Welcome to Daily Banking Digest, your premier source for the latest news and insights on March 21, 2024, focusing on banking, the economy, and finance. Our platform offers a comprehensive overview of the day’s most critical financial stories, market trends, and economic developments. Whether you’re a professional in the financial sector, an investor monitoring market movement, or someone interested in staying informed about the economic landscape, Daily Banking Digest provides reliable, up-to-date information.

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Sebi and RBI’s Assertive Actions: Restoring Market Confidence and Credibility

India’s financial regulators, the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI), have intensified their scrutiny of the financial sector in response to concerns about political influence and financial misconduct. This increased oversight has drawn criticism from both the fintech industry and traditional finance, but the regulators are determined to restore their credibility and address systemic risks.

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Key Points:

Political Influence:

The Adani Group controversy has raised questions about SEBI’s oversight of political funding and the potential involvement of Adani-linked entities in bribery.
The Supreme Court’s ban on anonymous political funding has put pressure on the RBI to ensure transparency in electoral bond transactions.

Financial Misconduct:

Commercial lenders have been accused of hiding bad loans in private-credit funds.
Investment banks are under investigation for facilitating IPOs through mule accounts.
Fintech firms are facing regulatory overreach concerns, particularly regarding person-to-person transactions.

Regulatory Goals:

SEBI aims to address froth in asset prices, concentrated positions in small-cap shares, and excessive retail investor participation in options trading.
RBI is concerned about credit flows in the economy, particularly in the context of a potential new investment cycle.

Overcompensation:

Regulators may overcompensate for perceived leniency by taking a tougher stance on enforcement.
The RBI’s recent shutdown of One 97 Communications’ banking unit highlights its increased focus on compliance.

Collaboration:

RBI and SEBI are collaborating to share data and address systemic risks.
This collaboration is expected to lead to more effective regulation and enforcement.

Indian Sponge Iron Industry Advocates for Tariffs to Restrict Iron Ore Exports

Indian sponge iron producers are urging the government to impose export duties on low-grade iron ore to address shortages of the raw material. The surge in iron ore exports has led to rising prices and reduced supplies for sponge iron producers, who use all grades of ore. The industry body representing mining companies opposes export curbs, arguing that India only exports low-grade iron ore not consumed domestically.

Key Points:

Shortage of Iron Ore: Sponge iron producers face shortages of iron ore, the main raw material for their production.
Export Duty Request: The Sponge Iron Manufacturers Association urges the government to impose export duties on low-grade iron ore to prevent shortages.
India’s Sponge Iron Production: India is the world’s largest sponge iron producer, with 336 plants across the country.
Iron Ore Exports: India’s iron ore exports have increased significantly, with over 90% going to China.
Impact on Sponge Iron Producers: The surge in iron ore exports has led to higher prices and reduced supplies for sponge iron producers.
Government’s Role: The government scrapped higher export taxes on low-grade iron ore in November 2022, which has exacerbated the shortage.
FIMI’s Argument: The Federation of Indian Mineral Industries argues that India only exports low-grade iron ore not used domestically.
Sponge Iron Producers’ Response: Sponge iron producers counter that they use all grades of ore and require increasing amounts of iron ore.
Projected Sponge Iron Output: India is expected to produce 51 million metric tons of sponge iron in the fiscal year to April 2024, with a projected 15% growth in 2024/25.
Domestic Consumption: Most of India’s sponge iron output is consumed within the country.

Income Tax Notices Issued to CreditAccess Grameen and Jana Small Finance Bank

CreditAccess Grameen has received a demand order of Rs 46 crore from the income tax department for the assessment year 2022-2023. The company plans to contest the ruling, claiming that the demand is based on incorrect information. Meanwhile, the income tax department has disposed of an appeal by Jana Small Finance Bank, resulting in no additional tax outgo for the bank.

Key Points:

CreditAccess Grameen’s Income Tax Demand:

Received a demand order of Rs 46 crore for the assessment year 2022-2023.
The demand is related to a deduction claimed by the company.
The company believes the demand is based on incorrect facts and assumptions.
It will contest the ruling and seek clarification from the IT department.

Jana Small Finance Bank’s Appeal Disposal:

The income tax department disposed of an appeal against an old income tax demand of Rs 73 crore.
The demand included an interest due of Rs 19 crore.
The bank had already remitted the disputed amount, resulting in no additional tax outgo.

