Weekly Top

Economy-Banking-
Finance News
28th September – 4th October 2020

FOR RBI GRADE B & SEBI GRADE A

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Weekly Top Economy-Banking-Finance News

28th September – 4th October 2020

1. Mobile phones to get costlier as govt imposes 10% display duty: ICEA
• Mobile phone prices are expected to rise about 3 per cent as the government has
imposed 10 per cent duty on the import of displays, industry body ICEA.
• The duty on display assembly and touch panel was proposed to be applied from
October 1 under a phased manufacturing programme (PMP) announced in 2016 in
consensus with the industry.
• The objective of the PMP was to facilitate manufacturing of components indigenously
and discourage imports thereafter.

2. BharatPe aims Rs 1,000 cr loan disbursal to merchants this fiscal

• Merchant payment facilitating network BharatPe said it has disbursed Rs 80 crore loan
in September, and targets Rs 1,000 crore disbursal in 2020-21.

3. Warburg Pincus invests Rs 700 cr to acquire stake in Home First Finance

• Affordable housing financier Home First Finance said it has entered into definitive
agreements with an affiliate of global private equity firm Warburg Pincus LLC for an
investment of Rs 700 crore.

4. Mubadala picks up 1.4% stake in Reliance Retail for Rs 6,247 crore

• Reliance Industries (RIL) said Abu-Dhabi-based sovereign fund Mubadala would invest
Rs 6,247.5 crore into subsidiary Reliance Retail for a 1.4 per cent stake.
• This is the fifth deal to be announced by the Mukesh-Ambani-led firm in three weeks,
stepping up its stake sale process that has seen marquee investors back the firm so
far. The valuation of the firm, however, remains at Rs 4.2 trillion, a worrying sign, said
sector experts.
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5. 'Sunidhi' project to digitise provident fund, pension services of CMPFO

• The government announced the launch of an ambitious information technology
project 'Sunidhi' to digitise all provident fund and pension related activities of the Coal
Mines Provident Fund Organisation (CMPFO).
• CMPFO, a statutory body under the coal ministry, administers different schemes of
provident fund, pension and deposit linked insurance for coal mine workers.

6. India Sept trade deficit in goods at $2.9 bn, merchandise imports dip 19.6%
• India posted a trade deficit of $2.91 billion in goods in September, data released by
the government showed.
• Merchandise imports contracted 19.60% in September to $30.31 billion from a year
ago while exports rose 5.27% to $27.40 billion, data from the Ministry of Commerce
and Industry showed.
• Total merchandise imports fell by 40.06% to $148.69 billion during April-August
while exports were down 21.43% from the year-ago period to $125.06 billion, the data
showed.

7. UPI hits Rs 3.3-trillion transactions in September, shows RBI data

• Unified Payment Interface (UPI), the flagship payments platform of the National
Payments Corporation of India (NPCI), touched a new high in September, the data
released by the RBI shows.
• While the number of transactions crossed 1.8 bn, from 1.61 billion in August, the value
of transactions reached Rs 3.3 trillion, from Rs 2.98 trillion a month ago.

8. PNB launches financial inclusion, literacy initiative Gram Sampark Abhiyan

• State-owned Punjab National Bank (PNB) launched a financial inclusion and literacy
initiative 'Gram Sampark Abhiyan' to commemorate the 150th birth anniversary of
Mahatma Gandhi.
• The nationwide campaign was launched by Minister of Agriculture and Farmers
Welfare Narendra Singh Tomar, PNB said in a statement.
• The campaign is centred on four key themes -- digital, credit, social security and
financial literacy that will encapsulate various activities and prescribes the cherished
theme of 'Aatmanirbhar Bharat', it said.
• Upon commencement, PNB's 3,930 rural and 2,752 semi-urban branches will aim to
reach 526 districts during the campaign, with two camps per branch every month, it
said.
Weekly Top Economy-Banking-Finance News Free GA e-book

• This campaign will culminate on December 31, 2020 covering 526 districts in 24 states,
including Maharashtra, Uttar Pradesh, Bihar, Gujarat, Odisha, Manipur, Tripura and
Telangana.

9. After record high, forex reserves decline $3 bn to $542 bn: RBI data
• After touching a lifetime high in the previous week, the country's foreign exchange
reserves declined by $3.017 billion to $542.021 billion in the week ended September
25, RBI data showed.

10. Investment fund TPG to invest Rs 1,837 crore in Reliance Retail Ventures
• Reliance Industries Limited and Reliance Retail Ventures Limited (RRVL) announced
that global investment firm TPG will invest Rs 1,837.5 crore into RRVL, a subsidiary
of Reliance Industries.
• This investment values Reliance Retail at a pre-money equity value of Rs 4.285 trillion.
TPG's investment will translate into a 0.41 per cent equity stake in RRVL on a fully
diluted basis. This marks the second investment by TPG in a subsidiary of Reliance
Industries, following a Rs 4,546 crore investment in Jio Platforms announced earlier
this year.

