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QBiz: RBI Dashes Hopes of Liquidity Window for NBFCs & More

1. RBI Dashes Hopes of Special Liquidity Window for NBFCs

The Reserve Bank of India nixed hopes of any special liquidity window for non-banking finance companies — a key government demand to keep the economy humming — arguing that there is adequate liquidity in the system. But it promised to open the spigot when necessary.

The central bank pulled out a laundry list of measures it has taken to ensure that interest rates don’t spike and said it is driven by systemic issues rather than specific segments which may have been facing difficulties due to poor management.

Accelerating investments and credit growth rate, which is higher than the nominal economic growth rate, are signs of strength rather than weakness that warrants bailout schemes, said Deputy Governor Viral Acharya.

(Source: The Economic Times)

2. SFIO Smells a Rat in Rs 400-crore IL&FS Loan to Staff Trust

The Serious Fraud Investigation Office has said Infrastructure Leasing & Financial Services (IL&FS) extended loans of over Rs 400 crore to the employee trust, knowing fully well they would not be repaid, a senior official said.

In its interim report to the corporate affairs ministry, SFIO said the IL&FS Employee Welfare Trust (EWT), an unregistered entity, was dominated by former senior directors of the company to implement their decisions and to enrich themselves at the cost of group companies.

(Source: The Economic Times)

3. Prolonged Pause? RBI Retains Rate & Stance, For Now

The Reserve Bank of India (RBI) on Wednesday, 5 December, left the repo rate unchanged at 6.5 percent and stayed the course to ease the systemic liquidity as most analysts expected, but refused to open a special liquidity window for non-banking finance companies.

It, however, surprised some by not changing the policy stance from ‘calibrated tightening’ to ‘neutral’ although the assorted risks that prevailed during the previous policy review have largely dissipated and the latest data-points have rather abruptly thrown up a new mix of more benign inflation and slower economic expansion.

(Source: The Financial Express)

4. Eyeing Drone Delivery, Zomato Buys TechEagle

Food aggregator and delivery provider Zomato on Wednesday, 5 December, said it has acquired TechEagle Innovations, a Lucknow-based startup that works exclusively on drones.

Zomato said the acquisition will help the company develop drone-based food delivery services in India. TechEagle was founded in 2015 by Vikram Singh Meena. The company has been involved in the development of unmanned aerial vehicles with a focus on customised drones capable of carrying up to 5 kg of payload.

Using drones for delivery is an idea that was experimented upon for a few years by companies such as Domino’s, Amazon, Alphabet and even Uber.

(Source: The Financial Express)

5. Mallya Offers to Repay ‘100 Percent of Principal Amount’ to Banks

Vijay Mallya has had another go at persuading Indian authorities to accept his settlement before the Karnataka High Court, and this time, the grand gesture has been made on Twitter. Mallya’s “offer” comes a week before a judge at Westminster Magistrate’s Court is set to deliver her verdict on India’s attempt to extradite him.

In a series of tweets on Wednesday, 5 December, Mallya, who is facing legal battles in London, pointed to the “thousands of crores” of rupees the Kingfisher group had contributed to the exchequer both at the national and State level over three decades, while insisting that Kingfisher Airline’s woes related to high aviation fuel prices.

“Kingfisher was a fab airline that faced the highest ever crude prices of $140/barrel. Losses mounted and that’s where banks’ money went. I have offered to repay 100 percent of the principal amount to them. Please take it,” he tweeted.

(Source: The Hindu Business Line)

6. OPEC, Russia Move Closer to Agreeing on Output Cut in 2019

A key monitoring committee of OPEC and its allies, including Russia, agreed on Wednesday, 5 December, on the need to cut oil output in 2019, two sources familiar with the decision said, adding that debates about volumes and the baseline for cuts were ongoing.

The Joint Ministerial Monitoring Committee, which includes Saudi Arabia and Russia, met in Vienna on Wednesday, a day before the meeting of members of the Organization of the Petroleum Exporting Countries (OPEC).

Saudi Arabia has been seeking to persuade Russia to cut oil production substantially with OPEC next year in a bid to halt a decline in the price of crude and prevent another global glut.

(Source: The Hindu Business Line)

7. RBI Lays Down Norms on Loan System For Large Borrowers

The Reserve Bank on Wednesday, 5 December, came out with guidelines for enhancing credit discipline among large borrowers.

In respect of borrowers having aggregate fund based working capital limit of Rs 150 crore and above, a minimum level of 'loan component' of 40 percent will be effective from 1 April 2019, said the guidelines.

"Accordingly, for such borrowers, the outstanding 'loan component' (working capital loan) must be equal to at least 40 percent of the sanctioned fund-based working capital limit...," it said.

Drawings in excess of the minimum loan component threshold may be allowed in the form of cash credit facility, the RBI added.

(Source: PTI)

8. NBCC, Kotak Among 4 Shortlisted Bidders For Jaypee Infra; L&T Infra Out of Race

State-owned NBCC, Kotak Investment, Singapore-based Cube Highways and Suraksha group have been shortlisted as bidders for debt-laden Jaypee Infratech, according to a regulatory filing.

Jaypee Infratech is undergoing insolvency proceedings in the NCLT.

L&T Infrastructure, which was among the five companies that had submitted expression of interest (EOI), was, however, excluded from the final list, as per the regulatory filing by Jaypee Infratech.

Sources had earlier said that L&T would not be considered for the bidding process as the infrastructure major was only interested in acquiring the 165-km long Yamuna Expressway that connects Delhi-Noida to Agra.

(Source: PTI)

9. Cabinet Likely to Clear Policy to Boost Exports of Agri Commodities

The Union Cabinet is expected to approve on Thursday, 6 December, a policy to boost exports of agriculture commodities such as tea, coffee and rice and increase the country's share in global agri trade, an official said.

The Commerce Ministry has sent the final agri export policy to the Cabinet.

The proposed policy would focus on all aspects of agricultural exports, including modernising infrastructure, standardisation of products, streamlining regulations, curtailing knee-jerk decisions, and focusing on research and development activities.

(Source: PTI)

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