India’s Inaugural Battery Storage Gigafactory to Commence Operations in October

GoodEnough Energy is launching India’s first battery energy storage gigafactory in Jammu and Kashmir, aiming to reduce carbon emissions by over 5 million tons annually. The facility will support India’s goal of achieving net zero by 2070.

Key Points:

Gigafactory Launch: GoodEnough Energy will commence operations at India’s first battery energy storage gigafactory in October.
Carbon Reduction: The facility is projected to cut carbon emissions by over 5 million tons per year.
Investment: GoodEnough has invested 1.5 billion rupees in the 7 GWH facility and plans to invest an additional 3 billion rupees by 2027 to expand capacity to 20 GWH.
Renewable Energy Support: Battery energy storage projects are crucial for India’s plan to increase its renewable energy capacity to 500 GW by 2030.
Government Incentives: The Indian government is providing $452 million in incentives for battery storage projects.
Energy Storage: Battery energy storage systems allow for the storage of energy from renewable sources for later use.

5G Users Consume Significantly More Data Compared to 4G Subscribers.

India’s 5G user base is rapidly expanding, with 131 million users in 2023 and projections of 575 million by 2026. The gap between users and available 5G devices is narrowing, with 134 million devices in 2023. 5G data traffic is increasing, with users consuming 3.6 times more data than 4G users. 5G Fixed Wireless Access (FWA) is gaining popularity, with users consuming 2.5 times more data than average 5G users. The average monthly data traffic per user has surged to 24.1 gigabytes.

Key Points:

Rising 5G User Base: – 131 million 5G users in India at the end of 2023 – Projected to reach 575 million by 2026

Narrowing Gap Between Users and Devices: – 134 million 5G capable devices in 2023 – Number of 5G devices has risen to 160 million in 3 months

Increasing 5G Data Traffic: – 5G made up 15% of all data traffic in December 2023 – 5G users consume 3.6 times more data than 4G users

Rise of 5G Fixed Wireless Access (FWA): – FWA users consume 2.5 times more data than average 5G users – Offered by Reliance Jio and Bharti Airtel

Surging Average Monthly Data Traffic: – Reached 24.1 gigabytes per user per month in December 2023 – 24% year-on-year increase

Spectrum Band Support: – All 5G devices in India supported through the 3500 MHz band – Least support for the 2300 MHz band.

Meta Embraces Transparency and Fairness in Election Processes

Meta, the parent company of Facebook, Instagram, and WhatsApp, is implementing measures to ensure free and fair elections in India ahead of the Lok Sabha polls. The company will establish an India-specific operations center to identify and mitigate potential threats, strengthen its fact-checker team, and address the misuse of AI-generated content.

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Key Points:

1. India-Specific Operations Center: – Meta will activate an operations center in India to monitor and respond to election-related threats.

2. Fact-Checker Team Expansion: – Meta is expanding its network of independent fact-checkers in India to 11 partners covering 16 languages.

3. Misinformation Mitigation: – Meta will use keyword detection and the Meta Content Library to facilitate fact-checking and limit misinformation.

4. Voter Interference Prevention: – Meta will work to remove voter interference and enhance transparency and accountability across its platforms.

5. AI-Generated Content Regulation: – Meta requires advertisers to disclose the use of AI in political or social issue ads. – Independent fact-checkers will review and rate AI-generated content.

6. Collaboration with Election Commission: – Meta is working closely with the Election Commission of India to flag unlawful content.

7. Google’s Measures: – Google has restricted its Gemini AI platform from answering election-related queries. – Google is strengthening its fact-checking ecosystem in India. – Google has implemented disclosure requirements for election ads containing synthetic content.

Global Capability Centres: Unlocking India’s Talent for Revenue Growth

Global capability centers (GCCs) are increasingly recognizing the revenue potential of the Indian market, which is a significant talent hub. India’s GCC market is growing rapidly, with over 1,580 centers and a market size of $46 billion. GCCs are expanding their operations in India, investing in innovation and go-to-market teams to capture the growing opportunities.

Key Points:

India’s GCC Landscape:

India has over 1,580 GCCs, with a market size of $46 billion.
The Indian GCC market is growing at a CAGR of 11.4%.

