General Awareness

BUSINESS AND ECONOMY - June 2020

Jun 2020

Aug 09, 2020

Flipkart Signs MoU with UP Government's One District, One Product Scheme

E-commerce marketplace Flipkart signed a memorandum of understanding (MoU) with the One District, One Product (ODOP) scheme of the Uttar Pradesh government to bring artisans, weavers and craftsmen into mainstream business. Flipkart said that the partnership will enable these under-served communities to showcase their specialised products and crafts to millions of customers across the country.
The initiative called `Flipkart Samarth` will enable them to break entry barriers by extending time-bound incubation support which includes benefits in the form of on-boarding, free cataloguing, marketing, account management, business insights and warehousing support.
The ODOP scheme was introduced to give a boost to the MSME sector while preserving and promoting the exquisite, indigenous legacy of art in Uttar Pradesh.

Murugappa Firm to Invest in CG Power

Murugappa Group firm Tube Investments of India Ltd (TIIL) will invest Rs. 700 crore in CG Power and Industrial Solutions Ltd for a 51% stake, the scam-hit company said. TIIL will be issued 64.25 crore shares at Rs. 8.56 apiece aggregating to Rs. 550 crore, CG Power said. Also, TIIL will invest Rs. 150 crore over the next 18 months in the form of buying warrants that can be converted into shares.

Aug 08, 2020

Exim Bank Extends $250 mn LoC to Mozambique

Export-Import Bank of India (Exim Bank) extended a USD 250-million (about Rs. 1,870 crore) line of credit (LOC) to Mozambique for improving power supply quality in the country.
The agreement to this effect was signed ealier this month through exchange between Saroj Khuntia, general manager, Exim Bank, and Adriano Isaias Ubisse, national directorate of treasury, Ministry of Economy and Finance, Mozambique.
With the signing of this LOC agreement, Exim Bank to date has extended 14 LOCs to Mozambique, taking their total value to USD 772.44 million.
Exim Bank has now in place 264 LOCs, covering 62 countries across regions including Africa, Asia, and Latin America, with credit commitments of around USD 25.98 billion, available for financing exports from India.

LIC Acquires Stake of YES Bank

Life Insurance Corporation of India (LIC) acquired 4.23% Stake (105.98 crore shares) of YES Bank by purchasing from the open market. With this acquisition, the hold of LIC in YES Bank has increased from 0.75% (19 crore shares) to 4.98% (125 crore shares).

Business Confidence Index falls in June Quarter

NCAER's Business Confidence Index (BCI), an indicator of the business sentiment across the Indian industry, stood at 46.4 in the first quarter of 2020-21, a drop of 40.1 per cent from its level of 77.4 in the previous quarter.
According to a survey by the National Council of Applied Economic Research (NCAER), it fell 62 per cent in the June 2020 quarter on a year-on-year (y-o-y) basis.
This is the lowest that the BCI has ever fallen in the history of 113 Rounds of the NCAER Business Expectations Survey (BES).
The decline of 40.1 per cent in the BCI came on the back of a 30.4 per cent quarter-on-quarter decline in the BCI in April 2020.
The BCI tracks the business sentiments of around 600 Indian companies to compute the composite index.

Gates and Gavi in Tie-up with Serum Institute

The Bill and Melinda Gates Foundation, along with Gavi-The Vaccine Alliance, will provide at-risk funding of $150 million to Serum Institute of India to support the production of two promising vaccines by University of Oxford and Novavax on the condition that the Pune-based firm prices the two vaccines at a maximum of $3 per dose.
Under the pact, Serum Institute will receive funding from the Gates Foundation through Gavi-The Vaccine Alliance, and also become part of the Gavi Covax Advance Market Commitment mechanism for equitable access to vaccines for India and other low and middle-income nations.
With a vaccine needed urgently, vaccine makers globally are taking a risk by investing in capacity for candidates despite them still being in clinical trials stage. To aid this effort, governments and Gavi—a global organisation founded by the Gates Foundation to improve access to new vaccines in poor countries—are providing funding to reduce the risk for manufacturers while, in return, securing supplies if approval is granted.

