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New GST Rates Kick In, Decline in NPA Ratio, Trump Willing to Negotiate et al.

Professor of Financial Economics and Part-time Value Investor, Transfin.
Jan 1, 2019 2:44 PM 3 min read
Editorial

New GST rates kick in, 23 items to get cheaper. Banking sector records decline in NPA ratio. US indices closed with the most losses since financial crisis.

 

Now to Today's Top Business News Stories in Our End Of Day Wrap Up:

 

New GST Rates Kick In, Decline in NPA Ratio, Trump Willing to Negotiate et al.

 

GST

 

23 goods and services to get cheaper from today as new GST rates kick in. 

 

The What: In its recent meeting, the GST Council had cut rates on 23 items, including movie tickets, TVs and monitor screens and power banks and exempted frozen and preserved vegetables from the levy.

 

Also this: This leaves only "sin" or "luxury" goods, besides cement, large screen TVs, Air Conditioners and dishwashers within the 28% bracket.

 

RBI

 

Banking sector records decline in NPA ratio. Cases of fraud multiply significantly in 2018 vs 2014. 6-member panel led by Bimal Jalan was finalized during Urjit Patel’s tenure, says Finance Minister. Paytm Payments Bank receives green light to restart opening accounts for its customers.

 

Bad loans: According to RBI’s 2018 Financial Stability Report, gross NPAs ratio declined to 10.8% in September 2018 from 11.5% in March.

 

It’s a scam: According to the same report, 5,917 frauds involving an amount of INR41,167cr were reported by the banks in FY18 vs. 4,306 frauds entailing an amount of INR10,170cr in FY14. Moreover, there has been a substantial increase in credit related frauds in the first half of FY18-19, constituting 95% of the overall amount vs. 54.8% in the previous fiscal year and 82.71% in FY14.

 

Devil’s advocate: Shunning rumors that the decision to appoint a Vice Chairman in the 6-member panel set up last week to review RBI’s capital framework was taken after Shaktikanta Das took charge, the Finance Minister clarified that the position was in fact finalized during Urjit Patel’s tenure.

 

Last Word: The Central Bank had asked the Paytm Payments Bank to stop adding new customers about six months back in June, when a regulatory audit found lapses on the part of the entity to stick to RBI’s requirements.

 

Because we love data: Read the RBI's Financial Stability Report here.

 

HEALTH

 

Lok Sabha passes Indian Medical Council (Amendment) Bill, 2018 to regulate medical education in India.

 
What you need to know: The Bill aims to run the Medical Council of India (MCI) through a panel of prominent professionals who would revamp medical education and practices in India.

 

Zoom Out: The development comes following allegations of corruption against MCI officials and subsequent investigations into opaque accreditation to several medical colleges.

 

MARKETS

US indices close with the most losses since 2008 on Monday.
 

Fall from grace:  US stocks gained marginally on Monday on back of ongoing negotiations with China. However fear of market instability resulted in a sharp decline, closing with the most losses since the financial crisis.

 

Zoom Out: For the year, DJIA was down 5.6%, S&P 500 off 6.2% and the Nasdaq down 3.9%.

 

New GST Rates Kick In, Decline in NPA Ratio, Trump Willing to Negotiate et al.

 

CFO

 

Activision Blizzard to fire Chief Financial Officer Spencer Neumann; Netflix to hire the media finance veteran.

 
The What: The American video game company Activision Blizzard has put its Chief Financial Officer, Spencer Neumann on paid leave and intends to fire him "for cause unrelated to the company's financial reporting or disclosure controls and procedures."
 

What about Netflix?: As per an Economic Times report, video-streaming platform Netflix is set to hire the  finance veteran Neumann, who has previously held several positions at Walt Disney.

 

GEOPOLITICS

Democrats to vote on a bipartisan package of six Senate spending bills on Thursday, does not include money for Donald Trump’s border wall. Trump "ready, willing, and able" to negotiate the $5bn funding requirement for the wall.

 

What you need to know: The six full-year spending bills would fund most of the government through September 2019 which includes a short-term patch extending current funding through February 8 for the Department of Homeland Security.

 

Up Close: The package will include Bills to fund the departments of agriculture, interior, housing and urban development and others closed by the partial shutdown. However, it does not include money for Donald Trump’s border wall.

 

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