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☕ 05.05.2020: Today's Banking / Financial News at a Glance
ЁЯНТ MFIs set to resume operations in orange, green zones : Nearly 88 lenders belonging to the micro-finance industry are making preparations to resume operations in green and orange zones, the Microfinance Institutions Network (MFIN) said on Monday. The lenders will adhere to all health and safety precautions related to COVID-19, the industry body of MFIs said in a statement. It, however, did not specifiy when the MFIs would resume operations. The lenders have also agreed to extend the three-month moratorium provided by the RBI on term loans to borrowers, the statement said, adding, collections will be made only from customers who have opted out of it. Demand for micro-finance will increase once MFIs start full-fledged operations after the lockdown is lifted, the MFIN said. - Economic Times
ЁЯНТ Small businesses will opt for gold loans to restart business : Traders, shopkeepers and small businessmen will be the biggest takers of gold loans to restart their operations after the lockdown, according to leading gold non-banking finance companies (NBFCs) such as Manappuram Finance and Muthoot Finance. Gold loans for business purposes are mostly used by small businesses as short-term working capital for stocking.With gold prices hovering around Rs 47,000 per 10 gm, small businesses will need to take loans to resume operations, said industry executives.George Alexander Muthoot, managing director of Muthoot Finance, told ET: “They will take gold loans for bridge financing to restart their operations. Due to the lockdown, payments have not come to small businesses, shopkeepers and traders. So they will need money, for which they will pledge their gold for taking loans. Nearly 75% of our customers are small shopkeepers, traders and small businesses.”Muthoot said some of the company’s branches, which are not in hotspots or containment areas, have started functioning. “Customers are slowly coming in. However, the flow is less as we have to follow social distancing norms. Our expectation is that gold loan demand will be more from northern India, western India and eastern India. At present, we have opened 1,300 branches,” he said.- Economic Times
ЁЯНТ Delhi HC allows HDFC Bank to deduct Indiabulls’ loan installment from fixed deposit : The Delhi High court, in an interim order on May 1, has allowed HDFC Bank to deduct `90 crore as a loan installment from Indiabulls Housing Finance (IHF) fixed deposit which it holds as security. Indiabulls had earlier filed a writ petition at Delhi HC to restrain HDFC Bank from recovering any loan amount during the moratorium period imposed by Reserve Bank of India (RBI). The banking regulator had, on March 27, announced a moratorium on term loan installments for three months from March 1,2020. However, several banks have not grant a moratorium to NBFCs. The company spokesperson for IHF said, ” We had filed a writ petition seeking clarity as to whether moratorium is to be extended to NBFCs or not and since a principal payment of `90 crore was due to HDFC Bank it was opportune to seek this clarification.” - financial express
ЁЯНТ Moratorium: Banks may give NBFCs a break : Banks could review extending the moratorium to non-banking financial companies (NBFCs) after a meeting with the Reserve Bank of India (RBI) on Saturday, sources close to development told FE. RBI governor Shaktikanta Das held meetings with heads of major public and private sector banks in two separate sessions through a video conference, the regulator said in a release on Saturday. The moratorium for NBFCs was discussed at the meeting, and the regulator is understood to have asked banks to consider a moratorium, at least, on a case-to-case basis. “We will review extending the moratorium to NBFCs at board level,” a banker told FE. FE reported earlier that public sector lender Bank of India has already provided a moratorium to NBFCs. The RBI, on March 27, permitted lending institutions to defer installments of term loans by three months from March 1, 2020. The NBFC sector has also given customers a repayments holiday but has not got one from banks. - financial express