GCCs Targeting Revenue Opportunities in India:

Planview has opened a global capability and innovation center in Bengaluru and invested $125 million in expansion.
Planview aims to double its India revenue this year.
Deutsche Bank views India as a growth market and is leveraging its centers in India to deliver value to clients.
Waters Corporation has invested $16 million in its GCC in Bengaluru and expects its India revenue to grow in the mid-teens.

GCCs Building Innovation and Leadership Capabilities:

GCCs are building innovation and leadership capabilities in India.
Some GCCs are starting to cater to global clients and large domestic clients in India.
GCCs are managing sales and services for global technology products developed in India.

GCCs Leveraging Local Talent Pool:

GCCs are leveraging India’s strong talent pool to build go-to-market teams in the country.
GCCs are gaining access to local market knowledge and expertise.

India’s Income Disparity Soars to Unprecedented Levels, Surpassing Colonial Era

India’s wealth inequality has reached historic highs, with the top 1% of the population earning a disproportionate share of national income and wealth. The study calls for tax policy changes to address this inequality and ensure better redistribution.

Key Points:

Income Inequality:

The top 1% of Indians earns 22.6% of national income, while the bottom 50% earns only 15%.
This is the highest level of income inequality recorded since 1922.

Wealth Inequality:

The top 1% of Indians owns 39.5% of national wealth, while the bottom 50% owns only 6.5%.
This is close to the highest share of wealth inequality since 1961.

Global Comparison:

India has the highest share of national income held by the top 1% among key peers, including the US, China, and the UK.
South Africa and Brazil have even higher levels of wealth inequality than India.

Tax Policy:

The study suggests implementing a super tax on Indian billionaires and multimillionaires to finance public investments.
It also recommends restructuring the tax schedule to include both income and wealth.

Influence on Policy:

The study warns that extreme wealth concentration can lead to disproportionate influence on society and government, especially in contexts with weak democratic institutions.

IMF Urges India to Foster Growth of Small Businesses into Corporate Titans

Krishnamurthy Subramanian, Executive Director at IMF, emphasizes the importance of fostering the growth of small firms into larger entities to create jobs in India. He highlights the positive impact of growing companies on the nation’s welfare and encourages entrepreneurs to strive for growth. Subramanian also praises India’s platform economy for its superior service to consumers compared to the US.

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Key Points:

Importance of Company Growth: – Small firms should not be discouraged from growing into larger entities. – Growing companies create jobs and contribute to the nation’s welfare. – Entrepreneurs who create successful companies are serving the nation.

Platform Economy in India: – India has the third largest platform economy in the world. – The platform economy in India is serving consumers better than in the US. – The potential for the platform economy in India is immense.

Social Protection for Platform Workers: – The OMI report outlines the diverse range of social protection benefits available to platform workers in India. – New-age and collaborative strategies are needed to provide comprehensive and meaningful social protections for platform workers. – India can create a model for social protection in the platform economy that benefits both workers and businesses.

RBI Likely to Revise FY25 GDP Growth Forecast Upward, Lower Retail Inflation Projection Slightly

The Reserve Bank of India (RBI) projects a higher real GDP growth rate of 7.4% for FY25 and a slightly lower CPI inflation rate of 4.4% compared to its previous estimates. The projections are based on the central bank’s in-house economic model.

Key Points:

GDP Growth: – RBI projects FY25 real GDP growth at 7.4%, up from 7% projected earlier.

Inflation: – CPI inflation is projected to average 4.4% in FY25, lower than the 4.5% projected earlier.

Economic Drivers: – Structural demand and healthy corporate and bank balance sheets are expected to drive economic growth.

Inflation Challenges: – While inflation is declining, short-term food price pressures are preventing a faster fall towards the target of 4%.

Byju’s, an embattled edtech company, has called an extraordinary general meeting (EGM) for March 29 to increase its authorized share capital for a $200 million rights issue. However, a group of investors has filed a petition with the NCLT seeking an injunction on the EGM, alleging oppression and mismanagement. The NCLT will hear the matter on March 28.

Key Points:

EGM Notice: – Byju’s has issued a notice for an EGM on March 29 to increase authorized share capital.

Rights Issue: – The EGM aims to complete the allotment of subscription for the recently concluded $200 million rights issue.