RBI Forms Committee to Recommend Parameters for Loan Restructuring

Reserve Bank of India (RBI) has formed a five member committee under the chairmanship of former ICICI Bank CEO K. V. Kamath to make recommendations on the financial parameters to be considered in the restructuring of loans impacted by the Covid 19 pandemic.
Other members of the committee are former State Bank of India executive Diwakar Gupta, current Canara Bank chairman T. N. Manoharan, consultant Ashvin Parekh and Indian Banks' Association (IBA) CEO Sunil Mehta who will also be a secretary to the committee. More members may be added to the committee if required.
As announced with the measures after the monetary policy, the committee will vet restructuring of loans above Rs. 1500 crore.
The immediate task of the committee is to recommend a list of financial parameters to be factored into the assumptions that go into each resolution plan, and the sector specific benchmark ranges for such parameters.
The parameters will include aspects related to leverage, liquidity, debt serviceability etc. The expert committee shall submit a list of financial parameters and the sector-specific desirable ranges for such parameters to the Reserve Bank, which, in turn, will notify the same, along with modifications, within 30 days.

Forex Reserves Hit an All-time High

As per RBI data, the country's foreign exchange reserves hit an all-time high of $534.568 billion after surging by massive $11.938 billion in the week ended July 31.
While announcing the monetary policy, Reserve Bank of India Governor Shaktikanta Das said that the reserves at $534.6 billion are equivalent to 13.4 months of imports.
So far in FY2020-21 (up to July 31), the reserves have risen by $56.8 billion.
In the week ended July 31, the reserves rose due to gains in foreign currency assets (FCA), a major component of the overall reserves.
FCAs were up by $10.347 billion to $490.829 billion in the reporting week.

Aug 07, 2020

RBI Leaves Key Rates Unchanged Amid High Inflation

The Reserve Bank of India left the repo rate and other key policy rates unchanged at existing levels taking stock of a recent rise in consumer inflation, and said that it would ensure retail prices are contained within its medium-term target going forward. Governor Shaktikanta Das said that the RBI's Monetary Policy Committee unanimously decided to keep the key rates unchanged and maintain an "accommodative" stance for "as long as necessary to revive growth and mitigate the impact of COVID-19, while ensuring that inflation remains within the target going forward.
Governor Shaktikanta Das said that the RBI's accommodative stance continues, the holding of rates runs counter to broad market expectations of a slash in policy rates to enable banks to lend more. Retail inflation, measured by the Consumer Price Index, rose in June to 6.09% from 5.84% in March, breaching the RBI's medium-term target range of 2-6%. That seems to have been a major red flag that prompted the MPC's unanimous decision.
Moreover, Das flagged concerns over domestic food inflation remaining elevated. Given the uncertainty surrounding the inflation outlook and the weak state of the economy amid the pandemic, the policy panel decided to keep the policy rate on hold, while remaining watchful for a durable reduction in inflation to use the available space to support a revival of the economy.

Oman India Joint Investment Fund II Buys Stake in DCB Bank

Oman India Joint Investment Fund II (OIJIF) acquired 5.07 million shares or 1.63% stake in Mumbai based DCB Bank through a block trade on stock exchanges. The stake is valued at Rs. 42 crore.
OIJIF is a private equity fund backed by State Bank of India (SBI) and State General Reserve Fund of Oman (SGRF),purchased 50,69,903 shares of DCB Bank through a bulk deal, according to information available with the stock exchanges.
The shares were purchased at an average price of Rs. 81.90 valuing the transaction at Rs. 41.52 crore, data showed.

