Brew-Up Ideas Winning Entry- The Need for Central Banks to Work Together

The Need for Central Banks to Work Together

Author: Priya Jain(Fore School of Management)

Past trends have shown a pattern of steady lowered interest rates being followed by the major central banks around the globe, indicating expansionary monetary policy. This can provide a short term relief in the manner of a boosting economic growth rate, however it could also be the reason for an impending financial crisis.

The slightest reduction in interest rates can help boost exports of a nation, but this not only weakens the currency but also puts pressure on the financial sector of that country. Chronic low rates may also cause people to worry about their future retirement and thus induce them to save more which goes starkly against the original purpose of the monetary stimulus. It might create an environment which reduces demand, followed by weakened economic growth.

This situation considered at a worldwide level, draws a gloomy and worrying picture. No single country has the power to enable the world to move away from this trap. So what can be done? The necessary inspiration can be drawn from the economic concept of Traveler’s Dilemma.


A group of travelers is returning home with identical pottery purchased during the trip. However, they find that it has been damaged in transit and demand compensation for the same. The manager of the airline, in order to find the right amount to be compensated, asks all of them to write down the price ranging from $2 to $100 – without interacting with each other. This can give us two scenarios which have been explained below:

On the face of it, this may seem easy, as all the travelers can write $100 and receive that amount as a compensation. But consider this, if all write $100 and one of them writes $99, he will get $99+$2 (the reward), i.e., $101, whereas the rest will get $99-$2 (the penalty), i.e. $97. This traveler realizes that maybe someone else has already written $99, so I better make it $98. But thinking maybe someone else has already done that he considers making it $97 and the process goes on. In the end, trapped by this rationale, everyone ends up writing, and receiving $2.So how is this related to the situation faced by the banks and lowered interest rates?

Banks have been lowering rates and this has been paving the road to global economic recovery, but soon this will be the root cause of a financial crisis. Similar to the traveler’s dilemma, banks gain by keeping the interest rates low, but if this is followed by all banks collectively, it leads to an inevitable trap. Which brings us to the need for central banks to work together taking into account the concept of altruism and drawing motivation from the moral of Traveler’s Dilemma which shows us how acting in one’s own interest is not always the best policy and can often, if not always, leave us with non-optimal results.



Brew-Up Ideas Winning Entry: Bitcoin- Can it be replacement for fiat currency?

Bitcoin – Can it be replacement for fiat currency?

Authors: Chetan Kothavade and Tushar Gupta(MDI Gurgaon)


Today’s fast paced world is quite adjustable to the rapid changes happening around it. From fire to an artificial but intelligent robot, we have come a long way and have become quite adept at exploring and experiencing new things. The age old process of ‘transaction’ has not been any different and has experienced quite substantial changes over its course of 8000 years. Today, in the age of digitalization, there is considerable interest among people if the existing system of transaction can take a fillip and enter into the realm of cryptocurrencies.

Brief history of fiat: 

The meaning of the Latin word ‘fiat’ means “It shall be”. In simple terms, fiat currency is not backed by any commodity (like gold) but shall be valid by government’s declaration. It came into initiation in 1971 after the then US president Richard Nixon, announced unilaterally that United States would no longer trade dollar for gold and the new currency would be backed by “faith and credit” of the US government.

As currencies of other countries were linked to the US dollar up untill 1971 (under the Bretton Woods system), these countries de-facto adopted the fiat currency system. Today, almost all countries have adopted it. One of the primary reasons to severe links with gold was that the government wanted to keep its unemployment rates in check. But, linkage with gold obstructed the supply of more money into the system. It was believed that pumping more money would generate economic activity and help resolve the problem.

Effects of fiat:

Immediately after the introduction of the fiat currency, there was rise in inflation as US government started printing money. But, the US economy (and so the world economy at large) started facing a peculiar problem called Stagflation due to the rising oil prices and the persistent high rates of unemployment. This phenomenon baffled economists and scholars with the Keynesian bend of mind. Moving to fiat for expansionary growth as well as for removing the economic-slum did not seem to work as planned. Ultimately, it was the raising of the interest rates during the mid-1980s that corrected the economy.

The inter-linkage of the global financial systems during the 2007-08 sub-prime loan crisis again made the world economy to undergo a deflationary phase. It was again the Quantitative Easing scheme which helped the big banks to stay afloat and avoid a complete collapse. Quantitative easing in simple terms really means “creating money” and providing it to the banks to steady their balance sheets. The interest rates were also kept very low to attract more investments. Today, the US Federal reserve has increased its balance sheet to $4.4 trillion from $870 billion in 2007.

We can observe from the above examples that, every time there was a crisis, governments monetary policy handling has helped cool down situation. Although monetary policy seems to be a positive tool in the hands of the governments for general well-fare of its public, it is exactly what irks the supporters of a decentralized monetary system. They believe that controlling money supply gives too much power to a too small number of individuals. It is to be noted that Reserve banks (responsible for creating money) are not entirely under the ambit of the governments. Thus, at any moment, creation of money for economic expansion, bail-outs etc. simply can increase the circulation of money in the economy thereby leading to inflation. It is common belief among these groups that inflation is nothing but ‘hidden tax’ to the general public, as the purchasing power of the money in hand is simply reduced by inflation.

Economies continuously creating money

During crisis situations, there have been examples where governments have reduced money supply in the economy and imposed sanctions on withdrawals of money on its citizens from their own bank accounts. Greek can be considered a great example of this. Banks there provided negative interest rates on deposits. Additionally, ATMs allow a withdrawal of only 45 euros per account per day. The pensions have taken a hit. At home, the recently introduced Financial Resolution and Deposit Insurance Bill includes the bail-in clause where-in depositors might lose their hard-earned money if ever the banks fail.

Thus, it is this substantial control of government on monetary policy that is seen by some in a distasteful manner rather than just the problems of money printing and inflation. These people eventually want that the general public be empowered and have more control on their own money. This is where “Bitcoins” take an entry.


We all might be well aware by now that bitcoin is a form of digital currency, whose concept was published in a paper by someone called Satoshi Nakamoto in 2009. With the help of bitcoins, people can carry out transactions like remittances and online shopping without requiring an intermediary (peer-to-peer) to aid them. It is regarded as highly secure mode for transaction which involves fairly complex mathematics at the core of its functioning. The maximum number of bitcoins in circulation will be at the most 21 million and all of the bitcoins are speculated to get mined (created) by 2140. A bitcoin can be divided up to 8 decimal places.

Advantages of bitcoin:

A bitcoin ticks all the boxes for it to be called money. A basic difference between definition of money and currency is that apart from being fungible, divisible, durable, portable and a unit of account it is also a store of value. A bitcoin is only generated after considerable amount of work is done on solving a math problem successfully. Thus, unlike fiat currency bitcoin has an intrinsic value. Another advantage is that being limited in quantity (max 21 million), usage of bitcoins will keep aggregate prices in check. But, the greatest benefit of bitcoins to users is the decentralized way in which transactions take place. Everybody has the information of every transaction, and the journey of a particular item can be tracked from its origination to current user. Thus, manipulating the prices as well as the encrypted information regarding the transactions is almost impossible. For transmitting say a certain amount overseas banks charge remittance up to 10 % of transactions, but through bitcoins this can be done for free. With heavy penetration and adoption, bitcoin can even help people not having access to any financial services in and around their vicinity to transact in a secure way. No wonder, bitcoin evangelists are travelling places to the spread the propaganda on bitcoins.

Disadvantages of bitcoins:

The selling of illicit items by sites like Silk Road, bitinstant etc. through the medium of bitcoins are famous examples of how the black market can misuse the anonymity and security factor of bitcoins to carry out their activities. One major concern is the ‘storage’ of bitcoins.  Currently, it is regarded highly unsafe to store your bitcoins online. Users are literally advised to store their bitcoins on hard drives. But, someday, hard drives can crash. It is important to note that once these bitcoins are lost, they cannot be regained. Thus, the number of bitcoins in circulation can decrease considerably. This brings us to another aspect of bitcoin – bitcoins being limited in supply, can be deflationary in the long run. This will be a cause of serious concern, if we were to move into complete adoption of bitcoins as people will hoard more coins and spend less as their value increases.

Currently, the usage is quite complex and transaction settlements are slow. The Indian government has not yet provided legal status to cryptocurrencies. The volatile nature of its prices is another cause of concern. Its value has rose 4 times since last two months, giving it a nature of a stock more than a currency. Some argue that bitcoin can face the same fate as Tulips in 17th century (Tulip mania) due to the similarity in their price structure over years as shown below.

Can it really replace fiat?   

Year spans of different monetary systems – What’s next?

At present, bitcoin are a buzz due to their rising values as compared to dollars. One of the speculation is that the value of bitcoin will stabilize once it equals the amount of dollar value currently present. But, what after it takes over? Is it compatible to survive on its own? A bitcoin standard closely resembles a gold standard. And history shows, gold standards do falter after a specific time. Will governments allow its unregulated usage? To what extent and how, a government body is going to intervene in its functioning (especially in the coin mining area) is a question as the whole point of bitcoin is – no third party regulation.

