IBC TO PLAY SIGNIFICANT ROLE IN INDIA BECOMING $ 10 TRILLION
ECONOMY, SAYS MCA
Insolvency and Bankruptcy
code (IBC) will play a significant role in India realising its dream of
evolving into a $ 10 trillion economy in foreseeable future, a top Government
official has said. This law (IBC) has come to stay and enable Indian economy to
greater heights by promoting entrepreneurship and ensuring effective use of
capital, Injeti Srinivas, Secretary, said. Srinivas also said that Government
would soon take effective steps to discourage frivolous bids and make sure that
the system is not gamed by resolution applicants. Srinivas told that he expects
the first phase of resolutions to happen in the next few months. Already 50
percent of the IL&FS Group assets have been put on the block, he added. Asked
if the latest NCLAT order (No NPA should be recognised by banks in the
IL&FS matter) put the banks in a quandary as regards compliance with RBI
norms, Srinivas felt NCLAT directive was one off and done in national interest.
He also said that the next round of insolvency regulations will be on ‘corporate
guarantors’ and this will be followed up with regulations on individual
insolvencies. Subodh Bhargava, said that insolvency law is a game changer but
non-adherence to timelines and inordinate delay in admission of cases are major
concerns, especially where debt is well established and one does not have to
determine the quantum of debt, rather one has to determine whether there is a
default. When say, 14 days time is given in the law, it should be done in 14
days Whereas, it is seen that it is taking three months or more. This needs to
be addressed, Bhargava said. He also suggested that definition of Persons
Acting in Concert (PAC) be specifically included in the Bankruptcy ordinance
and a reasonable definition be introduced for the purposes of submission of
resolution plans.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
THE INSOLVENCY AND BANKRUPTCY CODE IS NOT LIVING UP TO ITS
PROMISE
What makes good companies
go bad? The fall of businesses may have a lot of reasons but businesses need a
safe cushion to manage the stress and strains that gnaw at an economy to
thrive. In a span of just two years, the Insolvency and Bankruptcy Code 2016
has proved to be one such cushion for corporates and lenders looking to prevent
the failure of quite a few high-profile business houses The code rests a lot on
the pivot of an efficient time frame to ensure speedy resolution. Remember,
this was a cause of concern with the erstwhile Board for Industrial and
Financial Reconstruction. A resolution professional has been entrusted with
various duties and tasks to ensure in all fairness the protection of the rights
of debtors and creditors. The lawmakers have tried to plug the loopholes that
existed earlier. The Ramalinga Raju (of Satyam) case was a precursor to the
appointment of a forensic auditor and the Jaypee (real estate developer) case
was a precursor to protect the rights of homebuyers, amongst others. The code
has played a key role in taking India 30 places ahead in 2018's ease of doing
business.
What is the case for the
code and a body overseeing it? Enormous pendencies before courts lead to the formation
of specific tribunals to play the role of a specialised body for providing
speedy redressals to a never-ending litigation process present in India. The
National Company Law Tribunal (NCLT), the bankruptcy court, deals with a lot of
issues apart from insolvency laws. But with the evolving laws and systems that
are put in place, a debate has emerged on whether justice is being served or
delayed and the intent of the lawmakers is being met or not.
Has the code been
successful in alleviating the dreaded nightmare of insolvent companies or has
it changed gears to mounting litigation with NCLT? It is safe to say NCLT cases
leave several questions unanswered in the minds of aggrieved parties. The code
provides a timeline of 180 days (plus an extension by 90 days) to speed up the
resolution process. It is worth checking if such a strict timeline is too short
for the resolution professional to make a fair and reasoned application before
the NCLT. Of the 816 corporate debtors under the resolution process, about 50
percent have already exceeded the timeline, according to reports from rating
agencies. Random filing of applications without launching an investigation into
the matter hurts a debtor who may be innocent and is dragged into the process
with no redressal to his grievance. Foreign vendors suffer at the cost of lack
of a prior investigation before the filing of an application, adding to the
perennial fear of foreign nationals wanting to do business in India.
Applications get clubbed and dragged with big matters and are lost in
litigation, appeals and stay applications with the NCLT. Delays in the
finalisation of a resolution plan have NCLT to blame The court acting as a
supervisor at each stage of the proceedings ends up as a deterrent to the
finalisation of the Resolution Plan. NCLT currently has 11 benches. In terms of
both the infrastructure and the qualifications of the judges, the rescue plan
for saving drowning companies is more ambitious than similar processes in
London and Singapore. Currently, around 9,000 cases are pending before the NCLT
benches in the country for insolvency and other routine matters. NCLT registers
about 140 cases a day, with a dismissal rate of not even one case in a day Much
emphasis has been laid on the importance of a forensic audit under the code but
has the qualification of the forensic auditor been specified or a committee of
such auditors been formed to investigate the veracity of the reports made by
them? Can they be held responsible for a flawed finding in their reports, based
on which the resolution professional presents his case? Or does an innocent
party have no other option but to concede while the resolution professional
takes refuge under the garb of the duty cast upon him under the code. The
resolution professional is not necessarily a qualified chartered
accountant/company secretary. Data shows that India already has 1800 qualified
resolution professionals and is gearing up for the launch of a Graduate
Insolvency Program, whereas the number for a similar law present for almost two
decades in the UK is much lower. Where the lawmakers are placing such
exceptional powers on the resolution professional, necessary tools must be
available for such professionals to carry out their duty in all fairness and
ease. The resolution professional is tied in a tug of war between the creditors
and debtors in order to save the company with little or no cooperation from the
company. The bids to find an investor to save the company, after having been
approved by the committee of creditors fall flat when the investor withdraws or
fails to keep its promise, leading to the restart of the whole process again or
an unfortunate doom to liquidation. Will these missing gaps be filled with
tighter and more clearer provisions, conversion of existing Debt Recovery
Tribunals to NCLT benches, cross border insolvency provisions? We don’t know.