IBBI Amends Liquidation Process Regulations

As per the Insolvency and Bankruptcy Board of India (IBBI), a liquidator can claim fees only on the basis of the amount of work they have done during the liquidation process of a company, be it in terms of the amount realised or distributed.
When a company goes into liquidation under the Insolvency and Bankruptcy Code (IBC), generally, the committee of creditors (CoC) appoints a liquidator and decides on a fixed fee to be paid for their services.
However, in the absence of a fixed fee, IBBI regulations stipulate the liquidator's fee as a percentage of the amount realised and distributed through the liquidation process.
To address uncertainties in such cases involving multiple liquidators, the IBBI has amended the liquidation process regulations.
Similarly, the opposite applies to a liquidator who distributed the amount but did not realise it.

Reliance Industries Limited Ranks after Apple Inc Globally

Billionaire Mukesh Ambani's oil-to-telecom conglomerate Reliance Industries (RIL) has been ranked second biggest brand after Apple on the FutureBrand Index 2020. "This year's highest entrant at number two, Reliance Industries excels on every attribute," FutureBrand said, releasing its 2020 Index.
FutureBrand, which is a global brand transformation company, said part of Reliance's success could be attributed to Mukesh Ambani's recasting of the firm as a one-stop-shop for Indians. "The chairman built on the existing petrochemicals business, transforming it into a digital behemoth designed to meet every customer need.
The 2020 list is topped by Apple, while Samsung is ranked third, followed by Nvidia, Moutai, Nike, Microsoft, ASML, PayPal and Netflix.

RBI to Set up Innovation Hub for Financial Inclusion, Efficient Banking

The Reserve Bank of India (RBI) will set up an innovation hub to encourage start-ups and companies address the challenges of financial inclusion and efficient banking transactions. The hub aims to bring solutions to the financial sector by tapping into areas such as cybersecurity, data analytics, delivery platforms, and payment services.
To promote innovation across the financial sector by leveraging technology and create an environment which will facilitate and foster innovation, the RBI will set up an innovation hub in India. The innovation hub will support, promote, and handhold cross-thinking, spanning regulatory remits and national boundaries.
The innovation hub will act as a centre for ideation and incubation of new capabilities, which can be leveraged to create innovative and viable financial products or services. These will help achieve the wider objectives of deepening financial inclusion, efficient banking services, ensuring business continuity in times of emergency, and strengthening consumer protection, it added. The central bank, however, did not give further details on funds allocated or location of the project.

Government Abolishes All India Handicrafts Board

The government has abolished the All India Handicrafts Board, an advisory body which gives recommendation to government for promotion and growth as handicrafts in India.
"In consonance with the government of India vision of 'Minimum Government and Maximum Governance", a leaner government machinery and the need for systematic rationalization of government bodies, the government of India has abolished All India Handicrafts Board with effect from the date of issue of this resolution," textiles ministry said in a notification.
The board is chaired by textiles minister and has secretaries to the ministries of rural development and micro small & medium enterprises, and various states as members.

Banks can Give Loans up to 90% of the Value of Gold and Jewellery Pledged

According to RBI, borrowers can now pledge gold jewellery and ornaments in the banks and get loans of up to 90 per cent of its value. The RBI move came at a time when gold prices have shot up to over Rs. 55,000 per 10 grams, a rise of close to 40 per cent this year.
It has been decided to increase the permissible loan to value ratio (LTV) for loans against pledge of gold ornaments and jewellery for non-agricultural purposes from 75 per cent to 90 per cent.. This relaxation will be available till March 31, 2021.
This is being allowed "to further mitigate the economic impact of the Covid-19 pandemic on households, entrepreneurs and small businesses. As of now, loans sanctioned by banks against pledging gold ornaments and jewellery for non-agricultural purposes should not exceed 75 per cent of its value.