NCLT Injunction: – A group of investors has approached the NCLT for an injunction on the EGM. – The NCLT will hear the matter on March 28.

Investors’ Petition: – Four investors (Prosus, GA, Sofina, and Peak XV) have filed a petition alleging oppression and mismanagement. – The NCLT has directed Byju’s to keep proceeds from the rights issue in a separate account until the disposal of the petition.

EGM Resolution: – Investors at an EGM on February 23 voted to remove Byju Raveendran as CEO.

High Court Stay: – Byju’s has approached the Karnataka High Court for a stay on the EGM resolution. – The High Court has extended an interim order prohibiting shareholders from implementing the resolution.

India Advocates for Reduced Cross-Border Remittance Costs at WTO

India is actively pursuing its proposal to reduce the cost of cross-border remittances, which it presented at the WTO’s 13th Ministerial Conference. The proposal aims to initiate a work program within the WTO to explore ways to lower remittance costs, particularly for low and middle-income countries.

Key Points:

India’s Proposal at WTO MC13:

India highlighted the high global average cost of remittances (6.18%) and proposed promoting interoperability and interlinkages of digital payment infrastructures to reduce costs.
The proposal received support from countries like Sri Lanka, Nepal, and Bangladesh, as well as interest from the EU.

Pursuit at WTO General Council:

India has submitted a proposal to the WTO General Council to initiate a work program on remittances.
The work program would focus on understanding the development impact of remittances, reviewing costs and trends, and examining the impact of technology and new market players.

Objectives of the Work Program:

Identify opportunities for lowering remittance costs through digitalization and new technologies.
Explore ways to address challenges and utilize opportunities related to cost reduction.
Examine the drivers of remittance costs and challenges associated with reducing them.

Indian Direct Selling Industry Surpasses ₹21,000 Crore Milestone

The Indian direct selling industry experienced significant growth in 2022-23, with a gross industry turnover of ₹21,282 crore, representing a 12% increase from the previous year. The industry has maintained a steady growth trajectory over the past four years, with an average CAGR of 8.3%.

Key Points:

Growth Trajectory:

The direct selling industry in India has witnessed a surge in growth over the years.
The CAGR of 8.3% from 2019-20 to 2022-23 indicates steady growth.

Global Ranking:

India has improved its global ranking in direct selling, moving up to 11th place in 2022 from 15th in 2019.
The industry aims to break into the top-5 direct selling markets globally.

Employment:

Approximately 86 lakh direct sellers are actively self-employed in the Indian direct selling industry.

Government Establishes Fact-Checking Unit under Press Information Bureau

The Indian government has designated the Fact Check Unit (FCU) under the Press Information Bureau as the central fact-checking body for the government. This move comes amid concerns raised by stand-up comedian Kunal Kamra and the Editors Guild of India about potential censorship of online content.

Key Points:

Government Notifies Fact Check Unit – The FCU under the Press Information Bureau is now the official fact-checking unit for the central government.

Kunal Kamra Case – Kunal Kamra and the Editors Guild of India have filed a petition in the Supreme Court, seeking a stay on the FCU. – They argue that the FCU will lead to self-interested censorship of online content about the government.

IT Amendment Rules of 2023 – The IT Amendment Rules empower the MeitY to notify a fact-checking body. – The fact-checking body can identify and tag false or fake online news related to government activities.

Social Media Platforms – Social media platforms that fail to remove fake news notified by the FCU will lose legal immunity for such content.

Maharashtra and Uttar Pradesh to Auction Bonds Worth ₹12,000 Crore Each on Thursday

Maharashtra and Uttar Pradesh are set to raise ₹12,000 crore each through an additional auction of State Government Securities (SGS) on March 21. This follows a successful auction on March 19, where 16 states and one Union Territory raised ₹50,206 crore. The move suggests that states are eager to borrow and spend before the end of the financial year.

Key Points:

Additional SGS Auction: – Maharashtra and Uttar Pradesh will raise ₹12,000 crore each on March 21. – They had previously raised ₹6,000 crore and ₹8,000 crore, respectively, on March 19.

Exceptional Auction: – RBI typically conducts weekly SGS auctions on Tuesdays. – The additional auction on March 21 is an exception.

