QBiz: RBI Supersedes Yes Bank Board; Global Food Prices Decline
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1. RBI Supersedes Yes Bank Board, Caps Withdrawals
The Reserve Bank of India (RBI) superseded the board of Yes Bank and imposed a month-long moratorium, it said in an announcement late on Thursday, 5 March. It expects to arrive at a credible restructuring plan in the next few days.
“The Reserve Bank assures the depositors of the bank that their interests will be fully protected and there is no need to panic,” it said in a statement. This is the first time the central bank has taken such drastic action with respect to a big bank since July 2004 when the regulator got state run Oriental Bank of Commerce to take over Global Trust Bank to rescue the private sector lender.
The RBI action follows the lender’s inability to raise funds that would have helped it provide against loan losses. Prashant Kumar, former deputy managing director at State Bank of India, will be the administrator of Yes Bank, RBI said.
(Source: The Economic Times)
2. Relief in the Works for AGR-Hit Telecom Cos
The government is working on steps to provide relief to the telecom sector that will need to be ratified by the Cabinet, a senior official said, raising the prospect of a possible reprieve for financially strapped Vodafone Idea, which faces AGR dues of ₹53,000 crore.
On the eve of Vodafone Group CEO Nick Read’s visit to India, the official said any package will need to conform to the Supreme Court’s AGR ruling. The next hearing is on 17 March.
“Any decision will have to be cleared by the Cabinet. The government’s intent is clear — it does not want any company to close down,” the official told ET. “However, the relief will be for everyone, not just Vodafone Idea.”
(Source: The Economic Times)
3. Carlsberg Probing India Operations for ‘Fraud’
Carlsberg is investigating its Indian unit for financial irregularities, including incorrect payments, embezzlement and kickbacks from customers. The company said the probe followed accusations made by its local partner, with which it’s “engaged in a very difficult commercial conflict”.
The maker of Tuborg beer has launched an internal audit of all processes related to permits and licences, and has reopened previously closed investigations, regulatory filings show. The audit is being conducted under the supervision of Carlsberg Group’s global integrity committee.
(Source: The Economic Times)
4. Vivad se Vishwas: AAR Cases, STT, Disputes Over Rs 5-Cr Tax Demand Out of Ambit
The direct tax dispute resolution scheme (Vivad se Vishwas) would not cover certain kinds of disputes, including those pending before Authority for Advance Ruling (AAR) and cases with tax demand above Rs 5 crore arising from search and seizure operations, the Central Board of Direct Taxes (CBDT) clarified on Thursday, 5 March.
Further, it said that disputes related to wealth tax, security transaction tax, commodity transaction tax and equalisation levy are also out of scheme’s ambit.
The board had earlier clarified that the scheme barred disputes related to undisclosed foreign income/asset, assessment or reassessment made on the basis of information received under DTAA and where prosecution for any offence under the Indian Penal Code/Prevention of Money Laundering Act/Prohibition of Benami Property Transactions Act has been instituted or a person who has been convicted under the Acts.
(Source: The Financial Express)
5. Global Food Prices Decline in February for First Time in Four Months
Food prices across the world have declined in February for the first time in four months due to a sharp fall in the export prices of vegetable oils, partly driven by fears that the coronavirus (Covid-19) outbreak will slow global demand, Food and Agriculture Organisation (FAO) reported on Thursday, 5 March.
Concerns over the spread of Covid-19 and reduced imports by China impacted by delays in cargo handling at ports is seen impacting the market. Temporary drop in India’s import demand of palm oil and higher-than-expected output in Malaysia is also seen as a factor in the decline of food prices, according to UN body.
(Source: The Financial Express)
6. Coronavirus Impact: Airlines May Lose $113-Billion Revenue in 2020
The International Air Travel Association (IATA) has estimated that the financial impact of the coronavirus (Covid-19) on the passenger business of airlines would be somewhere between $63 billion and $113 billion.
Earlier, when the virus was still confined to China, IATA’s revenue impact estimate was significantly lower, at $29.3 billion. Industry players fear that the impact of this Black Swan event on the industry will be similar to that of the global financial crisis of 2008.
“Airline share prices have fallen nearly 25 percent since the outbreak began, some 21 percentage points greater than the decline that occurred at a similar point during the SARS (Severe Acute Respiratory Syndrome) crisis of 2003,” IATA said on Thursday, 5 March.
(Source: The Financial Express)
7. EPFO Cuts Rate on Employee Provident Fund to 7-Year Low of 8.5% for FY20
The Employees’ Provident Fund Organisation (EPFO) on Thursday, 5 March decided to slash the interest rates on provident fund savings of formal sector workers to a seven-year low of 8.5 percent for the year 2019-20.
The EPFO had given an interest rate of 8.65 percent in the previous financial year to roughly 170 million subscribers.
The decision was mainly because of two reasons: EPFO getting a lower rate of return on its investments in government securities and the body’s view to keep higher surplus owing to economic uncertainties, two people who were part of the deliberations said.
(Source: Business Standard)
8. Bombay HC Dismisses Chanda Kochhar's Writ Petition Against ICICI Bank
The Bombay High Court on Thursday, 5 March, dismissed the writ petition filed by Chanda Kochhar against her termination as managing director and chief executive officer of ICICI Bank, and the clawback of her bonuses.
A division Bench of Justices NM Jamdar and MS Karnik accepted the contention of the lender that Kochhar’s writ petition was not maintainable because the dispute concerned a private banking company and was over contractual terms.
“The termination of the petitioner is in the realm of a contractual relationship,” the Bench said in its order.
(Source: Business Standard)
9. ED Grills Ex-Jet Airways Chief Naresh Goyal, Asks Him to Appear on Friday
The Enforcement Directorate (ED) has asked Naresh Goyal, former chairman of now-defunct Jet Airways, to appear before it again on Friday, 6 March, for further questioning in connection with a money laundering probe registered against him on Tuesday.
This will be the third consecutive day of questioning. On Wednesday, he was summoned to ED Mumbai’s office, where he was interrogated for four hours and taken to his residence later in the evening. On Thursday, too, he was grilled for a few hours.
Sources in ED said the probe indicated that funds were siphoned off through entities created abroad and the money was diverted to the personal accounts of Goyal and his family.
(Source: Business Standard)
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