Volume XXXIII Number 3 October 16, 2017

Weeklies

BI – Business India

BusW – Business World

BusT – Business Today

CMar – Capital Market

EPW – Economic and Political Weekly

SE – Southern Economist

Eco – Economist

For(Asia) – Fortune AsiaCI – Corporate India

Newspapers

BS – Business Standard

ET – Economic Times

FE – Financial Express

FT – Financial Times

H – Hindu

HBL – Hindu Business Line

HT – Hindustan Times

IE – Indian Express

TI – Times of India

Mint – Mint

Classifications

Economy Banking Agriculture & Rural Development Industry Small Scale Industry

International Economics Labour & Personnel Management Management Miscellaneous Books

CONTENTS

A. ECONOMY 1

B. BANKING 3

C. AGRICULTURE & RURAL DEVELOPMENT 16

D. INDUSTRY 16

E. SMALL SCALE INDUSTRY 17

F. INTERNATIONAL ECONOMICS 17

G. MANAGEMENT 18

H. MISCELLANEOUS 19

– 1 –

BANKERS' BRIEF Vol. XXXIII No. 3October 16, 2017

ECONOMY"How strong is India's growth story?" – A day after the prime minister defended his government's handling

of the economy, some of the top leaders of India Inc have reposed their faith in the India growth story. At thesidelines of the World Economic Forum India Summit in New Delhi-top industry executives comments oneconomic growth and outlook for their businesses. Edited excerpts from an interview with Nestle chairmanand MD Suresh Narayan, Essar group CEO Prashant Ruia and Bharti Enterprises chairman Sunil Mittal. –(Mint Oct 6, 2017 p 14)

"IMF lowers India's growth forecast to 6.7% in 2017" – While projecting a more optimistic picture of theglobal economy, the IMF slashed India's growth forecast by 0.5 percentage points to 6.7 per cent in 2017.The growth projection for 2017 has been revised down... reflecting still lingering disruptions associated withthe currency exchange initiative introduced in November 2016, as well as transition costs related to thelaunch of the national GST in July 2017, it said in its October 2017, World Economic Outlook. A report. –(HBL Oct 11, 2017 p 4)

"India needs to speed up job creation, grow productivity" – India will have to speed up job creation toenhance productivity which in turn, will give the much needed push to economic growth, business and industryleaders at the India Economic Summit said. World over growth has come from increase in productivity. It willtake care of jobs. We get too negative about global developments. I think growth will improve in the upcomingquarters for India, according to Adi Godrej, chairman of Godrej group. A report. – (ET Oct 7, 2017 p 4)

"India's slowdown an aberration: World Bank chief" – The recent slowdown in India's economic growthis an 'aberration' mainly due to the temporary disruptions in preparation for the GST, the World Bank saidtoday, pointing out that it will get corrected in the coming months. World Bank President Jim Yong Kim alsosaid that the Goods and Services Tax (GST) is going to have a hugely positive impact on the Indian economy.We've been watching carefully, as Prime Minister (Narendra) Modi has really worked on improving thebusiness environment, and so, we think all of those efforts will pay off as well. A report. – (IE Oct 6, 2017 p13)

"Indian economy witnessing downward growth predictions" – A day after the IMF cut its India growthforecast to 6.7% for FY18, a look at the projections made by various agencies over the last month or soshows that most of them have lowered their predictions, according to an India Ratings report titled How theworld views India. A report. – (IE Oct 12, 2017 p 13)

"A long road ahead" – Govt needs to do much more to shore up economic growth. An editorial. – (BS Oct 6,2017 p 7)

"Lower corruption level boosts GDP growth, says SBI report" – Does reduction in corruption lead toeconomic prosperity? Data from around the world, including India, show that a lesser level of corruption isdirectly proportional to higher GDP growth. According to an SBI report, between 2011 and 2016, as Indiaimproved its rank in Transparency International's global corruption index from 96 to 79, its GDP growth rateimproved by half a percentage point. A similar trend was observed for countries like the UK, Portugal andItaly. During the period, these countries succeeded in bringing down corruption and their economic growthrate improved. A report. – (TI Oct 11, 2017 p 20)

"RBI survey finds consumer confidence at lowest point in last three years" – Economists may bickerabout whether the slowdown in the economy is just a blip or cyclical or structural, politicians may spar overit, but whatever the case, consumers are getting gloomier and gloomier with every passing quarter. That isthe message from the Reserve Bank of India Consumer Confidence Survey for September 2017. As thechart shows, the consumer confidence index based on the current perception of the economy is at its lowestsince December 2013. Similarly, the index for one-year-ahead expectations is at its lowest since December2014. A report. – (Mint Oct 6, 2017 p 4)

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"RBI surveys show general economy in pessimistic zone, jobs big worry" – A series of surveys undertakenby the RBI have indicated that more people see consumer confidence declining, business sentiment inmanufacturing dipping, inflation on the rise and growth sliding. The findings are in sync with the RBI'sposition in its monetary policy review, which slashed growth forecast from 7.3 per cent to 6.7 per cent forfiscal 2017-18. The current perceptions of households on the general economic situation remained in thepessimistic zone for four successive quarters, with the outlook worsening. A report. – (IE Oct 9, 2017 pp 1,2)

"The slowdown is official; PM's economy team picks 10 key areas to work on" – Acknowledging aslowdown in the country, the Economic Advisory Council to the Prime Minister today identified 10 areas foraccelerating growth over the next six months. Monetary policy, job creation, public expenditure, agricultureand animal husbandry top the focus areas. At the EAC's first formal meeting CEA Arvind Subramanianmade a presentation on boosting economic growth using a combination of policy levers. A report. – (HBLOct 12, 2017 p 1)