11. Singapore's GIC to invest Rs 5,512.5 crore in Reliance Retail Ventures

• Singapore's sovereign wealth fund GIC will invest Rs 5,512.5 crore ($752.08 million) in
Reliance Industries' retail arm Reliance Retail Ventures Limited (RRVL).
• GIC's investment will translate into a 1.22% equity stake in Reliance Retail on a fully
diluted basis.

12. Govt to waive compound interest during moratorium for some loans:
Report
• The government has told the Supreme Court it has decided to waive "interest on
interest" on loans of up to Rs 2 crore during the six-month moratorium period,
the Times of India reported.
• The government's decision will benefit those clearing their dues on a variety of loans
between March and August. "This category of borrowers, in whose case the
compound interest will be waived, would be MSME loans and personal loans up to Rs
2 crore of the following category—MSME loans, education loans, housing loans,
consumer durable loans, credit card dues, auto loans, personal loans to professionals
and consumptions loans,” said the finance ministry in an affidavit before the Supreme
Court.
Weekly Top Economy-Banking-Finance News Free GA e-book

• The Reserve Bank of India had allowed borrowers to seek a six-month moratorium on
all loans due to the economic impact of the coronavirus crisis,
but banks and finance companies charged interest on the entire amount: the interest
as well as the interest liability.

13. Clix Capital planning to raise upto Rs 2,500 cr through debentures

• Clix Capital, which is in discussions with Lakshmi Vilas Bank (LVB) for a possible
merger, is planning to raise upto Rs 2,500 crore through debentures.
• The enabling resolution for issuing non-convertible debentures (NCDs) was placed
before shareholders for approval at its Annual General Meeting on September 30,
2020, according to a filing with the NSE. The company’s NCDs carry a rating of “A+”
with stable outlook from CARE Ratings.
• The company would raise funds through private placement of debentures in one or
more tranches. It, however, did not elaborate on the purpose of raising funds.

14. Regional rural banks incur net loss of Rs 2,206 crore in FY20: Nabard
• Regional rural banks (RRBs) as a group reported net loss of Rs 2,206 crore in the fiscal
year ended March 31, 2020, as against Rs 652-crore net loss in FY19, according to data
published by Nabard.
• The data on RRBs, recently published by the National Bank for Agriculture and Rural
Development (Nabard), is based on the data uploaded by the RRBs in the Ensure
portal. Gross non-performing assets as a percentage of gross loans outstanding of
RRBs marginally declined to 10.4 per cent as on March 31, 2020, from 10.8 per cent
as on March 31, 2019, the data showed.
• Share of standard, sub-standard, doubtful and loss assets stood at 89.6 per cent, 3.6
per cent, 6.5 per cent and 0.3 per cent, respectively, as of end March 2020.
• As of end March 2020, 17 out of the 45 RRBs had capital to risk weighted assets ratio
(CRAR) of less than 9 per cent, of which six RRBs had negative CRAR.
• System-wide CRAR of RRBs deteriorated to 10.2 per cent as on March 31, 2020 from
11.5 per cent in the previous year, the data showed.

15. Negative rating actions on firms rises to 32% in Q1FY21 from 23%: Icra
• Negative rating actions on companies increased to 32 percent in the first half of the
current financial year from 23 percent in the year-ago period, indicating serious
disruption to businesses due to the coronavirus pandemic, says a report.
• Of the 32 percent negative rating actions, as much as 17 percents were downgrades
and upgrades were a paltry 5 percent in the first six months of 2020-21, Icra Ratings
said in a note on Thursday.
Weekly Top Economy-Banking-Finance News Free GA e-book

• The top five sectors that saw maximum negative rating actions were textiles, real
estate, hospitality, auto ancillaries, and construction.

16. Fiscal deficit of 18 states at 40.7% in Q1, revenue deficit at 285%: Ind-Ra
• Steeply falling revenues and central grants amidst rising expenditure to fight the
coronavirus pandemic led to 18 of the largest states reporting a collective revenue
deficit of 285 percent of Budget Estimates in April-June as against 12.9 percent a year
ago, as per a report by India Ratings (Ind-Ra).
• The collective fiscal deficit of the 18 states stood at 40.7 percent of Budget Estimates
(BE) in Q1 as against 13.4 percent a year ago, the report said.

