MANUFACTURING
ACTIVITIES IN LLPS
Manufacturing
& allied activities were restricted in LLPs vide OM No. CRC/LLP/e-Forms
dated 06.03.2019. This OM invoking the restriction regarding manufacturing
& allied activities has been withdrawn with immediate effect
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BANKS’ RECOVERIES FROM
IBC CASES FALLING
Banks’
recoveries from bankruptcy cases are on the decline as demand for sick
companies under the Insolvency and Bankruptcy Code has waned. However, fears of
losing their companies have pushed more promoters to approach banks with
onetime settlements under Sect 12(A) of the code. Data from the Insolvency and
Bankruptcy Board of India (IBBI) shows that till September, financial creditors
could only get 25 per cent of their claims under the code. Though that ratio
has increased to 90 per cent in the single quarter ended December, led by the
100 per cent realisation in the Binani Cement case, the trend is downward.
Besides relatively high interest for certain sectors, like, cement and steel
companies, there is only a marginal interest for other companies mainly because
of the quality of assets, scalability of operations and the sluggish economy.
Some of these legacy accounts have unsustainable portion of debts and hence not
viable. The delays in the cases have impacted the sentiment which explains the
lower realisation, said Babu Sivaprakasam. However, promoters are also willing
to pay up and settle the cases. Data from IBBI shows that out of the 142 cases
closed, 63 have been withdrawn under Section 12(A) which allows withdrawal of
insolvency proceedings against a debtor provided at least 90 per cent of the
committee of creditors (CoC) agree. Bankers said the supposed lower recovery
should not yet be taken as a trend as they include many old legacy cases which
had little or no value. This trend is temporary. The IBC should be seen as an enabler
to recovery of new cases and not for the old legacy cases. These legacy cases
do not have much of a recovery option left, so financial creditors will have to
take some haircut. But as these cases move out of the system, we should expect
the recovery to improve, said PR Rajagopal. However, there are growing concerns
due to a slowdown in the process. Credit Suisse, in a report last month, said
the average time taken for resolution is now around 350 days.
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GUIDANCE NOTE ISSUED BY
ICSI ON ANNUAL SECRETARIAL COMPLIANCE
Details
are available on below link…
https://www.icsi.edu/media/webmodules/Guidance_Note_on_Annual_Secretarial_Compliance_Report.pdf
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BANKS MUST FLAG BAD
LOANS AS NPAS AFTER 90-DAY DEFAULT: RBI TO NCLAT
The
Reserve Bank of India (RBI) on Tuesday told the National Company Law Appellate
Tribunal (NCLAT) that banks had an obligation to mark bad loans as
non-performing asset (NPA) after the default of 90 days and that the lenders
could not be relieved of the same. The banking sector regulator has moved the
NCLAT seeking a modification of its February 25 order in which the appellate
tribunal had said that accounts of the Infrastructure Leasing & Financial
Services (IL&FS) and its subsidiaries could not be classified NPAs without
approval. Reflecting such loans as NPA is important on the books of banks as it
acts as an early warning signal, senior advocate Gopal Jain appearing for the
RBI said. You have to know the real state of the accounts of the banks.
Otherwise, if you do not show NPA, you would constantly be booking interest on
the loan’s principal amount. It would be a very rosy picture. The whole thing
is to have a transparent and fair accounting system, so that the health of the
institution is not affected, Jain said. The banking sector regulator said it
was not on the question of the resolution process of the IL&FS and just
wanted a modification on the order, which would allow banks to record NPAs on
their books in terms of the master circular, which was also upheld by the
Supreme Court. A two-judge Bench of the NCLAT led by Chairperson Justice S J
Mukhopadhaya said that the appellate tribunal was not on the question of
whether the RBI and the banks had those powers in terms of the circular, but
would only decide if the accounts could be declared NPA. Nobody can challenge
your circular as bad We cannot say anything about your circular. We will be
deliberating whether it can be declared NPA. The moment it is declared NPA,
none of the (IL&FS) companies will go for resolution, the two-judge Bench
observed. The case would be next heard on April 29.
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NO WORKMEN’S DUES WHEN
COMPANY GOES INTO LIQUIDATION UNDER IBC?
A
petition has been filed in the Supreme Court challenging the validity of
Section 327(7) of the Companies Act, 2013. A Bench of Chief Justice of India,
Ranjan Gogoi and Justice Sanjiv Khanna issued notice to the Central government
last week. The petition has been filed by Karamchari Union of Moserbaer India
Ltd., a registered Trade Union. It is the petitioner’s case that the legitimate
dues of its members like gratuity, provident fund and pension and severance
compensation are being denied by the liquidator of the Moser Baer India citing
Section 327(7) of the Companies Act, 2013. Section 327 of Companies Act, 2013
was amended in 2016 and sub-section (7) was introduced vide notification No.