ЁЯНТ Banks expect higher inflows into fixed deposits as investors seek safe harbour after Franklin Templeton issue : Banks are gearing up for a rise in deposits from retail customers as they move to safer investment opportunities after Franklin Templeton Mutual Fund announced it would be shutting down six of its debt funds. “Corporates would still look at high yields, but retail customers are considering term deposits as a safer option as many are redeeming their investments in MFs,” said a banker on the issue.Other banks have also reported increased interest in their term deposits from customers in recent days, despite lower interest rates. For instance, State Bank of India is offering interest of 5.7 per cent for a one to two-year deposit for amounts below ₹2 crore. Sumant Kathpalia, Managing Director and CEO, IndusInd Bank had also said last week that the lender expects more deposits are coming in as much money is getting redeemed from mutual funds. - Business Line
ЁЯНТ NBFCs seek RBI nod for one-time restructuring of all loans : Non-banking finance companies (NBFCs) have asked the Reserve Bank of India (RBI) to permit one-time restructuring of all loans considering the economic scenario in the wake of COVID-19 lockdown, according to two people who attended a meeting between RBI top brass and NBFC industry representatives today. Both declined to be named. The RBI has allowed banks and NBFCs for a one-time restructuring of loans given to micro, small and medium enterprises (MSMEs). The scheme was recently extended till December 3, 2020, after the government requested the RBI to do so. NBFCs have now asked RBI to extend a similar scheme for their borrowers for all types of loans taking into account the COVID-19 situation. “Our key demand was permission for a one-time restructuring of loans of all borrowers. We also raised the moratorium issue with the RBI since some banks are still not extending a moratorium to NBFCs,” said one NBFC industry official. - moneycontrol.com
ЁЯНТ Indiabulls Housing Finance allowed to file fresh 'comprehensive' plea : In a relief to Indiabulls Housing Finance, the Delhi High Court has allowed the company to file a fresh "comprehensive" plea. The housing finance company will now be able to seek protection against all liabilities to be serviced during the ongoing lockdown, CNBC-TV18 has reported. The court has also granted Indiabulls the liberty to seek protection against the moratorium circular by the Reserve Bank of India (RBI). Indiabulls has withdrawn its plea seeking protection from payment of NCD dues under the Reserve Bank of India moratorium. The Delhi HC had last week stayed a single-judge bench order wherein interim relief was granted to Indiabulls Housing Finance, from payment of its non-convertible debentures (NCD) dues. This order was to remain in effect until May 4. The relief was granted in light of the COVID-19 pandemic which has brought businesses to a halt.- moneycontrol.com
ЁЯНТ Centre working on Agro MSME policy: Nitin Gadkari : The government is working on an agro MSME policy which will focus on entrepreneurship development in rural, tribal, agricultural and forest areas for manufacturing products using local raw material, Union minister Nitin Gadkari said on Monday. The Minister for MSME and Road Transport and Highways was speaking during meetings held via video conferencing with the representatives of SME Chamber of India, SME Export Promotion Council and representatives of beauty and wellness industry on impact of COVID-19 on MSMEs, according to an MSME Ministry release. - moneycontrol.com
ЁЯНТ Vijay Mallya files appeal against extradition order to India : Vijay Mallya on Monday filed an application seeking leave to appeal in the UK Supreme Court, exactly two weeks after the embattled liquor baron lost his London High Court appeal against an extradition order to India on charges of fraud and money laundering related to unrecovered loans to his now-defunct Kingfisher Airlines. The 64-year-old businessman had 14 days to file this application to seek permission to move the higher court on the High Court judgment from April 20, which dismissed his appeal against a Westminster Magistrates’ Court extradition order certified by the UK Home Secretary. “The leave to appeal has been filed. We have until May 14 to respond,” said a spokesperson for the UK Crown Prosecution Service (CPS), which represents the Indian authorities in the legal process of the extradition. - moneycontrol.com