Reason for Borrowing: – States may have fiscal space to borrow more. – They may be eager to spend before the end of the financial year.

SGS Issuance: – Maharashtra and Uttar Pradesh will issue four papers of 10-15 years and 15-20 years tenor. – They will raise ₹3,000 crore through each paper.

Previous Auction: – 16 states and one Union Territory raised ₹50,206 crore on March 19. – The weighted average cut-off rose 7 basis points due to high supply.

Spread between SGS and G-sec: – The spread between the cut-off of the 10-year SGS and the 10-year G-sec yield increased slightly on March 19.

MSMEs Demand Exemption from 45-Day Payment Rule for Exporters

Exporters in India are seeking an exemption from a new rule requiring them to pay pending bills to micro and small units within 45 days. They argue that this provision will negatively impact their liquidity, as export payments are typically received with a time lag of 120 days. Exporters also contend that the rule will discourage them from buying from micro and small enterprises, potentially leading to a loss of business for these smaller units.

Key Points:

Impact on Exporters: – Exporters face a liquidity crunch due to the 45-day payment requirement, as export payments are typically received with a 120-day time lag. – The provision will blunt their competitiveness, as they provide credit terms to remain competitive internationally.

Impact on Micro and Small Enterprises: – Exporters who receive supplies from micro and small units have been affected by the rule, as it has impacted their liquidity. – Small businesses may lose business and face return of goods due to the rule. – Some micro and small enterprises are giving up on MSME certificates and benefits to avoid the impact of the rule.

Exporters’ Concerns: – Other countries do not have similar laws, which could encourage imports and discourage buying from micro and small enterprises. – Exporters maintain larger inventories due to economic and demand factors in the destination market, which increases their cash flow challenges. – The rule should not apply to exports to provide a level playing field for Indian exporters.

Exporters’ Proposals: – Extend the payment period to 120 days for exporters. – Exempt supplies from micro and small units to exporting units from the 45-day payment requirement. – Provide exemptions for a few years to help exporters adjust to the new provision.

Sustained 8% Growth Essential for India’s Job Creation

India’s economy needs to sustain an 8% growth rate to create sufficient jobs and reduce poverty and inequality, according to Krishnamurthy Venkata Subramanian, India’s executive director at the International Monetary Fund (IMF). While India’s economy grew by 8.4% in the final quarter of 2023, Subramanian believes that the country should aim for higher growth to address its infrastructure needs and create more jobs.

Key Points:

Growth Rate: – India needs to grow at 8% on a sustained basis to create sufficient jobs and reduce poverty and inequality.

Infrastructure: – The country needs to create a lot of infrastructure, which requires a growth rate of 8% or higher.

Job Creation: – Growing at 8% has the potential to create a lot of jobs, thereby reducing poverty and inequality.

Fiscal Deficit and Debt-to-GDP Ratio: – India has copied the western model by aiming to bring down the fiscal deficit to 3% and debt-to-GDP ratio below 66%, which may not be relevant in the Indian context.

FRBM Framework: – The Fiscal Responsibility and Budget Management (FRBM) framework recommends that the government should aim to bring down debt-to-GDP ratio below 66% and fiscal deficit target at 3%, but these numbers were derived from the Maastricht Treaty, which is not applicable to India’s economic situation.

Platform Economy: – India’s platform economy is the third largest in the world, after the US and Europe.

NCLAT Prohibits Coercive Measures by PSBs Against IL&FS and Its Board

The National Company Law Appellate Tribunal (NCLAT) has ordered 11 public sector banks to refrain from taking coercive action against IL&FS and its group companies until the next hearing on May 14. This order is an extension of a previous NCLAT order from October 2018 that stayed all proceedings against IL&FS and its group companies.

Key Points:

NCLAT Order: – NCLAT has directed 11 public sector banks not to take coercive action against IL&FS and its group companies until May 14. – NCLAT has issued notices to the banks and the Reserve Bank of India (RBI) to file a reply.

Previous NCLAT Order: – On October 15, 2018, NCLAT stayed all proceedings against IL&FS and its group companies. – NCLAT also restrained creditors of IL&FS from filing suits in case of non-repayment of loans.

IL&FS Plea: – IL&FS filed an urgent plea with NCLAT seeking protection for its group companies from being declared willful defaulters. – IL&FS alleged that banks were violating previous NCLAT orders and harassing directors of IL&FS companies.