"State of the economy" – A graphical report. – (BS Oct 9, 2017 p 4)

"There is progress in NPA cleanup: Panagariya" – Former NITI Aayog vice-chairman Arvind Panagariya,in an interview, brushed aside concerns about India's economic growth and said the country's macroeconomicindicators are stable. Edited excerpts. – (Mint Oct 11, 2017 p 13)

"When Y V Reddy took to Thaler to Nudge authorities" – Hard nosed economists may scoff at 'nudgetheory' and its proponent Richard Thaler who won the 2017 Nobel Prize in economics. But few know thatthis branch of economics, often a blend of psychology and behavioural science, was practised by retiredIndian bureaucrat when he was given one of the most complex assignments. It was May 2014 when the newgovernment was not quite sure about the policy priorities, as head of the 14th Finance Commission Y VReddy turned to Thaler's default option in public policy to come up with the panel's views on states ofresources to local bodies. Until there was some clarity on the new government's policy direction, former RBIgovernor Y V Reddy, relied on Thaler's work to keep things going. A report. – (ET Oct 11, 2017 p 9)

"World Bank pegs India growth at 7% in FY18" – India's GDP may slow down to 70 per cent in FY18because of the disruptions caused by demonetisation and GST, the World Bank has forecast, warning thatsubdued private investment due to internal bottlenecks could put downside pressures on the country's potentialgrowth. A report. – (IE Oct 12, 2017 p 13)

Acharya, Shankar - "Past policies constrain economic recovery: sorting out the flaws in GST, exchangerate depreciation and avoiding fiscal slippages should be the top priorities for the government" –An article. - (BS Oct 12, 2017 p 9)

Rajadhyaksha, Niranjan - "Indian economy: uptick or recovery?" – The sharp decline in economicgrowth in the first quarter of the current fiscal year has brought the state of the economy into sharp politicalfocus. What lies ahead? An article. – (Mint Oct 11, 2017 p 18)

Sen, Pronab - "The takedown that isn't: Yashwant Sinha criticised the present government's economicmanagement. Surjit Bhalla responded with facts. His facts demand a response from anothereconomist" – An article. – (IE Oct 11, 2017 p 11)

CREDIT RATING AGENCIES"It's justified to criticise raters for missing big defaults" – As the chief analytical officer at India Ratings,

a unit of Fitch, Ananda Bhoumik has a first hand knowledge of the state of corporate India. Edited excerptsfrom an interview with Ananda Bhoumik – (ET Oct 11, 2017 p 14)

EMPLOYMENTKapoor, Radhicka - "India's jobs problem is getting harder to solve" – The urgency of accelerating

growth in sectors that have greater employment potential cannot be understated. An article. – (FE Oct 9,2017 p 7)

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FOREIGN EXCHANGE MANAGEMENT"The challenge of managing currency: Excessive exchange rate volatility could affect investment

and growth possibilities in tradable sectors" - An article. – (Mint Oct 12, 2017 p 14)

FOREIGN EXCHANGE RESERVES"Forex reserves dip by $2.59 bn to $399.66 bn" – The country's foreign exchange reserves fell by $ 2,590

billion to $ 399.656 billion in the week ended Sept 29 due to decline in foreign currency assets, RBI datashowed. The foreign currency assets, a major component of the overall reserves, decreased by $ 2.565 bn to$ 375.186 billion. – (IE Oct 7, 2017 p 11)

GST"GST at 28% too high: CBEC chief" – The highest slab of 28% under the GST could be restricted to luxury

and sin goods, a top tax official said. a day after the GST Council reduced the rates on 27 items amidconcerns over the new tax proving to be inflationary at the start. While a month ago the council had reducedthe tax rates on 30 items and few others earlier, finance minister Arun Jaitley subsequently hinted at a shift tofewer tax slabs once GSTs revenue neutrality is clearly established. A report. – (IE Oct 8, 2017 p 18)

"GST rate, returns relief for SMEs; exporters' refunds fast-tracked" – GST rates lowered for 27 products*Exporters' tax refunds for July and August to be processed in October* SMEs with annual turnover of Rs 1.5crore can file quarterly returns* E-way bill to be rolled out between January and April 2018* Exporters willget IGST relief for six months* E-wallet for exporters to start from April 1, 2018. A report. – (HBL Oct 7,2017 p 1)

SERVICES SECTOR"Services activity returns to growth in September: PMI" – Services sector activity in India expanded for

the first time in three months in September as it rebounded from goods and services tax related contractions,driven by a surge in new business orders that supported job creation, according to a monthly survey. TheNikkei India Services PMI Business Activity Index rose to 50.7 in September from 47.5 in August - a readingthat pointed to a slight pace of expansion. In PMI parlance, a print above 50 means expansion, while a scorebelow that denotes contraction. A report. – (BS Oct 6, 2017 p 4)

Ghani, Ejaz - "India's great leap into services" – The digital revolution means that it is now possible for theservices sector to deliver rapid economic growth and jobs more sustainably than the manufacturing sector inemerging economies. An article. – (Mint Oct 9, 2017 p 15)

UNIVERSAL BASIC INCOME SCHEME"IMF bats for universal basic income idea: says it is a better alternative to subsidy schemes and will

actually benefit poor for the same budgetary cost" – As policy-makers in New Delhi debate the conceptof the Universal Basic income that would do away with current government benefits, the IMF has come outin support of such a move on the grounds that it would perform better than current fuel and food subsidies. AUBI would outperform the PDS and energy subsidies along three key dimensions of coverage, progress andgenerosity. A report. – (HBL Oct 12, 2017 p 4)

