Coming Wednesday, Finance Minister (FM) Nirmala Sitharaman will present the 2023 Union Budget - the last full Budget ahead of the 2024 Lok Sabha elections. While India exited 2022 as a relatively bright spot in the global economy, the FM will endeavour to present a Budget that insulates India's economy against global headwinds and recession in advanced economies, while sticking to the path of fiscal consolidation. In this, she is being helped by her core team of trusted advisors.
The market capitalisation of BSE-listed firms jumped to an all-time high of Rs 304.53 lakh crore on Wednesday, buoyed by an unprecedented rally in equities where the BSE benchmark Sensex ended over the 67,000-mark for the first time ever. Rallying for the fifth day running, the 30-share BSE Sensex climbed 302.30 points, or 0.45 per cent, to end at its lifetime closing high of 67,097.44 points. During the day, it jumped 376.24 points, or 0.56 per cent, to reach its all-time intra-day peak of 67,171.38 points.
The Reserve Bank on Monday asked all banks and financial institutions to assess the impact on their balance sheet, asset quality, liquidity, among others, in the wake of the potential threat arising out of the spread of coronavirus disease in India. Several confirmed cases have also been detected in India, which highlight the need of a co-ordinated strategy for handling the emerging situations to protect the resilience of the Indian financial system, RBI said in a notification addressed to banks, urban cooperative banks, NBFCs, payment and small finance banks.
A whirlwind trip of the dark underbelly of global finance, covering everything from tax law changes to aiding criminals to decamp with money from bank accounts.
Indian society may be more advanced than we think it is, notes Ajit Balakrishnan.
The finance minister chaired a meeting through video conference with major private banks and NBFCs to ensure effective rollout of ECLGS and uninterrupted liquidity to Indian MSMEs in this difficult time.
The rupee breached the 80-mark against the dollar on Tuesday. The steady depreciation in the value of the rupee against the US dollar is likely to prove expensive for corporate India. The listed companies' revenue expenses in foreign currency or imports exceed their export revenues or revenue earnings in forex. In their latest financial year, BSE500 companies, excluding banks and non-banking finance companies and insurance (BFSI), reported combined forex expenses of Rs 12.31 trillion against forex earnings of around Rs 10 trillion.
Among the Sensex firms, Axis Bank, Power Grid, Maruti, State Bank of India, Tata Motors, ITC, Nestle and Mahindra & Mahindra were the major gainers. Bajaj Finance and Larsen & Toubro were the laggards.
Tata Group-owned Air India has informed the Centre that aircraft lessors wish to set up their special purpose vehicles (SPVs) outside India since they aren't enthused about the Indian 'legal structure' and are loath to take risks. Indian airlines have a combined fleet of about 700 planes; over 85 per cent are on lease. A majority of lessors are based in Ireland due to its attractive tax policy, light-touch regulations, and swift legal system.
'A key reason for the strong interest in IPOs has been an increased focus on profitability and reasonable pricing of deals.'
Arundhati Bhattacharya is a strong contender for chairperson post, after Pratip Chaudhuri retires in September.
The RBI was not party to the decision to demonetize 500 and 1,000-rupee notes, which was taken at the highest level of India's political leadership.
ICICI Bank was the top gainer in the Sensex pack, rising over 3 per cent, followed by ITC, SBI, HCL Tech, Axis Bank, Bajaj Finserv and Tech Mahindra. NSE Nifty advanced 32 points to 15,856.05.
If indeed the gate opens for big industrial houses, the RBI needs to be smarter than them and demonstrate it through action, not reaction, observes Tamal Bandyopadhyay.
Without bringing sound governance and technical capabilities into the RBI's work, injecting new money sets the stage for a next wave of bad behaviour by banks, warns Ajay Shah.
Citigroup India on Thursday announced a $3.5 million grant to the Indian School of Micro Finance to be set up in Ahmedabad.
The Department of Telecommunications (DoT) has initiated discussions with banks to address financial stress in the telecom sector, particularly Vodafone Idea Ltd (VIL) that urgently requires fund infusion to stay afloat. There was a meeting of DOT officials and senior bankers on Friday on the issue of Vodafone, sources said, adding that banks have been asked to look for a solution within the prudential guidelines. According to sources, senior officials from the country's biggest lenders State Bank of India and Bank of Baroda were also present among others in the meeting. More such meetings are expected to take place in the coming days, they said.
Wall Street-correlated stock markets are facing the risk of correction, as Christopher Wood, the global head of equity strategy at Jefferies, conveys to investors in his latest edition of GREED & fear. Rising crude oil prices, which are nearing $100 a barrel (Brent), pose a threat to the global central bank's battle against inflation and have led to a re-evaluation of its exposure to Indian stocks. "The potential for more US Federal Reserve (Fed) rate hikes, combined with the risk that monetary tightening finally bites as regards the economy, remains a risk for Wall Street-correlated world stock markets. "There is also the oil factor. This is why GREED & fear continues to believe the pain trade is down. "Areas in Asia, such as Indian midcaps, which have already done very well, are at obvious risk of some profit-taking," writes Wood.
From the Sensex pack, NTPC, Bajaj Finance, IndusInd Bank, UltraTech Cement, Bajaj Finserv, State Bank of India, Tata Motors, ITC, Power Grid and Larsen & Toubro were the biggest gainers. IndusInd Bank climbed 2 per cent after the company on Tuesday reported a 30 per cent jump in consolidated net profit in April-June quarter at Rs 2,124.50 crore, helped by core income growth and lower bad loan provisions.
'As an investor, I either have to exit my investments in the next three months or use dark pools or cash to transact. For a normal investor, it will be almost impossible to transact in bitcoin and other digital currencies.'
