Latest News: H1B Visa Rejections At All-Time High, Banks Link Lending Rates to RBI's, Govt Could Tweak FPI Surcharge

Finance Minister “receptive” to industry’s ideas and complaints, promises reviews and reforms. Govt could take decision to tweak FPI surcharge. Public sector banks volunteer to cut their MCLR and link their lending rates to RBI’s repo rate. NCLT reiterates its jurisdiction to ban auditing firms like Deloitte and BSR. Supreme Court upholds homebuyers’ rights to drag property developers to bankruptcy proceedings. Saudi oil giant Aramco could be listed in early 2020. SoftBank’s solar power ambitions collide with darkness. Trump administration considering executive order to enable monitoring of social media giants to check politically biased curation. H1B visa denials skyrocket to all-time high.

 

Moving on to the top Business news stories today:

 

 INDIA INC 

Finance Minister “receptive” to industry’s ideas and complaints, promises reviews and reforms. Govt could take decision to tweak FPI surcharge.

 

About Yesterday’s Meeting: FPIs, representatives of NBFCs and mutual funds, and other key financial sector participants met Finance Minister Nirmala Sitharaman on Friday to urge a slew of reforms to ease tax burden and boost the slowing economy.

 

Sitharaman was reportedly receptive to their ideas and, at a separate event, promised to review CSR rules and consider a uniform 25% tax rate for all companies once the government was assured that tax revenues were on a high-growth trajectory. More here.

 

About FPIs: Regarding the decision on FPI surcharge, the government will reportedly take a decision to tweak that decision soon. “A few measures will be announced soon, now that the finance minister has met FPIs and market participants,” a government official told Business Standard.

 

 RATE TRANSLATION 

Public sector banks volunteer to cut their MCLR and link their lending rates to RBI’s repo rate.

 

Cutting Rates All Over: Days after the RBI cut the repo rate for the fourth consecutive time – this time by 35bps – public sector banks have started reducing their marginal cost of funds-based lending rate (MCLR). SBI, Bank of India, Syndicate Bank, IDBI Bank, Allahabad Bank and many others softened their MCLR.

 

These cuts come after RBI Governor Shaktikanta Das’s comments on slow transmission of policy rate cuts. Das had said banks have cut their interest rates by 29bps in February-June even though the Central Bank had cut its repo rate by 75bps (not counting this week’s cut).

 

Rate Cut Repercussions: As public sector banks volunteered to link their lending rates to the repo rate and reduce their MCLR, analysts suggest this could hurt the banks’ profit margins since lending rates could not be lowered immediately.

 

 JUSTICE FOR ALL? 

NCLT reiterates its jurisdiction to ban auditing firms like Deloitte and BSR. Supreme Court upholds homebuyers’ rights to drag property developers to bankruptcy proceedings. 

 

Deloitte’s Dire Dilemma: The NCLT has reiterated its jurisdiction to ban auditing firms like BSR Associates and Deloitte. The Ministry of Corporate Affairs had previously moved the NCLT to ban the auditors (for five years for deliberately overlooking the wrongdoings in IL&FS), which Deloitte and BSR challenged as not being within the NCLT's powers.

 

Additionally, the MCA now has the clearance to appoint auditors for recasting and reopening the audit books of ITNL, IFIN and IL&FS.

 

Going Bust: The Supreme Court upheld homebuyers’ rights when it delivered a verdict saying homebuyers could drag property developers into bankruptcy proceedings. This decision could see several insolvency cases resume and potentially free up billions of rupees locked up in stalled projects. At the same time, this could deny banks more independence in resolving stressed assets. 

 

 ENERGY 

Saudi oil giant Aramco could be listed in early 2020. SoftBank’s solar power ambitions collide with darkness.

 

Saudi on a Stock Board: Following its first international bond sale in April, Saudi Arabia is reportedly working to having Aramco listed on a stock market in early 2020. The oil giant’s listing plans were previously put on hold as it focused on acquiring a 70% stake in chemicals company Sabic, a deal that was signed in March this year for $69.1bn. 

 

Solar Slump: For a long time, SoftBank has sought to build a solar energy empire so as to meet the world’s growing energy needs using less carbon-intensive sources. It had planned 220 gigawatts-worth mega solar projects in Saudi Arabia and India, among other countries. But its plans were derailed due to taxes, tariffs, land disputes, inter-partner reservations, not winning contracts altogether or doubts by governments whether SoftBank’s solar ambitions were feasible. Read more here.

 

 US 

Trump administration considering executive order to enable monitoring of social media giants to check politically biased curation. H1B visa denials skyrocket to all-time high.

 

Tackling Big Tech: According to reports, the White House is pondering over an executive order that would empower the Federal Communications Commission to monitor how tech giants like Facebook, Google, Instagram, Snapchat, Twitter and Pinterest manage their social networks.

 

The order – not yet released and which could be amended – enables the FCC to determine how social media companies filter posts, videos or articles on their platforms as a means to tackle online censorship.  Also in consideration are public complaint dockets and inter-departmental oversight to check whether curation on these platforms is politically neutral.

 

Who That Be? Not H1B: India’s largest IT services exporters are seeing their US work visa applications rejected at rates higher than ever before. Employees at TCS, Infosys, HCL and Wipro saw half their visa applications rejected in the past year as the US government pushed for more indigenous employment.

 

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