Banks Involved: – The 11 public sector banks involved are: – Central Bank of India – Bank of Baroda – Indian Bank – Canara Bank – Punjab National Bank – Indian Overseas Bank – State Bank of India – Bank of India – Jammu & Kashmir Bank – IDBI Bank – Union Bank of India

Fintech Lenders Disburse 2.5 Crore Loans in Q3: FACE Report

Fintech companies in India disbursed 2.5 crore loans in Q3 FY23, a 12% increase year-over-year and a slight decrease from the previous quarter. The total disbursement value rose by 46% to Rs 33,922 crore. The average loan size was Rs 11,945. The report also highlights that 80% of NBFCs were profitable in the first three quarters of FY23, compared to 68% in FY22-23. Women accounted for 12% of loans disbursed, and their representation in leadership roles remains low.

Key Points:

Loan Disbursements: 2.5 crore loans disbursed in Q3 FY23, a 12% increase year-over-year.
Disbursement Value: Rs 33,922 crore disbursed, a 46% increase year-over-year.
Average Loan Size: Rs 11,945.
NBFC Profitability: 80% of NBFCs were profitable in the first three quarters of FY23.
Women’s Participation: Women accounted for 12% of loans disbursed.
Leadership Representation: Women’s representation in leadership roles remains low.
Industry Outlook: Industry on track to reach 10 crore loans in FY 23-24.
Consumer Trust: Strong consumer trust and preference for digital loans.

Insurance Giants Provide Extensive Coverage for IPL to the Tune of Rs 10,000 Crore

The Indian Premier League (IPL) has secured a ₹10,000-crore insurance cover from New India Assurance Company and National Insurance Company. The policy protects against potential revenue losses due to unforeseen events, including player injuries, civil unrest, and event cancellations. The premiums have increased by 25% due to the calendar clash with the general elections.

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Key Points:

Insurance Coverage: – ₹10,000-crore insurance cover provided by New India Assurance Company and National Insurance Company. – Protects against potential revenue losses from unforeseen events.

Stakeholders: – BCCI, teams, broadcasters, sponsors, and service providers.

Coverage: – IPL revenues and expenditures, including event broadcasting and related costs. – Event cancellation is a significant part of the coverage.

Premium Increase: – Premiums have increased by 25% due to the calendar clash with the general elections.

Market Value: – The approximate market value of an IPL match ranges from ₹100 crore to ₹125 crore.

Omkara ARC Purchases Park Hyatt Hyderabad’s Non-Performing Loans at a 34% Discount

Omkara ARC, led by Manish Lalwani, has acquired the loans of Park Hyatt Hyderabad for ₹300 crore, representing a 34% discount from lenders including BlackRock and JM Financial. The deal involves the purchase of ₹450 crore of outstanding principal, with the total debt outstanding amounting to ₹700 crore. Omkara’s acquisition follows its previous purchases of hotels in Bengaluru and Pune from the Piramal Group.

Key Points:

Acquisition Details: – Omkara ARC acquired Park Hyatt Hyderabad’s loans for ₹300 crore. – The deal represents a 34% discount from lenders, including BlackRock and JM Financial. – The outstanding principal of the loans was ₹450 crore, with a total debt outstanding of ₹700 crore.

Hotel Information: – Park Hyatt Hyderabad is a 5-star luxury hotel with over 200 rooms, 25 suites, and 40 serviced apartments. – It is located in Banjara Hills, Hyderabad, and was developed by Gayatri Group and operated by Hyatt Hotels.

Previous Acquisitions: – Omkara ARC has previously acquired hotels in Bengaluru and Pune from the Piramal Group. – These acquisitions included the JW Marriott in Bengaluru and a Crowne Plaza facility in Pune.

Debt Restructuring: – The Park Hyatt Hyderabad project was financed with a debt-equity ratio of 60:40. – Delays in project completion led to cost overruns, necessitating debt restructuring.

Cosmea, Qatar Group, and Others Collaborate on General Insurance Joint Venture

Qatar Insurance Group, Cosmea Financial Holdings, and other investors have formed a joint venture to establish a general insurance company in India. The venture has applied for the R1 license, the initial stage of the insurance company registration process.

