General Awareness

BUSINESS AND ECONOMY - December 2015

Dec 2015

Feb 24, 2020

India's Top Trading Partner

The US surpassed China to become India's top trading partner, showing greater economic ties between the two countries.
According to the data of the commerce ministry, in 2018-19, the bilateral trade between the US and India stood at $87.95 billion.
During the period, India's two-way commerce with China aggregated at $87.07 billion.
Similarly, during April-December 2019-20, the bilateral trade between the US and India stood at $68 billion. It stood at $64.96 billion with China in the same period.
Trade experts believe that the trend will continue in the coming years also as New Delhi and Washington are engaged in further deepening the economic ties.

Sweden's Riksbank Begins Testing World's 1st Digital Cersion of Currency

Sveriges Riksbank (or simply the Riksbank), the central bank of Sweden, began testing its digital version of currency, e-krona. If this year-long pilot project is successful, this would lead to the creation of world's 1st central bank digital currency (CBDC).
The pilot project will be in operation for one year, until February 2021, will use distributed ledger technology inspired by the blockchains that operates cryptocurrencies.
The digital currency e-krona will be used to simulate day-to-day banking functions like payments from a digital wallet such as a mobile phone application.

Monnet Power Invites Bids to Sell Odisha Plant

Following bankruptcy proceedings last year, Monnet Power Company Limited, currently under liquidation, has invited bids for sale of its power plant in Angul, Odisha.
The Angul plant is a thermal power plant comprising two units of 525 MW capacity each.
In 2007, Monnet Power, a subsidiary of Monnet Ispat, was incorporated for setting up a thermal power plant in Odisha.
Pursuant to the directions issued by the Reserve Bank of India, in August 2017, proceedings under the Insolvency and Bankruptcy Code were instituted against the company by IDFC Bank.
Monnet Power owed around Rs. 6,000 crore to a consortium of lenders, including State Bank of India and Punjab National Bank.

Greaves to Tap EV, BS-VI Sectors

Greaves Cotton Ltd., a predominantly business-to-business (B2B) player supplying diesel engines to original equipment manufacturers (OEMs) such as Piaggio, has, following a business transformation strategy, moved into the business-to-consumer (B2C) segment to take advantage of the fast moving electric vehicles (EV) industry and the BS-VI compliant engine business.
Its fuel-agnostic engine solutions will add to its growth.
Three years ago, when disruptions were coming in, Greaves decided to shift focus from being a pure auto engine player to a fuel-agnostic solution provider and adopted a strategy to diversify into the non-automotive engine segment, clean mobility, including the fuel-efficient CNG engine, electric mobility and strengthen the after-market business.

Indigo and Qantas in Codeshare Deal Talks

IndiGo is in talks with Sydney-based Qantas Airways and its wholly owned subsidiary Jetstar Airways on codeshare agreements, which allows an airline to sell other airline's seats, officials said. Currently, IndiGo has a two-way codeshare agreement with Turkish Airlines and a one-way codeshare partnership with Qatar Airways. In a two-way codeshare agreement, each airline on its distribution system can sell seats on other's flights."IndiGo is currently in talks with Qantas Airways and Jetstar Airways regarding codeshare partnerships. With Qantas, it is likely to be one-way but with Jetstar, it is likely to be a two-way codeshare agreement.

LVB to Focus on Capital-efficient Lending

Cash-strapped private sector lender Lakshmi Vilas Bank Ltd. (LVB) began focussing on increasing its loan book through assets that require zero or lesser capital allocation, to improve its profitability.
S. Sundar, MD and CEO, LVB said that we are fine-tuning some of our business verticals and have given additional powers to branches, regional managers and centralised executives who were earlier not in the loop. The focus areas are jewel and MSME loans and deposits.

Feb 23, 2020

HDFC Bank Completes 25 Years of Operations

HDFC Bank, the most valuable Indian lender, completed 25 years in February 2020.
The bank observed the anniversary celebrations by committing to plant 25 lakh trees and also digitise 2,500 classrooms.
Its managing director and chief executive Aditya Puri, who has led the bank from scratch, planted a guava tree at a municipal school in central Mumbai, where the bank also donated its first digital classroom.
HDFC Bank is headquartered in Mumbai, Maharashtra.

