1. Rs 25,000 Crore Realty Rescue Fund May Fall Short
The government’s Rs 25,000 crore rescue fund for reviving the real estate industry may not be enough to address the full extent of the problem, even as private investors appear unwilling to take on outsized risks in the distressed sector without suitable returns.
With an estimated USD 25 billion worth of property projects facing insolvency proceedings in bankruptcy courts, there is little clarity on how many cases the proposed fund will be able to resolve.
“There is no legal provision of last-mile funding of projects under bankruptcy laws. The proposed alternative investment fund (AIF) would need to acquire the entire company or special purpose vehicle and not just projects under IBC (Insolvency and Bankruptcy Code)," a fund manager at an AIF, which specializes in distressed funding, said on condition of anonymity.
2. Have No Interest in Air India, Only Indigo: Qatar Airways CEO Akbar Al Baker
Qatar Airways on Thursday, 7 November, ruled out participation in the sale of national carrier Air India. However, the airline’s Chief Executive Officer (CEO) Akbar Al Baker said it can look to invest in budget carrier IndiGo at an appropriate time. “We have no interest in buying stake in Air India. We are interested in buying stake in IndiGo, but this is not the right time as issues among promoters are yet to be resolved,” Baker told reporters.
In the past, Baker has expressed interest in picking up stakes in an Indian carrier and setting up a domestic airline in the country. Meanwhile, IndiGo and Qatar Airways have signed a one-way codeshare agreement giving the middle-eastern carrier further access into the Indian market.
(Source: Financial Express)
3. Can Think of Taking ‘Further Decision’ If Firm Indication Given on ‘Core Interests’: MEA on RCEP
India on Thursday, 7 November, said if it gets a “firm indication” that its core interests will be accommodated in the RCEP trade deal then it can think of taking a “further decision” on the issue. The assertion by the Ministry of External Affairs came two days after Commerce and Industry Minister Piyush Goyal indicated that India is open for negotiations if the member countries of the Regional Comprehensive Economic Partnership (RCEP) come up with a better offer which can address concerns and provide greater market access for domestic industries.
He, however, had said that for the present, it is the final decision of the government that India will not join the China-backed mega free trade agreement.
4. Yes Bank Gave Loans of Over Rs 2,000 cr to Companies Linked to Indiabulls
Private sector lender Yes Bank Ltd had lent over Rs 2,000 crore to several companies linked to the Indiabulls Group that either have negative net worth or an average equity capital of Rs 1 lakh, an additional affidavit filed by Citizens Whistle Blower Forum in the Delhi high court has alleged.
According to documents which were submitted by the NGO as part of the affidavit, Yes Bank loaned Rs 2,183 crore to eight unlisted companies of the Indiabulls Group which had either negative net worth or had an average equity capital of Rs 1 lakh each.
While the case was filed on 13 September, the additional affidavit was filed on 22 October and has been reviewed by Mint.
5. PSU Banks Loan Melas Push Non-Food Credit Growth; Outstanding Loans Inch Closer to Rs 100 Lakh Crore
The non-food credit growth in the banking system stood at 8.79 percent year-on-year (y-o-y) for the fortnight ended 7 November, the highest in the last three fortnights, following the lending “outreach programmes” by public-sector banks (PSBs). Between 11 and 25 October, non-food credit grew 0.4 percent to Rs 97.68 lakh crore, according to the provisional data released by the Reserve Bank of India (RBI).
The loan carnivals were organised in two phases, with the first leg from 1 and 9 October and the second one from 21 to 25 October. The carnivals were mandated by the government to push retail loan growth directing the banks to hold ‘loan melas’ in partnership with non-bank lenders in 400 districts.
(Source: FInancial Express)
6. Tussle Between Traders, FMCG Firms Worsens Over Differential Pricing
An ongoing stir involving fast-moving consumer goods (FMCG) companies and distributors in Gujarat over differential product pricing and low margins is threatening to go national. This comes as the Federation of All India Distributors Association (FAIDA), which comprises 24 member state bodies, steps in to lend support to the agitation, which has seen the Gujarat-based distributors boycott products of a few companies for the past few days.
Companies whose products have not been picked up for distribution in the state under a “non-cooperation movement” include Marico, Dabur, Emami, Britannia, Reckitt Benckiser (RB), and Godrej Consumer Products. These firms, distributors allege, have been supplying directly to modern trade and e-tailers, bypassing them.
(Source: Business Standard)
7. Tatas Set for Long-Drawn-Out Battle Over Licence of Trusts
The dispute over the cancellation of registration of six Tata Trusts is set to be a protracted legal battle, as the trusts and tax officials differ over the end date of the registration, and whether it was a cancellation or a surrender.
While the charitable trusts said they surrendered their registration in February 2015, the tax department, which cancelled the registration in October 2019, said that there was no legal provision for surrendering the registration.
Also, if October 2019 is taken to be the end of the registration, the tax department can demand much higher tax from the trusts, because the Income Tax Act (I-T Act) did not permit taxing “accreted income" before 2016.
8. RBI Governor Shaktikanta Das Says Closely Monitoring Situation at PMC Bank; Forensic Audit Underway
Reserve Bank Governor Shaktikanta Das on Thursday, 7 November, said it is closely monitoring the situation at scam-hit PMC Bank and a forensic audit is underway. Punjab & Maharashtra Cooperative Bank (PMC Bank), among the top 10 urban cooperative banks in the country, was placed under an RBI administrator on 23 September for six months due to massive under-reporting of dud loans. “PMC Bank situation is being closely monitored. Forensic audit is underway in PMC Bank case,” Das told reporters after a meeting of the Financial Stability and Development Council (FSDC) here.
RBI had imposed withdrawal restrictions on account-holders after it found alleged irregularities to the tune of Rs 4,355 crore due to diversion of money to infrastructure firm HDIL. On Tuesday, the apex bank enhanced the cash withdrawal limit to Rs 50,000 per account, which was the fourth such increase since PMC Bank was placed under its direct control.
9. Cognizant to Hire 23,000 From Indian Institutes in 2020, Says India CMD
Nasdaq-listed information technology (IT) services company Cognizant is planning to hire around 23,000 employees from technology institutions in India during calendar year 2020, in addition to its campus hiring for business-process outsourcing (BPO) operations, according to Ramkumar Ramamoorthy, chairman and managing director of Cognizant India. He clarified that the company would continue hiring, and that the earlier job-cut announcement was but a small portion of the larger plan, considering Cognizant had around 290,000 employees globally.
Ramamoorthy’s latest statement comes days after Cognizant said it was planning to remove around 7,000 mid-and senior-level jobs and shut down its content moderation business, which accounts for another 6,000 jobs, as part of its ‘2020 Fit for Growth Plan’. He was speaking at the 18th edition of CII Connect 2019, an international conference and exhibition on information and communication technology,
(Source: Business Standard)
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