But we do hope that the code evolves to aid a fair resolution and not end up as
another law on paper in the garb of a growing and developing India.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
SUPREME COURT ASKS MALVINDER, SHIVENDER SINGH TO BE PRESENT IN
COURT ON MARCH 14
Bothers Malvinder and
Shivinder Singh will have to appear personally in the Supreme Court on March 14
in connection with a contempt case filed by Japanese drug maker Daiichi Sankyo,
which has accused them of disposing of their assets in violation of a court
order. Daiichi had moved Indian courts for implementation of a Rs 3,500-crore
arbitration award against the Singh brothers. The Japanese company won the
award after claiming that the brothers hid information about regulatory probes
against Ranbaxy Labs when they sold the local drug maker to it in 2008. The
brothers, Daiichi alleged in the top court, were disposing of their
unencumbered assets to divert funds that could have been used to pay the
arbitration award. The reference was the alleged attempts to sell their stake
in Fortis Health to a Malaysian company. The top court had earlier issued
notices on the plea and imposed a status quo on the sale of stake by the Singh
brothers. Fortis sold a 31.1% stake in the company to IHH Healthcare in
November through a preferential allotment of shares. Daiichi has been trying to
implement the arbitration award through Indian courts.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
RBI TO MOVE NCLAT AGAINST ORDER TO STOP DECLARING IL&FS
LOANS NPA
The Reserve Bank of India
(RBI) is considering moving the National Company Law Appellate Tribunal (NCLAT)
over its order directing lenders to refrain from classifying crisis-hit
IL&FS-owned companies’ loans as non-performing assets (NPA) without its
approval. On February 22, PTC Financial Services had filed an application with
the NCLAT seeking a temporary dispensation for IL&FS firms that would have
been classified as NPAs. Though the case pertained to one category of the
IL&FS entities tagged Amber, the tribunal passed a blanket order for all
the group firms. NCLAT directed financial services firms and banks to seek
approval before terming IL&FS group loans as NPAs. As per RBI regulations,
loans whose principal and interests are overdue for more than 90 days as per
the terms, have to be classified as NPAs and appropriate provisioning made. The
NCLAT order goes against the RBI regulations, and would force banks to go
against the norms.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
‘PENALISE BIDDERS WHO DEFAULT ON PROPOSED PLANS’
With some cases resolved
under the NCLT process ending up for liquidation, analysts want the government
to set up stringent deterrents ranging from monetary penalties to debarring the
applicant. As per estimates, about 600 cases have been closed under the
Insolvency and Bankruptcy Code (IBC) by various National Company Law Tribunal
(NCLT) benches. However, only 82 corporate insolvency resolution processes
(CIRP) yielded a resolution plan. Also, in the past few months, at least three CIRPs
that yielded a resolution plan were brought back to the NCLT and subsequently
ordered into liquidation, leading to high economic costs. Worse, loan
recoveries will likely be lower than the amount creditors would have gained if
the application materialised. There’s merit in government setting up strong
deterrents to ensure that the resolution applicants do not default on their
proposed plans The deterrents could range from a penalty amount (linked to the
realisation promised to the creditors under the resolution plan) to debarring
the resolution applicant from participating in any future CIRPs, ratings firm
ICRA noted. It added such deterrents would make applicants cautious and sincere
while submitting their resolution plans.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
BHUSHAN POWER : LENDERS URGE NCLT NOT TO GIVE OPERATIONAL
CREDITORS FURTHER HEARING
Apprehending further delay
in the resolution process, lenders to Bhushan Power and Steel (BPSL) on Tuesday
urged National Company law Tribunal (NCLT) not to give operational creditors
any further hearing as the adjudicating authority proceeds to approve the
resolution plan for the debt-ridden steelmaker. Senior counsel Ramji
Srinivasan, appearing on behalf of the Committee of Creditors (CoC), said that more
than 570 days have gone past since NCLT’s principal bench admitted insolvency
proceedings against BPSL and each day, lenders are incurring a Rs 12 crore loss
for their exposure to the insolvent firm. BPSL has 1,778 operational creditors.
It will take a hell lot of time to hear out their applications. They should
also not have any grudge since they will have to take only 50% haircut compared
with 60% by the financial creditors, Srinivasan said. BPSL’s operational
creditors have moved a series of applications to NCLT seeking to attract its
attention on a range of issues including alleged trimming of the operational
creditors’ list by the resolution professional and not getting copies of the
resolution plan, among others. The NCLT on Tuesday said it would hear the
matter on March 5 and decide whether notices are to be issued to the
operational creditors or not, and also on whether other parties would be served
notice on their applications.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
BANK OF BARODA TO SELL NPAS WORTH RS 6,000 CR, INCLUDING RCOM
DEBT
State-owned Bank of Baroda
(BoB) has floated an expression (EoI) of interest to sell its non performing
assets worth over Rs 5,928 crore, including its Rs 1,838 crore loan to
cash-strapped Reliance Communications. The bank has identified loans to 49
companies, including two power firms run by GVK (totalling Rs 357 crore), GMR
Chhattisgarh Energy Ltd (Rs 218 crore), and Monnet Power Company (Rs 199
crore), for sale. According to the offer, interested asset reconstruction
companies (ARCs), banks, non-banking financial companies (NBFCs), and financial
investors were allowed to conduct due diligence of these assets from February
25. Interested buyers will have to submit indicative prices at which they want
to buy these assets. BoB's largest asset for sale in this list is the loan to
RCom. The bank's decision to put its assets in RCom on the block comes after
the board of RCom early in February decided to opt for debt resolution through
the National Company Law Tribunal (NCLT).