IDBI Bank Inks Pact to Divest Stake in Insurance JV

IDBI Bank entered into a share purchase agreement (SPA) with the other two joint venture partners in IDBI Federal Life Insurance Company (IFLIC), to divest 27 per cent of its stake for Rs. 595.30 crore.
In June, the private sector lender had informed about the stake sale-purchase proposal among the three JV partners.
Under the SPA, 23 per cent of the stake would be sold to Ageas and 4 per cent to Federal Bank.
The transaction would be concluded subject to regulatory approvals.
Currently, LIC-promoted IDBI Bank holds 48 per cent in IFLIC, while Federal Bank and Ageas hold 26 per cent each.
IDBI Bank is expected to receive up to Rs. 595.30 crore from sale of up to 27 per cent stake in IFLIC.
The bank will receive Rs. 507.10 crore by selling 23 per cent stake to Ageas, and Rs. 88.19 crore by selling 4 per cent to Federal Bank.

Aug 06, 2020

Bharti Airtel Inks Strategic Pact with Amazon for AWS Solutions

Bharti Airtel announced a multi-year strategic pact with Amazon Web Services (AWS) – the cloud services arm of the retail giant – to deliver Cloud solutions to large as well as small and medium enterprise (SME) customers in India.
Puneet Chandok, president, commercial business, India and South Asia, Amazon Internet Services, said that it is a 50:50 strategic partnership.
This collaboration gives customers a single point of contact when dealing with complex migrations or custom-built solutions. Airtel has demonstrated a strong commitment to our shared customers, and we look forward to continue working with it to bring innovative solutions to the market.
According to the IDC Semiannual Public Cloud Services Tracker – Forecast 2019 H2 – the public Cloud services market in India is likely to touch $7.1 billion in 2024, rising at a compound annual growth rate (CAGR) of 20.3 per cent from $3.4 billion in 2020.
In addition, Airtel Cloud will leverage AWS' innovation and transformation services across analytics, data warehousing, Internet of Things (IoT), and machine learning (ML) to help customers adopt new services and migrate to the Cloud from legacy infrastructure.

HDFC to Raise Rs. 14,000 crore, Fixes Rs. 1,838 as Floor Price for QIP

Housing Development Finance Corporation's (HDFC's) Qualified Institutional Placement (QIP) for equity shares opened for subscription with a floor price of Rs. 1,838.94 per share. It is looking to raise Rs. 14,000 crore of equity capital.
HDFC might offer a five per cent discount on the floor price. Its share closed almost flat at Rs. 1,776.9 per share on the benchmark BSE Sensex.
The mortgage lender is also looking to raise Rs 9,000 crore through secured non-convertible debentures.
The company will use part of fresh capital for funding inorganic opportunities and investments in existing group businesses. It is also looking at setting up a real estate fund in collaboration with other investors to finance stressed projects.
The fund raising by HDFC comes within a day of Axis Bank launching its QIP to raise around Rs. 10, 000 crore. The floor price set by the bank is Rs. 442.19 per share. According to the terms of the deal, the base deal size is up to Rs. 8,000 crore, with an option to upsize an additional Rs. 2,000 crore.
HDFC's capital adequacy ratio (CAR) was 17.6 per cent, of which tier-I capital was 16.5 per cent and tier-II capital was 1.1 per cent, in financial year 2019-20 (FY20). The investment in HDFC Bank has been considered as a deduction in the computation of tier-I capital.

Govt. Extends SEBI Chairman Ajay Tyagi's Term

Ajay Tyagi will continue to be the head of the Securities and Exchange Board of India (Sebi) for another 18 months after the Centre extended his term as SEBI chairman up to February 28, 2022.
This is the second extension for the 62-year-old Indian Administrative Service (IAS) officer of the Himachal Pradesh cadre. His first three-year term was to end on February 28. At the time, the government had given him a six-month extension till August 31.
Market observers say that both the extensions were critical given the uncertainty caused by the Covid-19 pandemic. The latest extension will ensure continuity and give Tyagi a long rope to undertake key stock market reforms.