ЁЯНТ Banking bad debt could double in coronavirus crisis, delay recovery from the pandemic : India expects bad debts at its banks could double after the coronavirus crisis brought the economy to a sudden halt, a senior government official and four top bankers told Reuters. Indian banks are already grappling with 9.35 trillion rupees ($123 billion) of soured loans, which was equivalent to about 9.1% of their total assets at the end of September 2019."There is a considered view in the government that bank non-performing assets (NPAs) could double to 18-20% by the end of the fiscal year, as 20-25% of outstanding loans face a risk of default," the official with direct knowledge of the matter said.A fresh surge in bad debt could hit credit growth and delay India's recovery from the coronavirus pandemic."These are unprecedented times and the way it's going we can expect banks to report double the amount of NPAs from what we've seen in earlier quarters," the finance head of a top public sector bank told Reuters. The official and bankers declined to be named as they were not officially authorized to discuss the matter with media. - Economic Times
ЁЯНТ Looking to survive, CKP Co-op Bank to seek ₹240 crore from Maharashtra govt : In a last-ditch attempt at staying afloat, the CKP Co-operative Bank will approach the Maharashtra government seeking a capital infusion of ₹240 crore after the Reserve Bank of India (RBI) cancelled its licence, a senior bank official told Mint in a telephonic conversation. “We are drafting a letter to be sent to the government, requesting it to put the liquidation on hold," said Moreshwar Dhaimodkar, a general manager at the Mumbai-based co-operative bank.The RBI on 2 May said it has cancelled the licence of CKP Co-operative Bank Ltd for reasons including, the lack of any viable revival plan and functioning “in a manner detrimental to the public interest and interest of the depositors".A look at the bank’s list of defaulters, available on its website, would make it clear that delinquent estate loans led to its downfall. According to Dhaimodkar, of the ₹158-crore outstanding loan book as on 31 March, ₹153 crore or 97% were non performing. He added that ₹85-90 crore worth of the bad loans were in the real estate sector. - Live Mint
ЁЯНТ DBS Bank slashes India’s FY21 GDP forecast to 1% : With the lockdown now in place for two months, Singapore-based DBS Bank has cut India’s FY21 GDP forecast to 1 per cent vis-a-vis 1.5 per cent projected on April 9. This forecast is based on its assumption of an end in the lockdown in the June quarter, reopening of all sectors by third quarter (October-December) and catch-up production, normal monsoon, fiscal support measures of at least 3 per cent of GDP and direct lending support by the authorities. Risk scenarios point to a possible decline in the headline GDP if the extension prolongs or partial restart is rolled back, DBS Bank said in a report. - Business Line
ЁЯНТ Icra expects GDP to contract by 20 pc in June quarter; 2 pc fall in FY21 : After the government announced graded relaxations in the lockdown, domestic rating agency Icra on Monday estimated that the country's GDP might contract by as much as 20 per cent in the June quarter and is expected to overcome some lost ground in the remainder of the year but still close 2020-21 down by up to 2 per cent. The agency's earlier economic forecast was a range, according to which the GDP may either expand by 1 per cent or contract by 1 per cent in 2020-21.After keeping the country under a 40-day lockdown to arrest the spread of coronavirus, the government extended the lockdown till May 17 with a slew of relaxations to the unaffected areas in order to kick-start economic activity. "While the graded relaxations announced by the government will permit the resumption of economic activity, the relatively stringent norms in major urban centres will result in the pace of activity remaining constrained," the agency said.- Economic Times
ЁЯНТ Unwilling banks to seek their board view on moratorium to NBFCs : Bankers are going back to their boards after the Reserve Bank of India conveyed to them that even non-banking finance companies (NBFC) are covered under `borrowers' to be eligible for moratorium, opening up an opportunity for the struggling non-banking lenders to stay afloat. During a meeting over video conferencing, central bank officials also told bankers that they could use their discretion to decide the eligibility of firms based on their credit and liquidity profile, multiple people familiar with the matter said. The RBI move follows complaints from the NBFC sector that they were being deprived the moratorium that the regulator provided for all borrowers from paying principal and interest between March 1 and May 31 following the temporary shutdown of businesses to prevent the spread of Covid 19. - economic times
