 "News digest")
1. Bank NPA ratio to hit 12%, may reach highest level since 2000: RBI report
The gross bad debt ratio of the banking system may touch a two-decade high, with banks under prompt corrective action (PCA) expected to be the worst hit, warned the Financial Stability Report (FSR) released by the Reserve Bank of India (RBI) on Tuesday.
As bad debts balloon, the money set aside as provisions would drag down the capital position of Indian banks, with at least six banks witnessing a shortfall of capital, the inter-regulatory report warned.
Under the current macroeconomic environment, the gross non-performing asset (GNPA) ratio of scheduled commercial banks may rise to 12.2 per cent of the advances by March 2019, from 11.6 per cent in March 2018. Read more...
2. Singh brothers demand dues write-off in lieu of Fortis brand
As the new board of crisis-hit health care major Fortis Healthcare (FHL) is engaged in a closed-door marathon meeting to approve the company’s fourth quarter (Q4) and financial year results over two days, the erstwhile promoters of the hospital major are trying to extract value out of the Fortis brand to set off dues they owe the company.
Sources close to the development claimed that while the company’s board is deliberating ways to initiate recovery of funds (estimated to be close to Rs 5 billion) from the Singh brothers (Malvinder and Shivinder Singh), who are alleged to have diverted funds, the former promoters are trying to encash the value of the Fortis brand to set off dues. Read more...
3. Govt needs to sell stake of over Rs 250 billion as deadline draws near
The government will be required to sell stake worth over Rs 269.8 billion in less than two months in order to meet a regulatory deadline for minimum public shareholding.
The Securities and Exchange Board of India (Sebi) had granted an extension last year for listed public sector companies to meet the 25 per cent public shareholding rule. The deadline expires on August 21. An examination of current shareholding shows that the Centre will have to sell Rs 181.4 billion in companies, excluding public sector banks (PSBs). Read more...
4. Centre eases oil exploration norms, allows access outside contract areas
In a move that may ease the oil exploration regime in India, the government has allowed producers in the country to go beyond their assigned areas in case the same reservoir continues outside the contracted areas. This would help an operator undertake seismic studies, understand the data, and develop a discovery more efficiently.
Overlapping of reservoir is a contentious issue between Reliance Industries (RIL) and Oil and Natural Gas Corporation (ONGC) in the Krishna Godavari basin. The June 25 decision of the Ministry of Petroleum and Natural Gas (MoPNG) easing the permission norms for extended exploration will not affect this case since the new policy has riders. Read more...
5. GST mop-up will touch Rs 1 trillion a month in FY19, says Hasmukh Adhia
As GST rollout is to complete a year in a few days, finance secretary Hasmukh Adhia tells that the system has perfectly stabilised now. Edited excerpts:
What is the next level now after one year -- converging of slabs?
Our main thing has to be that return filing becomes very very smooth. Number two, our revenues have to stabilise. We have promised a very ambitious growth rate of 14 per cent to the states. We have to keep up that promise. The Centre should also get 14 per cent, after giving compensation to the states. That is our main concern as of now. After that, lot of other reforms can be done. Read more...
