trading. The total volume that has involved in algorithmic trading has increased from 17% and 11% of NSE and BSE in the year 2011 to around 40% in the year 2015. This has to be taken into concern as the market may have the chances of facing crashes due to these strategies which has happened earlier in America.
The PSBs must have to boost up their provisions associated with the risk of credit from the present levels, so that it could meet up with the losses expected. This is to do, if the macroeconomic environment is getting to be deteriorated under a stressed scenario which was assumed. The fall in the margin profits and an acute decrease on the capabilities of repayment of debt which was taken by the corporate sectors has added to the bad loan concerns now. The report has clearly mentioned these scenarios in it and the concern was all about prevalence of bad loans.
RBI’s report has revealed many business and market scenarios of future
The report has told that India though being into tougher phase of market and economy, it is really well prepared for dealing with all such volatile nature of the market and economy. When compared to the previous episodes, the preparation that India and the marketers if India has undergone was really better to handle all such tougher phases and also some surplus conditions. The report which was actually released by the reserve bank of India this Thursday has also mentioned about the flow of foreign portfolio into the country. It was told that the flow on foreign portfolio into India was very strong in the past years.
It was noticed that the macroeconomic environments has faced a significant improvement and has been moving forward still. Hence the expectation regarding the performance of the market is little higher than any other years. But while in this situation, the external susceptibility has reduced to a lower extent and the progress was made with a regard to the fiscal consolidation.
Warning against algorithmic trading
The report released by the RBI has also given a warning alarm against the algorithmic trading and the high frequency trading. It has mentioned that the Indian market has gone through certain abnormal situations in the past and the market experts have actually told that the reason behind these abnormalities in the market was nothing but the Algorithmic trading and the High frequency trading. The total volume that has involved in algorithmic trading has increased from 17% and 11% of NSE and BSE in the year 2011 to around 40% in the year 2015. This has to be taken into concern as the market may have the chances of facing crashes due to these strategies which has happened earlier in America.