🍒 RBI likely to maintain status quo for 3rd straight time on inflation concerns : The Reserve Bank is likely to keep the benchmark interest rates unchanged in its next monetary policy review in view of heightened retail inflation which has persistently remained above its comfort level, feel experts. However, with the economic growth continuing to remain in the negative territory for the second consecutive quarter ending September, the central bank is likely to continue with the accommodative monetary stance keeping the hope alive for a rate cut as and when needed. The six-member Monetary Policy Committee (MPC) headed by RBI Governor is scheduled to meet for two days starting December 2. The resolution of the sixth bi-monthly MPC meeting would be announced on December 4. - Business Line
🍒 RBI needs to be a super regulator if corporates are allowed to open banks : The key issue to monitor or prevent camouflaged or connected lending lies with the supervisory powers of the Reserve Bank of India (RBI). The current laws do not provide such powers to the regulator. As evident from the YES Bank case, there is nothing wrong in a bank lending to a particular entity so there is no way RBI inspectors could raise a flag. “The issue here is once you allow the conglomerates then only supervising the banks will not be sufficient,” said SS Mundra, former deputy governor of RBI. According to Mundra, supervision should be done at two levels – one on the non-operative financial holding company level and also on the group level.“You will have to supervise all the activities of the conglomerates. And for that you need a consolidated supervision. Consolidated supervision means if the group has an insurance arm or a broking business – various regulators should be together and there should be one lead regulator. There has to be a format, there has to be a system. That is one,” Mundra who was in-charge of supervision of banks and non-banks as deputy governor said. “The second is, since there will be a group involved, which may not be under the holding company, then supervisory capabilities are needed to know the flow of transactions, that is, from the bank whether it is going to related parties – not only in a direct way, sometimes these things happen indirectly also. So that kind of supervision will have to be maintained,” Mundra added. The existing laws need to be amended to provide those special powers to the Reserve Bank of India. The IGW has said that necessary amendments to the Banking Regulation Act, 1949 would be required, to prevent connected lending. - Deccan Herald
🍒 Madras HC tells DBS Bank to create reserve fund for LVB shareholders : The Madras High Court has asked DBS Bank India (DBIL) to create a reserve fund if it (the court) orders that the Lakshmi Vilas Bank (LVB) shareholders be compensated for the loss they have suffered in the process of amalgamation with DBIL. The court’s Division Bench, consisting of Justice Vineet Kothari and Justice M S Ramesh, on Friday passed an interim order on a writ petition filed by Kolkata-based AUM Capital Market.Senior Counsels P S Raman and Arvind Datar, representing the company, have asked for a stay on the amalgamation of LVB with DBIL. The amalgamation came into effect on November 27. AUM Capital holds a little less than 0.50 per cent in LVB. While refusing to give the stay, the Bench said no prejudicial action by DBIL should be taken against the shareholders of LVB without the court’s permission. - Business Standard.
🍒 ‘MPC likely to keep rates steady’ : The rate-setting Monetary Policy Committee (MPC) is likely to stand pat on the policy repo rate as retail inflation continues to remain sticky above its upper tolerance level of 6 per cent, even as the economy is showing signs of mending from the impact of Covid-19. The MPC, which is scheduled to meet from December 2 to December 4, left the policy repo rate unchanged at 4 per cent in its previous two meetings as retail inflation has been above the tolerance band for several months. Since the outbreak of the pandemic in India in March, the MPC has cut the repo rate cumulatively by 115 basis points in two tranches – from 5.15 per cent to 4.40 per cent on March 27 – and from 4.40 per cent to 4 per cent on May 22. - Business Line
🍒 RTGS payments to be available round the clock starting Dec 1. : In a bid to boost the adoption of digital payments, the Reserve Bank of India has allowed the transfer of funds through Real-Time Gross Settlement (RTGS) round-the-clock, 365 days a year from December 1. Under the current rules, the transfers can be made between 7 am and 6 pm on all working days except for the second and fourth Saturday of the month and on Sundays. - Timesnow.
