General Awareness

BUSINESS AND ECONOMY - October 2018

Oct 2018

Jun 18, 2019

HDFC MF to Buy ₹. 500-cr NCDs of EssHDFC MF to Buy Rs. 500-cr NCDs of Essel Group el Group

HDFC Mutual Fund has decided to buy Rs. 500 crore worth of Non-Convertible Debentures (NCDs) of the Essel Group from the debt schemes that have exposure to these securities.
The move removes uncertainty among investors, who were concerned that they might not get back their entire investments in case the Subhash Chandra-controlled group failed to sell some of its assets and repay lenders before September 2019.

Chinese banks seek $2bn from RCom

Chinese lenders, including China Development Bank, Industrial and Commercial Bank of China and Exim Bank of China, have demanded at least $2.1 billion from embattled tycoon Anil Ambani's Reliance Communications, that slid into bankruptcy earlier in 2019.
China Development Bank, with loans worth Rs 9,860 crore was the biggest creditor to the company, according to a filing made by the company to stock exchanges.
Exim Bank of China sought payment of Rs 3,360 crore, while Industrial and Commercial Bank of China claimed Rs 1,554 crore.

Sotheby's Sold to Media Titan Drahi

Sotheby's, the auction house whose shares have dropped 40% in the past year, is being sold to telecom titan Patrick Drahi for $2.7 billion.
Investors will receive $57 in cash per share of Sotheby's common stock under terms of the agreement.
The offer represents a 61% premium to the closing price on 14 June 2019.
Sotheby's is returning to private ownership after 31 years as a public company, the last few spent battling expenses and margins even as masterpieces and contemporary works soared in value.
Drahi, 55, is the president of Altice Europe NV, a publicly traded telecommunications business with more than 30 million customers.
An avid art collector, he's worth $8.6 billion, according to the Bloomberg Billionaires Index.
Drahi's takeover would mean that French citizens will own the world's two major auction houses.
The family of Francois Pinault, founder of Paris-based luxury goods giant Kering SA, owns Christie's after first buying a 29.1% stake in the company from British billionaire Joe Lewis two decades ago.

Lenders to Take Jet to NCLT

Lenders to Jet Airways (India) Ltd decided to start bankruptcy proceedings against the grounded airline, complicating hopes of a recovery.
The consortium of lenders, led by the State Bank of India (SBI), chose to refer Jet Airways to the National Company Law Tribunal (NCLT).
A meeting of lenders was held to consider the way forward in respect of Jet Airways. After due deliberations, lenders have decided to seek resolution under IBC (Insolvency and Bankruptcy Code, 2016) since only a conditional bid was received and requirement of the investor for Sebi (Securities and Exchange Board) exemptions and resolution of all creditors is possible under IBC.
The pilots' union of Jet Airways, National Aviator's Guild, also plans to file a plea against the grounded airline at NCLT for non-payment of salaries and not providing a provision for gratuity payment to its staff.
Aviation analysts said it is unlikely that the lenders will be able to recover a substantial portion of their dues by referring the airline to NCLT.

Plan to Amend Banking Laws

The government is understood to be considering amending banking laws to check loan evergreening (helping borrowers pay old dues by handing out new loans).
New norms would likely require banks to report any default beyond a week to the company affairs ministry if the company is unlisted and to Sebi, if it is listed.
Such timely information sharing, it is believed, will prevent cascading damage when a company faces financial crunch and is on the verge of default.
Currently, while firms are required to immediately report default on bonds to Sebi, they are not required to do so for bank loans, which account for bulk of credit in the economy.
New reporting norms may also mandate ratings agencies to look at short-term instruments such as commercial paper more closely to prevent mismatch between short-term and long-term ratings.
The picture of the financial health of a borrower becomes fuzzy when its commercial paper often gets top rating even when its long-term rating is much lower.