3453 (E). Sub-section (7) of Section 327 bars the application of Section 326
and Section 327 Companies Act, 2013 in the event of liquidation under the
Insolvency and Bankruptcy Code (IBC). Thereby, it effectively renders
Explanation (II) to Section 53 of the IBC meaningless and otiose. The said
Explanation in IBC defines workmen’s dues and it specifically states that it
shall adopt the definition from Section 326 of Companies Act, 2013 which is
pari materia to Section 529 (A) of Companies Act, 1956. However, with the application
of Section 326 excluded by Section 327(7), a void is created insofar as the
definition of workmen’s dues is concerned. Section 327 (7) renders the meaning
of the Explanation (II) to Section 53 of the Code meaningless and otiose, as
Section 327(7) bars the application of Section 326 and Section 327 Companies
Act, 2013 to the proceedings under the Code. The explanation defined workmen’s
dues and it is specifically stated that it shall adopt the definition from
Section 326 of Companies Act, 2013 which is pari materia to Section 529 (A)
Companies Act, 1956. It is pertinent to mention that the term workmen’s dues
are not defined anywhere in the Insolvency and Bankruptcy Code apart from this
explanation, therefore, this exclusion clause of the impugned sub-section
creates an embargo on the grant of statutory rights of workmen when the company
goes into liquidation. The IBC Code of 2016 is subsequent to Companies Act,
2013 and by application of Section 327(7) which was brought in vide
notification dated 15.11.2016, a void has been created because this sub-section
withdraws the application of Section 326 and 327 to the proceeding under IBC.
Therefore, by not defining Workmen Dues in the IBC itself and also by debarring
the application of Companies Act, a void has been created, with respect to the
definition of workmen dues under the IBC. On the other hand, by excluding the
applicability of Companies Act, especially Sections 326 and 327 from the
proceedings under the Code, it has created an ambiguity as it fails to define
as to what will constitute Workmen’s Dues under the IBC. This the petitioner
claims, is a violation of their right to livelihood under Article 21 of the
Constitution as it denies the workmen their legitimate dues for the services
rendered in the company for a long period of time. It, thereby, denies the
workmen their legitimate dues for the services rendered in the company for a
long period of time, which runs contrary to the concept to Right to Livelihood
enshrined under Article 21 of the Constitution of India. The petitioner has,
therefore, prayed for striking down section 327(7) of the Companies Act. They
have also prayed for a direction to leave the statutory claims of the workmen’s
dues out of the purview of waterfall mechanism under Section 53. The Court
issued notice to the Central government and Moser Baer India.
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NCLAT SEEKS ANIL
AMBANI'S RESPONSE IN CONTEMPT PLEA MOVED BY HSBC DAISY
The
National Company Law Appellate Tribunal (NCLAT) has asked Reliance
Communications (RCom) Chairman Anil Ambani to respond to a contempt petition
moved by HSBC Daisy Investments (Mauritius) within 10 days. The appellate
tribunal will now hear HSBC Daisy’s plea against Ambani and his company Reliance
Infratel on May 20. HSBC Daisy had moved the NCLAT alleging that Anil Ambani’s
companies Reliance Infratel, Reliance Communications Infrastructure and RCom
have breached a consent decree by not paying the Rs 230 crore settlement amount
within 180 days of June 29, 2018 when the agreement was taken on record by the
appellate tribunal. Minority investors of Reliance Infratel had moved NCLAT
alleging oppression and mismanagement after the company had allegedly not taken
their consent for the selling the tower and fiber assets. They had moved the
NCLAT in an attempt to thwart the then sale to Reliance Jio Infocomm, which had
then forced Reliance Infratel to settle the issue with them. Following the
agreement, both the parties had submitted to the NCLAT their final consent
terms after which the appellate tribunal had allowed both parties to withdraw
their appeals. The said agreement amount, however, was never paid, HSBC Daisy
has alleged. This is the second such contempt petition moved against Ambani and
his companies. Earlier on February 20, The Supreme Court had held RCom Chairman
Ambani and two of his top executives guilty of contempt of court for wilfully
failing to pay the dues to telecom equipment maker Ericsson. The court had also
directed Ambani, Reliance Telecom Chairman Satish Seth, and Reliance Infratel
Chairperson Chhaya Virani to pay Rs 453 crore within four weeks or face a jail
term of three months. It also slapped a fine of Rs 1 crore each for their
cavalier attitude towards the court’s orders.
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IL&FS SHOULD PAY
80% DUES OF SMALL CREDITORS: NCLAT
Emphasising
on the repayment of dues to small creditors including provident and pension
funds, the National Company Law Appellate Tribunal (NCLAT) on Tuesday observed
that IL&FS should distribute funds to small creditors in a manner that 80
per cent of their entitled amounts are paid. As IL&FS submitted the a chart
with details of four amber companies, the NCLAT bench headed by Chairperson,
Justice S.J. Mukhopadhyay asked the government to provide details on the rest
of the nine amber companies. Firms classified as green would continue to meet
their payment obligations, while amber companies can meet only operational
payment obligations to senior secured financial creditors. The red firms are
the entities which cannot meet their payment obligations at all. Thousands of
crores of money of more than 15 lakh employees of both public and private
sector companies have exposure to IL&FS bonds As these investments were
classified as unsecured debt, the funds feared that all money would be lost if
all market-related risks fell on them. The tribunal would next hear the matter
on April 29.