Key Points:

Joint Venture Formation: – Qatar Insurance Group, Cosmea Financial Holdings, and other investors have formed a joint venture to enter the general insurance sector in India.

R1 License Application: – The joint venture has applied for the R1 license, the first step in setting up a general insurance company in India.

Initial Investment: – The joint venture will start with an initial investment of over ₹300 crore.

Other Insurance Ventures: – V Jagannathan, founder of Star Health and Allied Insurance Company, has also applied to establish a standalone health insurance company.

Insurance Company Registration Process: – The insurance regulator scrutinizes documents and business projections during the R1 stage of insurance company registration. – Once R1 is approved, the applicant applies for R2 and then R3, the final stage.

Sam Ghosh’s Involvement: – Sam Ghosh, who previously formed a joint venture with Orowealth in the mutual fund industry, is involved in the new insurance venture.

Qatar Insurance Company Profile: – Qatar Insurance Company is the largest insurance company in the MENA region. – It is listed on the Qatar Stock Exchange with a market capitalization of over QAR 8 billion.

Insurance Industry Statistics: – There are 28 life insurance companies and 28 general insurance companies in India. – The non-life insurance industry underwrote a total direct premium of ₹2.57 lakh crore in FY22-23. – Health insurance is the largest segment within general insurance, contributing 38.02% of the total premium.

Future Group’s Manufacturing and Insurance Assets Attract Bidders

Future Enterprises’ insurance business and manufacturing units are up for sale, with Central Bank of India and M Pallonji & Co bidding for the insurance business and Orissa Metaliks and Uniworth Finlease bidding for the manufacturing units. The bids are currently under review, and lenders will decide on the next course of action.

Key Points:

Bidders for Insurance Business: – Central Bank of India: ₹450 crore – M Pallonji & Co: ₹300 crore

Bidders for Manufacturing Units: – Orissa Metaliks: ₹30 crore (Tarapur-Palghar unit) – Uniworth Finlease: ₹15 crore (Mahadevapura-Bengaluru unit)

Financial Situation: – Future Enterprises owes creditors over ₹13,540 crore – Central Bank is the largest creditor with over ₹4,000 crore of admitted claims

IBC Provisions: – Creditors can submit takeover plans under the Insolvency and Bankruptcy Code (IBC)

Next Steps: – Lenders will meet to decide on the next course of action – Lenders have time until early May to complete the process or seek an extension from the National Company Law Tribunal (NCLT)

Indian Chip Design Companies Poised to Dominate Global E2W Market: Cadence India MD

Cadence Design Systems, a leader in electronic design automation, believes that Indian chip and electronic design startups have a significant opportunity to cater to the global electric two-wheeler industry. These startups can supply to domestic players like Ola, TVS, and Ather, and eventually tap into the larger global market.

Key Points

Opportunity for Indian Startups

Global chip design companies primarily focus on the four-wheeler industry or the high-end two-wheeler market.
Indian startups can fill the gap by targeting the growing electric two-wheeler market in India and globally.

Challenges for Indian Startups

Indian companies like Ola and TVS currently rely on global chip players for their EVs.
Global chip design players do not provide the same level of service to Indian companies as they do to larger customers like Bosch and Denso.

Market Potential

The global two-wheeler market is larger than the four-wheeler market, offering significant growth opportunities for Indian startups.
Emerging economies in Asia, Africa, and Latin America have unique requirements that Indian startups can address with rugged, low-cost solutions.

Importance of Design

Design is crucial for the electronics and semiconductor industries.
The global electronic product market is valued at $3 trillion, driven by a $600 billion semiconductor market.
The $10 billion design industry enables the development of electronic products and semiconductors.

India’s Design Talent

India has an abundance of design talent, which is why global players use the country as a hub for cutting-edge designing.
However, India lacks electronic product and chip design companies.

Market Opportunities for Indian Startups

Building electronic products to solve problems of rural consumers.
Designing chips to support India’s navigation system, Navic.
Tapping into the Indian and global market for power management by designing chips for smart meters.
Addressing the global market for energy meters with low-cost, rugged products.

RBI Mandates Extended Banking Hours on March 31 for Government Transactions

The Reserve Bank of India (RBI) has instructed banks that handle government transactions to remain open on March 31, 2024, which is a Sunday. This is to ensure that all government receipts and payments for the current financial year (FY2023-24) are accounted for.