L&T demands 3 seats on Mindtree's board

Engineering giant L&T has written to Mindtree demanding three seats on its board as the hostile acquirer makes the final push to check into the mid-tier IT services company. L&T, which has emerged as the largest shareholder with a 30% stake, has sought board seats for its independent directors.
L&T can only appoint independent directors as long it isn't categorised as promoter.
As the takeover stand-off escalates, L&T is also likely to seek promoter status soon after the open offer to public shareholders ends by June end.
In March 2019, L&T had bought 20% stake in Mindtree from Coffee Day founder V G Siddhartha.
The company later increased its holding by another 10% through open market purchases. Its open offer to buy an additional 31% stake from Mindtree public shareholders, at Rs 980 per share, is under way.
The Mumbai based conglomerate's plan is to have a maximum holding of 66% in Mindtree.
L&T is also likely to oppose Mindtree's hefty special dividend in the upcoming AGM as it feels that the company needs to preserve cash even though it would be the largest beneficiary of such a payout.
Mindtree's board had recommended a Rs 443-crore dividend bonanza, translating into Rs 27 per share, to celebrate the company's twin achievements of exceeding $1 billion in terms of revenues and its 20th anniversary.
L&T, with its 30% stake in Mindtree, will get over Rs 100 crore as special dividend.

Piramal Sells Stake in Shriram Transport

Ajay Piramal-controlled Piramal Enterprises Ltd sold its entire stake of about 10% stake in commercial vehicle financier Shriram Transport Finance Co. Ltd, citing a "broader strategy" to leverage opportunities for growth in its financial services business.
As of March 31, Piramal held 22.6 million shares in Shriram Transport, which specializes in financing second-hand trucks, representing a 9.96% stake. The stake sale will fetch Piramal approximately Rs. 2,300 crore, based on the closing price of the stock.
Piramal invested in the Shriram Group to gain entry into the retail financial business, having initially focused on corporate debt and equity financing for realty and infrastructure projects.
Piramal has been working on exiting its investment in the Shriram Group for a few months now.

Govt Plans Co to Screen and Rate Borrowers

The government is considering a proposal on creating a special purpose vehicle (SPV) similar to the Goods and Services Tax Network (GSTN) to monitor and screen commercial borrowers.
The SPV would be vested with a giant database collated from information available with all public sector banks. The database would be used to develop a dynamic rating model to monitor borrowers.
The proposal is said to be part of a set of initiatives the government is planning in its first hundred days in office.
GSTN is a non-profit, non-government, private limited company in which the central government holds 24.5% equity.
States and the empowered committee of state finance ministers together hold another 24.5% and the rest 51% is owned by non-government financial institutions.
It is tasked with operating the complex state and central tax systems on a single platform using technology.
The proposed ratings model would be dynamic and capable of monitoring borrowers continuously, from the time of application until full repayment.
It will use data analytics to track related party transactions and any attempts to siphon money out of companies, it is learnt.
Public sector banks that have a common majority owner—the government—is expected to ease consolidation of data. Artificial intelligence and machine learning will be used for analytics.

Govt Rules out Bringing Fuel under GST

Turning down the demands of the aviation sector and oil firms, the government has ruled out including petroleum products within the ambit of GST.
This, despite the fact that even the oil ministry has backed the sector's demand. The Centre is of the view that states may not agree to a change in norms as they will be keen to retain flexibility in taxing a few items that they have control over, such as stamp duty on realty, and excise on alcohol and petroleum products.
Besides, politically too, the Centre is not keen to bring products like ATF under GST as it believes that taxes on the fuel are passed on to consumers.

Reliance Capital Sells 10.75% Stake in Reliance Nippon Life

In two successive offers, Reliance Capital has sold 10.75% of its shareholding in Reliance Nippon Life Asset Management Ltd , aggregating over Rs. 1,450 crore and has achieved the minimum public shareholding of 25% in RNAM by reducing the promoter stake.
The entire RNAM stake monetization proceeds of Rs. 6,000 crore, to be received from the offer for sale and the already announced transaction with Nippon Life Insurance Company of Japan, will be utilized to reduce Reliance Capital's outstanding debt.
Based on the above, and other asset monetization deals presently underway, Reliance Capital expects to reduce its debt by at least Rs. 12,000 crore, or 70% in the current financial year.

Fitch Cuts India's FY20 GDP Growth Forecast

Global ratings agency Fitch Ratings cut India's GDP growth forecast for FY20 to 6.6% from 6.8% earlier as manufacturing and agriculture sectors showed signs of slowing down over the past year.
In March, the ratings agency had lowered the growth forecast to 6.8% from its previous estimate of 7% on weaker than expected momentum in the economy. However, it retained the FY21 estimate at 7.1%.
India's economy grew at a five-year low of 6.8% in 2018-19.