The current fiat system seems to have survived the longest of all monetary systems (in its 40th year now) and seems to be holding good. Of course there have been open and shut cases of money laundering and funding of illegal activities by banks. Fractional reserve banking system can be a valid threat to depositors as the current money creation spree can make banks have more cavalier approach to lending. Hence, we do need decentralized cryptocurrencies as a way for banks to be more accountable and competitive.  The two systems of currencies can co-exist. Currently banks charge 2-3 % per transactions to merchants. As mining of bitcoins becomes more expensive (complexity of math problems increases with number of coins mined), data miners might as well charge a certain percentage as transaction fees. Thus, it is also important to keep the bitcoin system in check. Along with bitcoins, other cryptocurrencies like Ethereum, Litcoin, Ripple and Dash are also gaining traction. They are creating their own niche in terms of services offered. In conclusion, I believe that cryptocurrencies are here to stay and a peaceful co-existence of fiat and cryptocurrencies likely looks to be the scenario for the near future.

Brew-Up Ideas Winning Entry- Great power comes with great responsibility: Rating upgradation by Moody

Great power comes with great responsibility: Rating upgradation by Moody

Author: Rohit Mallimadugula (SIBM Pune)

French writer Voltaire once said “With great power comes great responsibility”, and rightly so. The context in this case being the rating upgradation of India by Moody’s from Baa3 to Baa2, an upgrade which took 14 years. The question which arises now is why did it take 14 years for this incident to take place. The important factors that should be taken into account to understand this upgrade are change in the political scenario of the country over the years, macroeconomic factors like inflation, exports and imports, and ease of doing business in India and last but not the least GST. From 2004-14, India was having a government formed by UPA(United Progressive Alliance)and Prime Minister Mr.Manmohan Singh. During that phase India’s demography was undergoing a structural change with 65% of its population coming under the category of being less than 35 years old. For development and growth of the country during that decade two of the most essential factors were education and employment. For education, UPA(United Progressive Alliance) had initiated Right to education which failed to deliver on quality and coming to employment, its performance on the job front was abysmal. In the 10 years of their governance, they had created only about 15 million jobs where the government prior to that created 58 million jobs from 1999-2005.

Inflation  in 2004 was 3.78% when the UPA reign started and was 5.86% in 2014. During these years there were some years where the inflation reached double digits like 14.97% in 2009, which shows that the government was unable to maintain a standard rate whereas the inflation in the recent years has been much more stable with 2.19% in 2017. Though there was economic growth in the country during the UPA reign with rise in GDP, FDI and Exports, this growth was hindered by corruption and scams like Coalgate and  2G  which made India holistically unworthy of upgradation in the rating by Moody’s.

The current government i.e. NDA (National Democratic Alliance) which is led by our honourable Prime Minister Mr. Narendra Modi and chairperson of the party Mr. Amit Shah were able to bring in some changes into the system which made Moody’s change their mindset on India. One of the important factors have been that the party have been principally driven by Mr. Modi to reduce corruption and improve employment in the country. To establish his principles into the system, the first big step was demonetization of currency which created a havoc in the country for about a month since its inception but over the course of time it had reduced the amount of black money in the economy. Moody’s believe that GST, demonetization, UID, direct benefit and new monetary policy system have strengthened economy. GST, I believe is one of the major talking points as it has had a direct impact on FDI and exports, as now exporting becomes cheaper due to the reduction in No. of indirect taxes into one GST  which in turn reduces the cost of logistics and supply chain, the same reason which contributes to the improvement of DBI rank of India and hence increase in FDI .Now, among BRICS nations, India stands higher than Brazil, Russia, and South Africa but lower than China (who stands 5 notches higher at A1). Due to this, cost of borrowings for corporate and banks will come down. In its former rating of Baa3, the range for cost of borrowing was 4.3% and 9.3%. With the new rating, India entered the club of countries like Spain, Italy, Philippines and the cost of borrowing decreased to 1.5% to 4.9%.

Its impact on the government spending is that this upgradation is going to put an upward pressure on Rupee( impact of too much of FDI) which is already being said overvalued. Exporters might not be happy with this. Moody’s has already warned that a huge amount of fiscal deficit would put negative pressure on rating so this will force the government to maintain the center fiscal deficit at 3.2% and combined fiscal deficit of center and state at 6.4%. There is utmost urgency in terms of external vulnerability as the oil prices is on a rise which might affect the import and in turn the fiscal deficit is affected. In a nutshell, the Moody’s rating is seen to positive in financial term but it has increased the burden and restricted the Government to maintain this level.

It has also emphasized the importance of banking system due to which the recapitalization of Rs.2.11 trillion has been allocated to the Public Sector Banks (PSB’s) over the course of 2 years for helping the banks improve its Capital Adequacy Ratio(CAR) and lending capacity. For better rating, India must concentrate in reducing the stressed assets in banks which will happen only if there is a proper system in  place and there is no political interference in the system. India can improve its rating if it continues to stay on the path of fiscal consolidation and control its debt. According to Moody’s  India uses 68 percent of  its GDP to cover its debt whereas it is a median of 44% for a country with Baa rating. So this is factor to be aware of as increase in debt would damage the chance of further upgradation. The current long term challenge though is job creation. If the services and the industrial sectors expands at a faster rate it will help reduce unemployment to a large extent. Stressing on more institutional reforms and implementation of key pending reforms in the areas of  land and  labour laws will help India in getting an upgrade by Moody’s. But the current political situation does not allow Mr.Modi  to use his political capital in undertaking tough and  unpopular reforms like relaxation of land acquisition rules and flexiblity in the labour law regulations.

I would conclude that though there is a plenty of development and reforms required, there is also a lot to cheer for India right now, given the fact that Modi’s government must follow similar lines in the future so that it highlight’s the growing potential in India which would in turn increase employment, FDI and FII. Consistently doing this over the years would help India enormously in upgrading its rating and competing with countries like China and become a force to reckon with.


Newsletter: 20th-26th November 2017



Bond yield falls 15 bps, most in a year, as RBI scraps open market sale plan

Indian 10-year bond yield dropped most in a year on Monday after the Reserve Bank of India (RBI) scrapped plans to sell bonds worth Rs10,000 crore via open market operations (OMOs). The 10-year bond yield was down 15.8 basis points at 6.891%—its biggest slide since November 2016.

“Other than global headwinds and domestic fiscal worries, the reason for higher yield was the large amount of OMO sales in last few months, which increased overall bond supply and also soaked up liquidity. With this cancellation of OMO, it seems that the market might have taken signal that this will be the end of the OMO sales” said Soumyajit Niyogi associate director of India Ratings & Research.

Card transactions soar 84% in September 2017 to Rs 74,090 crore: Report

The debit and credit card transactions have jumped to Rs 74,090 crore in September this year, up a hefty 84 per cent as compared to the same month last year when it stood at Rs 40,130 crore, thanks to the government push for non-cash payments, says a study.

Government Seeks Rs 13,000 Crore Surplus From RBI After Dividend Falls Short 
The dividend payout of central public sector enterprises (CPSEs) in 2017-18 will be at least 25 per cent (Rs.170 billion) higher than the budgeted estimate of Rs.675.3 billion, as per a report in Financial Express. This will provide additional resources to compensate for the expected shortfall in Centre’s revenue receipts. The RBI has transferred just Rs.306 billion as dividend for the current year.

12% & 18% GST slabs may be merged, 28% for demerit goods: Arvind Subramanian

The government may combine the 12 per cent and 18 per cent slabs for goods and services tax (GST) into one in the near future and reserve the 28 per cent rate only for demerit goods, said chief economic adviser Arvind Subramanian.

While India will never move to a single GST rate, over time there would be a “poor man’s” rate (0 per cent and 5 per cent), a “core” rate (the 12 per cent-18 per cent combination), and the demerit rate (28 per cent), Subramanian said.

Cabinet approves setting up of 15th Finance Commission

The Union cabinet has approved constitution of the Fifteenth Finance Commission that will decide the formula for sharing of taxes between the Centre and states for five years starting April 1, 2020.

April-Oct trade deficit soars 60% to $88 billion: DBS report

The trade deficit has ballooned to $88 billion between April and October, up 60% from the comparable period a year ago due to weak exports and a sharp rise in imports, says a report.

“The problem is two-fold; weak export growth of 9% year-on-year, coupled with a sharp 23% rise in imports during the April-October of this fiscal year, taking the overall trade deficit to $88 billion, which is up 60% year-on-year,” Singaporean brokerage DBS said a report today.

Rs 600 billion revenue deficit, oil price spike can undo the goods in economy

The past fortnight has been quite eventful in the context of its medium-term impact on the currency and money markets in India. Moody’s upgraded India’s credit rating from Baa3 to Baa2 with stable outlook. The immediate impact has been observed in the renewed interest in the capital markets where the indices have recovered their earlier losses that had crept in due to profit booking, economic recovery in developed markets leading to minor flight of capital and sudden rise in crude oil prices.