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KOTAK MAHINDRA BANK
MOVES NCLT AGAINST BILT UNIT
Kotak
Mahindra Bank has approached the dedicated bankruptcy court against Ballarpur
Industries Ltd subsidiary – BILT Graphic Paper Products – for default of Rs 218
crore The company owes about Rs 6,000 crore to its lenders. BILT Graphic was on
the so-called second list of 29 defaulting companies of RBI, recommending that
these firms be referred for resolution through the Insolvency & Bankruptcy
Code (IBC). The Mumbai bench of NCLT, presided over by VP Singh and Ravikumar
Duraisamy, has adjourned the admission of the company under IBC to May 5. The
respondent (BILT Graphic) can file its response during that time, it added.
This is second insolvency plea filed against BILT Graphic Paper.
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ESSAR STEEL
LENDERS SEE NO MAJOR CHANGES TO RESOLUTION PROPOSAL
Despite
the Supreme Court imposing status quo on the Essar Steel Ltd insolvency case,
financial lenders to the stressed steel mill believe they will not have to make
any major changes to the current resolution plan. Two members on Essar Steel’s
committee of creditors (CoC) and a lawyer advising on the case said on
condition of anonymity that tribunals can only recommend changes to a
resolution plan, and the Insolvency and Bankruptcy Code entrusts the final
commercial decision to the CoC. If you look at the NCLT Ahmedabad offer (dated
8 March), the court advised the CoC and Essar Steel’s resolution professional
to consider changes to the resolution plan and take an appropriate decision It
didn’t force the plan to be altered, a banker on the CoC said. The court
suggested that the ₹42,000 crore settlement
be split 85:15 in favour of the financial creditors, while the remaining could
be split between operational creditors and other stakeholders on a pro-rata
basis. The CoC took the court’s advice and decided to increase the settlement
to operational creditors by ₹1,000 crore. With this,
their settlement would be around ₹1,200
crore, he said. The CoC as well as the bankruptcy tribunal have approved
ArcelorMittal’s ₹42,000 crore bid for
Essar Steel. However, the Supreme Court on 13 April temporarily halted an NCLAT
order asking it to pay Essar’s lenders within 14
days, following a petition from Standard Chartered Bank. The Supreme Court
asked NCLAT to dispose all pending appeals in the Essar Steel case first. The
tribunal, NCLAT, will hear the matter next on 23 April.
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IL&FS: AUDITOR
REGULATOR NFRA PROBING ROLE OF EY, KPMG AND DELOITTE
The
newly formed regulator for auditors is probing the role of three of the big
four auditors in the alleged financial irregularity in Infrastructure Leasing
& Financial Services and two of its group companies. National Financial
Reporting Authority (NFRA) has asked Indian arms of EY, KPMG and Deloitte to
furnish last few years’ financial details of IL&FS, IL&FS
Transportation Networks (ITNL) and IL&FS Financial Services (IFIN), four
people with direct knowledge of the matter told. NFRA had issued a letter and
sought we submit some financial details including audit reports and documents
supporting that for the last three years, said a person working with IL&FS
Group. We understand that there would be a detailed scrutiny of the audits. He
said the letters were issued to the firms in the last week of March. This is
the first probe NFRA has undertaken after it came into force in November last
year under the corporate affairs ministry. NFRA would scrutinise the audited
accounts and role of the auditors when they audited debt ridden IL&FS and
its affiliate firms, the sources said. Investigations would also look into
whether the audits were carried out in a negligent or fraudulent manner, said
one of the persons close to the development.
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SFIO FINDS DELOITTE DUE
DILIGENCE BELOW PAR IN IL&FS FINANCIAL SERVICES AUDIT
The
Serious Fraud Investigation Office (SFIO) has found that Deloitte Haskins &
Sells did not exercise adequate due diligence while auditing the books of
IL&FS Financial Services (IFIN), a subsidiary of Infrastructure Leasing
& Financial Services, persons aware of the development told. Deloitte has
been with IL&FS and subsidiaries namely IFIN, ITNL, ISSL and many other
group companies as its statutory auditor for the last ten years. Its annual
average audit fee used to be Rs 13-14 crore and advisory and consultancy fee
around Rs 6-8 crore per annum. The firm did not audit IL&FS books with due
care and professional skepticism. The probe has revealed that the auditors have
failed to perform the duties as mandated under The Companies Act, one of the
above mentioned persons told. Audit and credit rating agencies are part of
IL&FS failure crisis. There is material evidence to show they failed to
apply basic test for transaction analysis They completely overlooked the asset
book and had not examined and reported properly, explained the official. There
was lack of due diligence with respect to the loans sanctioned by IFIN. There
are instances where non-compliance are apparent and the firm turned a blind
eye. As you are aware, there are several ongoing investigations by regulators
and agencies. Such agencies are in contact with us being the previous auditors.
We have provided full support to their investigations and will continue to do
so, Deloitte spokesperson said. The revelations come close on the heels of
allegations made by an anonymous whistleblower claiming the audit firm helped
fudge accounts of IFIN. In a three-page letter to the agency, the whistleblower
claimed that the audit and tax consultancy firm was aware of the factual
situation on the financial mismanagement and impropriety at IL&FS. The
agency is soon likely to submit its chargesheet on those arrested and others.
Since they have been found to violate norms under The Companies Act the agency
will recommend action as per the Act, added the official.