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
PANEL OF CREDITORS VOTES AGAINST FORENSIC AUDIT OF JAYPEE
ACCOUNTS
Jaypee Infratech Limited
Committee of Creditors (COC) rejected the demand of a forensic audit of
accounts of the company, in a voting, the results for which were announced on
Tuesday. Homebuyers had been demanding an independent audit for some five
years, to determine why Jaypee Infratech failed to finish the housing projects
despite buyers having paid the cost of the flats on time. However, in the first
round of corporate insolvency resolution process in 2017-18, no new developer
or private firm could take over Jaypee’s stalled realty projects in Noida. The
second round of process was, therefore, started in 2018 to select a bidder, who
could take over the crisis-ridden company and deliver around 20,000 unfinished
flats. According to the norms, the committee of creditors consisting of around
20,000 aggrieved homebuyers, bankers and IRP have the right to exercise the
voting power to decide the fate of the resolution process. All stakeholders
were called to vote on the ‘forensic audit demand’ from February 21 to February
25, 2019.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
ALLAHABAD BANK EXPECTS MORE RECOVERY FROM NCLT ACCOUNTS, SAYS
CEO RAO
The Reserve Bank of India
(RBI) has removed Allahabad Bank and Corporation Bank from the prompt
corrective action (PCA) list. Rao said, The lifting of PCA has created a
wonderful atmosphere in the entire Allahabad Bank employee base. With respect
to credit deployment, even in earlier occasions I had indicated that we already
have a good amount of headroom for credit deployment, so the plan for March ’19
as well as June ’19, on the line will continue, he added. Rao said, NCLT and
non-NCLT cases, in Q4, we have targeted for recovery of Rs 2,000 crore;
recovery and upgradation together without considering the NCLT.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
MOST IL&FS COMPANIES IN SECOND LIST ARE ‘RED’, UNABLE TO
MEET PAYMENT OBLIGATIONS: GOVT
The ministry of corporate
affairs secretary Injeti Srinivas on Tuesday said that most of the IL&FS
subsidiaries in the second list of 100 domestic entities that are part of the
debt-laden group are classified under ‘red’ – meaning they are unable to meet
their payment obligations. The ministry had earlier submitted a classification
for 70 companies under green (22 companies), amber (10 companies) and red (38
companies). Of the remaining among the 348 subsidiaries, 133 are incorporated
outside India, while some entities have been closed or divested or struck off
or liquidated. That’s just a process and the list should come out any time now.
It is in an advanced stage. It is unlikely that in the remaining 100 companies
there will be any green (who can pay their dues) company. So, there will be
essentially red companies and some amber, Srinivas told reporters. It has to
now submit the classification list for the 100 domestic entities of IL&FS.
I think a lot of headway is being made and in the next few months the first
phase of resolution should be completed. On the National Company Appellate
Tribunal’s (NCLAT) direction that banks or financial institutions cannot
declare accounts of IL&FS and its group companies as non-performing assets
without its permission, he said IL&FS is not an NPA as it is a one-off
cases It’s being done in the national interest. In the framework, there is a
provision that if liquidation is not the best option, then the tribunal can
give whatever dispensation that may be required to allow the other best option
to be implemented, which in this case is resolution. So, based on the spirit of
these provisions, the NCLAT agreed with the government’s proposal to allow
moratorium. So, there is no regulatory gap. In other cases, if a company is
brought to NCLT they do not get this dispensation, he said.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
STEEL SECTOR HAS TURNED OUT TO BE ONE OF THE MAJOR
BENEFICIARIES OF IBC: ICRA LTD
The steel sector has turned
out to be one of the major beneficiaries of the Insolvency and Bankruptcy Code
(IBC), according to ratings agency ICRA Ltd. This could lead to improved plant
utilisation and domestic steel supply. Out of the 40 large defaulting accounts
identified by the RBI in 2017, 11 entities belonged to the steel sector. As per
ICRA report, eight out of these 11 companies have steel manufacturing
capacities totalling about 23.8 million metric tonnes per annum (mtpa) forming
about 18% of the total domestic steel capacity. Abhishek Dafria, said: The
steel sector has provided an impetus to the IBC with four large corporate
debtors having already completed the corporate insolvency resolution process
(CIRP) yielding a resolution plan. Financial creditors have realised close to
Rs. 444 billion from these four CIRPs with an average haircut of about 47%. The
realisation for the financial creditors would have been even higher, but for
the delays seen in concluding the CIRP for two large entities, viz. Essar Steel
Limited and Bhushan Power and Steel Limited, both of which have attracted
interest from domestic and foreign entities. These two entities have been
caught in legal wrangles due to which their CIRPs have now exceeded 500 days.
We expect both the CIRPs to be concluded some time in CY2019, which should help
the financial creditors realise at least an additional Rs. 600 billion, he
added. Stressed assets in the sector make for good candidates for acquisition
by other large players who are looking to improve their market share and cater
to the favourable domestic demand, it said. Priyesh Ruparelia, said: As per our
estimates, the combined plant utilisation of the stressed assets was about 72%
during FY2018. With successful acquisition of these assets by new promoters
under IBC, the capacity utilisation could be ramped up to 90% within the next
two-year period which would improve the domestic supply position.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
50% IL&FS ASSETS ON BLOCK, 22 GROUP FIRMS SERVICING LOANS:
INJETI SRINIVAS
Fifty per cent of the
assets of the beleagured IL&FS group are on the block, corporate affairs
secretary Injeti Srinivas said on Tuesday. About 22 entities of debt-ridden
group are servicing their payment obligations Srinivas justifies the recent
ruling by the National Company Law Appellate Tribunal (NCLAT), saying that it
is a one-off order, keeping in mind national interest. The government has been
planning to sell the assets individually.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
RELIANCE COMMUNICATIONS MOVES NCLAT FOR FUND RELEASE BY BANKS
Reliance Communications on
Monday urged the National Company Law Appellate Tribunal(NCLAT) to direct
lenders, led by SBI, to release Rs 260 crore the company got by way of income
tax refund in favour of Ericsson India. The Supreme Court on February 20 held RCom
chairman Anil Ambani and two other directors guilty of contempt for not paying
Ericsson India’s dues as per the undertaking given by them. On Monday, RCom’s
lawyers made a mention of their plea immediately as the NCLAT sat for the day.
