RBI working on new corporate governance structure for banks. SC verdict could be inflection point for banking sector, says Morgan Stanley India. BSE drops four companies from index. Muthoot Finance enters mutual funds space. 88% of Indians use mobile devices for payments, says PayPal survey. Airtel and Vodafone Idea approach Supreme Court to review certain aspects of AGR verdict. US regulators label Huawei and ZTE as threats to national security.
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New Rules: In his keynote address at the Business Standard Annual Banking Forum, RBI Deputy Governor NS Vishwanathan said the Central Bank is working on a corporate governance structure for banks in line with Basel norms and that India's version of the same would likely be tougher in recognising bad loans.
"In the past we had a situation where the additional NPA (non-performing asset) assessed by the RBI was not made public. Because of the Basel committee recommendations, lots of disclosures are now required, but we need to go beyond those," Vishwanathan said.
"The effort should be to disclose more rather than less, except what you cannot disclose legally. The default should be to disclose as much as we can as long as we don't hit a provision of law, or end up disclosing the market strategy of the financial intermediaries." More details here.
Crossroads: The Supreme Court's recent ruling on ArcelorMittal's purchase of Essar Steel India paved the way for banks to set the terms of the distribution of sale proceeds among creditors. This will empower banks and, according to Morgan Stanley India's MD Ridham Desai, "has settled several disputes around India's bankruptcy law...Last week's judgement may well prove to be an inflection point for the [banking] sector." ET Markets
Change is the Only Constant: The Bombay Stock Exchange has revamped its index. Four blue-chip companies - Yes Bank, Tata Motors, Tata Motors DVR and Vedanta - have been dropped from the index. They have made way for three other companies - Titan, Ultratech and Nestle India. Deccan Herald
All's Fair in Love and Mutual Fund Asset Management: The country's largest gold financing company - Muthoot Finance - has announced that it will acquire IDBI Bank's mutual fund unit, thereby making its entry into the mutual fund asset management space.
The company said the transaction is expected to be completed by the end of February 2020, subject to requisite approval from the regulators including the Securities and Exchange Board of India. Business Today
Razor Speed: Razorpay has introduced Corporate Credit Card for Startups and SMEs and has activated digital payments for freelancers and homepreneurs. The neo-banking platform has also announced that it has acquired Opfin, a cloud-based payroll management solution, which automates the entire payroll money flow for any business, end-to-end. Moneycontrol
The Digital Age: As per a joint report by PayPal and IPSOS, c. 88% of Indian consumers use mobile devices for online payments. The global average is lower at 71%. Furthermore, bill payments and fashion are the key sectors where app purchases take place. The survey's respondent pool in India comprised 2,000 consumers aged 18-74 who owned or used a smartphone. More details here.
Back to Court: Bharti Airtel, Vodafone Idea and two other companies have filed a petition with the Supreme Court to review its judgement last month where it directed telecom companies to pay INR92,000cr in dues and interest to the Department of Telecommunications (DoT) in a 14-year-long case. The two other companies are Tata Teleservices and Hughes Communications India.
The review petition does not pertain to the entire AGR verdict but rather certain aspects of it - reportedly the penalty, interest and amount of interest on penalty. Livemint
Out of the Way, Huawei: In a blow to Chinese telecom companies, US regulators labelled Huawei and ZTE a "national security threat". The Federal Communications Commission (FCC) also began a regulatory process that would eventually force US firms to replace Huawei and ZTE equipment even if they have already been bought and installed. As per the FCC's own estimates, this could cost as much as $1.89bn within two years. WSJ
Slow and Steady Loses the Race: The Eurozone's business growth has almost ground to a halt as its manufacturing and services industries suffer a prolonged downturn in demand.
IHS Markit's flash November composite Purchasing Managers' Index climbed down to 50.3 from October's 50.6. This is only 0.3 points above the 50 mark separating growth from contraction. This was also just shy of a more than six-year low reading in September. Reuters
Reel-politik: In an interview, US President Donald Trump refused to publicly commit to signing legislation to support the pro-democracy protestors in Hong Kong.
The legislation - which comprises two laws - was recently passed by both chambers of the US Congress almost unanimously as lawmakers united across party lines and ideological divides to demand that Beijing refrain from violently clamping down on the protests that have engulfed the autonomous island since April.
Why?: Trump didn't mince words. "I stand with Hong Kong," he said, before adding: "But we're also in the process of making the largest trade deal in history." Trump is eager to sign a comprehensive trade deal with his Chinese counterpart Xi Jinping - who he referred to as "an incredible guy" and "a friend of mine" - to end the long-raging trade war before the Presidential election scheduled for November 2020. NYT
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