Hinduja Group May Tie Up with Cerberus to Invest in Yes Bank

London-based Hinduja Group is looking to partner private equity firm Cerberus Capital to buy a stake in Yes Bank Ltd.
Hindujas currently own a stake in another private lender, IndusInd Bank. Therefore, it is to be seen whether the transaction, if talks advance, is able to muster approval from the Reserve Bank of India (RBI).
It is no secret that Yes Bank is in dire need of capital and in January, the private lender's board approved raising funds of up to Rs. 10,000 crore in one or more tranches through a qualified institutional placement, or any other private placement of equity or debt.

Victoria's Secret to Have New Owners

L Brands Inc. agreed to sell a controlling stake in its Victoria's Secret brand to private equity firm Sycamore Partners in a deal that values the lingerie brand at $1.1 billion.
Sycamore Partners agreed to buy 55% in Victoria's Secret in the transaction. The lingerie brand, which will include the Pink line of young-adult focused underwear, will become a private company. L Brands will retain a 45% minority stake, while Bath & Body Works will be a public standalone company.
L Brands also said that billionaire founder Leslie Wexner will step down as Chairman and Chief Executive Officer. Wexner, 82, the longest-serving Chief Executive Officer on the S&P 500 Index, will be Chairman emeritus, remaining on the board of L Brands.

Deutsche Bank Boosts Loans to Cash-strapped Tycoons in India

India's shadow banking crisis and revitalized bankruptcy process are creating new opportunities for Deutsche Bank AG as it steps up lending to cash-strapped tycoons and for purchases of distressed assets.
The German lender is seeing three times the volume of financing deals compared with 2018, when the shadow banking problems erupted, according to Rahul Chawla, the head of global credit trading at Deutsche Bank's India unit. He declined to provide specific numbers, but said that the bank helped deploy a couple of billion euros to Indian structured finance deals.
Goldman Sachs Group Inc. and Apollo Global Management Inc. are among the other global firms to have spotted similar opportunities in India's bad-debt woes, which have been magnified by the shadow banking crisis that erupted in 2018 with the default of a major infrastructure lender. As the non-bank finance firms have retreated, Indian companies have been struggling to obtain credit, curbing wider economic growth.

Feb 22, 2020

RBI Clears Appointment of Sunil Gurbaxani as Dhanlaxmi Bank MD

Reserve Bank of India (RBI) approved the appointment of Sunil Gurbaxani as Managing Director and CEO of Dhanlaxmi Bank for a period of three years.
Dhanlaxmi Bank was removed from the RBI PCA framework, subject to certain conditions and continuous monitoring, as the bank is found to be not breaching any of the risk thresholds of the framework.

RBI Unveils 5-year Financial Inclusion Strategy

The Reserve Bank of India (RBI) came up with a National Strategy for Financial Inclusion 2019-24, aimed at providing access to formal financial services in an affordable manner. It aims to promote financial literacy among customers.
The Financial Inclusion Advisory Committee of the RBI — in consultation with the Centre, Securities Exchange Board of India (SEBI), Insurance Regulatory and Development Authority of India (IRDAI), and Pension Fund Regulatory and Development Authority of India (PFRDA) recommended various ways in which the objective can be fulfilled.
The committee recommended universal access to financial services wherein every village should have access to a formal financial services provider within a 5-km radius. Customers may be on-boarded through an easy and hassle-free digital process. This includes increasing banking outlets of commercial banks. Further, digital financial services have to be strengthened in all tier-II to tier-VI centres to facilitate a less-cash society by March 2022.

Feb 21, 2020

Axis Looks to Buy Stake in Max Life

Axis Bank Ltd is looking to buy more than 20% in Max Life Insurance Co. Ltd, the life insurance unit of Max Financial Services Ltd,.
Axis Bank, Max Financial Services and its subsidiary Max Life Insurance are in exclusive talks to explore the possibility of Axis Bank entering into a long-term strategic partnership with Max Life. The companies, however, did not disclose any financial details of the proposed transaction.
As per reports, the transaction is likely to involve the sale of 20-30% stake in Max Life, and could happen at a valuation of nearly Rs. 17,000-Rs. 18,000 crore. The eventual deal structure, however, would involve a portion of share swap or warrants, for up to 10% stake, in order to compensate for the bancassurance tie-up.