A two-member NCLAT bench, led by its chairperson justice SJ Mukhopadhaya,
agreed to hear the plea and listed it for hearing on February 27.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
NCLAT DISMISSES PLEA OF MONNET POWER RP OVER CLAIMS OF BHEL
The NCLAT Tuesday dismissed
a petition of the resolution professional of debt-ridden Monnet Power Company
against an NCLT order, which had directed the firm to reconsider claims of its
operational creditor state-owned BHEL. A two-member National Company Law
Appellate Tribunal (NCLAT) bench headed by Justice S J Mukhopadhaya asked the
RP to act in accordance with the directions passed by the Mumbai bench of the
NCLT on October 12, 2018, directing it to re-examine the claims of BHEL. The
National Company Law Tribunal (NCLT) Mumbai had said RP of Monnet Power Company
had wrongly disallowed the substantial claim in its entirety of BHEL, an
operational creditor of the company. We are not inclined to interfere with the
impugned order dated October 12, 2018 passed by the adjudicating authority
(NCLT). The 'Resolution Professional' is directed to act in accordance with the
directions of the Adjudicating Authority, the appellate tribunal said. NCLT
Mumbai, while determining inventory cost etc held that RP had wrongly
disallowed BHEL's substantial claim and directed him to re-examine the claim on
the basis of the accounts and evidence of PSU.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
FACING RISKS LIKE EXCESS CAPEX ON PROPOSED ESSAR ACQUISITION:
ARCELORMITTAL
Global steel giant
ArcelorMittal has said it is staring at various risks including excess capex
and delays in achieving commercial objectives in view of its proposed
acquisition of debt-laden Essar Steel India. The world's largest steelmaker
ArcelorMittal's takeover proposal of the Essar Steel India Ltd (ESIL), via a
joint venture with Nippon Steel & Sumitomo Metal Corporation (NSSMC), in a
bankruptcy resolution process has been approved by the committee of creditors
(CoC) and is pending before the National Company Law Tribunal (NCLT). Should
the resolution plan be implemented, as is currently expected, it would subject
ArcelorMittal to various risks. On the operational front, the industrial
project to turnaround ESIL and further improve operational profitability is
large-scale and ambitious, ArcelorMittal said in its annual report released
late on Monday. Capital expenditure in excess of budgeted amounts, delays and
difficulties in achieving commercial objectives therefore cannot be ruled out,
the company said.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
LIABILITY OF PAST DUES RESTS ONLY WITH RCOM, NOT RELIANCE JIO:
TDSAT
The Telecom Dispute
Settlement Appellate Tribunal (TDSAT) on Tuesday said that the liability of
past dues related to Spectrum Usage Charges (SUC) rested only with Reliance
Communications (RCom) and not the buyer of its 800 MHZ spectrum. The telecom appellate
tribunal held that the buyer of RCom’s 800 MHz spectrum, which in the current
case is Reliance Jio Infocomm (Jio), cannot be held liable until the spectrum
trade had happened The appellate tribunal on Tuesday also asked the Department
of Telecommunications (DoT) to reconsider RCom’s plea for No Objection
Certificate (NoC) that would allow the company to sell its spectrum to a buyer.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
RBI REMOVES ALLAHABAD BANK, CORPORATION BANK, DHANLAKSHMI BANK
FROM PCA FRAMEWORK
The Reserve Bank of India
(RBI) removed Allahabad Bank, Corporation Bank and Dhanlaxmi Bank out of the
prompt corrective action (PCA) framework on Friday, subject to certain
conditions and continuous monitoring. Allahabad Bank and Corporation Bank be
taken out of the PCA Framework subject to certain conditions and continuous
monitoring, RBI said in a release. It has also been decided to take Dhanlaxmi
Bank out of the PCA framework, subject to certain conditions and continuous
monitoring, as the bank is found to be not breaching any of the Risk Thresholds
of the PCA framework. The central bank has specified certain regulatory trigger
points as part of the PCA framework in terms of three parameters -- capital to
risk weighted assets ratio (CRAR), net non-performing assets (NPA) and Return
on Assets (RoA) -- for initiation of specific structured and discretionary
actions.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
SYNDICATE BANK TO BRING DOWN NPA IN THE CURRENT YEAR
Syndicate Bank is aiming
at bringing down the gross NPA to below 12% and the net NPA to below 6% in the
current year from the existing level of 12.5 and 6 .5 % respectively. Mrutyunjay
Mahapatra said the bank has made a profit in the third quarter after loss in
the previous quarters of FY 19. He hoped for an early settlement of the Rs
18,000 crore bad loans that are before national company law tribunal (NCLT). He
said the recent Rs 1600 crore fund infusion by the government along with
previous tranches of funds have helped strengthen the capital base of the bank
and the it may not need further support in the immediate future. For our future
requirements we can go for tier-1 bonds or rights issue, he said adding that
such a decision will be taken only after assessing the performance of the bank
in the current year. The bank is betting on house, retail, MSME and gold loans
for its growth.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
RBI PROPOSES TIGHTENING COMPENSATION NORMS FOR PRIVATE,
FOREIGN BANKS
Reserve Bank has proposed
strict compensation norms for senior officials of private as well as foreign
banks, including minimum 50 per cent variable component and money clawback
provisions. Floating a discussion paper, the central bank has also proposed
that variable pay of CEO and whole-time directors, among other key personnel,
should be capped at 200 per cent of fixed pay Earlier variable pay was capped
at 70 per cent of fixed pay but did not include Employee Stock Option Plan
(ESOP). High pay packets and excessive risk-taking ways in the banking industry
have been under the scanner ever since the global financial crisis of 2008.