ЁЯНТ Cryptocurrency exchanges approach RBI seeking clarity on status and taxability : Cryptocurrency platforms that have seen a revival in last two months have approached the central bank on clarity around their status in India which is also set to impact how they will be taxed domestically. Crypto exchanges have written to the Reserve Bank of India (RBI) and sought clarity on their status as lenders continue to deny banking services to them due to a lack of clarity from the regulator.The cryptocurrency exchanges also want a clarity as to whether they are being categorised as commodity, currency, goods or a service as this is set to impact the way they get taxed under Goods and Services Tax (GST) framework. “If the digital assets are not exempted from GST, the digital currency exchanges in India are going to have a standoff with the tax authority. In early 2019, the tax department had reached out to several cryptocurrency platforms in this regard. In the wake of the recent Supreme Court ruling, we have also approached the RBI for clarity on this, as if we pay GST on the whole transaction, then most platforms would not be able to survive," said Praveenkumar Vijayakumar, Chairman & CEO Belfrics Global, a cyrptocurrency platform.- economic times
ЁЯНТ NBFCs seek RBI nod for one-time restructuring of all loans : Non-banking finance companies (NBFCs) have asked the Reserve Bank of India (RBI) to permit one-time restructuring of all loans considering the economic scenario in the wake of COVID-19 lockdown, according to two people who attended a meeting between RBI top brass and NBFC industry representatives today. Both declined to be named. The RBI has allowed banks and NBFCs for a one-time restructuring of loans given to micro, small and medium enterprises (MSMEs). The scheme was recently extended till December 3, 2020, after the government requested the RBI to do so. NBFCs have now asked RBI to extend a similar scheme for their borrowers for all types of loans taking into account the COVID-19 situation. “Our key demand was permission for a one-time restructuring of loans of all borrowers. We also raised the moratorium issue with the RBI since some banks are still not extending a moratorium to NBFCs,” said one NBFC industry official. - moneycontrol.com
ЁЯНТ Market carnage: Sensex suffers fourth-biggest single day loss in absolute terms : Weak global cues, muted results from India Inc, zero sales from top auto manufacturers, an extension of lockdown by another 2-weeks and contraction in manufacturing activity led to profit-taking on D-Street on May 4 after a sharp 14 percent rally seen in benchmark indices in April. BSE Sensex plunged 2,002 points to end at 31,715 while the Nifty50 closed 566 points down at 9,293. Investors lose nearly 6 lakh cr in a single trading session. The average market capitalisation of the BSE-listed companies fell from Rs 129.41 lakh cr recorded on April 30 to Rs 123.69 lakh cr on May 4.
ЁЯНТ Gold gains Rs 180 to Rs 45,913/10 gm, silver slips : Gold prices gained Rs 180 to Rs 45,913 per 10 gram in the Mumbai bullion market on a depreciating dollar-rupee and weakness in the stock market. The yellow metal gained as investor sought safety in the safe haven after the US threatened to impose tariffs on China for mishandling of the novel coronavirus, or COVID-19, pandemic. The rate of a 10 gram 18, 22 and 24-carat gold in Mumbai was Rs 34,435, Rs 42,056 and Rs 45,913 plus 3 percent GST, respectively. Silver prices slipped Rs 900 to Rs 41,300 per kg from its closing on April 30.
ЁЯНТ Rupee plunges 67 paise to 75.76 against US dollar : The rupee depreciated 71 paise to 75.80 against the US dollar in opening trade on Monday tracking selloff in domestic equities and strengthening American currency overseas. The rupee opened weak at 75.70 at the interbank forex market and then fell further to 75.80, down 71 paise over its last close.At 11 am, the rupee was being quoted at 75.76 against the dollar. It had settled at 75.09 against the US dollar on Thursday. Forex market was closed on Friday on account of Maharashtra Day.