Suzlon's Debt Revamp Proposal Gets SBI's Nod

State Bank of India (SBI) approved a restructuring plan proposed by Suzlon Energy Ltd as the first step towards saving the stressed wind power firm.
Under the plan, Suzlon's debt of Rs. 12,700 crore will be converted into sustainable and unsustainable debt and will be repaid over 20 years. Sustainable debt, which is 32-35% of the total, will be repaid over the first 10 years, after which unsustainable debt, including non-convertible debentures and compulsorily convertible preference shares (CCPs), will be repaid. This would mean that lenders will have to take a haircut of 65% on the debt.
Lenders, led by SBI, will pick up 10% stake in Suzlon immediately on issue of shares and 49% stake in its unit, Suzlon Global Services Ltd (SGSL), after conversion of CCPs in 20 years.

Rajasthan Budget 2020: No New Taxes, Job Creation and Education Main Focus

Rajasthan Chief Minister Ashok Gehlot presented the state budget for 2020-21 in the legislative assembly. Ashok Gehlot, who also holds the finance portfolio, did not impose new taxes in the budget. He announced concession in stamp duty on lease executed by state government and local authorities, full exemption from stamp duty and concession in registration fees on transfer of sick micro and small enterprises, amnesty schemes to give 100 per cent waiver of interest and penalty payable on stamp duty, existing DLC rates to be reduced by ten per cent to facilitate industries.
Ashok Gehlot announced a DA hike for the state employees besides providing Rs. 100 crore for his flagship scheme "Nirogi Rajasthan" and assuring state's Rs. 2,000 crore share over next four years to set up 15 new medical colleges.
Ashok Gehlot said that job creation is the top priority of his government. "During 2020-21, we will be recruiting 53,181 people more in different departments," Ashok Gehlot said.
In the budget, Rs. 38,524 crore was allocated to education, Rs. 18,530 crore power, Rs. 6,808 crore to PWD and Rs. 8,794 crore to PHED and water resources and Rs. 4,557 crore to CAD.

Indian Bank Eyes Lending to Start-ups

Public sector lender Indian Bank is mulling the option of lending a helping hand to start-ups.
Padmaja Chunduru, Managing Director and Chief Executive Officer, Indian Bank said that Instead of lending Rs. 100 crore to corporates, which carries a higher risk, let us give Rs. 10 crore each to 10 start-ups, where the risk is less and spread out.
The idea to help start-ups, as a new activity, emerged at one of the town hall meetings Ms. Chunduru had with the officials of Allahabad Bank and Indian Bank in the last few months. Allahabad Bank is set to merge with Indian Bank on March 31.

Women Entrepreneurs in India may Help Create up to 170 mn Jobs by 2030

According to a joint report released by Bain and Co. and Google titled Women Entrepreneurship in India—Powering the economy with her, women entrepreneurs in India can generate 150-170 million jobs by 2030, which is more than 25% of the new jobs required for the entire working-age population.
The report identified six dominant segments of women entrepreneurs and said that despite India's economic progress in the last decade, women's participation in the labour force declined and is expected to be under pressure because of labour trends, technological disruption, and constraining social barriers.
The report also pointed out that among other things, women need equal access to finance through broad-based gender responsiveness across the financing sector.

New Polymer £20 Featuring Painter Turner Enters Circulation

You'll soon no longer find Adam Smith in your wallet or purse. The economist has been replaced as the face of the £20 note by artist JMW Turner.
The Bank of England said that the new polymer £20 - which entered circulation and is its most secure ever banknote.
It includes two see-through windows and a two colour foil to help beat forgers.
The new £20 is the third plastic banknote to be issued in the UK after the fiver featuring Winston Churchill - launched in 2016 - and the tenner featuring Jane Austen, which was first issued in 2017.
It replaces the paper-one featuring Adam Smith which has been in circulation since 2007.
But you'll still be able to use the old notes for many months to come. The Bank gave six months' notice ahead of its legal tender status being withdrawn.
The new £20 note is the first to feature the signature of Sarah John, the Bank's chief cashier.