Employees were too often rewarded for increasing short-term profit without
adequate recognition of the risks and long-term consequences for their
organisations. The latest discussion paper proposing changes to compensation
norms comes more than seven years after the Reserve Bank of India (RBI) issued
such guidelines for private and foreign banks. These (2012) guidelines are
being reviewed, with an objective to better align with FSB (Financial Stability
Board) Principles and Implementation Standards, based on experience and
evolving international best practices, the RBI said. Apart from CEOs and
whole-time directors, the proposed changes in compensation would be applicable
for material risk takers and control function staff It has also been suggested
that ESOPs should be included as a component of variable pay. The proposed
guidelines also said minimum 50 per cent of variable pay is to be via non-cash
component while mandating a compulsory deferral mechanism for variable pay,
regardless of quantum of variable pay. Further, the paper said banks are
required to put in place appropriate modalities to incorporate malus/ clawback
mechanism in respect of variable pay, taking into account relevant statutory
and regulatory stipulations as applicable. Comments have been sought on the
discussion paper till March 31.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
MERGER OF REGIONAL RURAL BANKS WITHIN SAME STATE LIKELY
The government is looking
at the possibility of merging regional rural banks (RRBs) operating within the
same state and has urged the state-owned banks to explore such options as it
wants further consolidation among RRBs. It eventually wants to bring them down
to a more manageable number of 10-15 There are 56 RRBs functioning in the
country, and State Bank of India, the largest bank, is the biggest sponsor with
14 RRBs. Already, around 10 have been merged which will be effective from April
1 this year. Ideally, we will like to have them reduced by 36 by the end of
this fiscal, said a senior government official, adding the idea is that rather
than three or four regional lenders operating in a state, there should be one
bank which leverages its strong regional and market connect. At present, the
Centre holds 50% stake in RRBs, while 35% and 15% are with the sponsor banks
and state governments, respectively.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
100 SUGAR MILLS MAY FACE SEBI ACTION FOR BREACH OF PRIVATE
PLACEMENT NORMS
A recent regulatory
crackdown on two sugar mills in Maharashtra for alleged breach of private
placement rules has cast a shadow over nearly 100 others in the state which
operate under the same model. Expanding the action to more mills could
potentially freeze cane procurement, delay payments to farmers and heighten
farm crisis, mill owners said. On 4 January, the Securities and Exchange Board
of India (Sebi) attached the assets of Lokmangal Agro Industries Ltd; exactly a
week later, it directed Babanraoji Shinde Sugar and Allied Industries Ltd to
refund money to individuals to whom it had sold shares. The two mills are
accused of violating rules on private placement, under which an unlisted
company can privately sell shares to a maximum of 49 people. The mills are
accused of crossing this limit, violating The Companies Act, 1956, and the Sebi
Act. Issuing shares to 50 or more people is considered as a deemed public
issue, bringing it within the regulatory ambit. There was a debate in Sahara
matter before Supreme Court whether Companies Act 1956 implied that a company’s
offer of securities to 50 or more persons (in a financial year) would
automatically become a public issue. Threshold for a deemed public offer has
increased to 200 or more persons under Companies Act, 2013. Sebi norms have
made it clear now that it is aggregate calculation and multiple offers of
security by any company at various intervals, with each offer being to less
than 200 persons but in aggregate more than 200 persons (per financial year)
would qualify as a public issue, said Sumit Agrawal.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
FUNDS INFUSION INTO PSBS NOT ENOUGH TO SUPPORT LENDING GROWTH:
FITCH
Fitch Ratings on Wednesday
said government's $7 billion (around Rs 48,000 crore) funds infusion into
public sector banks (PSBs) would not be sufficient to support significantly
stronger lending growth Fitch estimates that banks will need an additional USD
23 billion (around Rs 1.6 lakh crore) in 2019, after these latest injections,
to sufficiently meet minimum capital standards. Stating that the Indian
authorities' approach to the banking sector has clearly shifted towards
spurring lending in recent months, Fitch said these steps, along with capital
injections, have eased but not removed capital constraints on state banks'
growth. The Indian government's announcement on February 21 that it will soon
inject USD 7 billion into state-owned banks under its recapitalisation plan is
likely to help banks meet minimum regulatory requirements, but is not
sufficient to support significantly stronger lending growth, Fitch Ratings
said. Fitch said the capital injections have allowed Allahabad Bank and
Corporation Bank to leave the RBI's prompt corrective action (PCA) framework, following
earlier exits by Bank of India, Bank of Maharashtra and Oriental Bank of
Commerce. This frees these banks from tight restrictions on their management
and growth. However, leaving the PCA framework will not remove the constraints
on growth imposed by weak capitalisation, unless the state injects more capital
into these banks or there is strong turnaround in profitability that support
internal capital generation, which looks unlikely, Fitch said. Overall, we
estimate that banks will need an additional USD 23 billion in 2019, after these
latest injections, to sufficiently meet minimum Basel III capital standards,
achieve 65 per cent NPL cover, and leave surplus capital for growth, it said.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
IN DEPOSIT WAR, PRIVATE SECTOR BANKS WIN HANDS DOWN
Are private sector banks
winning the deposit war against public sector banks? It would appear so given
the recent figures from the Reserve Bank of India. The difference between the
weighted average term deposit rates of public sector banks and their private
sector counterparts has increased to the highest in at least five years
showcasing private banks’ ability to raise rates and drive higher credit
growth. Data from the Reserve Bank of India (RBI) highlighted by Elara Securities
shows that average term deposit rates for private sector banks in December 2018
was 43 basis points higher at 7.21% compared to 6.78% for public sector banks.