BANKING

AXIS BANK"Axis Bank cuts base rate by 5 bps to 9%" – Private sector lender Axis Bank has announced a reduction

in its base rate by five basis points (bps) to 9% on 4 Oct 2017. This follows the five bps cut in base rate to8.95% by state Bank of India. As of now, the lowest base rate in the system is 8.9% of HDFC Bank. The cutin base rate by lenders is to prevent borrowers from switching to the MCLR. – (FE Oct 6, 2017 p 12)

– 4 –

"High Court issues notice to FinMin, RBI on petition to cancel Axis Bank's licence" – The KarnatakaHigh-Court ordered issue of notices to the Min. of Finance and the RBI on a petition seeking cancellation ofAxis Bank's licence. The Court also ordered issue of notice to Axis Bank. A report. – (HBL Oct 12, 2017 p6)

BANDHAN BANK"Bandhan Bank not to revise savings deposit rates in the near term: MD: Looking to shore up share

of CASA to 30% of total deposits this fiscal" – At a time when banks have been slashing savings bankdeposit rates, Kolkata-based Bandhan Bank expects to keep the rates unchanged in a bid to shore up itsCASA (current account and savings bank account) ratio. According to Chandra Shekhar Ghosh, MD andCEO, Bandhan Bank, there will be no 'immediate revision' in its interest rate on savings bank deposit, whichcurrently stands at 4 per cent for deposits up to Rs.1 lakh; and 6 per cent for those above Rs.1 lakh. A report.– (HBL Oct 6, 2017 p 10)

BANK OF BARODA"Bank of Baroda slashes MCLR by 5 basis points" – Bank of Baroda reduced its MCLR by 5 basis points

across tenures. The revised rates will come into effect on Saturday. Under the MCLR regime, banks reviewtheir lending rates every month based on their incremental cost of funds. A report. – (FE Oct 7, 2017 p 10)

"BoB enters into tie-up with SBI Mutual Fund" – Bank of Baroda entered into tie-up arrangement withSBI mutual fund for sales and distribution of mutual fund products. As a part of agreement BoB will distributeSBI Mutual Funds products through its 5400 plus branches. – (BS Oct 12, 2017 Pt II p 3)

"BoB to raise Rs 1,650 crore from AT-1 bonds" – Bank of Baroda said it proposes to raise up to Rs 1,650crore from Additional tier-1 bonds to fund business expansion. Finance committee of the bank approvedissuance of AT-1 capital bonds compliant with Basel III capital norms of RBI for minimum amount of Rs 500crore with green shoe option, total issuance not to exceed Rs 1,650 crore in one or multiple issuance, BoBsaid. – (FE Oct 11, 2017 p 10)

CANARA BANK"Canara Bank prices dollar bonds to raise $200 million" – Canara Bank priced its dollar bonds at 119

basis points over the five year US treasury yield to raise $200 million, sources aware of the deal confirmed.Bonds are issued under the bank's $2 bn MTN programme. A report. – (FE Oct 12, 2017 p 10)

DENA BANK"Dena Bank launches QIP to raise Rs 1,800 cr" – Dena Bank said that it had launched a qualified institutional

placement of shares to raise as much as Rs 800 crore from institutional investors. On 27 June, the bank'sshareholders had approved a plan to raise funds through a QIP, a capital-raising tool through which listedcompanies can sell shares, fully and partly convertible-debentures, or any securities other than warrants thatare convertible into stocks, to a qualified institutional buyer. A report. – (Mint Oct 11, 2017 p 5)

ICICI BANK"ICICI Bank aid to armed forces" – ICICI Bank committed a financial assistance of Rs 10 crore to the

Indian Armed forces. The contribution, payable in two equal tranches this year and next year, will be utilisedtowards welfare activities and betterment of the families of ex-servicemen who have lost their lives guardingthe nation. – (HBL Oct 10, 2017 p 10)

IDBI BANK"Govt raises stake in IDBI Bank to 77.79%" – IDBI Bank said its promoter, the Government of India, has

increased its stake in the company to 77.79% by acquiring 3.81 per cent shares through preferential allotment.The government earlier had 73.98 per cent stake in IDBI Bank. – (IE Oct 8, 2017 p 18)

– 5 –

"IDBI Bank" – IDBI Bank has launched project nishchay in partnership with the Boston Consulting group toaccelerate its turnaround programme and improve financial performance. BCG will assist to identify areasfor cost containment and revenue maximization leading to sustainable growth and profitability of the Bank.Coordinating across multitude of initiatives, the Bank will focus on four key areas - revenue enhancement,cost control and reduction, asset productivity and overall program management in consultation with BCG. –(FE Oct 7, 2017 p 4)

"IDBI Bank bags Rajbhasha Kirti Puraskar for Hindi magazine Vikas Prbha" – IDBI Bank has beenawarded Rajbhasha Kirti Puraskar in linguistic region B of nationalised banks and financial institutions categoryfor the year 2016-17 for its Hindi Magazine Vikas Prabha. – (FE Oct 7, 2017 p 4)

IDFC BANK"IDFC Bank, Shriram, extend merger deadline" – The boards of IDFC Bank Ltd and Shriram Group

agreed to extend the agreement for their strategic merger till 8 November, as the exclusivity period fordiscussions ends on 6 October. '...Given the extensive due diligence process involved and the on-goingdiscussions, the parties have agreed for extension of the CES (Confidentiality, Exclusivity and Standstill)Agreement up to 8 November 2017,' said IDFC Ltd in a notice to stock exchanges. A report. – (Mint Oct 6,2017 p 3)

