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India-China trade deficit fell to $5.5 billion in Q1: Govt to Parliament
The trade deficit between India and China in April-June (Q1) of this fiscal year fell to $5.48 billion, compared to $13.1 billion in the corresponding period last year, Parliament was informed on Wednesday. In a written reply, Commerce and Industry Minister Piyush Goyal said the trade between the countries, too, dipped to $16.55 billion in Q1, against $21.42 billion in the same period last year. (BUSINESS STANDARD)
Govt to bring out strategy paper on boosting industrial growth: Goyal
The government is in the process of bringing out a strategy paper on boosting industrial growth which will be a road map for all businesses in the country, Parliament was informed on Wednesday. In a written reply to the Lok Sabha, Commerce and Industry Minister Piyush Goyal said the government is in the process of rationalising the existing central labour laws into four labour codes -- on wages; industrial relations; occupational safety, health and working conditions; and social security by simplifying, amalgamating and rationalising the relevant provisions of the existing central labour laws. The Code on Wages has been approved and notified, he added. "The government is in the process of bringing out a strategy paper on boosting industrial growth which will be a road map for all businesses in the country," he said. (BUSINESS STANDARD)
Manufacturing share in India's GVA down to 15.1% in FY20: Exim Bank study
The share of manufacturing in India’s gross value added declined to 15.1 per cent in 2019-20, from 18.4 per cent in 2010-11 despite the strong and growing private consumption demand in the country, a study published by the Export-Import Bank of India (India Exim Bank). In a webinar on Tuesday, the bank pointed out that recent performance of the manufacturing sector in India is indicative of an underlying inertia, and this weakness has translated into greater dependence on imports to meet the growing domestic demand over the years. India's imports fell by 8 per cent in 2019-20. As a result, the $152.9-billion trade deficit in FY20 was much lower than $176.4 billion in the previous year.(BUSINESS STANDARD)
Garment exports begin to see revival, September fall lowest in 5 months:
After witnessing a sharp decline since April, ready-made garment exports are on a road to revival. In April, exports dropped by around 91.04 per cent in dollar terms, and in August, the fall was 14 per cent. In April, exports fell to $126 million, compared to $1.409 billion in April 2019. In August, exports stood at $1.084 billion, compared to $1.260 billion in the corresponding month of the previous year. Recovery was largely driven by the European Union (EU) markets. With garments seeing demand revival, capacity utilisation has increased to 60-80 per cent. Companies said customers are placing new orders based on the season and the number of stores that opened have globally. E-commerce is also picking up. They expect growth to return by early next year. (BUSINESS STANDARD)
Debt restructuring scheme may soften blow of Covid-19 on books of PSBs:
The debt restructuring scheme is expected to soften the blow of the Covid-19 pandemic on books of public sector banks (PSBs). With years of capital infusion, consolidation and enhancement in monitoring risk management, PSBs are relatively better placed to face challenges. Yet, some of them are likely to need some capital support from the government, in order to absorb shocks, meet regulatory norms, and support business growth. Except for a few, most PSBs face major challenges in raising capital from the market, given the low premium. (BUSINESS STANDARD)
Worries as NPAs under Mudra scheme rise to 5% for public sector banks:
Non-performing assets for loans disbursed by state-owned banks under the Pradhan Mantri Mudra Yojana (PMMY) is on an upward trajectory. Bad loans soared to around 5 per cent of the total disbursed amount in 2019-20, Minister of State for Finance Anurag Thakur informed Parliament earlier this week. NPAs of public sector banks (PSBs) under PMMY stood at 4.9 per cent in 2019-20 — a big jump from 3.8 per cent in 2018-19, and 3.4 per cent in 2017-18. The government launched the Mudra scheme in April 2015 to give unsecured loans of up to Rs 10 lakh to small enterprises. (BUSINESS STANDARD)
Exporters face liquidity crunch with piling GST, MEIS entitlement dues:
At a time when exporters are hit with a slump in global market in the wake of Covid-19, they have to cope with a tedious process of getting GST refunds and the MEIS (merchandise exports from India scheme) entitlements due for the period much before the Rs 2 crore limit was fixed. The piling dues have led to liquidity crunch for exporters, for which they are approaching banks for extension of moratorium. (FINANCIAL EXPRESS)
Cost control: Centre asks autonomous bodies to return idle funds parked in their bank accounts:
The finance ministry has asked all government-funded autonomous bodies (ABs) and ‘grantee institutions’ to return part of the idle funds parked in their bank accounts or held by them as fixed deposits. The move is part of the revenue-starved government’s effort to rebalance the Budget amid a dire need to stimulate the economy. Though a precise estimate of the inflows into the exchequer as a result of the latest move is not immediately available, it will likely help the government garner a “substantial amount of funds”. Many of these institutions have over the years accumulated a lot of unspent funds, of the monies received from the Budget. Budget support to these bodies for FY21 is estimated at Rs 87,825 crore. (FINANCIAL EXPRESS)
Financial status of almost a fifth urban co-operative banks weak: Nirmala Sitharaman
