SBI may buy 49% stake in Yes Bank Ltd. Under resolution plan. Third-party motor insurance premium rates likely to witness a spike. Digital payment services disrupted after RBI puts Yes Bank under moratorium.
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The RBI has announced a restructuring plan for Yes Bank, and as per the plan, India's largest lender SBI will take a 49% stake in the distressed lender.
Finance Minister Nirmala Sitharaman has said the restructuring plan would be implemented within 30 days.
The RBI has sharply increased Yes Bank's authorised share capital, enabling Yes Bank to receive a cash injection following its failure to raise enough money to meet regulatory requirements.
Based on the details in the RBI's statement, analysts have estimated that the SBI-led consortium would have to invest at least ?2,500cr ($339.10m) to buy 49% stake in Yes Bank. [BS]
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The Government has imposed a month-long moratorium on Yes Bank, capping the withdrawal limit from the private lender at ?50,000 ($679) for the next one month. The move has seen multiple repercussions, one of them being the disruption in digital payment services.
Nearly all payment platforms of National Payments Corporation of India reported disruptions on Friday. National Electronic Funds Transfer (NEFT), Real Time Gross Settlement (RTGS), Immediate Payment Service (IMPS) and Unified Payments Interface (UPI) that depend on Yes Bank at the backend were unable to go through.
PhonePe, Walmart-owned payments platform, seems to have been hit the hardest, considering that Yes Bank is PhonePe’s exclusive UPI partner. [ET Banking]
A Bigger Hole in the Pocket
The Insurance Regulatory and Development Authority of India (IRDAI) has released a draft circular proposing an increase in insurance premium rates for 2020-21, following which third-party motor insurance premium for cars, two-wheelers, goods carriers, buses, including school buses, and other automobiles are likely to increase.
Among private cars, the premium could go up by an average of 5%. However, for cars above 1,500cc, the premium rates have been left unchanged at ?7,890 ($106).
When it comes to two-wheelers, the premium rates could go up by 2.3%-10.7% depending on the engine capacity. In this category, there is a premium increase from 75cc and below to 350cc and above.
In the 75-150cc category, the premium is proposed to be hiked from ?752 ($10.15) per annum to ?769 ($10.38).
Push for Green
IRDAI has proposed a discount of 15% for the electric vehicle category TP premium. The regulator said it will incentivise usage of environmental friendly vehicles. Further, a discount of 7.5% on motor TP premium for hybrid electric vehicles is also proposed. [The Hindu]
Good to Know
Telecom giant Vodafone Idea has estimated its AGR dues at ?21,533cr ($2,906m) - less than half the over ?50,000cr ($6,749m) that the government had estimated.
The company has so far paid ?3,500cr ($472m) in licence fee and spectrum usage dues to the telecom department.
Vodafone Group CEO Nick Read met top ministers, including Finance Minister Nirmala Sitharaman and Telecom Minister Ravi Shankar Prasad to discuss ways to save the cash-strapped firm. He also informed them that UK telecom giant's India joint venture, Vodafone Idea Ltd is "exploring" options to make additional payment towards its outstanding statutory dues. [Livemint]
The Government has invited initial bids for sale of its entire 52.98% in Bharat Petroleum Corp Ltd (BPCL).
The last date for submission of expressions of interest is May 2nd and interested parties must have a minimum net worth of $10bn, according to the bid document issued by the Department of Investment and Public Asset Management. [Moneycontrol]
South by Southwest - the annual tech, film and music conference in Austin - has officially been cancelled amid growing fears over the spread of coronavirus.
The event had been scheduled to take place from March 13th to March 22nd. This is the first time in 34 years that it has been cancelled, according to the organizers. [CNN Business]
Make Hay While the Sun Shines
Quibi - short for Quick Bits - is a mobile-only app with short video content made specifically for smartphones that can be viewed in landscape or portrait mode, is set to launch on April 6th with 50 shows and movies, half of which consists of “daily essential” programming that’s constantly being updated.
The app is looking to take on the likes of Netflix, Disney, Hulu, YouTube and TikTok, and towards this effect, is giving people a 90-day free trial.
After the 90-day trial, Quibi will cost $4.99 with ads, and $7.99 without. That’s more expensive than Apple TV Plus and Disney Plus, both of which run ad-free.
The company recently raised an additional $750m during its second round of funding, bringing its total so far to $1.75bn just one month before its official launch. [The Next Web]
According to a United Nations Global Compact (UNGC) India study, female labour-force participation in India has declined from 34% in 2006 to 24.8% in 2020. Tweet This
"Gender stereotypes and lack of infrastructure has traditionally sidelined women from core manufacturing functions. As a result, not many are able to reach leadership roles," it said.
India is the only country among the 153 surveyed countries where the economic gender gap is larger than the political gap, the study revealed.
The study also found that raising women's participation in the labour force to the same level as men can boost India's GDP by 27%. [News18]
The Brighter Side
American apparel retailer GAP has named Indian-American Sonia Syngal, Head of its Old Navy brand, to be its Chief Executive.
Syngal will become the 37th female CEO in the Fortune 500 when she takes the reins on March 23rd. [Fortune]
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