INDIAN BANK"Indian Bank releases Handbook on Forex Business" – Kishor kharat, MD and CEO, Indian Bank,

released the handbook FAQs on Forex Business at Corporate Office. – (Mint Oct 11, 2017 p 15)

KOTAK MAHINDRA BANK"Kotak sees threefold increase in customers: Attributes jump to bank digital drive" – Private sector

lender Kotak Mahindra Bank Ltd. has witnessed a threefold increase in customer acquisitions sincedemonetisation, according to a senior official. 'Our new customer acquisitions has grown threefold comparedto September 2016,' according to Ambuj Chandna, head - retail liabilities, investment and payment products,Kotak Mahindra Bank. According to Mr Chandna, 63% of new customers come from top 20 cities, 47% aresalaried employees and 82% are in the age group of 18 to 35 years. He also attributed the spurt in customersto higher interest rates offered on savings bank accounts. A report. – (H Oct 6, 2017 p 14)

LAKSHMI VILAS BANK"Lakshmi Vilas Bank" – Unaudited financial results for the quarter / six months ended 30th September, 2017.

An advt. – (BS Oct 12, 2017 Pt.II p 3)

"LVB reports Rs 80-cr fraud in a disappointing Q2" – Enhanced provisioning for higher bad loans andsequestering funds for a fraud eroded Lakshmi Vilas Bank's net profit during the second quarter. The bank'snet profit plunged 84 per cent to Rs 10.50 crore for the quarter ended September 30, 2017 compared with Rs64.85 crore in the year-ago period. A report. – (HBL Oct 12, 2017 p 6)

ORIENTAL BANK OF COMMERCE"RBI initiates corrective action against Oriental Bank for high NPAs" – The RBI has initiated a prompt

corrective action against Oriental Bank of Commerce for high bad loans. The move will place variousrestrictions on the public sector lender, including on fresh loans and dividend distribution. A report. – (FE Oct8, 2017 pp 1, 11)

PUNJAB NATIONAL BANK"Confident of achieving 10% credit growth this fiscal: PNB chief" – Punjab National Bank is targeting

credit growth of 10 per cent this fiscal and is well on course to achieving it, a top official said. I don't see aturnaround in credit growth for the banking industry as a whole, but for my bank, I am optimistic aboutachieving the targeted growth of 10 per cent, according to Sunil Mehta, MD and CEO, PNB. A report. –(HBL Oct 7, 2017 p 6)

– 6 –

"PNB puts 32 NPAs with unpaid loan of Rs 1,176 cr on block" – Punjab National Bank has put assets ofas many as 32 bad loans with outstanding loan exposure of Rs 1,176 crore on the block in an effort to bringdown its NPAs. A report. – (BS Oct 9, 2017 p 8)

SOUTH INDIAN BANK"South Indian Bank Q2 dives 96% on higher provisioning" – South Indian Bank reported a 96 per cent

drop in net profit at Rs.4.32 crore in the second quarter of the current fiscal against Rs.10 crore in thecorresponding period of the previous fiscal, due to higher provisions. However, the operating profit registeredan all-time record growth of Rs.163 crore, thanks to a clear shift of focus to retail, MSME and CASA. Areport. – (HBL Oct 11, 2017 p 10)

STATE BANK OF INDIA"Captain courageous" – The SBI chairman's astute handling saw the bank weathering the NPA storm that

has left most public sector banks in disarray. Ability to think out of the box, attention to detail, and leadershipskills are what she brings to the most vital job in the banking sector. It is never easy to be the chairman of SBIgiven the pulls and pressures of the job. But Bhattacharya has never bowed to pressure. The best instance ofthis was SBI's refusal to sanction a billion-dollar loan for a mining project promoted by the Adani Group.Given Adani's perceived proximity to the Prime Minister, it could not have been an easy decision, especiallysince the loan was discussed extensively in the media. A report. – (FE Oct 6, 2017 p 12)

"Credit growth is an unfinished agenda: Arundhati Bhattacharya, whose 4-year term as SBI chiefended on 6th Oct., is quite confident there will be an uptick in the economy sooner rather thanlater" – Don't think I will continue in the area of banking. But obviously I am not just going to hang up myboots. Excerpts from an interview with former SBI Chief, Arundhati Bhattacharya. – (HBL Oct 7, 2017 p 6)

"First woman banker to every Indian moves on: I don't think I'll continue in the area of banking butobviously I am not just going to hang up my boots... in today's time, 60 is too early - ArundhatiBhattacharya" – Most bank chairmen would want to demit office when the going is good, but it might not bethe same for Arundhati Bhattacharya, who steps down after a four year term as the chief of SBI. For thebest part of her tenure, the first woman boss of the country's biggest lender was busy battling the rising pileof bad loans, and she leaves amid hope that things turn better for her successor sooner than later. A report.– (ET Oct 7, 2017 p 5)

"For SBI, reviving credit growth will be the top priority: Rajnish Kumar: Resolving stressed assets,digitisation also high on agenda: Chairman-designate" – Revival of credit growth and resolution ofstressed assets would be State Bank of India's top priority, according to the Chairman-designate RajnishKumar. Kumar's observation comes in the backdrop of the bank's advances witnessing lacklustre, 1.16 percent, year-on-year growth in the June quarter, and gross non-performing assets almost touching 10 per cent(or Rs.1.88-lakh crore) of gross advances as of July 2017. 'Bad loans need to be resolved on an urgent basisas this will help in reviving the economy,' said Kumar, who is currently MD (National Banking Group), SBI.He expressed confidence that the bank's NPA position would improve, adding: 'The bank is already workingon resolving issues around corporate credit and soon you will see some changes.' We will be reviewing all theaction plans which are already happening in the bank - what is working, what is not - and what is the coursecorrection that is required, according to Rajnish Kumar, Chairman-designate, SBI. A report. – (HBL Oct 6,2017 p 1)