Have a Good day.."ЁЯМ╗ЁЯСйЁЯСйЁЯСзЁЯСж
☕ 05.05.2020: Today's Banking / Financial News at a Glance
ЁЯНТ MFIs set to resume operations in orange, green zones : Nearly 88 lenders belonging to the micro-finance industry are making preparations to resume operations in green and orange zones, the Microfinance Institutions Network (MFIN) said on Monday. The lenders will adhere to all health and safety precautions related to COVID-19, the industry body of MFIs said in a statement. It, however, did not specifiy when the MFIs would resume operations. The lenders have also agreed to extend the three-month moratorium provided by the RBI on term loans to borrowers, the statement said, adding, collections will be made only from customers who have opted out of it. Demand for micro-finance will increase once MFIs start full-fledged operations after the lockdown is lifted, the MFIN said. - Economic Times
ЁЯНТ Small businesses will opt for gold loans to restart business : Traders, shopkeepers and small businessmen will be the biggest takers of gold loans to restart their operations after the lockdown, according to leading gold non-banking finance companies (NBFCs) such as Manappuram Finance and Muthoot Finance. Gold loans for business purposes are mostly used by small businesses as short-term working capital for stocking.With gold prices hovering around Rs 47,000 per 10 gm, small businesses will need to take loans to resume operations, said industry executives.George Alexander Muthoot, managing director of Muthoot Finance, told ET: “They will take gold loans for bridge financing to restart their operations. Due to the lockdown, payments have not come to small businesses, shopkeepers and traders. So they will need money, for which they will pledge their gold for taking loans. Nearly 75% of our customers are small shopkeepers, traders and small businesses.”Muthoot said some of the company’s branches, which are not in hotspots or containment areas, have started functioning. “Customers are slowly coming in. However, the flow is less as we have to follow social distancing norms. Our expectation is that gold loan demand will be more from northern India, western India and eastern India. At present, we have opened 1,300 branches,” he said.- Economic Times
ЁЯНТ Delhi HC allows HDFC Bank to deduct Indiabulls’ loan installment from fixed deposit : The Delhi High court, in an interim order on May 1, has allowed HDFC Bank to deduct `90 crore as a loan installment from Indiabulls Housing Finance (IHF) fixed deposit which it holds as security. Indiabulls had earlier filed a writ petition at Delhi HC to restrain HDFC Bank from recovering any loan amount during the moratorium period imposed by Reserve Bank of India (RBI). The banking regulator had, on March 27, announced a moratorium on term loan installments for three months from March 1,2020. However, several banks have not grant a moratorium to NBFCs. The company spokesperson for IHF said, ” We had filed a writ petition seeking clarity as to whether moratorium is to be extended to NBFCs or not and since a principal payment of `90 crore was due to HDFC Bank it was opportune to seek this clarification.” - financial express
ЁЯНТ Moratorium: Banks may give NBFCs a break : Banks could review extending the moratorium to non-banking financial companies (NBFCs) after a meeting with the Reserve Bank of India (RBI) on Saturday, sources close to development told FE. RBI governor Shaktikanta Das held meetings with heads of major public and private sector banks in two separate sessions through a video conference, the regulator said in a release on Saturday. The moratorium for NBFCs was discussed at the meeting, and the regulator is understood to have asked banks to consider a moratorium, at least, on a case-to-case basis. “We will review extending the moratorium to NBFCs at board level,” a banker told FE. FE reported earlier that public sector lender Bank of India has already provided a moratorium to NBFCs. The RBI, on March 27, permitted lending institutions to defer installments of term loans by three months from March 1, 2020. The NBFC sector has also given customers a repayments holiday but has not got one from banks. - financial express