India GDP growth rate in Q2 likely at 6.2-6.3 pct: NITI Aayog VC Rajiv Kumar

The Budget for 2018-19 should focus on the social sector and an attempt should be made to provide universal health insurance cover to citizens. In an interview with Prasanta Sahu and Saurabh Kumar, NITI Aayog vice-chairman Rajiv Kumar says the think-tank can play a role similar to the GST Council for the social sector to generate better outcomes.

S&P holds India rating, government says it’s standard, not poor

Standard & Poor’s retained its sovereign rating for India at BBB- with a stable outlook, dashing hopes of another upgrade after rival Moody’s last week lifted its rating by a notch after a gap of nearly 14 years. The government chose to focus on the positives, with railway minister Piyush Goyal calling it a “very satisfying” report that endorsed the administration’s reforms agenda.

OMCs to fast-track upgrade of refineries to BS-VI standard

To meet the national capital region (NCR)’s demand for cleaner fuel by April 2018, oil marketing companies (OMCs) have decided to hasten the process of upgrading their refineries, two senior officials from the refiners said.

The refiners would be investing more than Rs80,000 crore in upgrading petrol and diesel quality to meet BS-VI specifications by 2020. India has already implemented Euro-III across the country and Euro-IV in major cities.

Banks squeeze India firms harder in $207 billion bad loan fight

Indian lenders are stepping up efforts to have safeguards in place as they struggle to clean up $207 billion of stressed loans in the system, targeting new borrowers and older ones that are tapping the market again. The Reserve Bank of India has asked banks to resolve 50 of the biggest defaulters within a year.


IndusInd Bank, shareholders to invest Rs 205 crore in Satin Creditcare network

Asian Development Bank-backed microfinance lender Satin Creditcare Network is in the process of raising Rs 205 crore from private sector lender IndusInd Bank, as well as from existing overseas shareholders, in a combination of equity and fixed income securities to augment capital base and support growth.

Uber to partner with Mahindra for electric vehicles in India

Automaker Mahindra & Mahindra has entered into a partnership with Uber India to deploy electric vehicles on the US cab aggregator’s platform, beginning with a few hundred vehicles in Delhi and Hyderabad in February next year before expanding to other cities in the country.

Jio reports positive AGR of Rs 4,270 crore for the first time in September quarter 

Jio reports positive AGR of Rs 4,270 crore for the first time in September quarter transaction at an early stage with Western Digital Corp, Toshiba’s joint venture partner.

BSE to auction investment limits for Rs 4,000-cr govt bonds

Leading stock exchange BSE on Friday said it will auction investment limits on Monday, enabling foreign investors to purchase government bonds nearly worth Rs 4,000 crore.

The auction will be conducted on BSE’s ‘ebidexchange’ platform from 1530 hrs to 1730 hrs, after the close of market hours, the exchange said in a circular.

FM To Launch SBI’s First Comprehensive Digital Service Platform, YONO

State Bank of India (SBI) is all set to launch India’s first comprehensive digital service platform, YONO, which stands for ‘You Only Need One’.

An integrated omni-channel digital platform that offers just about everything related to financial services and lifestyle products, YONO will be launched by Union Finance Minister Arun Jaitley in New Delhi on November 24.

RBI allows strong ARCs hold more than 26% in sick units 
In a move that would allow asset reconstruction companies (ARCs) taking management control of sick companies, the Reserve Bank of India has removed the 26% cap on shareholding after conversion of the debt of the borrowing firm under reconstruction into equity.

In a note to ARCs sent late Thursday, the central bank said ARCs that maintain Rs 100 crore net owned fund consistently and follow good corporate governance would be exempted from the 26% shareholding limit prescribed in 2014.

Oil, gas PSU mergers exempt from CCI approval 
Merger and acquisition deals involving public sector oil and gas companies have been exempted from seeking the Competition Commission approval, says a notification. The corporate affairs ministry’s decision to exempt such deals from the ambit of the Competition Commission of India (CCI) comes against the backdrop of the proposed consolidation and stake purchases among state-owned oil and gas companies.



China signs deal to build new nuclear reactor in Pakistan: WNN

China has signed a deal to build a third large nuclear reactor in Pakistan, which wants to get a fifth of its electricity from nuclear by 2030.

World Nuclear News, supported by industry lobby World Nuclear Association, reported that China National Nuclear Corporation (CNNC) and the Pakistan Atomic Energy Commission (PAEC) have signed a cooperation agreement for the construction of a 1,000 megawatt (MW) HPR1000 “Hualong One” reactor at the Chashma nuclear power plant in Punjab.

Apple files patent for foldable iPhone: Report

Following earlier reports that Apple was working with LG on a future foldable iPhone, the company has filed a patent application for a yet-unnamed foldable device that can be “opened and closed like a book”.

China imports no iron ore, lead, coal from North Korea in October

China imported no iron ore, lead or coal from North Korea in October as sanctions against the isolated nation came into force, while the world’s second-largest economy didn’t export any diesel, gasoline or corn, data showed on Friday.

The data represents the first whole month since the latest UN penalties came into force on Sept. 5, banning Pyongyang from selling coal, iron ore, lead, lead ore and seafood abroad.

Jobs growth in eurozone at ‘highest since dotcom era’
Jobs are being created across the 19-country eurozone at a pace not seen since the turn of the millennium thanks to stronger economic growth, particularly in a resurgent France, according to a closely watched survey Thursday.
In another sign that a robust economic recovery across the single currency bloc is gathering momentum, financial information company IHS Markit said its purchasing managers’ index – a broad gauge of business activity across manufacturing and services – rose to 57.5 points in November from 56 the previous month.


US crude tops 2-yr high as Keystone outage hits supply

US oil prices hit their highest levels in more than two years on Friday after the continued shutdown of a key pipeline running from Canada to the United States was expected to reduce supply into a major storage facility.

US West Texas Intermediate crude futures hit $58.92 a barrel, their highest since July 2015, before easing to trade up 79 cents on the day at $58.81.



Understanding India’s Twin Balance Sheet Problem: Challenges and the way forward


Based on the banking panel moderated by eminent journalist and author Tamal Bandyopadhyay at Gnosis ’17, XLRI’s 8th Annual Finance Symposium consisting of:

Ananth Narayan G. – MD and Regional Head of Financial Markets, Standard Chartered Bank

Jayesh Mehta – MD and Country Treasurer, Bank of America N. A.

Pradeep Khanna – MD and Head of Trading, HSBC India

Madan Sabnavis – Chief Economist, CARE Ratings

Sameer Narang – Chief Economist, Bank of Baroda

The twin balance sheet problem covers two aspects:

  1. Bad assets: The banking system comprises of 9.5 trillion rupees of bad assets.
  2. Overleveraged companies: Debt accumulation on companies is very high and thus they are unable to pay interest payments on loans.

The banking sector in our country is in a conundrum as close to 70% of the banking system is ill. The credit growth has fallen from 15% to 5% over the years. Some stimuli such as Insolvency and bankruptcy code, a 2.11 trillion rupees recapitalisation plan and public sector bank consolidation efforts will help in NPA (Non-Performing Assets) resolution process getting fast tracked but effects can only be seen in the long run.

The Indian banking system should have been prepared for such problems as they have been recurring frequently. There should be stronger pressure on banks to maintain credit quality. A perception has been formed that the public sector banks have contributed a lot to the systemic failure. It is often overlooked that private sector banks have not classified NPA in the right manner. If such failures are occurring regularly as they have been, then the credit delivery system should be made better.

The problem of the banking sector is twofold. First is the lack of effective risk management in the system. Second is the low rate of risk mitigation in India. 45% of lending done by banks is under stress. The resolution process should turn the cycle for hard assets like steel and infrastructure and such that they are converted into performing assets in the future. By 2018, there is a possibility that the whole NPA resolution process will either be resolved or written off completely.

The problem started when in comparison to high bank debt the equity was too small. Another issue is of cash flow gold-plating. If the cash flow from the project is for example, 100 crore rupees then it is gold-plated to make it worth 120 crore rupees. This contributes towards increase in bank debt. There is a need for proper skillsets to analyse if projects are correctly evaluated or not. The firms under stress should be bought out by somebody else at a smaller cost.

The NCLT (National Company Law Tribunal) route to resolution will be effective. The IBC code which ensures creditor-control and establishes a level playing field for both secured and unsecured creditors, will there-by reduce separation between them and reduce implementation problems for recovery.

Out of the 9.6 trillion rupees of stressed assets, recapitalisation will ensure that 35% of provisioning is done which is not enough. After the news of recapitalisation, the markets celebrated majorly due to the government finally acknowledging the problem. To accelerate reforms, long term funding needs to be channelized into the infrastructure sector. The monetary policy framework needs to be reviewed; a more financially stable framework is needed for it to be effective. The prolonged resolution judgement process also needs to be rectified. Currently, the judiciary system required 270 days for complete IBC resolution.

