QBiz: RBI Likely to Keep Repo Rate Unchanged in June and More
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1. RBI Likely to Keep Repo Rate Unchanged in June: Report
The Reserve Bank of India (RBI) may leave repo rate unchanged next week due to uncertainty over oil prices, monsoon, weak transmission of monetary policy and on expected pick-up in inflation, according to a report. The central bank will also evaluate the implications of policies of the new government for growth and inflation. In the recently concluded parliamentary polls, the BJP-led alliance secured a majority with the BJP alone winning 303 seats of the 542 seats that went to polling between April and May.
The RBI will announce its second bi-monthly monetary policy on 6 June. “We expect the RBI to keep policy rates on hold during the June meeting,” Goldman Sachs said in a report. It said crude oil prices would remain high this quarter due to uncertainty around production losses from Iran, and the ramping up of spare capacity.
(Source: Financial Express)
2. Unsold Inventory in Residential Realty Fell to 30 Months in Q1 CY19: Report
The unsold inventory in the residential real estate fell to 30 months of worth in the first quarter of calendar year 2019 as against 50 months in the corresponding period in 2017. In first quarter of 2018, the unsold inventory was 42 months of worth. This shows that the Indian homebuyers are taking advantage of favourable property prices and reduction in Goods and Service Tax (GST) and home loan rates, an Anarock report said.
An inventory overhang of 18 months to 24 months is considered healthy as it indicates that the current unsold housing stock can be sold within two years.
(Sources: Financial Express)
3. RBI Extends Relaxed Norms for NBFC Loan Securitisation Till 31 December
The RBI Wednesday extended minimum holding period requirement for NBFCs to raise funds via loan securitisation to help the sector overcome liquidity shortage.
Non-banking financial companies (NBFCs) have been permitted to securitise loans of over five-year maturity after holding them for six months on their books.
Earlier, they were supposed to hold it for at least a year.
As per the earlier notification issued by the Reserve Bank of India in November, the dispensation was valid till May, 2019.
On a review, it has been decided to extend the dispensation provided therein till 31 December, 2019, RBI said in a notification issued on Wednesday.
(Source: Financial Express)
4. M&M Q4 Profit Falls 20% on Slower Tractor Sales, Higher Expenses
Mahindra & Mahindra (M&M) Ltd said profit after tax dropped 20 percent in the fourth quarter from Rs 1,059 crore a year ago to Rs 849 crore, driven by falling tractor sales and a sharp rise in costs.
“In Q4, we have done better than market estimates. Reason behind fall in profits is the high base from the corresponding quarter (Q4FY18), which was a great three-month period for us. We will ascribe the rise in costs during Q4FY19 to the new product launches, which are not at mature margins at the moment. It is also accentuated by other costs that are associated with the new launches. Passing the rise in costs to consumers becomes challenging under the given scenario when the market is passing through low demand sentiment. Secondly, the overall tractor industry has declined," VS Parthasarathy, group chief financial officer, M&M, said.
(Source: Livemint)
5. Banks Can Use Aadhaar for KYC With Customer's Consent: RBI
Banks can use Aadhaar for KYC verification with the customer's consent, the Reserve Bank said Wednesday as it updated its list of documents eligible for identification of individuals.
The RBI specifies Know Your Customer (KYC) norms to be followed by banks and other entities regulated by it for various customer services, including opening of bank accounts.
"Banks have been allowed to carry out Aadhaar authentication/ offline-verification of an individual who voluntarily uses his Aadhaar number for identification purpose," the central bank said in its amended Master Direction on KYC.
(Source: Livemint)
6. Spicejet Plans to Add 8 More Planes From Jet’s Grounded Fleet
SpiceJet Ltd, which added its 100th aircraft in May, has inducted 22 Boeing planes that were withdrawn from grounded airline Jet Airways (India) Ltd’s fleet by lessors, and plans to add eight more such planes in the next two weeks, a top company official said.
“In the next fortnight, we expect to add another eight Boeing 737 (Next Generation) NG which were being operated by Jet Airways," Kiran Koteshwar, chief financial officer (CFO) of SpiceJet, said in an interview. “We didn’t incur any additional capex on these aircraft."
(Source: Livemint)
7. SC Agrees to Hear Govt on CGST, Asks HCs to Not Hear Such Cases
The Supreme Court on Wednesday agreed to hear the government’s plea seeking clarifications on powers to arrest an accused without filing a first information report (FIR) under the Central Goods and Services Tax (CGST) laws. The court, while constituting a three-judge Bench to hear the matter, also asked high courts (HCs) across the country not to interfere in such cases at this stage.
The apex court’s order came on a plea moved by the government in which it claimed that HCs were granting ex-parte interim relief to petitioners without considering any principles. The plea challenged a Bombay HC order that had, while granting anticipatory bail to a person accused of evading CGST, asked the government to file an FIR and only then proceed with the arrest.
(Source: Business Standard)
8. L&T Faces Delay in Launch of Open Offer for Mindtree Shareholders
Engineering major Larsen & Toubro (L&T) is behind schedule in the launch of its open offer for the shareholders of information technology company Mindtree.
It has already exceeded the timeline fixed under Securities and Exchange Board of India (Sebi) regulations in this regard. That rule says a company should launch an open offer within 55 days from the date of a public announcement. L&T, after an agreement to buy Cafe Coffee Day founder V G Siddhartha's stake, issued the public announcement on 18 March. Its detailed public statement in that regard was on 26 March in newspapers.
(Source: Business Standard)
9. PNB to Mop up Rs 10,000 Cr From Non-Core Asset Sale, Rights Issue
State-owned Punjab National Bank is looking to raise Rs 10,000 crore in 2019-20 from sale of non-core assets, rights issue and expected write-backs from two large accounts undergoing insolvency proceedings.
The lender is expecting a write-back of Rs 4,000 crore from Essar Steel and Bhushan Power and Steel which are undergoing resolution under the Insolvency and Bankruptcy Code.
"For FY20, we are looking to raise Rs 10,000 crore. We are expecting Rs 1,000 crore from sale of non-core assets, Rs 4,000 crore write-back (from) two accounts (Essar Steel and Bhushan Power and Steel) and Rs 5,000 crore from markets," the bank's managing director and CEO Sunil Mehta told reporters.
(Source: Business Standard)
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