QBiz: RBI Proposes New Liquidity Norms for NBFCs and More

Catch all the top business news stories of the day here.

Reserve Bank of India (RBI).

(Photo: Reuters)

1. RBI Proposes New Liquidity Norms for NBFCs

The Reserve Bank of India on Friday released draft rules proposing to tighten the liquidity framework for the country’s non-banking financial companies.

The new RBI NBFC norms, if finalised, will bring in a more robust governance and reporting structure for monitoring liquidity risks and introduce a "liquidity coverage ratio" in order to ensure that NBFCs have some buffer available in times of stress.

The rules come against the backdrop of an NBFC crisis, which was sparked by the collapse of Infrastructure Leasing and Financial Services. The default by the once-AAA rated firm led to tightness in the credit market and exposed liquidity risks on the balance sheets of NBFCs.

(Source: BloombergQuint)

2. Hinduja Group Sets Tough Conditions for Deal With Jet Airways

The Hinduja Group, which recently threw its hat in the ring for a potential investment in Jet Airways (India) Ltd, has laid down tough conditions for any investment in the airline. The conditions, unlikely to be acceptable to Jet Airways’ bankers, mean that the future of the airline remains uncertain.

The Hinduja Group is seeking an 80 percent haircut on the outstanding debt of the airline, said two people familiar with the discussions, who spoke on condition of anonymity. Jet Airways owes its lenders close to Rs 10,000 crore.

Also, the group is only interested in a minority stake in Jet Airways and does not intend to be a majority partner, these people said.

(Source: BloombergQuint)

3. HR Khan-Led SEBI Panel Suggests Significant Changes to FPI Rules

A Securities and Exchange Board of India-constituted panel has proposed significant changes to norms governing foreign portfolio investors, including simplified registration requirements for certain categories and barring entities that fail to furnish beneficial ownership details.

After consultations with various stakeholders, the working group on SEBI (Foreign Portfolio Investors) Regulations, 2014, has submitted its report to the regulator.

The group, headed by former Reserve bank of India Deputy Governor HR Khan, has also pitched for a liberalised investment cap, review of prohibited sectors for foreign investment for FPIs, permitting FPIs for off-market transactions and review of restriction on sovereign wealth funds for investment in corporate debt securities.

(Source: BloombergQuint)

4. Decision on Adani’s Coalmine in Australia in 3 Weeks

The process to obtain final approvals for energy giant Adani’s Carmichael coal mine in Australia will be settled within three weeks, the leader of the country’s Queensland state said on Friday as she sought to expedite the controversy-hit project.
If given the green light, Adani could begin breaking ground at its Carmichael mine site within weeks, after more than eight years of planning.

Adani group entered Australia in 2010 with the purchase of the greenfield Carmichael coal mine in the Galilee Basin in central Queensland, and the Abbot Point port near Bowen in the north. The massive coal mine in Queensland state has been a controversial topic, with the project expected to produce 2.3 billion tonne of low-quality coal.

(Source: Financial Express)

5. Public Sector Banks Recover Rs 1.2 Lk Cr From Bad Loans in 2018-19

Public sector banks (PSBs) have recovered close to Rs 1.2 lakh crore from stressed assets during the financial ended March, primarily helped by resolution under the Insolvency and Bankruptcy Code (IBC), an official said. During the first half of the previous fiscal, banks recovered Rs 60,713 crore from bad loans. “Due to non-resolution of some big accounts referred under NCLT (National Company Law Tribunal), PSBs could not achieve the resolution target of Rs 1.80 lakh crore. But, these accounts should be resolved in the current financial year,” the official said.

Banks recovered close to Rs 55,000 crore from the NCLT resolution, the official said. “Compared to Rs 74,562 crore in 2017-18, the recovery in the previous financial year nearly doubled to Rs 1.2 lakh crore,” the official said.

(Source: Financial Express)

6. Fuel Retailers Hike Petrol, Diesel Prices on Friday

The state-run oil marketing companies have hiked the petrol and diesel prices on Friday across Delhi, Mumbai, Kolkata and Chennai. While petrol prices have been raised by 14-15 paise a litre, diesel prices were increased by 16-17 paise a litre. In the national capital, petrol is selling at Rs 71.39 a litre as against the previous rate Rs 71.25 a litre on Thursday, whereas, diesel prices surged to Rs 66.45 a litre from the previous price of Rs 66.29 a litre, according to the Indian Oil Corporation website.

In Mumbai, people need to shell out Rs 77 for one litre of petrol, 14 paise more than the previous rate of Rs 76.86 a litre, while for diesel, they need to spend Rs 69.63 a litre, 17 paise more than the last price of Rs 69.46 a litre. In Kolkata, the petrol prices have been raised by 14 paise to Rs 73.46 a litre. Yesterday, petrol was being sold at Rs 73.32 in Kolkata. Diesel prices have also been hiked by 16 paise to 68.21 a litre. Yesterday, it was selling at Rs 68.05 a litre.

(Source: Financial Express)

7. Arun Jaitley Holds Meeting on Next Budget Amid Rumours of Ill Health

Finance Minister Arun Jaitley held a meeting on Friday with top bureaucrats of the finance ministry asking them to expedite plans for the first budget of the Modi government’s second tenure, amid rumours of his ill-health.

Jaitley took the meeting minutes on the day when the Union Cabinet passed a resolution to dissolve the 16th Lok Sabha of the National Democratic Alliance (NDA) government’s first term was dissolved. The meeting, which discussed key economic issues at length, lasted for about an hour at his residence.

(Sources: Business Standard)

8. Reliance Nippon Ofs Oversubscribed, Debt-Ridden Rcap Divests Entire Stake

Reliance Capital (Rcap) has been successfully able to divest its 8.65 percent stake in Reliance Nippon Life Asset Management—popularly known as Reliance Mutual Fund (MF). On Friday, an offer for sale (OFS) by Rcap in Reliance MF garnered 1.6 times more demand the shares on offer. The 52.9 million share offering saw bids for 82.5 million shares from institutional investors, data provide by stock exchanges showed. Another 5.3 million shares meant for retail investors will be auctioned on Monday.

The share sale is part of an agreement between Rcap and Japan’s Nippon Life, under which the former will sell its entire shareholding in Reliance MF.

(Source: Business Standard)

9. Vistara Leases Six Planes, Plans to Start New Domestic Routes

Vistara is inducting six planes, including four Boeing 737s, to fuel its expansion plan. These Boeing 737s were earlier flown by Jet Airways and will have two class configurations (12 business and 156 economy seats).

Vistara will use the planes on domestic routes and will open three new destinations, it is learnt.

Vistara operates an Airbus A320 fleet in a three-class configuration, which includes a premium economy cabin. It has opted to go for a mixed fleet following the collapse of Jet Airways. Jet’s grounding has opened up growth opportunities for rival airlines, which have access to slots, planes, pilots and trained manpower from it.

(Source: Business Standard)