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QBiz: RBI Guv Raps PSBs Over Rate Cut; Markets Slip on FM’s Stance

1. RBI Governor Shaktikanta Das Takes Public Sector Banks to Task on Rate Cut

Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday, 19 July, came down heavily on public sector banks (PSBs) for not reducing their lending rates despite liquidity remaining ample, bond yields being at a multi-year low, and policy rates being lowered by 75 basis points (bps) in the past six months.

“Bond yields have come down, policy rates have fallen, the borrowing cost for banks is low, as is evident from softening rates on certificates of deposit (CD), and liquidity is in surplus. I am surprised banks are still not lowering lending rates,” Das told top PSB executives during a meeting, confirmed multiple sources.

According to a statement uploaded on the RBI website, the governor discussed credit and deposit growth amid a slowing economy.

(Source: Business Standard)

Also Read: Expect RBI to cut rates fourth time in a row: Kotak

2. Sensex Slides 1.44% as Nirmala Sitharaman Stays Firm on Tax for FPIs

The stock markets slipped over one percent in a budget overhang on Friday as foreign investors appeared disappointed with the government’s stance on taxing the super rich, while corporate earnings for the June quarter continued to signal a slowdown in the economy.

The Sensex ended at 38,337.01, down 560.45 points, or 1.44 percent, while the 50-share Nifty closed at 11,419.25, down 177.65 points, or 1.53 percent. Sell-offs in mid- and small-cap stocks were sharp, with the BSE Midcap losing 1.99 percent and the BSE Smallcap index slipping 1.83 percent.

Shrugging off pleas by foreign portfolio investors (FPIs) against the budget proposal for a super-rich tax, finance minister Nirmala Sitharaman said Thursday that FPIs may consider structuring as companies, as those registered as trusts will have to pay the proposed higher tax surcharge.

(Source: Mint)

Also Read: Sensex, Nifty Extend Decline to Two-Month Low

3. RIL Q1 Net Profit up 7% at Rs 10,104 Crore

Reliance Industries Ltd (RIL) on Friday reported a 6.8 percent increase in its net profit at Rs 10,104 crore for the quarter ended June this year on the back of a record 22 percent jump in revenue at Rs 1.72 trillion.

Consumer businesses contribute 32 percent of the consolidated segment gross earnings (or earnings before interest, taxation, depreciation, and amortisation, or Ebitda) for the quarter.

For the same quarter last quarter, the company reported a net profit of Rs 9,459 crore. Revenue was 22.1 percent higher than the Rs 1.41 trillion in the corresponding period a year ago.

Consolidated debt as of June 2019 was at Rs 2.88 trillion compared to Rs 2.87 trillion as of March 2019.

(Source: Business Standard)

Also Read: RIL Q1 consolidated net profit up 6.8% to Rs 10,104 cr

4. EPFO Interest: Labour Ministry Rejects Move to Lower Rate

The labour ministry has rejected the finance ministry’s request to reduce the 8.65 percent interest rate offered in 2018-19 by the Employee Provident Fund Organisation, the government owned pension fund manager, in a move that should bring cheer to 46 million subscribers whose funds are managed by EPFO.

Government officials familiar with the matter said the labour ministry is of the view that EPFO has sufficient surplus of over Rs 3,150 crore, mainly earned from investments in exchange traded funds (ETFs).

EPFO interest rate is determined by the organisation’s Central Board of Trustees (CBT), which does so after assessing the annual returns on the investments.

(Source: MoneyControl)

Also Read: EPFO India Not Giving Rs 80,000 to Those Who Worked From 1990-2018

5. Creditors’ Panel Approves $10 Million Interim Fund for Jet Airways

Committee of Creditors (CoC) of Jet Airways (India) Ltd on Friday approved an interim funding of $10 million (about ₹69 crore) for the airline, which will be used for the corporate insolvency resolution process, two people with direct knowledge of the matter said, requesting anonymity.

During the past two days, the airline’s CoC, led by the State Bank of India (SBI), also voted on other resolutions, including calling for bids for bankrupt Jet Airways’ asset sale and admission of claims by creditors.

“The CoC has today voted in favour of a $10 million interim debt infusion by bankers, which will help start the insolvency resolution process," said the first person.

“$10 million will be used to hire people on contracts to verify claims made by different creditors of the airline," said the second person.

(Source: Mint)

Also Read: Govt Orders Probe Against Jet Airways over Alleged Fund Diversion

6. Maharashtra to File Cases Against Farm Insurance Companies

The Maharashtra government has decided to file criminal cases against erring agriculture insurance companies in the wake of alleged irregularities in crop insurance schemes.

Under the Prime Minister Fasal Bima Yojana for Kharif 2018-19, the insurance payout was Rs 3,500 crore in Maharashtra, while premium paid to insurance companies was Rs 4,200 crore.

Last week, at a meeting of farmers and State Government officials in Pune, the issue of irregularities was raised prominently. The farmers had alleged that certain officers of the companies concerned had deliberately played down the level of crop losses, which would benefit the companies. They had also produced evidence, pointing to the culpability of the officers.

(Source: Hindu BusinessLine)

Also Read: Shiv Sena takes out procession against private insurance firms

7. Ritesh Agarwal to Deploy $2 Billion in His Hotel Startup Oyo

OYO Hotels and Homes, on Friday, said that its founder and chief executive Ritesh Agarwal, will invest $2 billion in the hospitality startup. Agarwal, who founded the hotel chain in 2013 at the age of 19, would make this investment through RA Hospitality Holdings (Cayman).

He has signed a $2 billion primary and secondary management investment round and is supported by global institutional banks and his financial partners, subject to regulatory and shareholder approvals, according to the firm.

The SoftBank-backed company said its strong growth, improved margins, superior improvements in customer experience were behind this move. This makes it one of the first founder and executive-led management purchases in the technology and hospitality sector, globally.

(Source: Business Standard)

Also Read: OYO Hotels and Homes to invest Rs 200 cr in Haryana

8. Indigo Reports Highest Profit, Board Meet Continues Amid Promoters' Tussle

In the midst of a tussle between promoters, InterGlobe Aviation, which operates the country’s largest airline by market share IndiGo, has recorded its highest net profit at Rs 1,203 crore for the June quarter with a more than 40-fold rise from the same period last year.

That’s not the only first for the company. In a departure from the regular practice, the company’s board meeting has been stretched to two days. The board on Friday discussed a “range of issues”, including appointment of a woman director, and the meeting will continue on Saturday, IndiGo Chief Executive Officer Ronojoy Dutta said.

Along with the appointment of women directors, the board’s size will also be expanded to 12 directors from the current six.

(Source: Business Standard)

Also Read: IndiGo's Q1 net profit rises to Rs 1,203 cr

9. First Time in a Month, Forex Reserves Fall by $1.11 Billion

After touching record highs, the foreign exchange reserves declined by $1.113 billion to $428.797 billion in the week to 12 July - the first fall after four consecutive weeks of gains - due to a fall in foreign currency assets, show the latest weekly RBI data.

In the previous reporting week, the reserves had surged by $2.236 billion to scale a new life-time high of $429.911 billion.

In the reporting week, foreign currency assets, which are a major component of the overall reserves, slipped by $1.11 billion to $399.697 billion, the central bank said Friday.

Expressed in dollar terms, foreign currency assets include the effect of appreciation/depreciation of non-US units like the euro, pound and yen held in the reserves.

(Source: PTI)

Also Read: Forex Cards of Jet Staffers Frozen, Court Sends Notice on Refund

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