"I have really tried to propagate collaboration, says Bhattacharya" – Arundhati Bhattacharya, whoretired as SBI chairman recently, explains how she managed to collaborate and avoid confrontation as thehead of India's largest lender. Edited excerpts from an interview. – (Mint Oct 12, 2017 p 16)

"I regret not seeing end of NPA story: A PSU Bank CEO has to be very tactful" – Excerpts from aninterview with former chairperson of State Bank of India, Arundhati Bhattacharya. – (TI Oct 9, 2017 p 15)

"Liquidation is last option for cases being referred to insolvency courts" – Edited excerpts from aninterview with Rajnish Kumar, Chairman-designate, State Bank of India. – (FE Oct 6, 2017 p 12)

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"New SBI chief restructures top orgnisational set-up" – On day one of taking charge, the new SBIchairman Rajnish Kumar hit the ground running with a major restructuring at the top organisational set-up ofthe bank. In his first major decision as the chairman, Kumar has decided to realign the various businessgroups and verticals under the whole-time directors of the bank. The bank has decided to bring the criticalarea of recovery of NPAs and resolution of stressed assets under the control and oversight of MD (stressedassets resolution group), B.Sriram, MD (corporate and global banking) will hold additional charge of the newstressed assets group. A report. – (IE Oct 9, 2017 p 11)

"Rajnish Kumar takes charge as SBI chief" – Rajnish Kumar took charge as the new chairman of SBI forthree years, following the retirement of Arundhati Bhattacharya. Kumar who joined the SBI board on May26, 2015, looked after retail banking and latest initiatives in payments and digital banking. Prior to that, heheaded SBI Capital Markets - the merchant banking arm of SBI. Having joined the bank as a probationaryofficer in 1980, Kumar has spent close to four decades at SBI. – (FE Oct 8, 2017 p 1)

"SBI partners Moody's Analytics to train staff" – SBI announced teaming up with Moody's Analytics for aprogramme under which the PSU lender's staff will get training to bring efficiency in loan appraisal. The SBIand Moody's Analytics announced their collaboration to provide bank-wide credit certification to SBI'semployees enabling them to source, appraise and monitor loans faster. – (FE Oct 11, 2017 p 10)

"SBI to fund Maharashtra govt's affordable housing schemes" – The SBI will soon ink an MoU with theMaharashtra government-owned PSU Shivshahi Punarvasan Prakalp, for financing affordable housing underthe State's slum rehabilitation schemes. The SBI will make available funds for the construction of affordablehousing tenements under the slum rehabilitation schemes, including the Dharavi redevelopment Project, ofthe Maharashtra government. A report. – (HBL Oct 10, 2017 p 17)

"SBI to set up largest innovation centre" – SBI is creating a 15,000-sqft innovation centre in Navi Mumbaiinvesting around Rs 100 crore, a senior official said. The centre, to be built at its Global IT Centre in Belapurin Navi Mumbai, will be the largest innovation centre by any financial services company in the country – (FEOct 11, 2017 p 10)

"State Bank of India puts 24 NPAs worth Rs.3,554 crore up for sale" – State Bank of India has put 24non-performing accounts worth Rs.3,554.23 crore for sale to ARCs (asset reconstruction companies)/banks/NBFCs (non-banking financial companies)/FIs (financial institutions) at the end of second quarter, accordingto an auction notice on its website. – (Mint Oct 6, 2017 p 7)

"Take the STEPS to stay on top, SBI chief tells staff" – SBI's new chief Rajnish Kumar has exhorted histeam of 2,64,705 associates to take the STEPS so that the bank continues to retain the crown position in thebanking sector and delivers new age banking for new India. STEPS stands for Strong ethics, Transparentand high standards of corporate governance, Empathy and compassion for colleagues, customers andcommunities around, Politeness in dealing with customers, peers, seniors and junior colleagues and Sincerity.A report. – (HBL Oct 10, 2017 p 10)

–SME FINANCE

"SBI loans to Small Cos now hinge on cash flows" – A new era of credit appraisal is dawning on thenation's biggest lender, when it comes to funding small-scale companies. The SBI is now assessing theborrower based on their bank statements instead of the balance sheet. We are now evaluating a company'sability to repay the loan based on their cash flow, according to a senior SBI executive. For this, we drawanalysis from their bank statement of one year and collaborate it with their balance sheet. A report. – (ETOct 9, 2017 p 14)

VIJAYA BANK"Vijaya Bank, HPCL in pact" – Vijaya Bank has entered into an MoU with Hindustan Petroleum Corporation

Ltd for providing all its retail outlets with BHIM / UPI merchant solutions. Customers can make payments byscanning a payment QR code, using BHIM Vijaya or any BHIM app that supports payments via UPI. –(HBL Oct 9, 2017 p 16)

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YES BANK"YES Bank: with growth at new level, bank has entered sweet spot" – Initiatives on retail and a digital

focus likely to see sustainable and granular EPS growth in FY17-20e. A report. – (FE Oct 7, 2017 p 15)

CHINA

–PEOPLE'S BANK OF CHINA

"China central bank boss calls for reform" – People's Bank of China Governor Zhou Xiaochuan made afresh call to open up the nation's financial sector, and warned that reform will become more difficult if thewindow of opportunity is missed. The nation's longest-serving central bank chief defined a troika of threedrivers needed to further open up the economy, citing greater foreign trade and investment a more market-based foreign exchange rate mechanism with a reasonable and balanced yuan rate, and the relaxation ofcapital controls to allow use of the yuan to be gradually freed. A report. – (BS Oct 11, 2017 p 6)