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TROUBLED POWER COS: AT
LEAST 3 FIRMS COULD SEE RESOLUTION IN TWO MONTHS
The
resolution of at least three troubled power companies, including Coastal
Energen, GMR Chhattisgarh and Jaiprakash Power Ventures, could be completed in
the next two months, bankers have indicated. In the case of GMR Chhattisgarh,
the Adani Group is expected to take control later this month following a
nominal upfront payment. Lenders have agreed to the change in management and
will continue to extend loans to the business. Also, all lenders to Jaiprakash
Power are expected to approve the restructuring with the existing promoter this
week. An ICICI Bank-led consortium had been looking to restructure the business
which has piled up a debt of over 20,000 crore the company has plants at
Vishnuprayag, Bina and Nigrie. According to the plan, the promoters will make
an upfront payment of 20% over the next one year and lenders expect to upgrade
the account by quarter ending June 2020. The account, already an NPA
(non-performing asset) on the books of most banks, has been classified in the
D2 category with at least one large state-owned bank. The lenders with exposure
to the project are believed to have made provisions for anywhere between
40%-50% of the total exposure. Lenders are also hoping to complete a one-time
settlement with Ahmed Buhari-promoted Coal and Oil group for control of thermal
power generation company Coastal Energen. The group that once owned the
1,200-MW thermal plant based in Tamil Nadu has offered to pay 3,000 crore.
Lenders are awaiting 10% of the amount upfront either as cash or in the form of
bank guarantees. Bankers have been working to resolve stressed power assets
outside the Insolvency and Bankruptcy Code (IBC) since September last year.
This was after the Supreme Court asked Reserve Bank of India and others to
desist from invoking insolvency proceedings against corporate defaulters per
the February 12 circular. Resolution to Prayagraj Power Generation Company
(PPGCL), however, could stretch further, lenders aware of the developments
told. Renascent Power Ventures, arm of Tata Power-backed Resurgent Power
Ventures that acquired 75% in PPGCL is unhappy with the Uttar Pradesh energy
regulator UPERC’s direction asking to offer a discount of 14 paise/unit on the
fixed charges to the state power distribution entity (discom).
While Renascent Power Ventures has suggested
that bankers appeal the UPERC order at the Appellate Tribunal for Electricity,
circumstances indicate the process could see a 6-8 month delay. Given the
circumstances, PPGCL lenders are considering asking Renascent Power Ventures to
comply with the UPERC’s directions or consider bankruptcy proceedings. For
lenders, the consideration to appeal the UPERC it is a difficult decision since
it could take several months. One interesting factor though is a certain clause
within the power purchase agreement with the discoms that gives PPGCL the
option not to have to comply with the direction on discount on fixed charges.
However, the clause is only valid if 26% stake is with the promoter, which
Renascent may not agree to. Around 34 stressed power assets are named in a
Parliamentary Standing Committee report and 11 plants, with a capacity of
around12-15GW, and a total debt of around Rs 80,000-90,000 crore are being
resolved under SAMADHAN (Scheme of Asset Management and Debt Change Structure).
Under SAMADHAN, banks are required to assess the sustainable debt of the units.
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JET AIRWAYS NOT TO BE
DRAGGED TO NCLT; LENDERS SEEK RESOLUTION BY SEEKING BIDS
The
lenders would not drag debt-ridden Jet Airways to National Company Law Tribunal
(NCLT) and resolve the issue by seeking investment bids reported citing an
unidentified aviation official. It’s not the right time for the lenders to the
ailing airline to approach insolvency tribunal to find a solution, the report
added. Creditors can take the defaulting company to the NCLT for seeking
approval for resolution under the Insolvency and Bankruptcy Code (IBC). Even as
the lenders did not take a final decision on providing emergency funds, the
funding is expected to come through, the official also added. Vinay Dube, has
asked the banks for an immediate infusion of Rs 400 crore into the company.
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LENDERS OF GITANJALI
GEMS VOTE FOR ITS LIQUIDATION, CITING TIME OVER-RUN
Lenders
of Gitanjali Gems have rejected resolution proposals and have voted for
liquidation of the company, which owes over Rs 8,000 crore to creditors, citing
time over-run The committee of creditors met on March 28, and with a majority
of 54.14 percent, they rejected extension of the resolution process, and chose
to go for liquidation the company informed the exchanges Tuesday. The 180 days
since the resolution process began ended on April 6. Since extension is not
approved by the lenders, the next logical step is to go for liquidation, the
company said in a BSE filing.
The
corporate affairs ministry had earlier sought the NCLT's intervention to attach
the properties owned by Modi, his wife Ami, brother Nishal and uncle Choksi,
across the world. Modi and Choksi and their families own or control as many as
around 114 companies SEBI is also looking into the matter and the ministry is
also seeking the help of the Central Board of Direct Taxes to ascertain the
assets of the prime accused and other related parties.
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NCLAT ADJOURNS
IL&FS CASE HEARING TO 29 APRIL
The
National Company Law Appellate Tribunal (NCLAT) on Tuesday adjourned the
hearing on the matter of the debt-ridden Infrastructure Leasing and Financial
Services (IL&FS) to 29 April. During the hearing, the tribunal observed
that IL&FS should distribute funds to smaller creditors including the
investments made by provident funds (PF) and pension funds, in a manner that
80% of their entitled amounts are paid. The Reserve Bank of India (RBI) counsel
Gopal Jain said at the hearing that banks' non-performing assets (NPAs or bad
loans) should reflect in the books of the banks.