17. UPI transactions stood at Rs 3.29 trillion in September, shows NPCI data
• The Unified Payments Interface (UPI) transactions stood at Rs 3.29 lakh crore in
September with the number of transactions at 180 crores, NPCI data showed.
• The transactions were higher by over 10 percent from Rs 2.98 lakh crore in August.
Volume-wise, it grew nearly 12 percent month-on-month.
• In the past few years, person-to-person and person-to-merchant money transfer has
become simpler and safer due to BHIM UPI, the National Payments Corporation of
India (NPCI) said in a tweet showing the monthly data transactions.
• Among others, NPCI said the NETC FASTag has facilitated safe and contactless
payments of tolls and parking charges, making essential travel during lockdown safe
and non-stop with Rs 1,940.60 crore worth transactions at a volume of 11 crores.

18. In April-August, India’s fiscal deficit at 109% of the full-year target

• According to the data released by the Controller General of Accounts (CGA), fiscal
deficit during April-August was at 109.3 percent of the annual target estimated in the
Budget. In absolute terms, the fiscal deficit was at Rs 8,70,347 crore. It stood at 78.7
percent of Budget Estimates (BE) in the corresponding period during the last fiscal
year.
• Fiscal deficit or the gap between the expenditure and revenue had breached the
annual target in July.
• The government had pegged the fiscal deficit for 2020-21 at Rs 7.96 trillion or 3.5
percent of GDP in the Budget presented by Finance Minister Nirmala Sitharaman in
February. These figures, however, may have to be revised significantly in view of the
economic disruptions created by the outbreak of the coronavirus pandemic.
Weekly Top Economy-Banking-Finance News Free GA e-book

19. India’s June quarter current account surplus rises to $19.8 billion: RBI
• The country’s current account surplus rose to USD 19.8 billion or 3.9 percent of GDP
in the June quarter as merchandise imports declined amid the COVID-19 pandemic,
the Reserve Bank said.

20. Sebi imposes a penalty of Rs 1-crore on Brickwork Rating India

• Sebi has imposed a penalty of Rs 1 crore on Brickwork Rating India for violation of
Credit Rating Agencies Regulations. Sebi and RBI had conducted a joint inspection,
where they found lapses.

21. RBI defers CCB implementation by six months due to the Covid-19
pandemic
• The Reserve Bank has deferred the implementation of the capital conservation buffer
(CCB) requiring banks to set aside additional reserves of 0.625 percent by a further six
months due to the COVID-19 pandemic.
• The implementation of the regulations was to happen by September 30, and the same
has been now deferred to April 1, 2021, the RBI said in a notification.
Weekly Top Economy-Banking-Finance News Free GA e-book

• Accordingly, the minimum capital conservation ratios shall continue to apply till the
CCB attains the level of 2.5 percent on April 1, 2021, the RBI said.
• The pre-specified trigger for loss absorption through conversion/ write-down of
additional tier 1 instrument (perpetual non-convertible preference shares and
perpetual debt instruments), shall remain at 5.5 percent of risk-weighted assets
(RWAs) and will rise to 6.125 percent of RWAs from April 1, 2021, it added.
• Meanwhile, the central bank also deferred the implementation of Net Stable Funding
Ratio (NSFR) guidelines by six months to April 2021 because of the pandemic.

22. 38% engaged in employment, related activities in 2019: NSO time-use

survey
• As much as 38.2 percent of persons who were of the age of six years or above were
engaged in employment and related activities in the country in 2019, according to the
time use survey report of the National Statistical Office (NSO).
• The NSO, which is a wing of the Ministry of Statistics and Programme Implementation,
has conducted the first Time Use Survey (TUS) in India from January to December
2019.
• The survey measures the participation rate and time spent on paid activities, care
activities, unpaid activities, etc.
• As per the study, 57.3 percent males were engaged in employment and related
activities while the proportion was 18.4 percent for females in the country.
• In rural areas, the proportion of women engaged in employment and related activities
was higher at 19.2 percent compared to 16.7 percent in cities.
• The proportion of males above the age of six years engaged in gainful employment or
related activities was higher in cities at 59.8 percent in cities compared to 56.1 percent
in rural areas.
• The primary objective of TUS is to measure the participation of men and women in
paid and unpaid activities.
Read it completely here

23. E-commerce firms to create 300,000 jobs this festive season: RedSeer
• About 300,000 jobs are expected to be created by various e-commerce and logistics
companies during this year’s festive season, a report by RedSeer said.
• About 70 percent of these three lakh jobs are expected to be offered by online
platforms like Amazon and Flipkart, while the remaining will be by logistics players like
Ecomm Express and others, the report noted.
Weekly Top Economy-Banking-Finance News Free GA e-book

24. RBI appoints its director D K Kashyap on board of Dhanlaxmi Bank for 2 yrs
• Private sector Dhanlaxmi Bank said the RBI has appointed its General Manager D K
Kashyap on the board of the bank for two years.
• However, the bank did not disclose the reason for the appointment of the RBI’s
nominee of its board.
• The RBI usually does not appoint its nominee on the boards of private banks unless
there are exceptional circumstances to avoid any conflict of interest.
• Kerala-based Dhanlaxmi Bank was put under the Prompt Corrective Action (PCA)
Framework by the RBI in November 2015 due to deteriorating financial health and
only last year it came out of these restrictions. Since then it has posted a profit.