Key Points:

RBI’s Instruction: Banks dealing with government business are advised to keep their branches open on March 31, 2024 (Sunday).
Government’s Request: The Government of India requested banks to remain open on March 31st to facilitate government transactions.
Agency Banks: All agency banks are required to keep their branches open for government business on March 31, 2024.
Purpose: To account for all government receipts and payments in the current financial year.

Steady Crude Oil Processing in February: PPAC Reports 20.9 MMT Volume

Indian refiners processed a steady 20.9 million metric tonnes of crude oil in February 2023, with a slight increase from the previous year but a decline from January. Imports decreased by 6.5% annually and 16.8% sequentially, with Russia remaining the largest supplier. Domestic crude production rose by 4.87% annually, while exports of refined petroleum products increased by 14.1% in February.

Key Points:

Crude Oil Processing: – Processed volumes remained steady at 20.9 MMT in February 2023. – Government-owned PSUs and joint ventures accounted for 14.3 MMT, while private refiners processed 6.5 MMT.

Crude Oil Imports: – Imports decreased by 6.5% annually to 18.01 MMT in February 2023. – Russia remained the largest supplier for the 17th consecutive month.

Domestic Crude Production: – Production increased by 4.87% annually to 2.15 MMT in February 2023. – ONGC contributed 1.45 MMT, followed by OIL at 0.26 MMT.

Refined Petroleum Products Exports: – Exports grew by 14.1% to 5.8 MMT in February 2023. – Realized earnings remained unchanged at $4.1 billion due to lower prices.

Government Urged to Establish Centralized Body for Gig Economy Workers

The Ola Mobility Institute (OMI) Foundation study advocates for a centralized coordination authority between the central and state governments to ensure effective social protection for gig and platform workers in India. The report highlights the need for synchronized efforts to avoid duplication and optimize resource allocation, while reducing compliance burdens for platform businesses.

Key Points:

1. Centralized Coordination Authority: – The government should establish a centralized coordination authority to align social protection efforts between the central and state governments. – This authority would facilitate efficient policymaking and prevent suboptimal use of resources.

2. Alignment with CoSS 2020: – The establishment of a central coordinating authority is in line with the vision of the Code on Social Security (CoSS) 2020, which tasks the central government with creating a national board for platform worker welfare.

3. Uniform Worker Identity: – The government should implement a uniform worker identity across India, such as the UAN number through the e-Shram portal. – This would enable enrollment in social protection schemes and provide a basic social protection floor for platform workers.

4. Comprehensive Health Insurance: – The high cost of comprehensive health insurance poses a barrier to coverage for platform workers. – The government should explore alternative approaches to address this challenge.

5. Skilling and Upskilling: – Skilling and upskilling are crucial for gig and platform workers to enhance their employability. – The government should prioritize these measures to create a resilient workforce.

Government Releases Guidelines for Solid Waste Management in Aquaculture Facilities

The Ministry of Fisheries, Animal Husbandry and Dairying has introduced new guidelines for solid waste management in coastal aquaculture units to promote sustainable practices and reduce environmental impact. These guidelines cover waste handling, segregation, transportation, and disposal, with a focus on minimizing waste generation and ensuring responsible disposal.

Key Points:

Waste Management Protocols: – Systematic approach to identify, categorize, and manage waste streams. – Segregation of solid waste into biodegradable, non-biodegradable, and hazardous categories. – Provision of adequate bins for segregation. – Planning of waste transportation and implementation of reuse or recycling measures.

Ban on Plastic Burning: – Prohibition of burning plastics of any grade. – Handing over of plastics to local bodies or appointed agencies.

Temporary Storage and Disposal: – Maintenance of adequate temporary storage capacity for different waste categories. – Sale or handover of recyclable non-degradable waste to recyclers. – Designated spaces for landfill disposal.

Sewage Treatment and Biological Waste Management: – Operation of in-house sewage treatment plants in larger units. – Use of fermentation and composting for biological waste management. – Incineration of old or dead animals in certain facilities.

Fuel and Lubricant Storage: – Adherence to legal requirements for storing fuel, oil, and lubricants. – Regular maintenance and staff training to prevent spills and ensure safety compliance.