Maharashtra's Economic Survey

Though drought swept through Maharashtra in 2018, leading to a major dip in farm output, the state's economic growth rate for 2018-19 is set to remain unchanged at 7.5%, the figure for 2017-18, according to the state's economic survey. By contrast, the national growth rate is pegged at a lower 6.8% for 2018-19.
The survey shows although growth rate in the agricultural and industrial sectors is set to decline compared to 2017-18, in the services sector it is expected to rise from 8.1% to 9.2%. Given the much higher share of the services sector in the computation of the value of economic activity in the state, this rise appears to have restored the growth rate.
The survey showed a decline in estimated growth rate in the agricultural sector from 3.1% in 2017-18 to 0.4% in 2018-19 as a result of drought. While crop output showed growth of (-)8% in 2018-19, the survey forecast a rise in growth rate of several other segments. Growth rate in the livestock segment is expected to rise sharply from 8.5% in 2017-18 to 13.9%, while that in forestry and logging is set to double from 8.1% to 16.4%. Even the fisheries segment is expected to see a major rise from (-)11.7% to 3.4%.
Growth rate in the industrial sector is set to fall from 7.6% to 6.9%. The manufacturing sector is set to see a decline from 7.7% to 7.1%, while that in electricity and other utilities is estimated to decline from 6.5% to 4.3%. Mining and quarrying are expected to see a big dip from 7.2% to 2.9%
But growth rate in the construction sector is set to improve significantly from 7.9% to 9.9%. Within the services sector, the financial, real estate and professional services segment is set to see a rise in growth rate from 7.6% to 9.4% while the trade, hotels and communications segment is expected to improve its growth from 7.6% to 9.4%.
The state's financial position is still a concern, with debt estimated at Rs 4.14 lakh crore for 2018-19 compared to Rs 4 lakh crore in 2017-18. But the state says this is 15.6% of GSDP, well within the fiscal limit of 22.3% laid down by finance commission.
Data has shown employment of 73.50 lakh in 2018 compared to 67.50 lakh in 2017. Of total employment reported, 31.1% was in public sector. On government jobs, sanctioned posts in July 2018 were 7.17 lakh, of which 1.91 lakh had been filled.

Facebook to Unveil New Cryptocurrency

Facebook is set to unveil a bid to bring cryptocurrency payments into the mainstream, reportedly with the endorsement of governments and financial giants.
The world's biggest social network is expected to outline details of a virtual currency launching in 2020 that it hopes will avoid the rollercoaster volatility of "blockchain" technologies such as bitcoin.
Facebook is setting up a consortium called "Libra" which, according to the Wall Street Journal, has been joined by more than a dozen companies including Visa, Mastercard, PayPal and Uber.

Jun 17, 2019

Paytm Rebrands Gaming Platform as FirstGames

Paytm is rebranding its gaming platform Gamepind as First-Games, which claims to have garnered over 30 million registered users since its launch in February 2018.
With over 300 games and quizzes for gaming enthusiasts, the company is clocking a run rate Gross Merchandise Volume (GMV) of ₹20 crore monthly.
The fintech firm is also looking to raise $30 million to expand its gaming platform and scale it with more games.
Players can win Paytm cash, movie tickets, flight tickets, and physical goods such as two-wheelers.
The platform has also launched a fantasy cricket game, Paytm First Captains, in May, which aims to attract more than a million gamers during the ongoing Cricket World Cup. It has grown five times in June on the back of the global cricket event, the company claimed.

MCA Looks to Freeze IL&FS Ex-Directors' Properties

The Ministry of Corporate Affairs (MCA) is expected to move court for freezing the bank accounts and properties of some of the past directors of IL&FS group.
The ministry would soon apply before the National Company Law Tribunal to widen the net in the IL&FS probe.
Till now, assets of executive directors of IL&FS group have been attached by the court. Now, the MCA is likely to request the court to extend the earlier orders to cover past directors, probably including some of the non-executive board members.
Former auditors may also be included.
The MCA had originally moved NCLT on October 1, 2018, seeking the replacement of IL&FS board of directors on the ground that a probe by the Registrar of Companies had prima facie concluded that mismanagement and compromise in corporate governance norms were perpetrated by indiscriminately raising short- and long term borrowings.
Once the court passes an interim order freezing the assets, limited withdrawal of funds is allowed for the sustenance of account holders.