As many as 277 urban co-operative banks (close to a fifth of the total UCBs) have “weak” financial status, finance minister Nirmala Sitharaman told the Lok Sabha on Wednesday. She was explaining the reason for coming out with a Bill to bring urban and multi-state co-operative banks under the central bank’s regulations. The idea was to better protect the interests of depositors and avoid a PMC Bank-like crisis in future. “The financial status of 277 urban cooperative banks is weak; 105 cooperative banks are unable to meet the minimum regulatory capital requirement and 47 banks have net worth in negative,” Sitharaman said. As many as 328 UCBs have gross non-performing asset of more than 15%, she added. The Covid-19 pandemic has hit most of them much harder than the commercial banks. (FINANCIAL EXPRESS)
NBFCs ride out pandemic thanks to record govt stimulus steps even while virus ravages economy:
The health of India’s shadow banks remained resilient in August, suggesting that record stimulus steps by the nation’s authorities are helping the crisis-hit sector ride out the pandemic. Premiums on non-bank lenders’ bonds narrowed to a two-year low, according to an index of AAA rated five-year notes. Three other indicators compiled by Bloomberg, covering areas including liquidity and share performance, stayed steady from the previous month, with two at levels indicating strength. India’s non-bank lending sector was hit by a crisis in 2018 when a large financier unexpectedly defaulted, and the nation now needs it to stay healthy in order to prevent gross domestic product from shrinking further. The reach of shadow banks extends into many corners of the economy, as they lend to a wide range of businesses from road-side teashops to tycoons. (FINANCIAL EXPRESS)
Changes in banking regulation law aimed at improving governance in cooperative banks: FM Sitharaman
Finance Minister Nirmala Sitharaman on Wednesday said amendments to the banking regulation law seeking to extend the supervision of RBI to cooperative banks are aimed at improving their governance and protecting depositors’ money. Moving the Banking Regulation (Amendment) Bill, 2020 in the Lok Sabha, Sitharaman said the government was compelled to come out with an ordinance during the lockdown period as the condition of the cooperative banks was “grave”. Gross non-performing assets (NPAs) of cooperative banks increased from 7.27 per cent in March 2019, to over 10 per cent by March 2020, she said, adding as many as 277 urban cooperative banks have reported losses in 2018-19 fiscal. She further said over 100 urban cooperative banks were unable to meet the minimum regulatory capital requirement and 47 had negative networth at the end March 2019. (FINANCIAL EXPRESS)
Changes in banking regulation law aimed at improving governance in cooperative banks: FM (ECONOMIC TIMES)
Lok Sabha passes bill to bring co-op banks within RBI ambit (MINT)
State Bank of India's digital startup, YONO, could be a $40 billion goldmine:
The country’s largest lender State Bank of India (SBI) could be sitting on a goldmine when it comes to its digital startup YONO (You only need one). The super-app could be valued at $40 billion with the lender considering long term plans to hive it off as a separate entity once it assumes a certain size.
SBI had launched the YONO platform in 2017 and within three years of inception, notional profit and loss statements created by the bank suggests that its profits could be running in a few hundred crores. Bank is booking profits basis earnings of fee income, savings on net interest income, productivity gains and reduction in costs due to its digital only nature. (ECONOMIC TIMES)
Interest of bank depositors has to be protected: RBI governor Shaktikanta Das:
The Reserve Bank of India (RBI) governor Shaktikanta Das warned that India’s economic recovery will be gradual and argued strongly in favour of protecting the interest of depositors amid a contentious Supreme Court hearing on waiver of interest during the loan-moratorium period. India’s lead economic indicators, which had shown an uptick in June and July, appear to be levelling off, Das said at an event organised by the Federation of Indian Chambers of Commerce & Industry (Ficci) on Wednesday. (ECONOMIC TIMES)
RBI says protection of depositors should be banks' primary concern:(MINT)
India's fraud-hit PMC Bank asked other major banks for a merger, says administrator:
India's fraud-hit PMC Bank has approached other banks over a possible merger even as its efforts to recover funds from a big borrower have been disrupted by the coronavirus pandemic, the bank's administrator said in a court filing seen by Reuters. (ECONOMIC TIMES)
Clix's Pramod Bhasin says could approach RBI within four weeks for LVB merger:
Non-banking finance company Clix Capital expects to complete its due diligence of Lakshmi Vilas Bank NSE 9.80 % (LVB) in the next "two to four weeks", following which it will formally apply to the Reserve Bank of India (RBI) for an approval, its chairman, Pramod Bhasin, told ET. (ECONOMIC TIMES)
Total tax collection plunges 22.5% to Rs 2.54 lakh crore so far this fiscal: Source
Reflecting the tepid recovery in the overall economy after lifting of national lockdowns, the pace of deceleration in tax collections has slowed down with total tax mop-up touching Rs 2,53,532.3 crore so far this fiscal, which though is still down 22.5 per cent from the year-ago period, according to an Income Tax Department source. (ECONOMIC TIMES)
Digital shift has made banks even more vulnerable: SWIFT India CEO Kiran Shetty
With over 11,000 member banks across the world, SWIFT is one of the premier international bodies enabling eective crossborder communications and transactions within the global banking network. SWIFT India CEO and regional head Kiran Shetty talks to Ashwin Manikandan on the impact of the pandemic on banking technology and the need to enhance security. (ECONOMIC TIMES)
