QBiz: Repo Rate Hiked; World Bank Says India To Grow At 7.3%

Here are the top business stories of the day.

The RBI headquarters in Mumbai.

(Photo: Reuters)

1. MPC Hikes Interest Rates For The First Time In Over Four Years

India’s monetary policy committee voted unanimously to increase the benchmark repo rate for the first time in more than four years, as it tries to fend off rising inflation pressures.

The repo rate was raised by 25 basis points to 6.25 percent. The last time this benchmark rate was raised was in January 2014. The reverse repo rate stands increased to 6 percent from 5.75 percent. Fourteen of 43 economists polled by Bloomberg had forecast a 25 basis point hike in rates. Post the rate hike, the MPC maintained its monetary policy stance at ‘neutral’, giving it the flexibility to move in either direction.

(Source: BloombergQuint)

2. World Bank Sees India as Fastest Growing Economy for Next Three Years

The Indian economy will see a robust GDP growth of 7.3% in 2018-19 and 7.5% for the next two as “factors holding back growth in India fade”, the World Bank has forecast, allowing the country to retain the tag as the world’s fastest growing major emerging economy.

“India’s economy (today) is robust, resilient and has potential to deliver sustained growth,” Ayhan Kose, Director of the Development Prospects Group at the World Bank, told PTI. Growth in India is projected to advance 7.3% in FY 2018-19 (1 April 2018-31 March 2019) and 7.5% in FY 2019-20, reflecting robust private consumption and strengthening investment, the bank said in its June 2018 edition of the Global Economic Prospect report.

The report, released on Wednesday, is the global lender’s flagship publication on the state of the world economy.

(Source: PTI)

3. RBI To Set Up Public Credit Registry On All Borrowers

In a bid to check loan defaults, RBI said on Wednesday, 6 June, said that a Public Credit Registry will be set up containing information on all borrowers to ensure financial stability.

RBI said it has considered the recommendations and decided to set up a PCR in a modular and phased manner, following a report by Yeshwant M Deosthalee headed high-level task force.

An implementation task force is being constituted to help design and undertake logistics for the next steps in setting up of the PCR, it said after the second bi-monthly monetary policy review of 2018-19.

(Source: PTI)

4. IDFC Bank, Capital First Merger Gets RBI Approval

IDFC Bank Ltd on Wednesday announced that the Reserve Bank of India (RBI) has approved the proposed merger of Capital First with the bank. The deal announced on 13 January still remains subject to approval from shareholders of the two companies and the National Company Law Tribunal, the bank said in a BSE filing.

At 11.18 am, IDFC Bank shares were up 3.66% to Rs 39.65, while Capital First shares gained 2.33% to Rs 545.40. “The Reserve Bank of India has, via its letter dated 4 June conveyed its ‘no objection’ for the voluntary amalgamation of Capital First, Capital First Home Finance Ltd and Capital First Securities Ltd with IDFC Bank,” said the bank.

(Source: Livemint)

5. Infosys Says Strict Work Visa Norms Will Not Constrain Business Growth

Infosys Ltd on Wednesday said stricter work visa norms across various markets like the US and Australia will not “constrain” its business growth as the IT firm is focusing on hiring locals and training workforce in these geographies.

“I think, in general what we see in many of our markets — Europe, Australia, New Zealand, US market, independent from the current political situation — the overall sentiment is to enhance more local jobs activities,” Infosys CEO Salil Parekh said at Morgan Stanley’s 20th Annual India Summit.

Parekh was responding to a query on whether the software services major is concerned about measures being taken by various governments to tighten work visa norms. “....what we are building with this localisation approach is really gearing towards making sure that our business model evolves in the right way, without sacrificing the best elements of the business model for the future. So, I don’t think we see that this is going to constrain our business growth,” he said.

(Source: Livemint)

6. Air India Delays Salaries for Third Month in a Row

Air India, which failed to get even a single bidder for its disinvestment plan, has delayed payment of salaries to its employees for the third consecutive month, according to sources.

The airline management has also not communicated to the staff as to when the salaries for the month of May will be paid, they added.

"We have still not received our salaries for May. Moreover, the management has not informed us till date as to when it will be disbursed. This is the third month in a row that the airline has delayed the salaries," one of the source cited above said.

(Source: PTI)

7. BSE Sensex, Nifty Surge Despite First RBI Rate Hike in Over 4 Years

The Reserve Bank of India’s (RBI) first repo rate hike in over four years failed to dampen market sentiments on Wednesday, with the benchmark index Sensex closing 0.79% higher.

After a volatile session, the 30-share BSE Sensex ended at 35,178.88, up 275.67 points, while the broader NSE Nifty closed at 10,684.65, up 91.50 points, or 0.86%.

RBI’s rate-setting panel — the monetary policy committee — voted unanimously to raise the repo rate by 25 basis points (bps) to 6.25%, and retained its neutral policy stance. It cited rising oil prices and higher core inflation momentum amid signs of stronger growth as the main reason for the rate hike.

(Source: Livemint)

8. TCS Says Issued 24,000 Job Offers This Year

Tata Consultancy Services (TCS) on Wednesday said it has issued 20,000 job offers to freshers and around 4,000 offers to non-freshers this year.

The company will go for on-demand hiring because of increased automation in software delivery process, according to the company’s executive vice president and head of global human resource Ajoyendra Mukherjee.

“Everybody is becoming more and more cost conscious, we can’t hire much in advance,” he said. Last year, too, TCS has issued similar number of offers to freshers.

(Source: Livemint)

9. Videocon Industries Admitted For Insolvency Proceedings

The Mumbai bench of the National Company Law Tribunal on Wednesday, 6 June, admitted Videocon Industries Ltd under the Insolvency and Bankruptcy Code, two bankers in the know confirmed on the condition of anonymity.

Anuj Jain from KPMG has been appointed as the interim resolution professional at the company by the NCLT. State Bank of India had filed the insolvency petition against Videocon Industries in December last year, following directions from the Reserve Bank of India. The regulator in August 2017 had sent a list of 29 stressed corporate accounts to bankers for action under the insolvency process.

(Source: BloombergQuint)