One basis points is 0.01 percentage point. This is the highest differential
between private and public-sector banks in at least five years and shows that
fast growing private sector banks are able to offer a much higher rate to
garner deposits helped by a better pricing power. Data shows that this
differential has turned since April 2017 when private sector banks, taking
advantage of benign liquidity conditions post demonetisation were in fact
offering a lower rate compared to public sector banks. Private sector banks
rates were 8 to 10 basis points lower to public sector banks between January
and April 2017 and have since turned the other way. Private banks and PSBs
hiked their rates by 15 basis points and 8 basis points respectively, over the
past three months. On fresh loans, private banks’ quarterly average of weighted
average lending rate (WALR) in Q3FY19 was 10.41% vs 10.08% in Q2FY19, a rise of
33 basis points QoQ while PSBs’ quarterly average was 9.43% vs 9.33% in Q2FY19,
a rise of 10 basis points QoQ. This shows strength of private banks as they are
able to garner market share along with rise in yields, Elara said. However,
higher deposit rates mean lending rates will also not come down in a hurry as
both are linked in the current marginal cost-based lending rate regime. In the
current scenario it will be difficult for banks to cut lending rates unless
they are ready to take a hit on their margins. Lending rates will hence remain
elevated, said Karthik Srinivasan.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
RBI MIGHT REDUCE ITS KEY POLICY RATES TWICE THIS YEAR, SAYS
BOFA-ML
The Reserve Bank will reduce
its key policy rates twice this year as it accommodates the concerns about
growth amid the cooling price situation, says a brokerage report. The monetary
authority will cut the key policy rates at the forthcoming policy review in
April, and effect another reduction in either June or August depending on
monsoons, Bank of America Merrill Lynch (BofA-ML) said in a report Tuesday. With
concerns voiced on the core inflation or the price rise excluding food and
fuel, the brokerage said there is no generalisation there, saying idiosyncratic
factors are pushing up rural healthcare and education costs. The brokerage also
said high real rates, which is the difference between the policy rate and
inflation, also support for a 0.50 per cent cut in the policy rates.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
SEBI FINES RADFORD GLOBAL RS 30 LAKH FOR VIOLATING NORMS,
FAILING TO PROVIDE INFO
Markets regulator Sebi
Tuesday slapped a fine of Rs 30 lakh on Radford Global for violating listing
norms and failing to provide information sought by the regulator. Despite
repeated summons in 2017, the firm failed to furnish the information required,
Sebi said. Further, the regulator observed that the firm made a preferential
allotment in February 2012, and the proceeds of the allotment funds were
utilised for the purpose other than its disclosed objective. However, no such
disclosures were made to the exchanges, the Securities and Exchange Board of
India (Sebi) noted. Accordingly, Sebi fined the firm Rs 10 lakh for failing to
provide information and Rs 20 lakh for violating listing agreement norms,
totalling Rs 30 lakh. In a separate order, Sebi imposed a fine of Rs 5 lakh on
Kolkata-based K B Sponge Iron for executing fraudulent trade and, thereby,
creating artificial volume in the illiquid stock options segment of the BSE.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
FOREIGN SHAREHOLDING LIMIT IN KOTAK MAHINDRA BANK GOES UP TO
45 PC
Kotak Mahindra Bank
Tuesday said its board has approved a proposal to increase foreign shareholding
limit to 45 per cent from the existing 43 per cent. RBI had earlier asked the
lender to pare promoter Uday Kotak's shareholding down gradually to 15 per cent
by March 31, 2020. The bank was asked to cut Kotak's holding to 20 per cent of the
paid up capital by December 2018 and further to 15 per cent by March 31, 2020.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
BANKS MAY SET REPO RATE AS BENCHMARK
Most commercial banks in
India are likely to select RBI’s repo rate as the external benchmark to decide
their lending rates, from April 1. The repo rate is the key policy rate of the
Reserve Bank of India (RBI). The banking regulator had asked the banks to move
to an external benchmark for loan pricing from April 1, a move expected to improve
monetary transmission as lenders had, in the past, been found reluctant to
reduce lending rate. Banks had four options from which to choose the external
benchmark: the repo rate, the 91-day treasury bill, the 182-day T-bill or any
other benchmark interest rate produced by the Financial Benchmarks India
Private Ltd (FBIL). The marginal cost of fund based lending rate (MCLR) is
currently the benchmark for all loan rates. Banks typically add a spread to the
MCLR while pricing loans for homes and automobiles. For the new benchmark, the
central bank has mandated that the spread over the benchmark rate — to be
decided by banks at the inception of the loan — should remain unchanged through
the life of the loan, unless the borrower’s credit assessment undergoes a substantial
change and as agreed upon in the loan contract. If the lending rates are linked
to the repo rate, any change in the repo rate will immediately impact the home
and auto loan rates, since RBI has mandated the spread to remain fixed over the
life of the loan. RBI was expected to issue the final guidelines on the matter
by December-end but the guidelines are yet to come. Banking industry sources
indicate that the final guidelines will be issued in March.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
SBI CALLS LENDERS' MEETING WITH JET AIRWAYS CHAIRMAN NARESH
GOYAL, ETIHAD CEO DOUGLAS
State Bank of India (SBI)
has called an urgent meeting of lenders with Jet Airways Chairman Naresh Goyal
and the domestic carrier's significant shareholder Etihad Airways' CEO Tony
Douglas on Wednesday to discuss a way forward for the debt-laden airline,
sources said. The meeting, to be held at SBI's office in Mumbai, assumes
significance amid differences persisting between Goyal, the lenders and Etihad,
which has 24 per cent stake in Jet Airways. SBI is the lead lender of a
consortium that has extended loans to Jet Airways. While there was no official
word from the airline, as also from the lenders, officials aware about the
development said the meeting has been called by SBI and both Goyal and Douglas
would be present.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
RBI PROPOSAL TO REVAMP BANK CEO COMPENSATION: COMPANIES ACT
SHOULD TAKE A LEAF OUT OF CENTRAL BANK’S GESTURE
Chanda Kochhar, the
disgraced and tainted former CEO and managing director of ICICI Bank, got a
salary of Rs 7.85 crore in 2017-18, according to news reports. That translated
into a whopping Rs 2. 6 lakh per day assuming 300 working days NR
Narayanamurthy, the founder of Infosys, caused a flutter in honcho circles by
suggesting a cap about a decade ago—the CEO salary should not exceed 15 times
the salary of the lowest employee at the bottom of the salary pyramid.