Feb 20, 2020

Govt. Makes Crop Insurance Schemes Voluntary for Farmers

The government made its flagship crop insurance schemes voluntary for farmers with existing crop loans or those willing to take new ones, as it seeks to address the concerns raised by farmers' body and states in implementation of these programmes.
The Union Cabinet approved revamping of 'Pradhan Mantri Fasal Bima Yojana (PMFBY)' and 'Restructured Weather Based Crop Insurance Scheme (RWBCIS)' to address the existing challenges in implementation of crop insurance schemes. Under the PMFBY, which was launched in February 2016 by Prime Minister Narendra Modi, it is mandatory for loanee farmers to take insurance cover under this scheme.
The PMFBY provides comprehensive crop insurance from pre-sowing to post-harvest period against non-preventable natural risks at extremely low premium rate of 2 per cent for kharif crops, 1.5 per cent for rabi crops and 5 per cent for horticulture and commercial crops.
The Cabinet approved modification of certain parameters/provisions of ongoing PMFBY and RWBCIS schemes.

DoT Gets Right to Bar Chinese Firms from Govt. Telecom Tenders

According to a government notification, the department of telecommunications (DoT) now has the power to bar Chinese telecom equipment suppliers from participating in tenders floated by state-run companies and central and state governments.
Government projects in India use telecom gear in areas such as railways, smart cities' mission and state government fibre connectivity projects as well as BharatNet, India's mission to provide internet to gram panchayats.
The move is set to hit Chinese companies such as Huawei, ZTE, and UTStarcom that may not be allowed to participate in government projects.

India to Stop Import of Thermal Coal

Union Minister of Coal and Mines Pralhad Joshi said that India will stop importing thermal coal from Financial Year 2023-24,. The Minister also said that various ways and means were discussed with key stakeholders to achieve 1 billion tonnes (BT) coal production target by Coal India Limited (CIL) by Financial Year 2023-24. The Ministry of Coal will coordinate with Indian Railways and Shipping Ministry and enable CIL, Captive and Commercial Miners evacuate more coal by 2030. Stressing upon the diversification in the Indian Coal sector, the Minister said that ideas have also been mooted that CIL could think of coming up with the state of the art pithead thermal power plants to transform it into an integrated energy company. It was also proposed that CIL could generate 5 GW of solar power by FY 2023-24 and could diversify into coal gasification with a target of 50 Million Tonnes by 2030 enabling a sustainable energy mix for the country. All these ideas will be deliberated, studied and examined for their feasibility in detail and based on that, they could be implemented.

Kiran Mazumdar Shaw is EY Entrepreneur of Year 2019

Kiran Mazumdar-Shaw, chairperson and managing director, Biocon, was named the EY Entrepreneur of the Year 2019 at the 21st dition of the awards. She will now represent India at the EY World Entrepreneur of the Year Award (WEOY) in Monte Carlo between June 4 and 6.
Mazumdar-Shaw was named the winner by an eight-member jury panel, led by Kotak Mahindra Bank Managing Director and CEO Uday Kotak. The award ceremony was attended by over 500 business personalities in New Delhi.
Godrej Group Chairman Adi Godrej was conferred the Lifetime Achievement Award, and Tuhin Parikh, senior managing director (Real estate), Blackstone India, was the first recipient of the Transformational Impact Person of the Year award. According to EY, this new category has been launched to recognise individuals who have transformed both the industry and ecosystem in India.

Neuberg Close to Acquiring Labs in Mumbai

Having acquired majority stake in Pune-based AG Diagnostics, Neuberg Diagnostics Ltd. chalked out plans to acquire two or more pathological labs in Mumbai to foray into Maharashtra.
The company plans to invest about Rs. 100 crore for the foray into the State.
This year, the company plans to close with a revenue of Rs. 500 crore which is expected to go up to Rs. 650-Rs. 700 crore next year.

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