EURO-ZONE

–BANKING REGULATORS

"Eurozone regulators to push for tighter rules on bad loans" – Eurozone bank supervisors are set toescalate a clash with Italy by pushing for tougher rules to tackle a stockpile of almost Euro1 tn-worth of non-performing loans left from the financial crisis. A report. – (FT Oct 9, 2017 p 3)

USA

–FEDERAL RESERVE

"The Federal Reserve will be a new creature soon" – A report. – (ET Oct 9, 2017 p 14)

Moss, Daniel - "Recession will fox next Fed chair" – The Fed's cautious approach to raising rates, thisyear's consistency notwithstanding, means there isn't a lot there to trim. An article. – (FE Oct 9, 2017 p 6)

Wolf, Martin - "The Fed treads a fine line on tightening" – Excessive and premature interest rate riseswould be as damaging as an explosive surge in inflation. An article. – (FT Oct 11, 2017 p 9)

BANK CAPITAL

–PUBLIC SECTOR BANKS

Goswami, Omkar - "First, fix the banks: finance minister must recapitalise better PSBs. This willstrengthen distressed balance sheets" – An article. – (IE Oct 7, 2017 p 8)

BANK CONSOLIDATION

–PUBLIC SECTOR BANKS

"Govt searches for merger candidates among PSBs; Govt makes first move but final call will restwith banks based on their commercial considerations" – The central government has started an internalexercise to ascertain merger candidates from among the PSBs. The move comes as state-run lenders areyet to approach the finance ministry with their consolidation plans. A senior government official, while confirmingthe internal exercise, said the final decision will be taken by banks after commercial considerations. A seniorbank executive said that merger within banks will only go through if the combined entity takes on a newname. A report. – (ET Oct 10, 2017 p 13)

"Plan to bring down number of public sector banks to 10-15" – India will have 10-15 PSBs with government'smajority stake, down from 21 at present, as part of its plan to consolidate banks, according to Sanjeev Sanyal,Principal Economic Advisor of Finance Ministry. Cleaning up of the bad loan problems is the first priority andafter that the PSU banks could be consolidated. A report. - (HBL Oct 7, 2017 p 4)

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BANK FRAUDS

–MUSLIM CO-OPERATIVE BANK

"RBI eyes allegations of multi-crore fraud in Pune co-op bank" – Following allegations of Rs 100 crorefraud in Muslim Co-operative Bank, the RBI along with the state cooperative department has sought anexplanation from the chairman of the bank. The action comes after two directors of the bank, filed a complaintwith the RBI and Co-operatives Commission about an alleged fraud in the bank. A report. – (HT Oct 9, 2017p 1)

BANK LENDING"A small step by RBI may go a long way in identifying big loans" – The status quo on repo rate by the

Reserve Bank of India was anticipated. The push for monetary policy transmission and changes in loanpricing regime were also largely seen coming. The inflation-focussed commentary too was in place, with themuch-needed call to push for growth. So, what was new in the fourth bi-monthly monetary policy reviewWednesday? Just a simple announcement - companies to register for 'Legal Entity Identifier', if their debtexceeds Rs.5 crore. In conjunction with the move by RBI to set up a high-level task force on Public CreditRegistry, this seemingly innocuous announcement can be a game-changer for how banks lend and borrowersconduct business in India. By asking companies to register as a Legal Entity Identifier the idea is to providelenders clear visibility on what the exact debt position of a borrower is, across the system. A report. – (HBLOct 6, 2017 p 10)

Merwin, Radhika - "Shopping for loans: as the festival frenzy grips shoppers, banks are getting intothe act by offering attractive loans. We zoom into the scene to help you choose the best deals"– An article. - (H Oct 8, 2017 Pt. II p 8)

BANKING REGULATOR – RBI

–MONETARY POLICY

"Visible signs of growth in second half: Urjit Patel" – RBI governor Urjit Patel said there are visible signsof upturn and economic growth is likely to exceed 7% in the last two quarters of the year as projected in lastweek's monetary policy report. We have started seeing the upturn. The Nikkei India Services PMI BusinessActivity Index rose more than 3% in September over August; the core sector IIP saw a 4.9% rise in August.If you look at some of the high frequency data such as automobile and two-wheeler sales, you also see theupturn there. We should aim at achieving the inflation target without losing sight of supporting economicgrowth. A report. – (Mint Oct 9, 2017 p 1)

"We have started seeing the upturn in economic growth: Urjit Patel" – In his first interview to anynews-paper since he took over as RBI governor in September 2016, Urjit Patel discussed growth, inflation,liquidity and the one-year journey of the MPC. Edited excerpts. – (Mint Oct 9, 2017 p 8)

BASEL III BANK REFORMS"Basel-III norms: Banks need a breather, says SBI report" – Backing the Finance Ministry's pitch to

defer implementation of Basel-III norms beyond March 2019, SBI, in a research report, said an extendedtimeline to meet the capital needs would give banks a much-needed breather to lend more while they grapplewith several issues, including asset quality. The Basel-III norms are a set of reform measures aimed atimproving the banking sector's ability to absorb shocks arising from financial and economic stress. A report.– (HBL Oct 12, 2017 p 1)

CORPORATE DEBT RESTRUCTURING"Companies with debt of Rs 32K cr fail at CDR cell in Apr-Jun" – Companies with debt of around Rs