Banks need to look for new markets such as affordable home segment, MSMEs, SMEs etc. There a lot of governance issues in both private and public sector which can only be resolved by effective changes in board.

Aashna Pallav


Newsletter: 13th November-19th November , 2017



Moody’s has raised India`s credit rating from the lowest investment grade of Baa3 to Baa2, and changed the outlook from stable to positive

It`s the first upgrade of India`s rating in 14 years. Cost of borrowings for corporates and banks is set to come down following the upgradation. The timing of this upgradation is critical as the election is around the corner and opposition is criticising moves like GST and Demonetisation.
Centre approves Rs. 10,000 Crore for 107 irrigation projects in Maharashtra: Fadnavis

The amount will be received in next two years. The completion of the projects will ensure largescale irrigation facilities in the districts of Vidarbha and Marathwada, known for suicides by farmers, besides in North and Western Maharashtra.
India should consider bad banks to deal with stressed asset: Asian Bankers Association Chairman
India’s Insolvency and Bankruptcy Code is not the only way to deal with stressed borrowers and the government should look at other options, including the formation of a bad bank, Asian Bankers Association Chairman Daniel Wu said. “I understand that the government may want to inject more capital in these banks, but from my personal experience, that is going to be ineffective,” he said.

Confident to go past direct tax collection target of Rs 9.80 Lakh Crore: CBDT 
“The collections have been buoyant and very good. I am very happy to say that the net growth of collections is about 15.2 percent at the moment and I would say that the individual assesses under the advance tax category have responded very well. The advance tax of the individual assesses rose by 30 percent, which is quite heartening for the department,” CBDT Chairman Sushil Chandra said. He added that the department had witnessed an overall increase of 20 percent in returns filed post demonetisation and hence, the “tax will be much more”.

Delhi to get BS-VI fuel two years early to tackle the pollution 
Bharat Stage VI fuel will now be available with effect from 1 April 2018 in Delhi, the petroleum ministry said, and added that it is examining the possibility of introducing BS-VI fuel across the national capital region by 1 April 2019. A 2016 report by Indian Institute of Technology, Kanpur, showed that cars and jeeps emit less than 10% of particulate matter, while trucks are the bigger culprits. A big contributor to Delhi’s air pollution is road dust, which accounts for about 35% of tiny particles known as PM 2.5 in the air, followed by vehicles at 25%. Other contributors are domestic cooking, power plants and industries.

India increases import duties on edible oil as domestic price plunge below MSP
India has increased import duties on various edible oils ranging between 60% to even 100% on some oils like crude palm oil. The new rates are as under: Import duty on crude soyabean oil 30% (17.5), soyabean refined oil 30% (20%), palm crude oil 30% (15%).


India, EU hold discussions on proposed free trade agreement  

Senior officials of India and European Union (EU) held discussions on the long-stalled free trade pact and expressed willingness to address issues in a time-bound manner, the department of commerce said. Launched in June 2007, the negotiations for the proposed BTIA have witnessed many hurdles with both sides having major differences on key issues like intellectual property rights, duty cut in automobile and spirits, and liberal visa regime.
Number of high risk PPP highway projects fall: CRISIL 
RBI gets ready to train its guns on 50 more stressed accounts .The proportion of under-construction, high-risk highway projects has reduced significantly from 53% two years back to 21%. Today, only 2,000 km of the 9,400 km of highway projects under construction awarded by the NHAI on a build operate-transfer (BOT) basis, are at high risk. Apart from reduced risk, policy measures by the NHAI also resulted in a doubling of highway construction from 12 km per day in fiscal 2015 to 23 km in fiscal 2017. The pace is expected to quicken to 40 Km in near-term.
The regulator may set a March 31 deadline for banks to find a resolution on these or commence bankruptcy proceedings against the borrowers. These accounts are in addition to the 41 that the central bank has already identified, including several against which banks have now started bankruptcy proceedings.
Power, oil companies to remain publicly owned: FM Jaitley 

The statement comes on the back of the government’s bullish efforts to meet the current financial year’s disinvestment target of over Rs 72,500 crore. This includes Rs 46,500 crore from a minority stake sale, Rs 15,000 crore from strategic disinvestment and Rs 11,000 crore from the listing of PSU insurance companies. Total disinvestment proceeds in the current financial year, as of November 1, were Rs 30,185.67 crore. The government is looking to raise close to Rs 9,000 crore by selling 10 per cent equity stake each in state-run companies BHEL and Oil India Ltd.
Indian army builds defence against outdated technology 

In a move that could unlock defence contracts of more than Rs 25,000 crore, the government is in the process of amending its defence procurement manual, which will enable the armed forces to procure the latest tech in a speedy manner.


Moody’s withdraws RCom’s corporate family rating on “default” 

Moody’s Investors Service has withdrawn debt-laden Reliance Communications corporate family rating, citing a missed scheduled payment related to the company s dollar bond. “The semi-annual interest payment on its USD 300 million senior secured bond was due on November 6, 2017. According to the indenture, the company had a seven-day grace period, after which an event of default would occur,” Moody s said.


Airtel receives CCI nod for Tata Tele’s consumer business buy

After CCI’s nod, approvals are needed from the SEBI, National Company Law Tribunal (NCLT), shareholders and depart of telecom (DOT). As part of the October agreement, Airtel will absorb Tata consumer mobile business operations across the country in nineteen circles — 17 under TTSL and 2 under TTML. These circles represent bulk of India’s population and customer base. Besides customers, the merger will also enable Bharti Airtel to further bolster its strong spectrum foot-print with the addition of 178.5 MHz spectrum (of which 71.3 MHz is liberalised) in the 850, 1800 and 2100 MHz bands.


Vodafone pegs $5 billion valuation for 42% stake in Indus towers

The country’s second-largest operator, which saw a 15.8% drop to Rs 19,002 crore in its service revenue and a 39.2% fall in its operating profit to Rs 4,075 crore in the first half of the financial year amid intense price competition, is seeing a “quicker-than-expected progress” on its equal merger with No. 3 telco Idea Cellular, which it expects to be closed by September 2018. Vodafone India’s ARPU fell to Rs 132 in the second quarter from Rs 141 in the first quarter.
Social spend of PSU’s down 10% in 2016-17

The total social spend of 49 PSUs went down to Rs 2,630 crore from Rs 2,935 crore spent by 46 PSUs in 2015-16, the data showed. As per CSR rules, which came into force in April 2014, companies subject to the provisions of the law have to mandatorily invest 2% of their net profit in CSR projects. Companies with net worth of Rs 500 crore and above or revenue of Rs 1,000 crore and above or net profit of Rs 5 crore and above have to spend 2% of average net profits of the past three year. Education saw the maximum spends, followed by healthcare.
Toshiba, Tech Mahindra partner to build smart factories
This partnership aims to leverage strengths of both sides and offer a one stop solution for manufacturer customers with the latest IoT technologies and system integration capabilities from both sides, a company statement said. Toshiba Digital Solutions developed Meister series, a suite of smart manufacturing solutions, by leveraging manufacturing expertise built up through experience in manufacturing businesses ranging from semiconductors to social infrastructure, it added.

Bain-Piramal, Aion among 4 in race to buy 58% stake in GTL Infrastructure 

The four bidders include Bain-Piramal joint venture asset reconstruction firm, Aion Capital, a foreign telecom company, and a lesser-known investment firm Beam Investments. There are 16 lenders to GTL Infra  including SBI, IDBI, United Bank of India and Dena Bank  and they are expecting Rs 10,000 crore from the stake sale. GTL Infra had gone for strategic debt reconstruction (SDR) in 2016. Under the scheme, the lenders had converted their debt of about Rs 8,500 crore into equity and have been looking to sell it.
Alibaba seeks CCI nod to buy stake in BigBasket 
“The proposed combination relates to the acquisition and purchase of shares of Supermarket Grocery Supplies by Alibaba Singapore,” as per a CCI notice. The notice, however, did not spell out the details of the proposed investment, including the quantum of stake and the financial value of the deal. The company has raised over USD 200 million from investors including Abraaj Group, Bessemer Venture Partners, Growthstory, Helion Venture Partners, IFC and Sands Capital. According to a report by Franchise India, the online grocery market is expected to be Rs 2.7 billion market by 2018-19.
Larsen & Toubro Infotech to acquire Syncordis SA

The transaction, which is expected to close within 6-8 weeks, will help LTI expand its core banking implementation capability. The enterprise value payable for the acquisition of 100 per cent share capital of Syncordis SA and Syncordis India is 14.65 million euros and 0.35 million euros, respectively on a cash-free, debt-free basis and is subject to customary working capital adjustments. It added that additionally, an amount of 13.50 million euros may be payable over a period of 4-5 years, contingent on the performance of the target entity.