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GDR MANIPULATION: SEBI
BARS KASHYAP TECH, 6 OTHERS FROM SECURITIES MARKET
Sebi
has barred Kashyap Technologies and six other entities, including Clifford
Capital Partners, for at least five years from securities market in a matter
related to manipulation of global depository receipts (GDRs). Among the six
entities, five were Kashyap Technologies' directors when the violation took
place. Besides, Sebi directed Kashyap Technologies ltd (KTL) to continue
efforts to recover an outstanding sum of $10.39 million from Clifford Capital
Partners, the only subscriber of the company's GDRs. The regulator after an
investigation of a GDR issue during December 2007 found that the firm issued
0.49 million GDRs worth $16.5 million on the Luxembourg Stock Exchange. It was
observed that the entire 0.49 million GDRs were subscribed by only one entity,
Clifford Capital Partners. However, the firm had pledged the GDR proceeds to
the bank against the loan given to Clifford for subscription of GDRs, Sebi said
in an order on Friday. Regarding the five directors, Sebi said they were the
members of the board of directors who approved the resolution regarding the
loan agreement to Clifford and thus were part of the fraudulent arrangement of
facilitating the subscription of its own GDR. Moreover, $10.39 million was
transferred to Clifford by KTL for default in repayment of loan to the bank. The
regulator found that the Clifford acquired the GDR, to the extent of $10.39
million for free and at the cost of investors of KTL which cleared the loan of
Clifford from the GDR proceeds.
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STOVEC INDUSTRIES PAYS
RS 6 LAKH TO SETTLE DISCLOSURE LAPSE CASE WITH SEBI
Stovec
Industries has settled an alleged disclosure lapse case with Sebi after paying
nearly Rs 6 lakh towards settlement charges According to Sebi, the company suo
motu filed an application proposing to settle, without admitting or denying the
guilt for alleged delayed compliance of SAST (Substantial Acquisition of Shares
and Takeovers) norms. The firm failed to make the requisite disclosures within
the stipulated time on three occasions and the disclosures were made
subsequently after a delay 14 days, 105 days and 2 days, respectively, the
regulator said.
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INDIA’S TOP 500
DEBT-HEAVY COMPANIES TO SAVE UP TO RS 7,000 CRORE, THANKS TO RBI FOREX MOVE
The
latest foreign exchange swap window opened by the RBI can reduce the cost of
borrowing for the top 500 corporate borrowers of foreign funds in India with a
cumulative reduction upto Rs 7,000 crore according to a report. The interest
outgo of the top 500 debt-heavy corporate borrowers could cumulatively reduce
by Rs 4000 crore-7000 crore, assuming a 0.50%-0.75% reduction in the cost of
forex borrowings and a 50bp-200bp rise in the share of forex borrowings in the
outstanding debt of these corporates, said India Ratings and Research in a
report. The $5 billion reserve swap auction by the RBI was taken in a bid to
improve the pace of monetary transmission and improve the liquidity in the
economy. Under it, the central bank bought $5 billion from the market through
auction for three years on March 2019 and will sell the same amount back to the
respective counterparties in March 2022. It is said to take another swap in on
April-23. The total settlement volume, as a percentage of forex reserves,
increased to 3.28 per cent during March 2019. The report pegs non-food credit
growth will reach Rs 11.68 lakh crore in FY20 and the deposit shortfall will be
Rs 2.79 lakh crore even after the proceeds from the swap window and an increase
in credit-deposit ratio.
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BANDHAN BANK GETS CCI
APPROVAL TO ACQUIRE GRUH FINANCE
Bandhan
Bank Tuesday said it has received approval of the Competition Commission of
India (CCI) for the proposed acquisition of Gruh Finance. Gruh Finance, the
affordable housing finance arm of HDFC Ltd, was taken over in January by
Bandhan Bank in a share-swap deal. The Competition Commission of India has by
way of its letter dated April 15, 2019, intimated that CCI, at its meeting held
on April 15, 2019, considered the proposed combination and approved the same,
the bank said in a regulatory filing. The swap ratio for the amalgamation would
be 568 shares of Bandhan Bank for every 1,000 shares of Gruh Finance.
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WIPRO Q4 NET RISES TO ₹2,484
CRORE, ANNOUNCES ₹10,500
CRORE SHARE BUYBACK
Software
services exporter Wipro Ltd reported a 38% rise in fourth-quarter profit,
helped by a strong performance from its banking, financial services and
insurance segment. Net profit rose to ₹2,484
crore in the three months to March 31, from ₹1,803
crore in the same period a year earlier. Revenue from its mainstay IT services
business grew 11.1%, driving the Bengaluru-based company's total revenue to ₹15,038 crore ₹13,824 crore last year. In dollar
terms, IT services revenue of Wipro rose to $2,075.5 million, a growth of 1.4%
quarter-on-quarter. Wipro announced ₹10,500
crore share buyback at a price of ₹325
joining the growing roaster of IT firms returning surplus cash to their
shareholders. Cash-rich Indian IT companies have been returning cash in their
books to shareholders through buybacks and dividends.
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IDBI BANK LAUNCHES
PAPERLESS ACCOUNT OPENING FACILITY FOR NRIS
Non-Resident
Indians (NRIs), living in nearly 40 countries, will now be able to open account
in IDBI Bank without submitting paper documents, the lender said on Tuesday.