Predictably, no one took him seriously. But now the Reserve Bank of India (RBI)
has taken the issue seriously. It has proposed a cap of 200 percent on the
variable salary with reference to the fixed salary as opposed to 70 percent now
with the additional condition that the variable component should be a minimum
of 50 percent of the fixed salary. The other difference is the extant cap of 70
percent does not include employee stock ownership plan (ESOP) but the proposed
cap of 200 percent and floor of 50 percent both include ESOP. The proposal is
for both Indian private as well as foreign banks. Cynics would say this is
practically shortening the length of the first line so that the second line
looks decently longer. In other words, since the public sector bank (PSB)
honcho salary is abysmally low, what the RBI is doing according to critics is
reducing the salary of foreign and private banks. The proposed move targets all
whole-time directors of these banks and not only the CEO. As per the Companies
Act, 2013, the managing director’s salary is capped at 5 percent of the
company’s profit with minimum salary thrown in when the profits are inadequate
in the manner of 'heads I win, tails you lose'. What the RBI is planning is for
the fixed component to be the pivot around which the variable portion would be
woven. If a CEO of a private bank is appointed on a fixed salary of Rs 10 lakh
per month, a minimum 50 percent i.e., Rs 5 lakh per month must be variable
subject to the condition that this cannot be more than 200 percent, i.e., Rs 20
lakh per month. One hopes the RBI also puts in place a limit on fixed salary
with reference to the mean salary of the company. Vishal Sikka, Infosys CEO,
caused heartburn by taking a salary that was 900 times the mean salary.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
NSE'S NEW FEATURE ON GOBID APP ALLOWS RETAIL INVESTORS TO
DIRECTLY INVEST IN G-SEC
The National Stock
Exchange (NSE) Tuesday said it has introduced a new feature on its mobile app
'goBID' that will enable retail investors to invest in government securities
directly from the platform. Through this platform, retail investors can place
orders under the non-competitive bidding facility permitted by the Reserve Bank
of India for retail investors, the NSE said in a release. This new feature of
the goBID app will allow KYC compliant individuals having a demat account to
seamlessly invest in government securities and help increase retail
participation, said Vikram Limaye.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
JHUNJHUNWALA FAMILY LOOKS TO INVEST IN NBFCS PUMMELED BY THE
IL&FS CRISIS
A family office that
manages money for India’s wealthy Jhunjhunwala family is looking to invest in
finance companies which have been pummeled by the crisis in the country’s
shadow banking sector. He said he’s also looking to invest in private companies
in the sector, including through acquisitions. India’s non-bank financing
sector, which provides nearly four out of every 10 loans to consumers, has
suffered from a Rs 1.2 trillion ($16.9 billion) funding shortfall after costs
skyrocketed last year. The crisis was triggered by the default at one of the
nation’s biggest lenders, Infrastructure Leasing & Financial Services Ltd.,
prompting the government to step in and seize control of the lender. Fears of
wider market contagion have led to the collapse of the share prices of Dewan
Housing Finance Corp. -- down 76 percent over the past 12 months -- and other
firms in the sector.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
GOVT MUST MAKE 5G SPECTRUM AVAILABLE AT REASONABLE PRICING:
SUNIL MITTAL
Bharti Airtel chairman
Sunil Mittal Tuesday said the government must encourage 5G rollout in the
country at the earliest by supporting the telecom sector in terms of pricing of
spectrum at reasonable levels and lowering various levies. My recommendation is
govt must encourage 5G coming in India rather than being late. Government can
help in giving more spectrum at reasonable price, Mittal told. He said the
telecom regulator Trai-recommended price is very high, as for 5G every operator
will require over 100 megahertz. All equipment currently being deployed by
Airtel are 5G ready. You cannot have a situation where you want to benefit
Digital India and you tax the most. Just not get into a new dialogue. you see
new DCC (Digital Communications Commission) policy. What you have committed do
that, Mittal said. The government has promised reduction in levies on the
telecom sector under the new telecom policy. He said the industry is building
infrastructure for 5G service and the government has to extend support.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
NILA MOHANAN HOLDS INTERIM RERA CHARGE
With the transfer of
bureaucrat Sudhir Mahajan to Andaman and Nicobar Islands, the post of the
interim Real Estate Regulatory Authority has fallen vacant. The government has issued
an order stating the secretary of urban development will officiate as the
regulatory authority, however, Goa lacks a full time urban development
secretary too. Nila Mohanan has been given charge as urban development
secretary as an interim measure along with her full time assignments as
secretary education and secretary revenue. Government of Goa hereby designates
the secretary urban development as the regulatory authority for the purpose.
This order shall come into force with immediate effect, director and additional
secretary for municipal administration R Menaka said in the official order.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
RELIANCE JIO, INDIA'S MOST PROFITABLE TELECOM COMPANY, MAY BE
LOSING MONEY: ANALYSTS
Reliance Jio Infocomm Ltd,
India’s most profitable wireless carrier, could lose as much as Rs 15,000 crore
($2.1 billion) this fiscal year when costs such as handset subsidies are
included, said Chris Lane and Samuel Chen. That would be a bigger deficit than
those of its larger rivals Bharti Airtel Ltd and Vodafone Idea Ltd, even though
the company known as Jio will probably overcome them over the next 12 months in
terms of service revenue and subscribers, the analysts wrote in a note to
clients dated February 26. The fiscal year of Jio’s parent, Reliance Industries
Ltd ends March 31. Jio, part of the group controlled by Asia’s richest man
Mukesh Ambani, introduced a free-for-life call service and a price war in one
of the world’s most crowded mobile markets. That push, which has included
offering low-cost phones, has resulted in net handset subsidies likely totaling
Rs 7,200 crore and total invested capital of Rs 2.6 lakh crore, Bernstein
estimates.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
MUKESH AMBANI BREAKS INTO GLOBAL RICH LIST AS ANIL WITH $1.9
BN FIGHTS BANKRUPTCY
Reliance Industries
chairman Mukesh Ambani has broken into the top 10 richest list globally with a
networth of USD 54 billion, while his younger brother Anil has paled into the
oblivion having lost over 65 percent of his networth, according to a report.