🍒 Finance Ministry asks PSU general insurers to rationalise branches, other expenses: Sources : The Finance Ministry has asked public sector general insurance firms, especially National Insurance, Oriental Insurance and United India Insurance, to rationalise branches and cut down avoidable expenses to improve their financial health, sources said. Earlier this year, the Union Cabinet decided to halt the merger process of three state-owned general insurance companies due to their weak financial positions. Instead, the government approved fund infusion of ₹12,450 crore to meet regulatory parameters. The Finance Ministry has asked these companies to cut the flab by rationalising branches and rein in other avoidable expenses like guest houses, etc, sources said. Besides, sources said, they have been asked to expand their business through digital medium. - Business Line
🍒 NBFCs planning to seek CRR, SLR breather on net demand, time liabilities : Leading non-bank financial companies (NBFCs) have got cracking on their banking ambitions a week after the Reserve Bank of India’s (RBI’s) internal working group suggested that those with an asset size of Rs 50,000 crore or more may consider converting into a bank. A clutch of four large groups with shadow banks in their fold have held extensive internal consultations and are set to make a formal representation to the banking regulator (which sources said may well be within a fortnight) seeking the grandfathering of reserve norms – the cash reserve ratio (CRR) and statutory liquidity ratio (SLR) in December on their net demand and time liabilities (NDTL). According to highly placed sources, these NBFCs plan to seek exemptions on the CRR and SLR front on their existing NDTL and that these be mandated on the fresh liabilities which would accrue upon conversion into a bank. If permitted, the move will benefit some of the large NBFCs such as HDFC Ltd, Bajaj Finance (held through Bajaj Finserv), Tata Capital, Shriram Capital (which is the holding company for Shriram Transport Finance and Shriram City Union Finance), and Mahindra & Mahindra Financial Services (subsidiary of automobile major, Mahindra & Mahindra). - Business Standard
🍒 IT Dept finds Rs 450 cr undisclosed income during search across four cities : A recent search conducted by the Income Tax (IT) Department's in 16 premises across Chennai, Mumbai, Hyderabad and Cuddalore, resulted in the detection of an undisclosed income of more than Rs 450 crore. The search was conducted in the case of an IT SEZ developer, its ex-director and a "prominent" stainless-steel supplier from Chennai. The Department did not disclose the names. According to the Department, an unaccounted assets worth Rs 100 crore accumulated by the ex-Director and his family members in the past three years were unearthed during the search. Besides, the IT SEZ developer claimed bogus work-in-progress expenses of about Rs 160 crore in an under-construction project, capital expenses of Rs 30 crore on account of bogus consultancy fees in an operational project and inadmissible interest expense of Rs 20 crore. - Business Standard
🍒 IndoStar Capital to exit corporate lending business by Mar 2022, to focus on retail segment : Alternative asset manager Brookfield and private equity player Everstone promoted non-banking finance company IndoStar Capital Finance is looking to fully exit from corporate lending business by March 2022, its executive vice-chairman and chief executive R. Sridhar said. The company has been reducing its corporate book over the last two years, and has brought down the portfolio by close to ₹3,500 crore. "From a portfolio size of ₹6,000 crore in 2018, the corporate book is down to ₹2,500 crore as of date, which is a reduction of around 60% (We have collected ₹3,500 crore). By March 2022, the wholesale and corporate book will become zero," Sridhar told PTI in an interaction. The company will continue to focus on and expand its retail segment, he said. - Live Mint
🍒 Indiabulls Housing Finance sells part of its stake in OakNorth Holdings, raises Rs 93 crore : Indiabulls Housing Finance Ltd (IHFL) on November 29 announced that it had raised approximately Rs 93 crore by selling a portion of its stake in OakNorth Holdings Ltd. "The sale proceeds will be accretive to the regulatory net worth and the CRAR of the company," the mortgage lender said in a regulatory filing. The firm has raised a total of Rs 2,670 crore as fresh equity in the month of September, October, and November 2020 - Rs 683 crore through QIP and Rs 1,987 crore through the sale of a stake in OakNorth - adding to the regulatory equity capital of the company, it added. - moneycontrol.
🍒 EPFO subscribers up 45 lakh in FY21, big indicator of job creation: Apurva Chandra, Labour Secretary : India could look at a minimum contribution of about Rs 1,000 annually from gig workers towards their social security with the balance to be contributed by the platform they are associated with, said labour secretary Apurva Chandra in an interview with ET. Chandra said there was net addition of over 45 lakh Employees Provident Fund Organisation (EPFO) subscribers in the fiscal year so far, an indicator of new employment generation. - economic times
🍒 Big relief for mid-scale companies, government postpones QR code requirements to March end next year : In what is set to give relief to several companies, the government has postponed the requirement of generating QR code under the Goods and Services Tax (GST) framework. The government on Sunday said that it is postponing the requirement to generate and then use QR code for all business to customer (B2C) transactions. Companies would now be required to be prepared with the QR code compliance by March end next year. Abhishek Jain, Tax Partner, EY said, “The Central government has provided the much required relaxation for the businesses by waiving the penalty for non-compliance with QR code requirement till March 2021 for B2C transactions. As many of the industry players were not ready, this waiver would give the requisite time for the industry to be ready for this compliance.” - economic times
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