Panaya is Back in Business at Infosys

More than a year after Infosys put automation software company Panaya up for sale and failed to find a buyer, the Bengaluru based software services exporter has begun to invest in the Israel-based company again as it looks to make the Vishal Sikka-era acquisition successful.
Over the past months, Infosys has appointed a new CEO at Panaya, brought in executives from outside and is looking to hire a slew of salespeople in the US.
The Panaya buyout was the main flashpoint for the corporate governance battle between former CEO Sikka and Infosys founder NR Narayana Murthy.
Questions were asked over whether there were conflicts of interest in the buyout and whether the company had overpaid. Infosys paid $200 million to buy Panaya in February 2015.
One of the first moves by Infosys CEO Salil Parekh in April 2018 was to put Panaya and another acquisition, Kallidus, up for sale.
The company also took a slew of writedowns on their value. In January, Infosys said it had failed to find buyers and would refocus on Panaya's products.
In May, David Binny, the former chief product officer of Panaya's software-as-a-service platform, took over as CEO of the company, replacing Jake Klein.
The company has also appointed a global sales enablement director, who joined from HP, and a business development and regional sales manager.

DoT Backs ₹ 3,050-cr Fine on Airtel, Vodafone Idea

The Department of Telecommunications (DoT) has backed penalties of Rs. 3,050 crore on Bharti Airtel and Vodafone Idea for allegedly denying Reliance Jio Infocomm adequate points of interconnection (PoIs) in 2016.
That would uphold the regulator's recommendations in one of the most heated disputes in the sector's recent history.
The telecom department's view is set to be taken up by the Digital Communications Commission (DCC), the highest decision-making body of the department, at a meeting in June.
With the three senior-most DoT officials having endorsed the regulator's recommendation, the DoT is now taking it to the DCC.
The DCC, previously called the Telecom Commission, is an inter-ministerial body and its members include secretaries from the ministries of IT, finance and department of industry, among others, and is headed by the telecom secretary, currently Aruna Sundararajan.

China Slaps Duty on US Chemicals

China has slapped a higher duty of 5-25% on most chemicals coming from the US compared with the tariff of 2-7% levied on Indian chemicals.
Copper concentrates, granite, xylene and inverters are the key American products on which China has levied 25% duty while products of reclaimed rubber and parts of taps are in the 20% tariff category since June 1.
India and China, two of the fastest-growing markets in the world, are members of the Asia Pacific Trade Agreement and are negotiating the Regional Comprehensive Economic Partnership trade pact with 14 others.
The 151 products identified by India are part of a list of 774 such items where the country sees scope for higher exports.
These 774 product lines are those in which China's imports from the US are substantial and so are India's exports to the world.
Besides, there are more than 600 other products in which market access with China will be vigorously pursued.
India has prepared a strategy to gain market access in China for its farm and pharmaceutical exports and attract foreign companies looking to shift their manufacturing bases out of the country in the wake of the trade war between the US and China.
India's trade deficit with China stood at a record $53.6 billion in FY18.

Top PE Firms Look to Invest in Yes Bank

Private equity investors Blackstone Group, Apax Partners and Warburg Pincus are seeking more details of Yes Bank Ltd's exposure to stressed loan accounts before committing to an equity infusion, potentially delaying the private lender's fund raising plan.
The buyout firms are looking to invest between $500 million and $750 million in Yes Bank, depending on the final valuation.
Yes Bank is considering an equity infusion from private equity funds along the lines of the Bain Capital-Axis Bank deal in 2017, which saw Axis Bank raise Rs. 11,625.8 crore through a private placement of shares to a clutch of investors led by Bain Capital.
An equity infusion is expected to help Yes Bank boost investor confidence and improve its ability to absorb future losses at a time when the bank's chief executive officer Ravneet Gill is effecting a cleanup of its balance sheet, resulting in the lender reporting its first quarterly loss of Rs. 1,506 crore.
The cleanup may have been necessitated because of the bank's high exposure to struggling non-bank lenders and real estate companies.