ЁЯНТ Banks expect higher inflows into fixed deposits as investors seek safe harbour after Franklin Templeton issue : Banks are gearing up for a rise in deposits from retail customers as they move to safer investment opportunities after Franklin Templeton Mutual Fund announced it would be shutting down six of its debt funds. “Corporates would still look at high yields, but retail customers are considering term deposits as a safer option as many are redeeming their investments in MFs,” said a banker on the issue.Other banks have also reported increased interest in their term deposits from customers in recent days, despite lower interest rates. For instance, State Bank of India is offering interest of 5.7 per cent for a one to two-year deposit for amounts below ₹2 crore. Sumant Kathpalia, Managing Director and CEO, IndusInd Bank had also said last week that the lender expects more deposits are coming in as much money is getting redeemed from mutual funds. - Business Line
ЁЯНТ NBFCs seek RBI nod for one-time restructuring of all loans : Non-banking finance companies (NBFCs) have asked the Reserve Bank of India (RBI) to permit one-time restructuring of all loans considering the economic scenario in the wake of COVID-19 lockdown, according to two people who attended a meeting between RBI top brass and NBFC industry representatives today. Both declined to be named. The RBI has allowed banks and NBFCs for a one-time restructuring of loans given to micro, small and medium enterprises (MSMEs). The scheme was recently extended till December 3, 2020, after the government requested the RBI to do so. NBFCs have now asked RBI to extend a similar scheme for their borrowers for all types of loans taking into account the COVID-19 situation. “Our key demand was permission for a one-time restructuring of loans of all borrowers. We also raised the moratorium issue with the RBI since some banks are still not extending a moratorium to NBFCs,” said one NBFC industry official. - moneycontrol.com
ЁЯНТ Indiabulls Housing Finance allowed to file fresh 'comprehensive' plea : In a relief to Indiabulls Housing Finance, the Delhi High Court has allowed the company to file a fresh "comprehensive" plea. The housing finance company will now be able to seek protection against all liabilities to be serviced during the ongoing lockdown, CNBC-TV18 has reported. The court has also granted Indiabulls the liberty to seek protection against the moratorium circular by the Reserve Bank of India (RBI). Indiabulls has withdrawn its plea seeking protection from payment of NCD dues under the Reserve Bank of India moratorium. The Delhi HC had last week stayed a single-judge bench order wherein interim relief was granted to Indiabulls Housing Finance, from payment of its non-convertible debentures (NCD) dues. This order was to remain in effect until May 4. The relief was granted in light of the COVID-19 pandemic which has brought businesses to a halt.- moneycontrol.com
ЁЯНТ Centre working on Agro MSME policy: Nitin Gadkari : The government is working on an agro MSME policy which will focus on entrepreneurship development in rural, tribal, agricultural and forest areas for manufacturing products using local raw material, Union minister Nitin Gadkari said on Monday. The Minister for MSME and Road Transport and Highways was speaking during meetings held via video conferencing with the representatives of SME Chamber of India, SME Export Promotion Council and representatives of beauty and wellness industry on impact of COVID-19 on MSMEs, according to an MSME Ministry release. - moneycontrol.com
ЁЯНТ Vijay Mallya files appeal against extradition order to India : Vijay Mallya on Monday filed an application seeking leave to appeal in the UK Supreme Court, exactly two weeks after the embattled liquor baron lost his London High Court appeal against an extradition order to India on charges of fraud and money laundering related to unrecovered loans to his now-defunct Kingfisher Airlines. The 64-year-old businessman had 14 days to file this application to seek permission to move the higher court on the High Court judgment from April 20, which dismissed his appeal against a Westminster Magistrates’ Court extradition order certified by the UK Home Secretary. “The leave to appeal has been filed. We have until May 14 to respond,” said a spokesperson for the UK Crown Prosecution Service (CPS), which represents the Indian authorities in the legal process of the extradition. - moneycontrol.com