Aug 05, 2020

RBI May Not Cut Lending Rate; Announce Other Measures to Boost Growth

As per reports, the RBI may refrain from cutting the benchmark lending rate but can announce other measures like restructuring of loans amid the urgency to revive the coronavirus-hit economy.
The six-member Monetary Policy Committee (MPC), headed by the RBI Governor, is scheduled to announce its decision very soon. This is the 24th meeting of the MPC.
Although opinions are divided on the rate cut, experts believe loan restructuring is more essential at this juncture to combat the impact of Covid-19.
"The focus is on restructuring. Finance ministry is actively engaged with RBI on this. In principle, the idea that there may be a restructuring required, is well taken," Finance Minister Nirmala Sitharaman had said last week.
Besides, the central bank is expected to issue directions regarding the loan moratorium which is coming to an end on August 31 amid bankers opposing further extension of this facility on concerns over its misuse.

National Bank of Bahrain Selects Infosys Finacle to Digitally Transform its Transaction Banking B...

National Bank of Bahrain (NBB) and Infosys Finacle, part of EdgeVerve Systems, a wholly-owned subsidiary of Infosys, announced that the bank has decided to adopt the Finacle Cash Management Suite to digitally transform its transaction banking business.
This partnership is a part of NBB's digital transformation, with the upgrades provided by the suite to equip the bank with a modern system that will provide simple and seamless service to the clients.
NBB will implement the Finacle Liquidity Management platform and upgrade its existing Finacle Corporate Online Banking platform to a full-fledged Digital Engagement Suite with the latest versions of the Finacle Corporate Online and Mobile Banking solutions, along with the Finacle Digital Engagement Hub.
The front-to-back integrated cash management solution will provide a world-class banking experience to the corporate and institutional customers, thereby driving the growth of our transaction banking business
It will enable NBB manage their customer preferences and entitlements effectively across channels.

Sashidhar Jagdishan to Succeed Aditya Puri as HDFC Bank CEO

After months of speculation, HDFC Bank named Sashidhar Jagdishan new managing director and chief executive officer (CEO) who would take over from India's longest-serving CEO Aditya Puri when he retires in October 2020.
Jagdishan joined the bank in 1996 and heads finance, human resources, and some other departments. In August last year, he was named "change agent" in the bank, and it is understood he had the strong backing of Puri as successor. Kaizad Bharucha, head of HDFC's wholesale banking division, and Sunil Garg of Citibank were among the other candidates in the race for the post.

Nokia to Set up Robotics Lab to Study 5G's 'Socially Relevant' Uses

Finnish telecom gear maker Nokia announced a collaboration with the Indian Institute of Science (IISc) in Bengaluru to establish a network robotics laboratory for research on socially relevant use cases based on 5G and emerging technologies.
The Nokia Centre of Excellence (CoE) for Networked Robotics will promote interdisciplinary research involving robotics, advanced communication technologies and Artificial Intelligence (AI) to develop use cases across areas like emergency management, agriculture and industrial automation, the company said.
The centre will promote engagement and cooperation between academia, start-ups and industry ecosystem partners in research and development of use cases.
The centre supports and aligns with the government's initiatives of Start-up India.

Canara Bank Partners with 3 Insurers to Provide Individual Short-Term Corona Kavach Policy

As part of a social commitment to compensate the unprecedented expenses of ordinary people, Canara bank partnered with 3 insurers namely, New India Assurance Company Ltd, Bajaj Allianz General Insurance Co Ltd and HDFC ERGO Health Insurance Co Ltd to offer individual short-term Corona Kavach policy to cover COVID-19 related health expenses.
The premium of the policy starts from Rs 300.
Purchase can be made on an individual basis and family floater basis.
The policy will be available for a maximum period of 9 and half months (or 285 days).
A minimum 24 hours hospitalisation is required.
The minimum sum insured is Rs. 50,000 and maximum is Rs. 5 lakh.
There is no capping on room rent, and home care treatment up to 15 days.
It will cover Ayush treatment up to 100% of sum assured and cover co-morbid conditions.
It also covers the Optional hospital cash.

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