The Hurun Global Rich List 2019 is topped by Amazon chief Jeff Bezos for the
second year in a row, while the senior Ambani is placed 10th with a network of
Rs 3.83 lakh crore, thanks to a rally in RIL shares, which had topped the Rs
8-lakh-crore-mark last month. Ambani owns almost 52 percent in Reliance. Anil
Ambani, held in contempt of court by the Supreme Court last week for not paying
up Ericsson Rs 540 crore, has lost over USD 5 billion, from USD 7 billion seven
years ago to USD 1.9 billion this year, even though both the brothers got off
with more or less same amount of inherited wealth. The other wealthiest Indians
are Hinduja group chairman SP Hinduja with networth of USD 21 billion, Wipro
chairman Azim Premji is at third with a networth of USD 17 billion, says the
report released Tuesday. Steel giant ArcelorMittal's Lakshmi Mittal stands at
fifth position, followed by Kotak Mahindra's Uday Kotak (USD 11 billion),
Gautam Adani (USD 9.9 billion) and Sun Pharma's Dilip Shanghvi (USD 9.5
billion). With a wealth of USD 96 billion, Microsoft founder Bill Gates ranks
second in the global list followed by Warren Buffet, chairman of Berkshire
Hathaway with networth of USD 88 billion, LVMH's Bernard Arnault at USD 86
billion at the fourth slot. Facebook's Mark Zuckerberg with networth of USD 80
billion is at the fifth position.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
$22 BILLION GONE, YET INDIA'S SHADOW BANKS FACE MORE DARK DAYS
About $22 billion has
evaporated from a group of almost two dozens non-bank financial companies since
August 31, before confidence was rocked. And investors aren’t rushing to get
back in, according to Citigroup Inc. analyst Manish B Shukla. Despite the sharp
correction in stock prices of NBFCs, most investors are cautious on these names
given near-term uncertainties, he wrote in a report earlier this month. He notes
volatile third-quarter results and potential funding tightness after the recent
events may be reasons for the lingering skepticism in the sector. Until last
summer, non-bank financiers were a major part of investment portfolios. But a
series of missed payments by one of the biggest firms, Infrastructure Leasing
& Financial Services Ltd. — once categorised as systemically important by
the central bank — then roiled India’s stock market. Now, the nation’s
shadow-lending industry, which accounted for nearly four out of every 10
consumer loans in the last three years, has grown more cautious about extending
new credit amid a funding crunch of its own. From small-ticket loans for
smartphones to funding large apartment clusters, the firms have a finger in every
pie. At some point, the growth in their loan books even rivaled that of the
state-run banking giants facing lending restrictions owing to the large burden
of bad debt. We believe NBFC growth will disappoint and there is a marked
slowdown for most, which is now starting to reflect in their valuations, said
Nilesh Shah He noted that his firm has reduced its exposure on both debt and
equity funds, without saying by how much. In the race to grabbing opportunity,
the companies ended up creating an asset-liability mismatch, according to Shah,
who said the IL&FS default and tight liquidity in the banking system only
added to the pain. India’s banking system liquidity is still in a deficit of ₹1.2
trillion ($16.9 billion), data compiled by Bloomberg show.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
AIR STRIKE ON PAKISTAN INCREASES MODI CHANCE TO RETURN:
ANALYSTS
The air strike on terror
camps in Pakistan is a positive for the markets as it illustrates a
decisiveness in foreign policy and increases the chances of Narendra Modi to
retain power after the forthcoming polls, say analysts. Economists at SBI said
the markets is likely to gain after the strikes as they will look at the action
as the one which builds a positive deterrence illustrating a decisiveness in
our foreign and national security policy. It said during the Kargil conflict
between May and July 1999, leading stock indices showed an initial decline but
strong recovery thereafter, while after Uri action, the Sensex gained 100
points and so was the rupee. The SBI report also deemed to suggest that just
like the previous actions, conflicts are more localised in nature.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
INDIA 47TH IN ‘INCLUSIVE’ INTERNET LIST: FACEBOOK
India ranked 47th
in the overall Inclusive Internet Index 2019 score while Sweden topped the
chart, followed by Singapore and the US, a Facebook-led study has revealed. Men
still have more Internet access than women globally but low and lower middle
income countries narrowed the gender gap in 2018, the study noted. According to
the Inclusive Internet Index (3i) prepared by the Economist Intelligence Unit
(EIU) for Facebook, there are demonstrable benefits from comprehensive female
e-inclusion policies, digital skills programmes and targets for women and girls
to study science, technology, engineering and mathematics (STEM). The UK,
Namibia and Ireland, followed by Austria, Chile and South Africa, are among the
top performers of the year, all with female digital skills training plans.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
LOK SABHA ELECTIONS: TWITTER PLANS TO LIAISE WITH EC, BOOST
HIRING IN INDIA
Twitter Inc plans to boost
hiring in India and appoint an officer to liaise with the Election Commission
(EC), a senior executive said on Tuesday, responding to concerns about
political misuse of social media ahead of this year’s general elections. Colin
Crowell, told the election was a top priority for the company. Crowell said he
had told the panel that we will certainly have a process and mechanism in place
to address issues that will arise during the election period. The company was
prepared to meet a request to hire an officer to liaise with the Election
Commission, he said. However, Crowell was also critical of draft rules proposed
in December by the technology ministry but yet to be formalized, which, if
enforced, will impose rules on social media companies such as Twitter and
Facebook. They include removing within 24 hours content deemed to be unlawful,
including anything affecting the sovereignty and integrity of India.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
WARNING ISSUED OVER ATTACKS ON INTERNET INFRASTRUCTURE
Key parts of the internet
infrastructure face large-scale attacks that threaten the global system of web
traffic, the internet's address keeper warned Friday. The Internet Corporation
for Assigned Names and Numbers (ICANN) declared after an emergency meeting an
ongoing and significant risk to key parts of the infrastructure that affects
the domains on which websites reside. There have been targeted attacks in the
past, but nothing like this. The attacks could date back to 2017 but have sparked
growing concerns from security researchers in recent weeks, which prompted the
special meeting of ICANN. The malicious activity targets the Domain Name System
or DNS which routes traffic to intended online destinations. ICANN specialists
and others say these attacks have a potential to snoop on data along the way,
sneakily send the traffic elsewhere or enable the attackers to impersonate or
spoof critical websites. There isn't a single tool to address this, Conrad
said, as ICANN called for an overall hardening of web defenses. This is roughly
equivalent to someone lying to the post office about your address, checking
your mail, and then hand delivering it to your mailbox, the US Department of
Homeland Security said in a recent cybersecurity alert.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
FACEBOOK FACES EMPLOYEE ANGER OVER WORKING CONDITIONS AT
OUTSOURCING FACILITY
Facebook now has about
15,000 content reviewers, almost all of whom work not for Facebook itself but
for staffing firms like Accenture and Cognizant. The company’s decision to
outsource these operations has been a persistent concern for some full-time
employees After a group of content reviewers working at an Accenture facility
in Austin, Texas complained in February about not being allowed to leave the
building for breaks or answer personal phone calls at work, a wave of criticism
broke out on internal messaging boards. Why do we contract out work that’s
obviously vital to the health of this company and the products we build, wrote
one Facebook employee. Bloomberg News viewed dozens of messages about the
topic, on the condition that it not publish the names of people involved;
Business Insider first reported the internal criticism earlier this month. A
Facebook spokeswoman said there has been no change in policies at the facility
in Austin, and that it is has been working with Accenture to ensure practices
comply with Facebook policies.
#For Source of Information copy and paste the heading in google.
Thanks & Regards,
CS Meetesh Shiroya
Thanks & Regards,
CS Meetesh Shiroya
No comments:
Post a Comment