India may Trade Places with US to Ship Items to China

India has identified 151 products that it can export to China instead of the US and benefit from the price advantage thrown up by the retaliatory higher duties slapped by the Xi Jinping government on US products amid the intensifying trade war between the two countries.
These include diesel engines, X-ray tubes, antibiotics, copper ores, granite, xylene, inverter and ketones.
This comes in the wake of the US terminating preferential benefits to $6.35 billion of Indian exports and India deciding to raise import tariffs on 29 goods originating in the US.
The government has also identified 531 product lines in which US imports from China and India's exports to the world are significant. Out of these, India has the potential to replace Chinese exports to the US as it has market access and is a competitor of China in 203 lines.

ONGC to Auction over 60 Small Fields to Private Companies

Oil and Natural Gas Corp. Ltd (ONGC) will shortly auction more than 60 of its discovered small and marginal fields to private companies.
The fields will be auctioned under the production enhancement contracts (PEC) mechanism, followed by global energy firms to enhance production from mature oil fields. Under PEC, the private company invests and introduces comprehensive technologies to improve production, while the ownership of the fields rests with ONGC.
In January 2019, the government allowed state-owned explorers to rope in the private sector to raise production to better exploit its hydrocarbon resources and cut dependence on foreign oil.

Jun 16, 2019

Swiss to Share Details of Desi a/c Holders

Swiss authorities are in the process of sharing details of at least 50 Indian nationals having accounts in Switzerland-based banks, with regulatory and enforcement agencies in the two countries tightening their noose on individuals suspected to have amassed illicit wealth.
These individuals largely include businessmen associated with companies, including the dummy ones, in sectors ranging from real estate, financial services, technology and telecom to paints, home decoration, textiles,engineering goods, gems and jewellery.
Switzerland has been striving hard for the past few years to shed a long-standing perception of it being a safe haven for black money, while the issue has been a politically sensitive one in India as well.
The full names that have been made public in recent weeks in the Swiss government federal gazette include Krishna Bhagwan Ramchand, Potluri Rajamohan Rao, Kalpesh Harshad Kinariwala, Kuldip Singh Dhingra, Bhaskaran Nalini, Lalitaben Chimanbhai Patel, Sanjay Dalmia, Pankaj Kumar Saraogi, Anil Bhardwaj, Tharani Renu Tikamdas, Mahesh Tikamdas Tharani, Savani Vijay Kanaiyalal, Bhaskaran Tharur, Kalpeshbhai Patel Mahendrabhai, Ajoy Kumar and Dinesh Kumar Himatsingka, Ratan Singh Chowdhury and Kathotia Rakesh Kumar.
However, there are many cases where only initials have been disclosed for Indian nationals.
Several of these persons and their companies are said to be based in Kolkata, Gujarat, Bengaluru, Delhi and Mumbai.
Under the Swiss laws, foreign clients of Swiss banks are given an opportunity to appeal against proposed sharing of their details within 30 days (only 10 days in some cases) after a country with a mutual assistance treaty, or party to the multilateral information exchange framework, seeks the details while giving sufficient proof of any suspected financial wrongdoings.
While the Swiss government federal gazette notifications are made public when a foreign client is given an appeal opportunity, in some cases their full names are redacted due to some secrecy clauses and only a few details such as their initials, date of birth and the nationality are made public.

Yash Birla Declared a Wilful Defaulter by UCO Bank

Yashovardhan Birla has been declared a wilful defaulter by Kolkata-based lender UCO Bank for non-repayment of Rs 67 crore by Birla Surya Limited—one of the companies in his group.
Notifying him as a wilful defaulter, the bank said that the company had a credit limit of Rs 100 crore, of which Rs 67 crore plus interest was due. The loan was classified as a non-performing asset in 2013.
Once a promoter is classified as a wilful defaulter, his access to funding dries up not just for the existing business but for any company in which he is a director. Birla Surya had availed of the loan for the purpose of manufacturing multi-crystalline solar photovoltaic cells.
The company faced fresh trouble last year when three group firms—Birla Cotsyn, Birla Shloka Edutech and Zenith Birla— came under investigation for diversion of funds.