North Korea sentences Trump to death for insulting Kim Jong-un 
North Korea’s state media has criticised Donald trump for insulting leader Kim Jong-Un, saying the US president deserved the death penalty and calling him a coward for cancelling a visit to the inter-Korean border. The visit was part of a marathon five-nation Asia tour by the US president aimed largely at galvanising regional opposition to the North’s nuclear weapons ambitions. Since becoming president, Trump has engaged in an escalating war of words with Kim Jong-un, trading personal insults and threats of military strikes and raising concerns about an outbreak of hostilities.

Russia again vetoes bid to renew Syria gas attacks probe 

Russia cast a second veto in as many days at the UN Security Council on Friday to block the renewal of a UN-led investigation to identify the perpetrators of chemical weapons attacks in Syria. A draft resolution put forward by Japan would have extended the Joint Investigative Mechanism (JIM) for 30 days to allow time for negotiations on a wider compromise. But Russia used its veto power to prevent adoption after 12 council members voted in favour of the measure. China abstained. It was the 11th time that Russia has used its veto power to stop council action targeting its ally Syria.

Governments keep global climate deal on track despite US pullout 

Almost 200 nations kept a 2015 global agreement to tackle climate change on track. Delegates agreed to launch a process in 2018 to start reviewing existing plans to limit greenhouse gas emissions as part of a long-term effort to ratchet up ambition. The Paris pact aims to limit a rise in average world temperatures to “well below” two degrees Celsius (3.6 degrees Fahrenheit) above pre-industrial times, ideally 1.5 (5.4F) to limit more droughts, floods, heatwaves and rising sea levels. But existing policies are on track to cause a rise of about three degrees (5.4F) by 2100. The “Talanoa Dialogue” would be a step towards tighter policies.

Calls mount in Zimbabwe’s ruling party for Mugabe to resign 

Eight out of the ten provincial committees of Zimbabwe’s ruling ZANU-PF party called on President Robert Mugabe to step down, a media report said. The call came after the military takeover of the government earlier this week. The provinces accused Mugabe of allowing the formation of cabals and called for the renunciation of the G40 faction allegedly led by First Lady Grace Mugabe, Xinhua news agency quoted the state broadcaster as reporting on Friday.

Newsletter: 30th October- 5th November, 2017


India to be high middle income economy by 2047: World Bank CEO  

Days after it gave India a 30 place jump in its ease of doing business ranking  the Goods and Services Tax (GST) reforms push by the government will catapult the country to high middle income economy in 30 years. It credited India’s “extraordinary” achievement of quadrupling of per capita income to reforms taken in last three decades.

October services PMI at four-month high 

India’s services activity rose to a four-month high in October on the back of stronger demand, a private survey showed. The Nikkei India Services Purchasing Managers’ Index (PMI) rose to 51.7 in October, the highest since June, from 50.7 in September


India to become largest milk producer in 2026: Report

The OECD-FAO Agricultural Outlook 2017-2026 said the world’s population will increase from 7.3 to 8.2 billion over the course of the next decade with India and Sub-Saharan Africa accounting for 56 per cent of total population growth. The report said that given their strong population growth, India and Sub-Saharan Africa will also drive a large share of global demand.


Retail inflation for industrial workers hits 2.89% in September 

Retail inflation for industrial workers slid to 2.89 per cent in September, from 4.14 per cent in the same month last year, on account of cheaper food items. “Year-on-year inflation measured by monthly CPI-IW (Consumer Price Index-Industrial Workers) stood at 2.89 per cent for September 2017 compared to 2.52 per cent for the previous month (August) and 4.14 per cent during the corresponding month of the previous year.
Manufacturing slows in October as GST rollout hits flow of new orders 

Manufacturing activity slowed in October following a drop in new orders, a private survey said, but firms hired workers at a high pace to service greater volumes of outstanding business. The survey attributed the dampened demand to the negative effects of the roll out of goods and services tax (GST).
Huge biz opportunities for textile, apparel in UAE: FIEO 

Exporters body FIEO today said huge business opportunities exist in the UAE for domestic textile and apparel sector. It said in a 112-member business delegation from the sector is participating in the ‘International Apparel & Textile Fair’ (November 1-3) in Dubai. India is UAE’s largest trading partner and export to the Emirates in 2016 touched $32 billion


Made in China swamps PM Modi’s plans as backlash spreads to streets 

Two-way trade statistics tell the tale. India’s deficit with China has ballooned nine-fold over a decade to $49 billion in 2016 as China’s manufacturing edge stacks the odds against Prime Minister Narendra Modi’s three-year-old ‘Make-in-India’ program.

French companies take up business challenges with government officials

A French delegation comprising representatives from sectors such as defence and aerospace, renewable energy, food processing and retail held discussions with Indian officials on challenges faced by French companies in the country.
PAN not needed for cash sale of agri produce up to Rs 2 lakh/day 

The revenue department today said farmers do not need to quote PAN for cash sale of their produce up to Rs 2 lakh a day. The Central Board of Direct Taxes (CBDT) said in response to representations from stakeholders regarding the applicability of provisions of Income-tax Act, 1961 to cash sale of agricultural produce by the cultivators/ agriculturists. .
India is the world’s leading ‘banana’ republic

The advent of steam engine made possible the transfer of this perishable fruit to the American market. The commercial popularity of banana resulted in the formation of United Fruit Company in 1899. With the support of the American government, the company went on to create several politically unstable countries — the ‘banana republics’ of Honduras and Guatemala, etc. Today, India is the biggest producer of bananas, not these small, tropical countries


Reliance Communications to shut voice calls from next month
Loss-making telecom operator Reliance Communications will shut down voice call service from December 1 and its customers can move to other networks by the end of the year, as per direction issued by telecom regulator Trai
Dividend-paying banks most likely to receive recap funds 

The government is planning its recapitalisation programme of public sector banks (PSBs) in such a manner that funds will be allocated largely to those lenders that will pay large dividends. The objective is to ensure that the capital infusion will be neutral on the fiscal deficit.
Rs 47-crore LPG subsidy deposited in Airtel bank accounts ‘opened without consent’ 

More than 23 lakh customers have received cooking gas subsidy of Rs 47 crore in their respective AirtelBSE -0.32 % Bank accounts they don’t seem to have opened, prompting the government to intervene even as the top mobile operator denied any wrongdoing.
India Posts bank to have nationwide operations by April 

India Posts Payments Bank services are expected to be available across the country by April, Payments Bank branches will be opened across 650 districts by around April. All these branches will be linked to rural post offices. This will be largest banking network in the country
ONGC to explore all ways to raise output: Chairman 

Timely project completion, attrition at senior level and low gas prices will be the key challenges for ONGCBSE 1.78 %, which is seeking to raise its oil production by a quarter and double gas output in five years with Rs 92,000 crore worth of projects underway
Brigade Group plans Rs 3,000 crore investments in 3 years 

Brigade Group is planning to invest Rs 3,000 crore over the next three years to expand its commercial property portfolio by 8 million sq ft. The Bengaluru-based property developer has office projects spread over 12 million sq ft at present. A top executive said the group will be building the assets mainly in southern India.
Torrent Pharma walks away with Unichem’s domestic business for Rs 3,600 crore 

Torrent Pharma is acquiring the domestic business of Unichem Laboratories for Rs 3,600 crore in a deal that will make the Ahmedabad-based company among the country’s top five drug makers. The deal will also give Torrent access to 120 brands of Unichem in India and Nepal besides a manufacturing unit in Sikkim.
Hero MotoCorp October sales dip 5% at 6,31,105 units 

Country’s largest two-wheeler maker Hero MotoCorp’s -1.13 % today reported sales of 6, 31,105 units in October, down 4.83 per cent, over the same month previous year. The company had sold 6, 63,153 units in October last year

Lebanese prime minister resigns, saying his life in danger 

Lebanese Prime Minister Saad al-Hariri resigned on Saturday, saying in a televised broadcast he sensed a plot to target his life and criticising Iran and its Lebanese ally Hezbollah.
US official: Rohingya should be returned safely to Myanmar 

Rohingya Muslims should be returned safely to their homes in Myanmar after they were forced to flee the country amid a brutal crackdown by Myanmar security forces, the US would continue to support Rohingya who have fled to Bangladesh because of persecution in Myanmar’s Rakhine state.
Ousted Catalan leader calls for united front for independence 

Ousted Catalan leader Carles Puigdemont called on Saturday for a united political front in the Dec. 21 election to continue the drive for independence from Spain and to protest the imprisonment of former members of the regional government

APEC summit: Recognition of Vietnam’s economic achievements and challenges ahead 

All eyes are on the APEC Summit on Nov 11-12 in Vietnam — one of the fastest growing economies – amid the global economic slowdown. Vietnam as the host country, has attempted to harmonise interests, seek common ground to bridge differences, and promote co-operation among APEC members.
Territorial losses suffered by Islamic State in Syria, Iraq 

With new losses, the Islamic State group has been driven from more than 96 percent of the large parts of Iraq and Syria it once held, crushing its goal of establishing a “caliphate” in the region. Syrian President Bashar Assad’s military on Friday announced the capture of the eastern Syrian city of Deir el-Zour, while Iraqi Prime Minister Haider al-Abadi proclaimed victory in retaking the town of Qaim on the border, the militants’ last significant urban area in Iraq.