32,000 crore have failed at the CDR cell in five months of FY18, taking the total failures since inception ofthe cell in 2001 to Rs 1.69 lakh crore. Data from CDR cell showed that a bulk of the failures Rs 29,830 croreoccurred in August. The primary reason for CDR failure is the inability of promoters to infuse the requisite

– 10 –

equity capital in the defined period and non-compliance with CDR agreement in pledging shares in favour ofthe consortium of lenders. A report. - (FE Oct 10, 2017 p 10)

CURRENCY NOTES

–DEMONETISATION

"Note bank decision had factored in short-term impact: Shaktikanta" – Former economic affairs secretaryShaktikanta Das, who played a key role during the demonetisation drive, spoke to TOI. Four months afterretiring from service. He says he does not agree with the criticism that implementation of demonetisation hadserious shortcomings. Edited excerpts from an interview. – (TI Oct 7, 2017 p 19)

CYBER SECURITYBair, Sheila - "Cyber dangers lurk in European rules on bank account data" – The cyber world is full of

would-be extractors of our bank account dta. Banks and their regulators recognised cyber risk as a majorthreat decades ago and have built an elaborate ecosystem of protections against it. Regulated banks arestrictly limited in how they store customers data. They are required to have multiple lines of defence againstsecurity breaches, subject to independent audit and review by government supervisors. We need tech toenjoy a symbiotic relationship with banking, not act as an invasive species. An article. – (FT Oct 10, 2017 p9)

DEVELOPMENT BANKSRay, Partha - "Development banks in a new avatar?" – The WLTF banks need to be institutions in search

of a new business model to take care of an old need of the Indian economy. The RBI has released animportant and timely discussion paper on Wholesale and long-term finance banks. The genesis of WLTFbanks can be traced in the Nachiket Mor Committee report of June 2014 that envisaged a class of differentiatedbanks called wholesale banks. An article. – (BS Oct 10, 2017 p 8)

DIGITAL CURRENCYSabnavis, Madan - "Why bitcoin should not be allowed" – The cryptocurrency will fuel laundering of black

money and financing of terrorism. It will render monetary policy ineffective. An article. – (HBL Oct 10, 2017p 8)

DIGITAL PAYMENTS"Understanding the digital payments landscape" – Adoption of digital payments has increased significantly

with the move towards a cashless economy. Digital payments comprise transactions carried out using avariety of electronic modes such as cards, mobile phones or an internet-based set-up to send and receivemoney. A survey by KPMG titled Digital Payments - Analysing the Cyber Landscape - finds 36% of respondentsattributing ease of making payments to the enhanced use of digital payments. A quarter of the respondentssay digital payments help them to track all payments. Forty per cent believe that phishing, distributed denial-of-service (DDoS) attacks, vulnerability and spam are the major cyberthreats faced by various organizations.According to the survey, a barrier to the growth of digital payments is security concerns. Lack of awarenessis also a barrier. Twelve per cent of the respondents say that additional charges stop them from making digitalpayments. The survey calls for a strong cashless ecosystem to enable faster adoption of digital payments. Areport. – (Mint Oct 6, 2017 p 12)

–UNIFIED PAYMENTS INTERFACE

"UPI grows 85% in September, fastest among retail digital payment modes" – The Unified PaymentsInterface (UPI) channel grew the fastest among all modes of retail digital payments in September, rising 85%month-on-month (MoM) in terms of the aggregate volume of transactions, to 30.78 million, and 28% in valueterms to Rs.5,293.5 crore, representative data released by the Reserve Bank of India (RBI) showed. Areport. – (FE Oct 6, 2017 p 12)

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EXECUTIVE APPOINTMENTS

–PUBLIC SECTOR BANKS

"Centre elevates 9 GMs of public sector banks as executive directors" – The Centre has elevated asmany as nine General Managers to Executive Directors in various PSBs. The Appointments Committee ofthe Cabinet has given its nod for these appointments and the Dept. of Financial Services has issued therelevant orders. A report. – (HBL Oct 11, 2017 p 10)

FINANCIAL RESULTS"Elevated provisions, weak credit growth to keep bank profits subdued in Sept quarter: earnings of

retail-heavy private banks likely to be stable; corporate-heavy banks may incur elevated creditcosts" – Elevated provisions, weak credit growth and some hit on consumption due to the implementation ofthe GST will keep bank profits subdued in the second quarter of the current financial year. Provisions willincrease as banks will have to set aside a higher amount for the 12 large accounts, which were referred to theNCLT by RBI and also as some new accounts have been admitted to the NCLT during the quarter. IndusIndBank will kick off the banking results season. A report. – (ET Oct 9, 2017 p 9)

FINANCIAL SERVICESLabh, Prabhat - "Creating demand for financial services" – Hand-holding the client is the first step. Field-

level workers play a crucial role here. This suggests that an uptake of financial product may not automaticallytranslate into adoption. If India is to advance along the road of financial inclusion, we need to empower theend-users by building their financial capability, taking into account their specific needs. But imparting financialliteracy may not be enough if it is not aligned with the client's financial goals. An article. – (FE Oct 6, 2017 p11)

FOREIGN BANKS IN INDIA

–STANDARD CHARTERED BANK

"StanChart's global service centre" – StanChart Bank has officially opened its new Global Business Servicescentre with an aim to attract the best minds available locally to redefine banking for the world. The bankexpects to have 30 per cent of GSB employees based in Bengaluru over the next few years by doubling thecurrent head count based in the city from a combination of internal moves and selective hiring. – (HBL Oct11, 2017 p 10)