25. Indian startups raised up to $63 billion since 2016, spawn 27 unicorns
• The startups’ ecosystem has raised as much as USD 63 billion in growth capital
between 2016 and 2020, when they spawned 27 unicorns, according to the data
collated by the Indian Private Equity and Venture Capital Association and Praxis Global
Alliance.
• According to them, this makes India the third-largest tech startup ecosystem in the
world. Of the total inflows, nearly half came in 2019 alone — USD 34 billion and USD
17 billion in 2020 till May.
• The time-period also created as many as 27 unicorns in the country. Unicorns are
those with USD 1 billion or more valuation.
• Tech-enabled players continue to drive investors’ interest and have dominated the
early-stage funding landscape here.

26. MG Motors to invest Rs 1,000 crore more in India despite the anti-China
mood
• MG Motors, the Indian arm of China’s SAIC Motor, says it will invest a further Rs 1,000
crore in the next one year to enhance capacity.
• This comes amid higher scrutiny by the government and growing anti-China sentiment
against Chinese investment.
• It plans to increase the localization of products, which would mean higher
manufacturing in India, and aims to assemble battery lines locally.

27. Icra scales up a projection for GDP contraction to 11% from 9.5% earlier
• Rating agency Icra has revised its forecast for the contraction in the gross domestic
product (GDP) to 11 percent from its earlier assessment of 9.5 percent for 2020-21,
Weekly Top Economy-Banking-Finance News Free GA e-book

with fresh Covid-19 infections remaining elevated at the end of the second quarter of
the year.
• With this, most agencies now projected double-digit de-growth in GDP for the current
financial year.

28. RBI extends enhanced borrowing limit for banks under MSF till Mar 31
• Amid the ongoing economic woes created by the coronavirus pandemic, the Reserve
Bank has decided to extend by six months the enhanced borrowing facility provided
to banks to meet liquidity shortage till March 31, 2021.
• The RBI, as a temporary measure, had increased the borrowing limit for
scheduled banks under the marginal standing facility (MSF) scheme from 2 percent to
3 percent of their Net Demand and Time Liabilities (NDTL) with effect from March 27,
2020.
• The facility, which was initially available up to June 30, 2020, was later extended up to
September 30, 2020,”in view of the disruptions caused by the Covid-19 pandemic.
• With a view to providing comfort to banks on their liquidity requirements as also to
enable to continue to meet LCR requirements, it has been decided to continue with
the MSF relaxation for a further period of six months, i.e., up to March 31, 2021,” RBI
said in a statement.
• This dispensation, it added, provides increased access to funds to the extent of Rs 1.49
lakh crore, and qualifies as High-Quality Liquid Assets (HQLA) for the Liquidity
Coverage Ratio (LCR).
• Under the MSF, banks can borrow overnight at their discretion by dipping into the
Statutory Liquidity Ratio (SLR).
• The marginal standing facility rate currently stands at 4.25 percent.

29. Sebi eases norms for REITs, InvITs to raise fund in institutional placement
• Seeking to make fundraising easier, markets regulator Sebi has provided relaxations
to REITs and InvITs for preferential and institutional placement of their respective
units.
• Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) can
now raise equity capital through the institutional placement route two weeks after a
previous such exercise.
• Earlier, the mandated time gap was six months between two institutional placements.
• Also, changes have been made with respect to the pricing of units by
REITs and InvITs for preferential issues.
• In two separates but similarly worded circulars, Sebi said that in view of the situation
emerging out of the coronavirus pandemic, it has “granted certain relaxations for
raising of equity capital” by listed REITs and InvITs.
Weekly Top Economy-Banking-Finance News Free GA e-book

• Sebi said REITs and InvITs “shall not make any subsequent institutional placement
until the expiry of two weeks from the date of the prior institutional placement made
pursuant to one or more special resolutions”.
• Also, a provision has been put in place about the pricing of units for any preferential
issue made between the date of the circular and December 31, 2020.
• The units allotted on a preferential basis using the pricing method set out by the
regulator shall be locked-in for a period of three years, as per the circulars.
• All allotments arising out of the approval of the same unitholders need to follow the
same pricing method.
• For the computation of the lock-in requirement, the units held by the sponsors and
locked-in for three years in the past, in accordance with REIT and InvIT Regulations,
shall be considered, Sebi noted.
• The units locked-in pursuant to REIT and InvIT norms “shall not be put under fresh
lock-in again, even though they are considered for computing the lock-in requirement,
in case the said units are free of lock-in at the time of the preferential issue,” it added.

Source: Business Standard

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