Mired in corruption, politics and with a history of suicides by its hapless depositors, PMC Bank's revival is a challenge very different from Yes Bank and LVB, both for the regulator and the rescuer, observes Tamal Bandyopadhyay.
'No Budget has so far has addressed the issue of the government's abysmal productivity of capital spending, improving which will be the big game changer. 'But, the government's tight lock on businesses, banks, education, and even essential services like transportation and large parts of infrastructure and healthcare is destroying capital year after year,' points out Debashis Basu.
In the June quarter of FY24, 51 per cent of consumers who took small-ticket personal loans already had more than four credit products at the time of accessing yet another new loan, compared with just 17 per cent in the June quarter of FY20, points out Tamal Bandyopadhyay.
Canadian Prime Minister Justin Trudeau highlighted the importance of coordinated G20 leadership and action to uphold the rule of law and international law and strengthen democratic systems, as he participated in a virtual G20 Leaders' Summit hosted by India.
Billionaire Mukesh Ambani's Reliance Industries Ltd is the most valuable private company in the country, as per Hurun India's 2022 Burgundy Private Hurun India 500 list. The list, which was released on Tuesday, stated that with a value of Rs 16.4 lakh crore, Reliance is India's most valuable company, followed by Tata Consultancy Services (TCS) with Rs 11.8 lakh crore and HDFC Bank with Rs 9.4 lakh crore. Reliance is also the highest taxpayer with a payout of Rs 16,297 crore and the most profitable company with a bottomline of Rs 67,845 crore in 2022-23.
The International Monetary Fund (IMF) warned on Tuesday that India's general government debt (comprising both central and state government debt) could exceed 100 per cent of gross domestic product (GDP) in the medium term. It also cautioned that long-term debt sustainability risks are high due to the significant investment required to meet India's climate change mitigation targets. The Indian government, however, disagreed, arguing that risks from sovereign debt are extremely limited as it is predominantly denominated in domestic currency.
From the Sensex pack, Infosys jumped the most by 3.67 per cent. Asian Paints, HCL Technologies, Reliance Industries, ICICI Bank, Wipro, NTPC, Tech Mahindra, Bajaj Finserv and Larsen & Toubro were among the other major gainers. State Bank of India, Bajaj Finance, Titan, Tata Steel, Tata Motors and UltraTech Cement were among the laggards.
Nestle, Infosys, ICICI Bank, Tata Motors, Tata Consultancy Services, HCL Technologies, Tech Mahindra and Axis Bank were the other major winners. Sun Pharma, Asian Paints, Bajaj Finance and Titan were the laggards.
Equity benchmark indices ended flat on Wednesday with Sensex sliding 33 points and Nifty gaining 9 points after an unabated record-breaking rally in the last few trading sessions. Weak global market trends and fall in HDFC twins also spoiled markets party. The 30-share BSE Sensex dipped 33.01 points or 0.05 per cent to settle at 65,446.04.
'Clearly, the depositors of cooperative banks need the maximum protection.'
About 150 years ago, in British India, big farmers in the western region of Maharashtra agitated over unfair lending practices and demanded a more fair and inclusive financing structure. People say this is where the seeds of the cooperative movement, now omnipresent in the country, were sown. Today, more than 800,000 cooperative societies thrive in India, with 300 million members, a number close to the population of the United States. Despite a reach this deep--grass roots as they call it--cooperatives do not occupy a lion's share in the Indian economy.
GE Commercial Finance, which has an asset base of more than $230 billion globally, is planning to increase its exposure in the Indian market.
Micro-finance institutions (MFIs) are planning to take legal action against YES Bank's move to recall a part of its loans to them.
In India, it is not easy to fight it out with the large banks which are nimble-footed and technology-savvy and are continuously innovating on the retail turf with newer products for customer acquisition.
Banks operating in India reported fraud of Rs 4.92 trillion as on March 31, 2021, which represents nearly 4.5 per cent of the total bank credit, showed Reserve Bank of India (RBI) data, which was sought under the Right to Information (RTI) Act by Saurabh Pandhare. The data showed 90 banks and financial institutions reported a total of 45,613 cases of loan fraud till March 31, 2021. State Bank of India - the country's largest lender - reported the highest amount of loans as fraud - Rs 78,072 crore as on March 31, 2021.
'We are all in a tizzy about NBFCs in the aftermath of the IL&FS default.' 'We tend to jump to the notion that an NBFC is like a bank. But banks make a promise that deposits are liquid and have an assured return.' 'NBFCs make no such promises,' points out Ajay Shah.
Indian start-ups raised issues, such as blockages in international wire transfers, disruptions due to threshold limits on withdrawals, lack of communication from US agencies, and the need for preferential access to credit, in a meeting with the government over the fallout of Silicon Valley Bank's collapse. Rajeev Chandrasekhar, minister of state for electronics and information technology, held a virtual meeting with over 450 members from start-ups, venture capitalists, and investors who have been directly affected by the closure of SVB. He assured them that the IT ministry would put together a list of suggestions and give it to the finance minister on behalf of start-ups.
Kotak Bank was the top loser in the Sensex pack, shedding over 2 per cent, followed by ICICI Bank, PowerGrid, HDFC, IndusInd Bank and Axis Bank. NSE Nifty declined 45.75 points to 16,568.85.
'The focus needs to shift towards the ability to collect payments, particularly in tier-3 to tier-4 areas where acceptance is still lacking.'
'Flush with funds, lending became a cash management exercise.' 'Road projects, power generation plants, airports etc were financed left and right with apparently no regard for the projects' ability to repay,' explains S Muralidharan, former managing director, BNP Paribas.
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