IDBI Bank has launched the ‘NRI-Insta-Online’ account-opening process for NRIs
residing in Financial Action Task Force (FATF) member countries, it said in a
release. NRIs desirous of opening account can now access the ‘NRI Insta-Online’
on the bank’s website via web module, upload the supporting documents and
choose the branch in which the account needs to be opened, IDBI Bank said. On
the successful uploading and verification of the scanned documents, the account
is instantly opened and an electronic advice is sent to the customer.
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CANARA BANK BECOMES THE
FIRST PUBLIC SECTOR BANK IN INDIA TO MEET RBI’S EMV MANDATE
ACI
Worldwide, a global provider of realtime electronic payment and banking
solutions, announced that Canara Bank has successfully rolled out major new
functionality to support EMV card acquiring across its ATM network and Aadhaar
Authentication, leveraging ACI’s UP Retail Payments solution to achieve market
firsts. Canara Bank, one of India’s largest public sector banks with nearly
6,300 branches and a network of more than 10,000 ATMs, is the first public
sector bank to shift to EMV chip and PIN for card present transactions across
the country’s vast ATM network. The Reserve Bank of India (RBI) had set a
deadline of December 31, 2018 for the switch, mandating use of an embedded chip
to replace the traditional magnetic stripe card. In addition, functionality
developed by ACI and Canara Bank also speeds up the process of Aadhaar number
linking, which eases KYC compliance at the bank’s branches.
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THERE IS NO 'MAKE IN
INDIA' YET
The
latest Index of Industrial Production (IIP) print of just 0.1 percent, a
20-month low, is telling in that it confirms a slowing of the economy through
several ground-level checks with dealers and industry players. What’s more
worrying, though, is that the average investment proposals are down about 18
percent compared to the fiscal year 2004-2009 period, according to data. Manufacturing—a
key driver of growth and a sector that represents the government’s ‘Make in
India’ ambition—hasn’t fared better. In fact, the performance in the
manufacturing sector has been far worse. The February IIP data actually
indicates a 3 percent decline in manufacturing activity, while a longer tenure
view reveals that investment proposals for manufacturing have more than halved
to Rs 3.1 lakh crore in FY19 from Rs 6.5 lakh crore in FY09. Capacity
utilization in most sectors is also far from proving to be an impediment to
growth at present. This risk aversion is also anecdotally evidenced in the
thinning employment opportunities in the organized sector. Barring IT services
and some new-age business, there is hardly any hiring happening across sectors.
Another development that will inspire more productive and rational investments
is the Insolvency and Bankruptcy Code, but this will also act as a deterrent
against companies taking on much debt, thus checking against overleverage, but
also constraining large scale expansions due to risk aversion.
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MAKE IN INDIA IS NOT
BENEFITING SMES: CONGRESS LEADER
The
Make in India has not helped small industries, charged Krishna Byre Gowda, the
Congress-Janata Dal (Secular) alliance candidate for Bengaluru North. Byre
Gowda said that the Make in India programme favours top business tycoons
whereas it has neglected the MSMEs. The state of MSMEs has not improved in the
last five years. He said, The BJP-led Centre talks about Make in India. It is
only on paper, as a mere slogan. There is no understanding on how it has favoured
industrialists. It is important to maintain the balance between the primary,
the secondary and the tertiary sectors, he added. The development must take
place in all the sectors such as industrial, and agricultural. This will result
in a strengthened economic system in the country, he mentioned. He said that it
has failed to develop the garment industry, capable of creating employment
opportunities on a large scale. As a result, the opportunity has been taken by
Bangladesh. Our industrialists have invested in Bangladesh, Gowda said. Demonetization
too has affected the sectors. More than 35 lakh people lost their job due to
demonetization, he said.
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EGGS, POTATO ON THE
MENU AS BSE, NSE TURN AGGRESSIVE IN COMMODITY FUTURES
Stock
exchanges, which were thus far competing among themselves in the financial
markets space, are now turning aggressive in commodity derivatives as well. Within
a matter of six months, they are now looking at several untapped opportunities
in agri-commodities, while planning to enter non-agri commodities, such as
metal contracts as well. NSE is exploring 8-10 new agri-commodities including
eggs, potato, tur and urad. According to sources, potato may come first, as the
exchange has established cold storage and other ecosystems. Egg is still at the
exploration stage. BSE is exploring around 15 agri commodities including
ethanol, tea and coffee. Majority of contracts that these exchanges are looking
at are in agri and are not traded on any other online derivative exchange in
India. Ethanol futures have takers with sugar mills increasing production, but
the regulator has to first permit the product. So far, NSE has not been able to
do much in terms of volume, while BSE has seen good interest in its agri
contracts. Egg is an interesting item for futures, but is quite perishable.
However, some big poultry firms and large retails chains would prefer to hedge
their requirements with egg futures. A source close aware of the development
said, The regulator is insisting on making egg futures settled in delivery. He
said that contract specifications will be crucial for success of of the
product, which has vibrant spot market. Poultries can sell in their future
produce and big retail chains, traders who have access to cold storages to
stock egg powder, and other product makers would be buyers in futures once the
contract is actually launched.