ЁЯНТ Banking bad debt could double in coronavirus crisis, delay recovery from the pandemic : India expects bad debts at its banks could double after the coronavirus crisis brought the economy to a sudden halt, a senior government official and four top bankers told Reuters. Indian banks are already grappling with 9.35 trillion rupees ($123 billion) of soured loans, which was equivalent to about 9.1% of their total assets at the end of September 2019."There is a considered view in the government that bank non-performing assets (NPAs) could double to 18-20% by the end of the fiscal year, as 20-25% of outstanding loans face a risk of default," the official with direct knowledge of the matter said.A fresh surge in bad debt could hit credit growth and delay India's recovery from the coronavirus pandemic."These are unprecedented times and the way it's going we can expect banks to report double the amount of NPAs from what we've seen in earlier quarters," the finance head of a top public sector bank told Reuters. The official and bankers declined to be named as they were not officially authorized to discuss the matter with media. - Economic Times
ЁЯНТ Looking to survive, CKP Co-op Bank to seek ₹240 crore from Maharashtra govt : In a last-ditch attempt at staying afloat, the CKP Co-operative Bank will approach the Maharashtra government seeking a capital infusion of ₹240 crore after the Reserve Bank of India (RBI) cancelled its licence, a senior bank official told Mint in a telephonic conversation. “We are drafting a letter to be sent to the government, requesting it to put the liquidation on hold," said Moreshwar Dhaimodkar, a general manager at the Mumbai-based co-operative bank.The RBI on 2 May said it has cancelled the licence of CKP Co-operative Bank Ltd for reasons including, the lack of any viable revival plan and functioning “in a manner detrimental to the public interest and interest of the depositors".A look at the bank’s list of defaulters, available on its website, would make it clear that delinquent estate loans led to its downfall. According to Dhaimodkar, of the ₹158-crore outstanding loan book as on 31 March, ₹153 crore or 97% were non performing. He added that ₹85-90 crore worth of the bad loans were in the real estate sector. - Live Mint
ЁЯНТ DBS Bank slashes India’s FY21 GDP forecast to 1% : With the lockdown now in place for two months, Singapore-based DBS Bank has cut India’s FY21 GDP forecast to 1 per cent vis-a-vis 1.5 per cent projected on April 9. This forecast is based on its assumption of an end in the lockdown in the June quarter, reopening of all sectors by third quarter (October-December) and catch-up production, normal monsoon, fiscal support measures of at least 3 per cent of GDP and direct lending support by the authorities. Risk scenarios point to a possible decline in the headline GDP if the extension prolongs or partial restart is rolled back, DBS Bank said in a report. - Business Line
ЁЯНТ Icra expects GDP to contract by 20 pc in June quarter; 2 pc fall in FY21 : After the government announced graded relaxations in the lockdown, domestic rating agency Icra on Monday estimated that the country's GDP might contract by as much as 20 per cent in the June quarter and is expected to overcome some lost ground in the remainder of the year but still close 2020-21 down by up to 2 per cent. The agency's earlier economic forecast was a range, according to which the GDP may either expand by 1 per cent or contract by 1 per cent in 2020-21.After keeping the country under a 40-day lockdown to arrest the spread of coronavirus, the government extended the lockdown till May 17 with a slew of relaxations to the unaffected areas in order to kick-start economic activity. "While the graded relaxations announced by the government will permit the resumption of economic activity, the relatively stringent norms in major urban centres will result in the pace of activity remaining constrained," the agency said.- Economic Times
ЁЯНТ Unwilling banks to seek their board view on moratorium to NBFCs : Bankers are going back to their boards after the Reserve Bank of India conveyed to them that even non-banking finance companies (NBFC) are covered under `borrowers' to be eligible for moratorium, opening up an opportunity for the struggling non-banking lenders to stay afloat. During a meeting over video conferencing, central bank officials also told bankers that they could use their discretion to decide the eligibility of firms based on their credit and liquidity profile, multiple people familiar with the matter said. The RBI move follows complaints from the NBFC sector that they were being deprived the moratorium that the regulator provided for all borrowers from paying principal and interest between March 1 and May 31 following the temporary shutdown of businesses to prevent the spread of Covid 19. - economic times