Newsletter 23rd-29th October, 2017



Modi booster gives stock investors Rs 2 lakh crore in a day; banks contribute half 


The Modi government’s booster dose for domestic banks and the infrastructure sector gave stocks a big lift on Wednesday, helping the benchmark Sensex its highest daily gain in five months in absolute terms, while the Nifty logged the best show in five months. Both the indices scaled new lifetime peaks – Sensex at 33,042.50 and Nifty at 10,295.35.


Cash ban, GST disruptions to cool India’s GDP growth to a 4-year low


India’s economy will likely grow at its slowest pace in four years this fiscal year, a Reuters poll showed, as a currency ban and the new goods and services tax (GST) have disrupted business activity and dampened consumer demand. Asia’s third-largest economy will grow at 6.7 percent in the fiscal year ending March 2018


India’s pension system showing steady improvement: Report 
India has been ranked 28 out of the 30 countries under review in the Melbourne Mercer Global Pension Index 2017, which was topped by Denmark for the sixth straight year. According to the index, India’s overall index value has increased from 43.4 in 2016 to 44.9 in 2017 and its pension system is found to be more sustainable than that of Poland, Germany, France, Japan, Italy, Austria, Brazil, China and Argentina.


5 exclusive tourism zones under PPP mode on cards
The Centre will soon set up five exclusive tourism zones in public-private partnership mode wherein the state governments will offer land in excess of 1,000 acres and also bring in private players for development. This is expected to alleviate the shortage of hotel rooms in the country, besides generating employment and boosting the economy.


Centre releases Rs 8,698 crore as GST compensation to states
The centre has released Rs 8,698 crore to states to compensate them for revenue loss following GST implementation. All states barring Rajasthan and Arunachal Pradesh, have been given compensation for the first two months (July-August) after Goods and Services Tax rollout


‘Bank recap may make fiscal deficit target hard to achieve’ 

The massive Rs 2.11 lakh crore capital infusions in public sector banks may make the 3.2 per cent fiscal deficit target for 2017-18 difficult to achieve if two-thirds of the planned recapitalisation bonds are issued by the government

India, UAE complement each other in areas of business growth 

India and the UAE complement each other in areas of business growth and the private sectors are ready to support the two governments The UAE is the 10th largest FDI source market for India with cumulative FDI reaching USD 4.76 billion in the last 17 years from April 2000 till March 2017.

India’s pepper exports may hit a 5-year low this fiscal

India’s black pepper exports could hit a five-year low in the current fiscal amid consistently higher prices that have forced buyers to shun Indian shipments in favour of those from Vietnam and Brazil. Exports shrunk 13% year-on-year to 3,900 tonnes in the quarter ended June. In FY17, pepper exports had plunged 37% to 17,600 tonnes.

Centre hikes MSP of wheat, pulses, mustard


The central government on Tuesday increased the Minimum Support Price (MSP) for Rabi crops for 2017-18 to encourage farmers to bring a major area under their cultivation.
Government to take action after ICAR probe on spurious cotton seeds 
Agri-research body ICAR is looking into the matter of sale of spurious cotton seeds and action will be taken based on its report  Sale of unapproved and fake cotton seeds has been reported from cotton growing states like Telangana, Andhra Pradesh, Karnataka and Maharashtra.

Vijay Mallya to step down from United Breweries board, name successor
Vijay Mallya has been persuaded to step down from the United Breweries Ltd BSE 5.04 % (UBL) board and he will propose a successor following a Securities and Exchange Board of India (Sebi) order that’s made him ineligible to be director of any listed company


IDFC-Shriram merger plan may have to factor in government’s stake dilution concerns

The proposed merger of Shriram Capital and its associate companies with IDFC and its subsidiary IDFC Bank has got bogged down as the two sides have not been able to arrive at a mutually agreeable alternate structure following the dissatisfaction of the government and other IDFC shareholders over terms


Shaken, not stirred: Foreign Investors bond with Infosys in times of turmoil


Some foreign portfolio investors in Infosys BSE -0.01 % increased their stakes in the July-September quarter, the period during which Vishal Sikka quit as CEO and cofounder Nandan Nilekani returned as non-executive chairman. Infosys, which is due to report second-quarter results on Tuesday, is expected to cut its full-year growth guidance, analysts said. The company is also in the process of buying back shares worth Rs 13,000 crore as it looks to return cash to investors


ICICI Bank net plunges on NPA surge, muted stake sale in Lombard JV 


India’s largest private sector lender ICICI Bank BSE 0.57 %’s net profit plunged 34% as bad loans rose and gains from stake sales at insurance subsidiary were muted compared with the year-ago quarter. While bad loans jumped in line with the industry trend, the bank said there was no divergence between its accounts and the Reserve Bank of India’s assessment.
Pratt & Whitney engine glitches may lead to cost overruns for IndiGo, GoAir 
Glitches in Pratt & Whitney’s engines used by IndiGo and GoAir on their new Airbus A320neo planes have led to as many as 64 of them having to be removed for repair and replacement by the two airlines in the last year and a half on 32 aircraft, said people aware of the matter. That, according to experts, is more than six times the usual number, leading to hundreds of cancelled flights when the problem was at its height


Google loses 6 year battle, must pay tax on remittances made to Google Ireland 

The Indian tax office gained an upper hand in its six-year-long battle with Google India in a ruling that would set a precedence for some of the other multinational companies. The rift owes its origin to the arrangement and fund flow between Google India and the global giant’s office in Ireland — a jurisdiction known for its lax tax rules.


Tata stocks ride Chandra-yaan


Some key Tata Group stocks have outperformed Sensex and Nifty in the one year since the ouster of Cyrus Mistry as the Tata Sons chief, underlining investor support for steps taken by the N Chandrasekaran-led team. Rising commodity prices, share buybacks and successful restructuring in Tata Teleservices and Tata Steel BSE -0.44 % have given investors’ confidence that the group may be able to put aside past troubles.


RCom may shut its wireless business in next 30 days, employees put on notice period 


Top 5 Gainers NSE                                                                                  Top 5 Gainers SENSEX

Signet Industries Industl. Invest Trust The United Nilgiri PNB RattanIndia Infra SBI ICICI bank Adani Ports & Special Larsen & Toubro ONGC
70.7% 65.56% 56% 51% 45% 28.23% 16.72% 7.56% 7.23% 6.62%


Reliance Communications (RCom) is shutting major parts of its wireless business in the next 30 days to cut widening losses, blaming, among other factors, the “creative destruction” wrought by Reliance Jio’s free voice services. The shakeout in the sector has led to just three big non-state companies remaining in the fray, aside from the government-run telcos

Spain takes over Catalonia, fires defiant separatist leaders 
Spain has taken direct control of Catalonia and sacked the region’s defiant separatist government by publishing special measures overnight in an official gazette online. Prime Minister Mariano Rajoy, who now replaces Catalan President Carles Puigdemont as the top decision-maker in the north    eastern region, has dissolved the regional parliament and called a new regional election on December 21.


Activists fear more crackdowns in Xi Jinping’s ‘new era’ 


When President Xi Jinping was handed a second term at the helm of the Communist Party this week, he said China had entered a “new era”. But human rights activists expect the same old crackdowns. Xi has increasingly stifled civil society since taking office in 2012, targeting everyone from activists to human rights lawyers and teachers to celebrity gossip bloggers


House backs $4T budget, faces challenges on Donald Trump tax plan

Republicans powered a $4 trillion budget through the House on Thursday by a razor-thin margin, a close vote underscoring the difficulties that lie ahead in delivering President Donald Trump’s promise to cuts taxes.

Pakistani court issues arrest warrant for ex-premier Nawaz Sharif 
A Pakistani judge has issued an arrest warrant for former Prime Minister Nawaz Sharif after he failed to appear in court to face corruption charges. Judge Mohammad Bashir on Thursday also rejected a request from Sharif’s lawyer that he be exempted from court appearances in order to remain in London where his ailing wife is getting medical treatment.


Myanmar’s Rohingya crisis ‘spinning out of control’ – aid officials
A combination of escalating violence, worsening health and poor access to conflict zones in Myanmar’s Rakhine state is fueling a humanitarian crisis that is “spinning out of control”, More than 600,000 Rohingya Muslims have crossed the border to neighbouring Bangladesh since Aug. 25, when coordinated Rohingya insurgent attacks on security posts sparked a ferocious counter-offensive by the Myanmar army.


Twitter to ban ads from Russia Today, Sputnik 


“Excellence is a continuous process”


-APJ Abdul Kalam


Top 5 Losers NSE                                                                                    Top Losers SENSEX

Gyscoal Alloys Arcotech Ltd TV Vision Sri Adhikari Brother Parabolic Drugs Lupin Kotak Mahindra Bank HDFC Tata Motors DVR Hindustan Unniliver
23.83% 23.20% 22.38% 22.30% 21.59% 4.91% 4.18% 3.29% 2.83% 0.19%


Twitter says it will ban ads from Russia Today and Sputnik, two state-sponsored Russian news outlets that the U.S.