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BOND RALLY IN INDIA
SOON FACES ANOTHER HEADWIND: MONSOON SEASON
Predictions
for below-average rain by a private forecast earlier this month has raised the
specter of increasing food costs combining with higher oil prices, even as the
state-run weather office Monday said the monsoon is likely to be in the lower
end of the normal range. That risk may stay the hand of the Reserve Bank of
India from adding to two rate cuts this year even though economic growth is
weakening, according to ICICI Bank Ltd. Yields of the nation’s most-traded 2028
bonds have advanced by 12 basis points since the central bank on April 4
disappointed traders by retaining a neutral policy stance. June rate-cut
expectations have been unwound and a cut is now being priced much later in the
year, partially because of the uncertainty due to monsoons, B. Prasanna, said.
The full impact of monsoon rain on inflation will not be known by June and the
RBI is understandably always fearful of sharp spikes in inflation.
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UPIS OUTSCORE WALLETS
ÀS KYC NORMS, GOOGLE PAY TILT SCALES
The
volume of Unified Payments Interface (UPI)-based transactions grew to nearly
twice that of transactions made through mobile wallets in February, showed data
released by the National Payments Corporation of India (NPCI) and Reserve Bank
of India (RBI). With 674 million transactions worth Rs 1.07 lakh crore during
February, UPI stood head and shoulders above mobile wallets, which together
clocked 345 million transactions worth Rs 14,279 crore during the same month. As
UPI trotted out a 293% year-on-year (y-o-y) growth rate for the month, mobile
wallet transactions managed to grow only by about 11% y-o-y. While transaction
data for wallets is unavailable for March 2019, UPI volumes nudged the 800-million
mark last month. On the other hand, wallets have been struggling to make it to
400 million transactions. The two channels had volumes of 406 million and 324
million, respectively, in that month. Industry executives say that the new
‘know your customer’ (KYC) guidelines brought in by RBI that came into force in
March 2018 have led to many users abandoning wallets. According to payment
gateway provider Razorpay, 62% of all UPI payments in 2018 came through Google
Pay, followed by PhonePe (11.9%) and Paytm (9.7%). The growth in UPI has
generally been synonymous with a decline in the number of wallet transactions,
Harshil Mathur, said.
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NESTLE INDIA TO SEEK
SHAREHOLDERS’ NOD EVERY FIVE YEARS ON ROYALTY TO PARENT FIRM
Nestle
India has decided to seek shareholders approval every five years on the issue
of payment of royalty to its parent company after receiving feedback from
investors and proxy advisory firms. The FMCG major, currently pays royalty at
the rate of 4.5 per cent of the net sales to Societe des Produits Nestle SA. Nestle
India spokesperson said, We received feedback from our shareholders and other
stakeholders on the resolution pertaining to royalty payment and as a
responsible corporate citizen with high standards of corporate governance
modified the resolution. Though the General Licensing Agreements (GLA’s) are
reviewed periodically by the Audit Committee, the resolution has been modified
to provide for shareholder approval every five years in accordance with
applicable laws and regulations, the statement added. The resolution does not
propose any revision in rates of royalty payment, the company said.
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JSPL REFUTES ALLEGATIONS
OF NOT DISCLOSING INFO ON AUSTRALIAN MINES TO INVESTORS
Jindal
Steel and Power Ltd (JSPL) Tuesday refuted allegations of not reporting to the
investors issues related to its mines in Australia and termed the charges as
false facts. Arun Kumar Jagatramka erstwhile promoter of Gujarat NRE Coke Ltd,
has made an extremely shallow attempt by writing a flimsy defamatory piece and
the allegations made are incorrect and frivolous in its entirety and hence not
to be believed, JSPL said in a BSE filing. The company further informed the
exchange that it is already into litigation with GNCL and it is saddening to
see that Jagatramka is resorting to insinuate the public at large with false
fact and accusations in response to the litigations. The company said this is in
response to a clarification sought from the exchange with reference to a media
report, 'JSPL not disclosing closure of Australian mines to investors: Gujarat
NRE ex-promoter to SEBI'.
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ADB COMMITTED
HIGHEST-EVER $3 BILLION IN SOVEREIGN LOANS TO INDIA IN 2018
ADB
committed to provide USD 3 billion in sovereign loans to India in 2018, the
highest level of assistance since sovereign operations began in the country in
1986, said the annual report of multilateral lending agency. In all, the Asian
Development Bank (ADB), owned by 68 member countries, committed a total of USD
3.88 billion, including sovereign loans and co-financing during the year ended
December 2018. The demand for ADB assistance continued to grow in 2018. New
commitments included USD 21.6 billion in loans, grants and investments from
ADB’s own resources, exceeding the target of USD 19.71 billion and up 10 per
cent from 2017, said the report released on Tuesday. Private sector operations
reached USD 3.14 billion, a 37 per cent increase from 2017, which is 14.5 per
cent of ADB’s overall commitment. ADB also successfully mobilised USD 14
billion in co-financing from bilateral and multilateral agencies and other
financing partners, including USD 7.17 billion in co-financing from ADB’s
private sector operations. In India, ADB committed USD 3 billion in sovereign
loans in 2018, the highest level of assistance since sovereign operations began
in the country, the report said. The report also noted that in India, ADB
provided a USD 100-million loan to Ostro Kutch Wind, a renewable energy company
owned by investment funds under the management of Actis Capital, for
constructing and operating a 250-megawatt wind power project in Gujarat. ADB
continued to deliver on its climate commitments in 2018 with USD 3.6 billion in
financing approved. ADB is on target to double its annual climate financing to
USD 6 billion in approvals by 2020, the report said.
