News digest: RBI bans LoUs, Aadhaar deadline, defence budget, and more

RBI bars banks from issuing LoUs after Nirav Modi, Choksi fraud at PNB

The Reserve Bank of India (RBI) on Tuesday discontinued issuance of letters of undertaking (LoUs) and letters of comfort (LoCs) for importers with immediate effect, in an attempt to prevent fraud such as the one allegedly carried out by jewellers Nirav Modi and Mehul Choksi. Letters of credit (LCs) and guarantees will continue to be issued like before if they meet certain criteria. Normal trade credit is unlikely to be hampered. Read more…

 

SC extends deadline for linking Aadhaar to phones, bank accounts

The Supreme Count on Tuesday issued an interim order extending the deadline for linking Aadhaar numbers to bank accounts, mobile phone numbers, passports and other services indefinitely beyond the previous deadline of March 31. A Constitution Bench is also hearing a case on this matter.The five-judge Bench comprising Chief Justice Dipak Misra, Justice A K Sikri, Justice A M Khanwilkar, Justice D Y Chandrachud, and Justice Ashok Bhushan said there was no need to link Aadhaar to these services till a judgment was pronounced on the constitutionality of the Unique Identification Programme. With the earlier deadline, banks had gone into an overdrive, asking customers to submit Aadhaar numbers. Read more…

 

Trade war: Action plan to analyse impact of US metal tariffs by weekend

The Union government has started working out an action plan to analyse the impact of the recently imposed US tariffs on steel and aluminium and on how to deal with it. In the first meeting on this on Tuesday, senior officials of the department of commerce and the ministries of steel and mines met the industry leaders to assess the impact of the US tariffs on Indian industry. A senior official later said export details had been sought from industry players and a plan would be finalised by the end of the week. Commerce Secretary Rita Teotia, Steel Secretary Aruna Sharma and Mines Secretary Arun Kumar attended the meeting. Read more…

 

Uncertain times in bond market casting shadow on economy

The notion that the bond market will eventually replace bank loans is coming under scrutiny as yields rise, while banks keep their lending rates relatively unchanged.The rate cycle has decisively changed to an uptick, as can be seen by the sharp reaction to any incremental adverse news flow. Investors are cutting losses, while the successive withdrawal of high-yielding quasi-equity bonds, which yielded returns of as high as 11-11.25 per cent, has caused further losses to investors, particularly mutual funds. Read more...

 

Defence budget not sufficient to cater commitment to payment: Army vice chief

Expressing grave concern at the “insufficient” allocation of funds for new weaponry, a top army general has told the parliament’s standing committee on defence that the Budget announced on February 1 “has dashed our hopes”.A draft report by the committee that Business Standard has reviewed notes that the army has been allocated just Rs 268.2 billion for equipment modernisation against the Rs 445.7 billion it had projected. That is barely 60 per cent of its request. Read more…