Newsletter: 16th-22nd October, 2017


GST: Anti-profiteering screening panel set up in MP, Chhattisgarh

The Customs, Central Excise and Service Tax Commissionerate has constituted a state-level ‘anti-profiteering screening committee’ in Madhya Pradesh and Chhattisgarh to ensure that the benefits of GST reduction are passed on to the consumers

You can now use GSTN offline to file tax returns

The GST Network has rolled out an offline, Excel-based utility to make the process of filing returns simpler.
Taxpayers can download the offline utility from the GSTN portal under the download section, according to a GST statement. After filling in the data, they need to upload the GSTR 3B form on the GST portal. They will have to then preview the form, complete formalities like submit, offset the liability and file the GSTR-3B Return using digital signature or an electronic verification code.

India’s oil imports hit record high in September – trade

Top 5 Gainers NSE                                                                                  Top 5 Gainers BSE

Optiemus Infra Parabolic Drugs IFB Agro Shekhawati Poly Karma Energy   Optiemus Infra. Polo Queen Industrial IFB Agro. Welcast Steels Provestment Svcs
87.11% 50.33% 49.69% 42.86% 40.85%   88.15% 73.84% 49.53% 47.32% 46.75%


The world’s third-biggest oil importer shipped in 4.2 percent more oil last month than a year earlier and about 19 percent more than in the previous month, ship-tracking data from industry sources and Thomson Reuters Analytics showed.“There was heavy maintenance at some refineries in July-August. All those refineries have come online, so naturally refiners will have to boost purchases to meet local demand.”  FGE.Maintenance turnaround at some refineries led to Indian Oil Corp deferring the shutdown of its 300,000 bpd coastal Paradip refinery to April-March. During the first nine months of the year India’s oil imports rose 1.8 percent to about 4.4 million bpd, with most supplies coming from the Middle East, followed by Africa and Latin America.

Led by commercial papers, credit offtake clips 14.6% to Rs 80.09 trillion in September

Driven by commercial papers, the record low credit growth, it seems, has turned around finally, as outstanding credit in the system till the end of September clipped at 14.6 per cent to Rs 80.09 trillion, against 13.6 per cent a year ago, according to Reserve Bank and Sebi data.
At a paltry 5.08 per cent, fiscal 2017 was the worst year in over six decades for bank credit-lowest since fiscal 1953 when it grew at a much lower 1.8 per cent

India stiffens restrictions on trade with North Korea

India has put in place a stricter regime for trade with North Korea in line with the restrictions imposed by the United Nations. The Directorate General of Foreign Trade (DGFT) has come out with a notification to widen the prohibition on direct or indirect import and export from/to North Korea.”The direct or on direct or indirect supply, sale, transfer or export of specified items to North Korea is prohibited,” it said. The items include condensates and natural gas liquids, refined petroleum products and crude oil.


Milestone Capital looks to raise up to Rs 1,000 crore

Private equity firm Milestone Capital Advisors is looking to raise up to Rs 1,000 crore through a logistics fund to invest in warehousing and industrial assets. The fund will target developing around 6 million sq ft of integrated logistics parks across the Mumbai Metropolitan Region, Pune, Delhi-NCR, Chennai, Kolkata, Bangalore, Hyderabad and Ahmedabad.

Hero Group set to buy wind energy assets of Bhilwara

The Hero Group is close to acquiring almost the entire wind energy portfolio of the LNJ Bhilwara Group, helping the buyer emerge as one of the biggest players in the rapidly growing sector that has seen large M&A deals in recent months.
The acquisition, on the verge of being finalised, follows several deals since last year in the sector, involving the Tatas, Sun Edison, CLP Holdings and other companies.

Mahindra ties up with HDFC Cap for affordable housing platform

Top 5 Losers NSE                                                                                    Top 5 Losers BSE

KSS Ltd Stampede Cap Arcotech Ltd TV Vision Ltd. Usher Agro   Arcotech Ltd Siddharth Education  Sri Adhikari Ashirwad Cap Usher Agro
33.33% 32.62% 23.17% 18.16% 17.32%   24.88% 21.23% 18.34% 18.30% 17.91%


Realty developer Mahindra Lifespace Developers has partnered HDFC Capital Advisors-managed HDFC Capital Affordable Real Estate Fund-1 to form a platform focused on the development of affordable housing projects in India.
The platform will have total investment commitment of Rs 500 crore over 3 years.

Reliance Jio tariff revision gives Airtel, Vodafone, Idea room for price hike

Reliance Jio Infocomm’s decision to raise effective prices of most 4G tariff plans by 15-20% from October 19 will allow incumbents Bharti Airtel, Vodafone India and Idea Cellular to consider price hikes after several quarters of chasing the newcomer’s disruptive rates, analysts say.

Maruti’s new Dzire crosses 1 lakh sales mark in over 5 months

Maruti Suzuki India today said the all-new version of its compact sedan Dzire has crossed one lakh unit sales milestone in just five and half months of launch. The third generation Dzire was launched in May 2017 and has become the fastest to clock one lakh unit sales mark, Maruti Suzuki India (MSI) said in a statement. The new Dzire takes the brand to a whole new level an authentic sedan designed for the young, aspirational and indulgence seeking Indian customer.

GM India’s Hardeep Singh Brar set to join Volkswagen as head of sales

Hardeep Singh Brar is set to return to Volkswagen India as head of sales, filling a critical post that had been lying vacant for several months. People aware of the development said Brar, who was head of sales at General Motors India, had his contract running till March 31 next year but also had the option of exiting by September 30. He will take up his new role after Diwali, they said.

Arvind Limited signs MoU with Gujarat for Rs 300-crore apparel park

Textile major Arvind Limited today signed an MoU with the Gujarat government to set up a mega apparel park with an investment of Rs 300-crore in Dahegam in Ahmedabad district. The MoU has been signed days after the state government announced its garments and apparel policy, 2017, the company said in a release here. The “mega apparel facility” will be a “first-of-its-kind” which will employ more than 10,000 people, it said.

Sebi bans Grass Root Finance, 13 others from markets

Regulator Sebi has banned Grass Root Finance & Investment Company (India) Ltd and 13 others from the capital markets for raising funds without complying with the public issue norms. A probe by Sebi found that the company had issued equity shares to 9,321 people between 1995-96 and 2006-07 and raised Rs 6.80 crore through such issuance.

End of an era as Hong Kong stock trading floor set to close

Hong Kong’s last remaining stock market floor traders are taking their final orders as the exchange prepares to shut its trading hall, joining other world exchanges in going fully automated. The bourse’s operator, Hong Kong Exchanges & Clearing, says it will close the trading hall by the end of the month and turn the space into a showcase for the city’s financial markets.

Bharti Airtel, Millicom close deal to combine Ghana operations

Telecom operator Bharti Airtel and Millicom International Cellular today announced completion of a deal to combine their operations in Ghana. The deal, executed through their respective subsidiaries, will create Ghana’s second largest mobile operator with nearly 10 million subscribers and USD 300 million in revenue.


Madrid to impose direct rule in Catalonia to quash independence bid

The Spanish government will impose direct rule on Catalonia, firing the regional government and forcing a new election, it said on Saturday, unprecedented steps that brought thousands of pro-independence protesters onto to the streets.

Tillerson lands in Riyadh at start of Gulf, South Asia tour

The chief U.S. diplomat flew into King Salman Air Base a little more than a week after U.S. President Donald Trump unveiled a strategy to contain Iran and compel Tehran to agree to close what he charged are flaws in the multinational 2015 deal designed to prevent Iran developing nuclear weapons.

Billionaire Babis scores big in Czech election

Babis’s ANO movement held an unbeatable 30.04 percent of the vote with 94.4 percent of voting stations having reported — almost three times any other party and giving it a chance to rule with just one partner in a coalition.

China says winter smog battle to have limited impact on economy

“Measures to fight pollution don’t have a big impact on economic growth,” Zhang Yong, vice-chairman of the National Development and Reform Commission, told reporters during a briefing. As many as 28 cities in northern China have vowed to slash industrial output this winter in a bid to cut smog by at least 15 percent and meet politically important air quality targets for this year.

Trump expected to pressure China’s Xi to rein in North Korea: officials

Trump leaves Nov. 3 on a trip that will take him to Japan, South Korea, China, Vietnam and the Philippines. It will be his first tour of Asia since taking power in January and one with a major priority: Preventing the standoff with North Korea from spiraling out of control.

Eastern Libyan central bank launches its own coins made in Russia

Authorities in eastern Libya will circulate their own coins for the first time to ease shortages of money. The new coins, made in Russia, will join Russian-made paper currency that has already been issued in the eastern half of the country. Libya, once one of the richest countries in Africa, has faced a sharp decline in living standards since a 2011 NATO-backed uprising toppled dictator Muammar Gaddafi.

