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The finance ministry has directed heads of public sector banks to closely monitor and review the top 20 cases under the Insolvency and Bankruptcy Code (IBC) as part of their strategy for managing bad assets. During a meeting with the managing directors and CEOs of these banks, financial services secretary Vivek Joshi emphasized the monthly review of these cases for resolution. Additionally, the ministry urged banks to oversee cases that have been pending for admission and resolution under the IBC.from Business News: Latest News on Business, Stock Markets, Financial News, India Business & World Business News https://ift.tt/jRPMlSf
The Reserve Bank of India (RBI) has introduced a draft framework for self-regulatory organizations (SROs) among entities it regulates. The framework emphasizes the importance of SROs fostering consumer protection, fair competition, transparency, and innovation. To qualify as an SRO, an entity must have sufficient authority to set and enforce ethical, professional, and governance standards. Jatinder Handoo, CEO of the Digital Lenders Association of India, acknowledges that the RBI has outlined a comprehensive framework covering critical aspects.
A paper by the finance ministry's economic division calls for reform in the credit rating process of global agencies like Moody's, Fitch, and Standard & Poor's. The paper highlights the opaqueness and disadvantage faced by developing countries due to the rating methodologies. It criticizes the weighting of foreign ownership of banks and the lack of transparency in selecting experts. The review of the credit rating methodologies of the officials showed that there was considerable reliance on qualitative variables to capture 'willingness to pay'.
The Centre is set to miss its privatisation target for state-run companies this year due to stalled progress and limited appetite before elections. Roadblocks, including bureaucratic sloth, have hindered the process, affecting big-ticket enterprises like IDBI Bank. Stake sales in state-run banks and an insurance company recommended for privatisation by NITI Aayog have not moved forward. The privatisation of Pawan Hans has been scrapped, and the large public sector policy has not taken off. The disinvestment process is now awaiting the new government for a fresh start.
The S&P BSE Sensex surged by more than 900 points from its intra-day low of 69,920, while the Nifty climbed by 300 points to reach a high of 21,288. HDFC Bank and RIL were the top contributors to the index, followed by Infosys.
Italy's benchmark bond yield hits lowest level in 15 months despite central bank officials' attempts to rein in the exuberance. Yields have tumbled due to falling inflation and expectations of interest rate cuts from the ECB and the US Federal Reserve. Investors anticipate more than 150 bps worth of rate cuts next year. Italy's borrowing costs have benefited from lower interest rate expectations. The gap between Italy and Germany's bond yields narrows to 160 bps. Shorter-dated yields also fall. ECB officials caution against excessive optimism.
The IMF criticizes the Reserve Bank of India's intervention in the foreign exchange market, but the central bank dismisses the charge. The IMF's report shows a divergence of views on the exchange rate and foreign exchange intervention between the IMF and Indian authorities. The IMF notes that the rupee-dollar exchange rate remained stable, suggesting excessive forex intervention. In response, the RBI states that the exchange rate is market determined and it intervenes only to prevent excessive volatility.
The finance ministry plans to review insolvency cases that are stuck in bankruptcy tribunals. The government aims to address concerns about the slow progress of these cases, which were initially identified by the Reserve Bank of India and the government. The review will help identify pain points for creditors and improve the functioning of the tribunals. Authorities are also examining the roles of bankers and resolution professionals to make the process more transparent and efficient.
In a representation to the RBI earlier this month, lenders argued that penal interest rates contribute to better credit discipline. They also stated that they require additional time to reconfigure their internal systems.
States are adopting a 'just in time release' of funds to improve efficiency and reduce borrowing. The Centre's move to rework fund release saved around Rs 10,000 crore last year and is expected to save more this year. However, banks that relied on government cash flow are now affected. The Centre implemented a Treasury Single Account and two other accounts to reduce fragmented banking arrangements. The new system releases funds promptly, tracks transactions in real-time, and improves delivery efficiency.
Remittances to India are estimated to rise over 11% to $125 billion in 2023, helping it retain the top spot ahead of Mexico and China. Flows to South Asia are estimated to have grown 7.2% in 2023 to reach $189 billion. Remittances from highly skilled Indians in the US, the UK, and Singapore account for 36% of total remittance flows to India. The UAE is the second-largest source of remittances to India after the US, accounting for 18% of the total.
Goldman Sachs plans to expand its credit business in India, targeting the nation's wealthy diaspora as global investors shift focus to the fastest-growing major economy. The investment bank aims to broaden its range of loans through its shadow banking unit and obtain a license to scale up currency trading. Indian markets have benefited from the shift of emerging market equity flows from China. Goldman Sachs is also looking to serve Indian entrepreneurs who have moved abroad during the pandemic from offices in Singapore, London, and Dubai.