India kicks off hike in tariffs on US items

India announced a hike in customs duties on as many as 28 US products, including almond, pulses and walnut, in response to higher tariffs imposed by Washington on Indian products like steel and aluminium.
The increased customs duties will come into effect on 16 June 2019.
he move will hurt the American exporters of these 28 items as they will have to pay higher duties, making those items costlier in the Indian market.
Amending its June 30, 2017, notification, the Central Board of Indirect taxes and Customs said the notification will "implement the imposition of retaliatory duties on 28 specified goods originating in or exported from USA and preserving the existing MFN rate for all countries other than USA".
The country would get about USD 217 million additional revenue. The government had on June 21, 2018 decided to impose these duties in retaliation to the US decision of imposing 25% tariff on steel and a 10% import duty on aluminium products.
As India is one of the major exporters of these items to the US, the move has revenue implication of about USD 240 million on domestic steel and aluminium products.

Jun 15, 2019

Facebook's Cryptocurrency gets New Backers

Facebook Inc. has enlisted more than a dozen companies including Visa Inc., Mastercard Inc., PayPal Holdings Inc. and Uber Technologies Inc. to back its new cryptocurrency.
Each company will invest around $10 million in a consortium that will govern the cryptocurrency.
The money will fund the creation of the coin, which will be pegged to a basket of government-issued currencies.

Trade Deficit Widens

According to official data released, India's trade deficit widened in May 2019 to $15.36 billion, with imports growing faster that exports during the period.
Exports grew 3.93% in May to $30 billion compared with $28.86 billion worth of exports in the same month last year.
The industries that saw a major growth in exports include electronic goods (50.97%), organic and inorganic chemicals (20.64%), and readymade goods of all textiles (14.15%).

Hexaware Acquires Mobiquity

Information technology (IT) services company Hexaware Technologies Ltd has acquired US-based digital services firm Mobiquity for $182 million in an all-cash deal.
Hexaware is majority owned by private equity firm Baring Private Equity Asia. As of March 31, Baring owned 62.59% in Hexaware.
With a presence across three continents, Mobiquity is one of the largest independent customer experience consulting firms specializing in creating frictionless multi-channel digital experiences using cloud technologies.
Mobiquity creates digital products for well-known global brands such as Amazon Web Services, Rabobank, Philips, Wawa, Backbase and Otsuka.
The transaction involves an upfront payment of $131 million and deferred payouts of $51 million.
In the near term, Hexaware will focus on growing revenue through cross-selling and up-selling services across the two platforms, as well as by creating new services.

HDFC Sells Stake in Gruh

Mortgage lender HDFC sold more than 4.22% stake in subsidiary Gruh Finance Ltd. (Gruh), which is proposed to be amalgamated with Bandhan Bank, for Rs. 899.43 crore.
The sale of 3,10,00,000 equity shares representing 4.22% of the issued and paid-up share capital of Gruh was carried out through stock exchanges at the prevailing market price.
HDFC had sold 6.1% stake in Gruh earlier in May 2019 for Rs. 1,327.89 crore.

Retaliatory Tariffs on US Could Worsen Trade Ties

India's move to impose retaliatory tariffs on the United States could worsen the trade-related problems between the two countries because the Trump administration is not in a mood to relent on international trade and may not shy away from a confrontation, according to trade analysts in Washington and New Delhi.
The trade deficit between India and the US stood at roughly $21.3 billion in India's favour in 2018.
Though some trade between the two countries has increased in recent months, the problem largely hovers around three issues that could have long-term implications.
The first is the disagreement over medical devices. India, in 2017, put certain cost caps on certain procedural and remedial equipment largely to benefit poorer patients. The most important among the devices was the cap on stents, which affected large US multinationals such as Abbot and Boston Scientific. India's medical devices market is estimated to be about $5 billion, and one fallout of the cap on priensure ces is the non-availability of drugeluting stents in India. Even as the two sides try to hammer out a deal, this is an issue that could also impact India's booming medical tourism sector.
Second, on the investment front, India's recent rules on e-commerce have inconvenienced US-based firms Walmart and Amazon, which run India's top two e-commerce marketplaces. Walmart, in 2018, completed a $16 billion acquisition of Flipkart. India's new e-commerce rules say that online marketplaces must treat all vendors equally by providing the same terms. This effectively stops these companies from forcing sellers to feature products exclusively on their platforms, thereby limiting control over inventory. It's an issues that has become another irritant between the countries.
Third, data localization rules by the Reserve Bank of India (RBI) -- all system providers must ensure that the entire data related to payment systems are stored in a system only in India to ensure better monitoring of service operators – have become a point of contention.
In April, the US criticised the norms, describing them as discriminatory and trade-distortive.
In this backdrop, on June 1, US President Donald Trump issued the presidential proclamation and withdrew preferential duty benefits — Generalised System of Preferences (GSP) — to India.
The trade analysts cited above said that a retaliatory tariffs response by India may be good from a political standpoint, but could inflict long-term damage to trade between the two countries.