Trump considers Fed’s Powell, economist Taylor to lead central bank

President Donald Trump is considering nominating Federal Reserve Governor Jerome Powell and Stanford University economist John Taylor for the central bank’s top two jobs, in an apparent bid to reassure markets and appease conservatives hungry for change. Under that scenario, either Powell or Taylor would take the reins from Fed Chair Janet Yellen when her term expires in early February, and the other would fill the vice chair position left vacant when Stanley Fischer retired this month.



Newsletter: 9th October- 15th October, 2017


Top 5 Gainers NSE                                                                                  Top 5 Gainers BSE

RKEC Projects Ltd. KSS Ltd. Global Offshore Financial Tech Ravi Kumar Dist   Cadsys( India) Ltd. Next Mediawoks Aarvi Encon Ltd. Oriental Trimex Sterling Bio
74.17% 50% 38.46% 37.95% 34.08%   33.79% 68.14% 29.64% 26.67% 26.09%


IMF favors three structural reforms in India

The IMF has suggested a three- pronged approach for structural reform in India that includes addressing the corporate and banking sector weaknesses, continued fiscal consolidation through revenue measure, and improving the efficiency of labour and product markets.

Agriculture growth likely to be above 3% in FY18: Niti Aayog member

Agricultural growth rate will be more than 3% in 2017-18, according to Ramesh Chand, a member of the government’s premier think-tank Niti Aayog. He said agricultural growth rate in 2016-17 might be revised upwards to 5% from earlier 4.1%.

Direct tax collections jump 16% to Rs 3.86 lakh core in April-September

The government’s net direct tax collections rose 15.8% to Rs 3.86 lakh crore for April-September, buoyed by healthy growth in advance tax mop-up, the finance ministry said. Personal advance tax climbed over 30%, according to provisional data. The net direct tax collections for the first six months of the financial year constituted 39.4% of the budget estimate of Rs 9.8 lakh crore, the finance ministry said.

Exports climb 25.67 per cent in Sept, imports up 18 per cent

India’s merchandise exports rose sharply in September, belying fears of a slump due to disruption and working capital issues brought on by the introduction of the goods and services tax. Exports climbed 25.67 per cent in September, exceeding an 18.1 per cent increase in imports, helping to narrow the trade deficit to $8.98 billion from $9.07 billion in September 2016.

Indo-Bhutan trade infrastructure to have large scale upgradation

To ensure seamless trade of Bhutan with India and other third parties, India is further widening its door for Bhutan. Development and upgradation of new Indo-Bhutan cross border trade routes are expected to give a quantum jump to the commercial strata of economically backward Himalayan foothills region in northern West Bengal .


Banks, foreign companies face tax dept’s heat over GST credit

The tax department has sought explanations from banks and financial institutions, including multinationals, on transitional credit claimed by them in July under the goods and services tax (GST) regime, two people with direct knowledge of the matter said.

Banks need to set aside Rs 3.3 lakh crore as NPA provisioning in FY18

Top 5 Losers NSE                                                                                    Top 5 Losers BSE

Radha Madhav TV Vision Ltd. Sri Adhikari SAB Events & Governance Now Media Ltd. Bharatiya Glo   Ashirwad Cap Radha Madhav Sri Adhikari Bharatiya Glo Suryanagri Fin
22.18% 18.40% 18.37% 18.10% 17.90%   26.92% 22.36% 18.43% 18.39% 18.37%


Banks are likely to need nearly Rs 3.3 lakh crore this fiscal as provisioning for large NPA accounts in the current financial year, said a Crisil report. The report said with the economic value of assets underlying NPAs eroding with time, and resolutions are hard to come by, banks would need to step up on provisioning, mainly for large corporate NPAs. It will facilitate faster clean-up of their balance sheets.

Idea shareholders okay Vodafone merger

Shareholders of Idea Cellular approved the merger of the company’s mobile business with Vodafone, with almost all of the votes going in favour of the alliance. Idea Cellular and Vodafone India have approached the National Company Law Tribunal (NCLT) for a nod, which had earlier ordered the companies to get shareholder approval, before the companies go to the telecom department to get a final approval to the merger.

Flipkart all in on payments, loads $500 million in PhonePe

Online retail major Flipkart has committed $500 million to its payment arm PhonePe, as the Bengaluru-based company prepares to take on Noida-based rival Paytm, which has become the largest mobile wallet player. The first tranche of $180-200 million is expected to come in by December-January, said PhonePe’s chief executive Sameer Nigam. The newly-committed amount adds to the $75-million worth of infusion Flipkart has made in PhonePe since the acquisition.

Airtel-Tata Teleservices deal unchains the bulls

Shares of Bharti Airtel and Tata Teleservices (Maharashtra), the listed unit of Tata Teleservices, surged Friday, a day after India’s biggest telco announced its decision to take over the consumer mobile business of Tata Teleservices. Bharti Airtel rose 7.9% to close at Rs 431.60 on the BSE, while those of Tata Tele (Maharashtra) shot up nearly 10% to close at Rs 4.86.

HSBC names John Flint as next chief executive

HSBC has appointed John Flint as its next chief executive the bank said, sticking with a tradition of promoting company insiders to run the firm. Flint, who currently runs HSBC’s retail and wealth management business, will start in his new role on Feb 21 2018, taking over from current chief executive Stuart Gulliver, who is retiring after seven years in the job.

Google commits $1billion to prepare modern workforce

India-born Google CEO Sundar Pichai has pledged $1 billion in new initiatives to prepare people for the next generation technology jobs. At an event in Pittsburgh, Pichai said Google will spend the money over the next five years to fund grants to non-profits globally, CNET reported.

Tesla fired hundreds of employees in past week

Luxury electric vehicle maker Tesla Inc fired about 400 employees this week, including associates, team leaders and supervisors, a former employee told Reuters. The dismissals were a result of a company-wide annual review, Tesla said in an emailed statement, without confirming the number of employees leaving the company.

Qualcomm asks China to halt manufacture, sale of iPhones

Qualcomm Inc. filed lawsuits in China seeking to ban the sale and manufacture of iPhones in the country, the chipmaker’s biggest shot at Apple Inc. so far in a sprawling and bitter legal fight. The San Diego-based company aims to inflict pain on Apple in the world’s largest market for smartphones and cut off production in a country where most iPhones are made. The product provides almost two-thirds of Apple’s revenue. Qualcomm filed the suits in a Beijing intellectual property court.


France’s Audrey Azoulay wins vote to be next UNESCO chief

UNESCO’s executive board has chosen former French Culture Minister Audrey Azoulay to be the UN cultural agency’s next leader over a Qatari candidate in an unusually heated race overshadowed by Mideast tensions. The US announcement this week that it’s quitting UNESCO rocked the multi-day election and heightened concerns about the agency’s funding and future direction.

Pakistan gets its first Metro, all thanks to China

Pakistan’s first Metro train rolled into Lahore, all thanks to its growing cooperation with China under CPEC, the controversial project of China’s Belt and Road initiative. The first set of coaches and engines were showcased in Lahore under the CPEC project, which comprises a network of railways, roads and pipelines that would connect Pakistan’s port city of Gwadar in the province of Balochistan, with the Chinese city of Kashgar in landlocked Xinjiang Uyghur Autonomous Region.

Trump, Trudeau meet at the White House amid new NAFTA talks

President Donald Trump remained non-committal about the future of the North American Free Trade Agreement as he welcomed Canadian Prime Minister Justin Trudeau to the White House amid simmering disputes over trade between the two North American neighbors. Trudeau joined Trump in the Oval Office at the start of a new round of talks over the North American Free Trade Agreement, which the U.S. president has threatened to withdraw from if he can’t negotiate a better agreement with Canada and Mexico.

China September FDI jumps most in over 2 years as manufacturing, hi-tech boom

Foreign direct investment (FDI) in China rose the most in more than two years in September, likely boosted by strong growth in the country’s manufacturing and hi-tech sectors, the commerce ministry said on Friday. FDI rose 17.3 percent to 70.63 billion yuan ($10.73 billion) in September from a year earlier, compared with a 9.1 percent gain in August, marking its biggest percentage gain since August 2015.

Clinton attacks Trump’s handling of Iran, North Korea

Hillary Clinton says President Donald Trump’s threat to pull out of the Iran nuclear accord is “dangerous,” and she suggests her former campaign opponent is undermining the validity of the United States’ promises to other nations. Trump accused Iran of violating the landmark 2015 accord, blaming the Iranians for a litany of sinister behavior and hitting their main military wing with anti-terror penalties.

US will withdraw from UNESCO over its ‘anti-Israel bias’

The Trump administration announced that it would withdraw from UNESCO, the United Nations cultural organization, after years of the United States distancing itself because of what it saw as the group’s “anti-Israel bias.” “This decision was not taken lightly,” according to a State Department statement. The department also cited “the need for fundamental reform” and “mounting arrears” at the organization.