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RIDING ON GROWING
SMARTPHONE PENETRATION, DIGITAL SPEND BY POLITICAL PARTIES MAY DOUBLE
Online
advertising expenditure by political parties is likely to double to Rs 400-500
crore this Lok Sabha election compared to 2014, riding on the growing
smartphone penetration and cheaper Internet packs, experts said. The Bharatiya
Janata Party (BJP) leads the pack in advertising spend in the digital space,
they said. The total advertising expenditure on election campaigns could be
between Rs 2,500-3,000 crore in the 2019 general elections, said Ashish Bhasin.
Of this, ad spends on the social media and other digital platforms could be
around Rs 500 crore, Bhasin, who is also the company’s chairman and CEO-India,
told PTI. According to Google’s Political Advertising Transparency Report, the
total spend on its various digital segments surpassed Rs 86,311,600 since
February 19 this year. A similar report by Facebook showed such expenditure at
Rs 121,845,456 for 61,248 ads.
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INDIAN FIRMS SEE GREAT
VALUE IN DATA, 47% ALREADY MONETISING IT: DELL STUDY
With
data becoming a mainstream conversation, more and more businesses in India
realise the importance of leveraging it for better outcomes. A recent study has
found that 93 per cent of the businesses in India see the potential value of
data and 47 per cent of the businesses are monetising it We are at 47 per cent,
versus the global average of 36 per cent and APJ (Asia Pacific Japan) of 35 per
cent. Most of these (Indian) organisations also realise that they need to have
the right kind of tools and technologies to make themselves competitive, said
Ripu Bajwa. In India, leaders in data protection increased from one per cent in
2016 to 30 per cent in 2018. Whereas, data protection adopters increased from
12 per cent in 2016 to 60 per cent in 2018, the survey found. As many as 32 per
cent believe that their data protection solutions will meet all future
challenges, compared with 16 per cent globally.
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SOCIAL MEDIA
INTERMEDIARIES WORKING WITH ECI TO ENSURE FAIR & TRANSPARENT ELECTION:
IAMAI
The
social media intermediary members of the Internet and Mobile Association of
India (IAMAI) are committed to supporting the Election Commission of India
(ECI) in holding free and fair elections in India To this end, the 48 hour
'silence period' is very critical and participants to the Voluntary Code of
Ethics for General Election 2019 have operationalized their respective
notification mechanisms, IAMAI said. IAMAI said the platforms have conducted
training sessions with the ECI appointed nodal officers, to report potentially
unlawful content for expeditious redressal. IAMAI has said that it will
continue to provide support to the ECI throughout the election period to
improve the integrity and transparency of the electoral process. The
association said its members are committed to ensuring transparency in regards
to paid political advertisement by maintaining a repository of political
advertisement with information such as the sponsor, expenditure and targeted
reach of such content in an aggregated manner. Participants have built the
technology to upload MCMC certification. Participants have also committed to
taking action on paid advertisements violating MCMC certification requirement
under notification by the ECI.
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APPLE AND QUALCOMM
SETTLE ROYALTY DISPUTE WITH NEW PATENT AGREEMENT
Apple
Inc and Qualcomm Inc on Tuesday settled their royalty dispute, reaching an
agreement on global patent license and chipset supply. The settlement includes
a payment from Apple to Qualcomm. Apple had alleged that Qualcomm's patent
practices were an illegal move to maintain a monopoly on the market for premium
modem chips that connect smart phones to wireless data networks. Qualcomm in
turn had said Apple used its heft in the electronics business to wrongly order
contract factories such as Hon Hai Precision Co Ltd's Foxconn to withhold
royalty payments from Qualcomm that Apple had historically reimbursed to the
factories.
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24/7 NEWS, SOCIAL MEDIA
REDUCING OUR ATTENTION SPAN: STUDY
The
'fear of missing out', keeping up to date on social media, and 24/7 cycle of
breaking news is narrowing our collective attention span, a study has warned. The
research, showed this effect occurs not only on social media but also across
diverse domains including books, web searches, movie popularity, and internet
trends. The negative effects of social media and a hectic news cycle on our
attention span has been an on-going discussion in recent years -- but there has
been a lack of empirical data supporting claims of a 'social acceleration'. Sociologists
and psychologists have warned of an emerging crisis stemming from FOMO -- or
the 'fear of missing out' -- keeping up to date on social media, and breaking
news coming at us 24/7. When looking into the global daily top 50 hashtags on
Twitter, the scientists found that peaks became increasingly steep and
frequent: In 2013 a hashtag stayed in the top 50 for an average of 17.5 hours.
This gradually decreases to 11.9 hours in 2016. This means that content is
increasing in volume, which exhausts our attention and our urge for 'newness'
causes us to collectively switch between topics more rapidly, said
Lorenz-Spreen.
#For Source of Information copy and paste the heading in google.
Thanks & Regards,
CS Meetesh Shiroya
Thanks & Regards,
CS Meetesh Shiroya
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