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MOSL: Morning India (05/April/19): 1. Financials (The changing face of private banks!); 2. EcoScope (RBI cuts policy rate by 25bp, maintains neutral stance); 3. Titan Company; 4. Preview 4QFY19 (a. Banks; b. NB

MOrning India (05/April/19): 1. Financials (The changing face of private banks!); 2. EcoScope (RBI cuts policy rate by 25bp, maintains neutral stance); 3. Titan Company; 4. Preview 4QFY19 (a. Banks; b. NBFCs; c. Automobiles)

 

Today’s top research theme

Financials: The changing face of private banks! Will RBI play ball and extend the retirement age for bank CEOs?

• The Indian banking sector is at a critical juncture with MD & CEO of most banks (having ~77% of the private loan market share) either been replaced or retire over FY19-21. Such an event is significant as these banks are either led by CEO’s who have built these banks or have led them for more than a decade. Difference in appointment rules between corporates and banks has however invigorated talks of a further extension in the age limit for a bank CEO/Director
• Will the RBI again play ball and extend the retirement age for bank CEOs?
• The difference in appointment rules between Corporates and Banks has once again brought into the limelight the discussion around further extension in the age limit of a bank CEO/Director. In 2014, the RBI extended the upper age limit of a bank’s MD & CEO from 65 years to 70 years (in line with the Companies Act, 2013). However, the Companies Act allows a person who has attained the age of 70 years to continue as a Director via a special resolution. This brings us to an important question — will RBI harmonize the rules relating to the appointment of a bank’s MD & CEO, in line with the Indian corporate sector?

Piping hot news

Maruti cut vehicle production by around 21% in March

• The country's largest car maker Maruti Suzuki India (MSI) cut vehicle production by around 21 per cent across its factories in March due to subdued demand. The auto major produced a total of 1,36,201 units in March, including Super Carry LCV, down 20.9 per cent from 1,72,195 units in the year-ago period, it said in a regulatory filing.