ЁЯНТ Cryptocurrency exchanges approach RBI seeking clarity on status and taxability : Cryptocurrency platforms that have seen a revival in last two months have approached the central bank on clarity around their status in India which is also set to impact how they will be taxed domestically. Crypto exchanges have written to the Reserve Bank of India (RBI) and sought clarity on their status as lenders continue to deny banking services to them due to a lack of clarity from the regulator.The cryptocurrency exchanges also want a clarity as to whether they are being categorised as commodity, currency, goods or a service as this is set to impact the way they get taxed under Goods and Services Tax (GST) framework. “If the digital assets are not exempted from GST, the digital currency exchanges in India are going to have a standoff with the tax authority. In early 2019, the tax department had reached out to several cryptocurrency platforms in this regard. In the wake of the recent Supreme Court ruling, we have also approached the RBI for clarity on this, as if we pay GST on the whole transaction, then most platforms would not be able to survive," said Praveenkumar Vijayakumar, Chairman & CEO Belfrics Global, a cyrptocurrency platform.- economic times
ЁЯНТ NBFCs seek RBI nod for one-time restructuring of all loans : Non-banking finance companies (NBFCs) have asked the Reserve Bank of India (RBI) to permit one-time restructuring of all loans considering the economic scenario in the wake of COVID-19 lockdown, according to two people who attended a meeting between RBI top brass and NBFC industry representatives today. Both declined to be named. The RBI has allowed banks and NBFCs for a one-time restructuring of loans given to micro, small and medium enterprises (MSMEs). The scheme was recently extended till December 3, 2020, after the government requested the RBI to do so. NBFCs have now asked RBI to extend a similar scheme for their borrowers for all types of loans taking into account the COVID-19 situation. “Our key demand was permission for a one-time restructuring of loans of all borrowers. We also raised the moratorium issue with the RBI since some banks are still not extending a moratorium to NBFCs,” said one NBFC industry official. - moneycontrol.com
ЁЯНТ Market carnage: Sensex suffers fourth-biggest single day loss in absolute terms : Weak global cues, muted results from India Inc, zero sales from top auto manufacturers, an extension of lockdown by another 2-weeks and contraction in manufacturing activity led to profit-taking on D-Street on May 4 after a sharp 14 percent rally seen in benchmark indices in April. BSE Sensex plunged 2,002 points to end at 31,715 while the Nifty50 closed 566 points down at 9,293. Investors lose nearly 6 lakh cr in a single trading session. The average market capitalisation of the BSE-listed companies fell from Rs 129.41 lakh cr recorded on April 30 to Rs 123.69 lakh cr on May 4.
ЁЯНТ Gold gains Rs 180 to Rs 45,913/10 gm, silver slips : Gold prices gained Rs 180 to Rs 45,913 per 10 gram in the Mumbai bullion market on a depreciating dollar-rupee and weakness in the stock market. The yellow metal gained as investor sought safety in the safe haven after the US threatened to impose tariffs on China for mishandling of the novel coronavirus, or COVID-19, pandemic. The rate of a 10 gram 18, 22 and 24-carat gold in Mumbai was Rs 34,435, Rs 42,056 and Rs 45,913 plus 3 percent GST, respectively. Silver prices slipped Rs 900 to Rs 41,300 per kg from its closing on April 30.
ЁЯНТ Rupee plunges 67 paise to 75.76 against US dollar : The rupee depreciated 71 paise to 75.80 against the US dollar in opening trade on Monday tracking selloff in domestic equities and strengthening American currency overseas. The rupee opened weak at 75.70 at the interbank forex market and then fell further to 75.80, down 71 paise over its last close.At 11 am, the rupee was being quoted at 75.76 against the dollar. It had settled at 75.09 against the US dollar on Thursday. Forex market was closed on Friday on account of Maharashtra Day.
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