QBiz: Parekh on HDFC Succession Planning; Goyal to Meet Bank Heads
Here are the top business stories of the day.
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1. Deepak Parekh Says Succession Planning Imminent at HDFC Companies
A round of succession planning is imminent at Housing Development Finance Corporation Ltd and its group companies, Non-Executive Chairman Deepak Parekh said on 4 July in a letter addressing the shareholders of India’s largest mortgage lender.
“As passionate and energetic as some of our leaders within the HDFC Group are about their jobs, the reality is that individuals do get on in age,” Parekh said in the letter which was part of the company’s annual report.
The group will focus on a smooth transition and shareholders should not expect any announcements immediately, he clarified. “All the boards of the HDFC group of companies believe that succession planning needs a time frame of 18 to 24 months to ensure a smooth transition.”
(Source: BloombergQuint)
2. FM Piyush Goyal to Meet Heads of Banks Today to Discuss NPA Cases
Finance Minister Piyush Goyal will meet heads of banks on Thursday, 5 July, to discuss an inter-lender structure suggested under the 'Project Sashakat' that intends to fast-track resolution of stressed assets in the banking system.
The meeting is likely to formalise the inter-creditor agreement structure as suggested in the five-pronged 'Project Sashakat', sources said.
The meeting has been organised by Indian Banks Association (IBA) and inter-creditor agreement would be the framework under which the consortium would take up NPA cases.
(Source: Business Standard)
3. Rs 3.8 Lakh Crore in Loans to Come Up for Resolution by September: ICRA
Rating agency ICRA expects 70 large corporate accounts, with loans worth Rs 3.8 lakh crore, to come up for resolution by 1 September 2018, it said in a presentation on 4 July.
These are accounts which are rated ‘D’ by external rating agencies and have outstanding debt of over Rs 2,000 crore, ICRA explained. More than 90 percent of these accounts are already classified as non-performing in bank books but are approaching the 180-day deadline set for resolution under the Reserve Bank of India’s new stressed asset resolution framework. If a resolution plan is not finalised within these 180 days, the accounts need to be referred for insolvency proceedings, the RBI’s framework says.
(Source: BloombergQuint)
4. Post Reliance Jio, India’s Mobile Industry Officially Shrinks by a Third
The Telecom Regulatory Authority of India’s (TRAI) performance indicator report for the March 2018 quarter shows that the industry’s woes continue. Kotak Institutional Equities points out in a note to clients that consumer-level wireless spends (including service tax) fell to ₹29,800 crore in the March quarter. That’s down from a peak of ₹44,700 crore in the June 2016 quarter, the last ex-Reliance Jio quarter. As such, the reduction in wireless bills works out to ₹59,600 crore on an annualised basis.
On an average, based on this data, consumer spends have fallen by 33% since Reliance Jio’s launch. While these computations are based on TRAI’s quarterly report, there are some adjustments made by Kotak’s analysts.
(Source: Livemint)
5. Supreme Court Tells Jaiprakash Associates to Deposit ₹650 Crore
The Supreme Court on Wednesday, 4 July, suggested Jaiprakash Associates Ltd (JAL), the parent of debt-ridden Jaypee Infratech Ltd (JIL), submit ₹650 crore to prove it is bona fides before the court, after it failed to deposit ₹1,000 crore as directed on 16 May.
However, no formal order was passed to this effect and the apex court asked JAL to seek instructions on the issue.
(Source: Livemint)
6. Govt to Raise ₹1 Trillion from Market for Funding Education Infrastructure
The Union cabinet on Wednesday, 4 July, allowed the Human Resource Development (HRD) ministry to raise ₹1 trillion from the market for funding education research and infrastructure.
The funds will be raised from a clutch of sources, including education bonds, commercial borrowings and corporate houses. The money shall be given as loans to government-controlled higher educational institutions, including medical colleges, as well as central government-run school chains such as Kendriya Vidyalayas (KVs) and Navodaya Vidyalayas (NVs) as the Union government explores innovative ways to fund education to reduce the burden on the exchequer.
(Source: Livemint)
7. PNB to Designate 60 Branches to Carry out Loan Operations Above Rs 500 Mn
Fraud-hit PNB has decided to designate 60 systematically important branches (SIB) to carry out all lending operations of above Rs 500 million to ensure better checks and balances over large accounts.
The bank will create these SIBs across the country as part of its credit restructuring exercise.
"The bank is in the process of shifting most of the large accounts to SIBs," Punjab National Bank (PNB) said in a release on Wednesday, 4 July.
(Source: Business Standard)
8. Govt Weighs Legislation on Right to Skill Training
The government is considering introduction of a rights-based legislation for skill training in India, in line with those in Germany and South Korea, a move that will give legal heft to Prime Minister Narendra Modi’s flagship programme, the Skill India mission.
The next step in skill development would be to back it with an act that entitles millions of youth entering the workforce to a right to be skilled, a senior government official told ET.
“This will make skill training enforceable, which in turn will significantly improve the employability of the Indian workforce,” the official added.
(Source: The Economic Times)
9. China Vows Not to Fire Tariff Shot Ahead of US in Trade War
China said that it wouldn’t implement tariffs ahead of the US on Friday, after previous arrangements put it on course to do so.
"We will never fire the first shot and will not implement tariffs ahead of the US," the Ministry of Finance said in a statement late Wednesday, 4 July, after media reported that Beijing would start levying tariffs hours ahead of the US due to the time zone difference.
Bloomberg earlier reported that China would start applying the duties from midnight on Friday – midday on 5 July in Washington – according to two officials with knowledge of the plans. The Chinese customs service had adjusted their systems so the new tariffs would start being charged as soon as the clock ticks over to 6 July in Beijing, according to one of the people.
(Source: BloombergQuint)
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