RBI to Impose Penalty for Keeping ATMs Dry

In what could bring respite to people facing cash crunch at ATMS, the Reserve Bank of India (RBI) has told banks that they will have to pay penalty for keeping ATMs dry.
Banks cannot keep ATMs out of cash for more than 3 hours, doing which will attract penalty and the penalty will be imposed region-wise.
Small cities and rural areas are faced with severe cash crunch many a times with ATMs running dry for several hours to few days.
This results in serpentine cues in branches which have running ATMs.

Retaliatory Tariffs on 29 US products

New Delhi has decided to impose long pending retaliatory tariffs on 29 US products.
Washington had withdrawn duty-free benefits for Indian exports under its Generalized System of Preferences (GSP) effective June 5.
The duty hikes will come into effect in normal course as the notification to postpone the hikes will expire on 15 June 2019.

Jun 14, 2019

Grofers to Expand its Warehousing Capacity

Online grocery start-up Grofers drew up a Rs. 280-crore plan to expand its warehousing capacity within the next 18 months (till December 2020) to meet its growth needs.
Currently, the company has a storage capacity of 2.1 million sq.ft. This would be increased to 2.5 million sq.ft. by December 2019 and to 3.5 million sq.ft. by December 2020.
Grofers has 25 warehouses in 10 cities. It plans to add seven more warehouses by December 2019.
The expansion would cost about Rs. 80 crore for the first phase and Rs. 200 crore for the second phase.
The new warehouses would come up in Chennai, Bengaluru and Hyderabad.

AIIB Could Overtake ADB

China-led Asia Infrastructure Investment Bank (AIIB) may soon dominate the space of 'development projects financing' in Asia surpassing the Asian Development Bank (ADB) as the major financier, feel Indian experts observing the changing contours of Asia's finance.
With China continuing its financial assertiveness across the globe through its various infrastructure projects like the One Belt One Road (OBOR) strategic initiative, the AIIB funding is the logical next step for them.
Currently, India has a 7.65 per cent vote share in the AIIB while China holds a whopping 26.63 per cent stake in the organisation. The other large shareholders are the Russian Federation, Korea and Australia.
Setup in 2016, the AIIB has an advantage of getting projects cleared from member countries within six months as against a minimum period of 3 years required by the 1966-established ADB.

Promoters of DHFL in Talks with PE Firm

Promoters of DHFL are in talks with private equity firms and are expecting to garner $1 billion (about Rs. 6,900 crore) by selling nearly 50% of their holdings.
The Wadhawan family, who are the promoters, currently holds close to 40% stake in the firm.
The sale proceeds will enable DHFL to substantially reduce its debt-to-equity ratio and restart the business to its full potential.

BPCL Ropes in STFC

State-owned Bharat Petroleum Corporation Limited (BPCL) roped in Shriram Transport Finance Company (STFC) to fund truckers for diesel purchase under its "Fuel now, pay later" scheme.
According to P. S. Ravi, ED, retail, BPCL, small transporters, due to their lesser financial capabilities, were in look out for high quality fuelling, associated services and financial solutions to build their business and growth.
In arrangement with Shriram Transport, they will get money and there is no need to carry cash.
This partnership addresses the need for fuelling. BPCL has the highest market share in the top 20 national highways.
This scheme is aimed at targeting small truck owners with less than 10 trucks, constituting about 75% of the diesel sales.

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