INSOLVENCY AND BANKRUPTCY CODE"IBBI tweaks norms to involve all stakeholders" – An insolvency resolution plan will need to have statement

spelling out how the interest of all stakeholders be dealt with according to the amended regulations under theinsolvency and bankruptcy code. The move would help ensuring more clarity in terms of taking intoconsideration interest of stakeholders, including homebuyers concerned during the insolvency process withthe latest amendment by the IBBI. A resolution plan should have a statement about dealing with the interestof stakeholders. A report. – (FE Oct 7, 2017 p 1)

"IBC reforms likely to protect homebuyers" – The Ministry of Corporate Affairs is gearing up for somecrucial amendments to the IBC to provide more rights to individual consumers, including worried homebuyers.Other consumers who might also benefit are telecom subscribers. A senior official from the MCA said therewas a bit of problem in ensuring that homebuyers receive a status equal to banks, as lenders will then becomereluctant to lend to builders. A report. – (BS Oct 10, 2017 p 1)

Roy, Abir - "How effective has IBC been? The real success would depend on the viability of resolutionplans and how much haircut would financial creditors have to take" – A key issue that has emergedfrom the progress so far is that a resolution plan must contain the liquidation value and not enterprise value.This may have an impact on potential bids since the liquidation value may not take into account futurerealisable revenue. An article. – (FE Oct 11, 2017 p 8)

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–NPA RESOLUTION

Sabharwal, Manish - "Good news on bad loans: relationship between entrepreneurs, banks, bankruptcyis being reworked to end culture of impunity" – The government passed the IBC, SEBI directedimmediate loan default disclosure for listed companies (regrettably deferred but not abandoned), and the RBIhas forced banks to use IBC provisions. The IBC is clever legislation that recognises all failures are not fraud(reasons could include unrealistic ambition, policy inconsistency, regulatory failure, etc), separates financialand operational viability, ensures high negotiating human capital for borrowers, and uses deadlines to preventbankruptcy being perpetual or terminal. An article. – (IE Oct 10, 2017 p 10)

–PROVISIONING

"IBC cases: Govt in talks with RBI to relax provisioning norms" – The government and commercialbanks are seeking a relaxation of provisioning requirements on accounts identified for bankruptcy proceedings,seeking to free up capital and boost credit growth. The finance ministry is in talks with the RBI on this issue,three govt.officials aware of the matter said. On 26 June, RBI directed banks to set aside 50% of the loanamount as likely losses for all cases. It has referred to the NCLT under the IBC. The central bank also saidthat provisioning should be 100% in cases that fail to get resolved under insolvency proceedings and areforced into liquidation. A report. – (Mint Oct 12, 2017 p 1)

INTEREST RATES"The impact of demonetization on interest rates" – Year after demonetization, one of its effects has been

a substantial decline in lending and deposit rates. The chart has the details. The chart shows that in the pre-demonetization period- December 2014 to October 2016 - while RBI lowered the repo rate by 1.75 percentagepoints, the weighted average lending rate on outstanding loans went down by 0.75 percentage points. But inthe year after demonetization, even though the repo rate has been lowered by a mere 0.25 percentage points,the fall in WALR on outstanding loans has been 0.50 percentage points. The big change has been in freshloans. A chart. – (Mint Oct 9, 2017 p 4)

-DEPOSITS

"Reserve Bank must allow external benchmarking for deposits too: banks" – The Reserve Bank ofIndia (RBI) must allow deposit rates to be linked to an external benchmark if it wants to apply such abenchmark for loan rates so as to prevent asset-liability mismatches, said bankers. However, depositors'acceptance for floating rate products may not come easy. 'It cannot be one-sided,' according to RajnishKumar, Managing Director of State Bank of India (SBI). 'Any change in the methodology would mean thatthe pricing of loan and liability product will have to move in tandem. Today, to reduce interest rate, withoutreducing deposit rate is not possible. And to reduce deposit rate, I have to take care of my depositors. This isa delicate balancing act which the bank does.' A report. – (Mint Oct 6, 2017 p 6)

LOAN PRICING"Lending rates: RBI proposal poses many questions" – The Reserve Bank of India's (RBI) proposal to

link lending rates to an external benchmark might solve the persisting issue of monetary transmission butquestions arise as to how these short-term rates could help in the effective pricing of long-tenure loans andhow banks could convince their customers to shift to floating-rate term deposits. An internal study group ofthe RBI has shortlisted three potential external benchmarks to which bank lending rates could be linked - thetreasury-bill rate, certificates of deposit rate and the RBI policy repo rate. A report. – (FE Oct 6, 2017 p 12)

"Link lending rates to market benchmark : RBI panel wants interest rate on loans to be pegged tobenchmarks like T-bill, certificate of deposit rate or repo rate" – Those who avail of home loans andpersonal loans could soon be on par with the big corporates when it comes to how banks calculate interestcharges on borrowers. Interest rates on loans across the board would soon be benchmarked to externalmarket rates as the banking regulator aims to put an end to opacity of loan pricing by banks. A report. – (ETWealth Oct 9-15, 2017 p 6)

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"Micro-managing banks is a bad idea" – RBI can't get them to lower lending rates with a new benchmark,banks need to see if this is viable. An editorial. – (FE Oct 6, 2017 p 10)

"Reform floating rates" – Pegging interest rates to external benchmarks is the way forward. An editorial.– (BS Oct 6, 2017 p 7)

Saha, Manojit - "Why do we need external benchmarks while pricing loans?" – An Internal StudyGroup constituted by the RBI has recommended that banks should set interest rates based on an externalbenchmark and not as per internal benchmarks as is the practice now. Here is what you need to know on thesubject. An explainer. – (H Oct 9, 2017 p 14)

–MONETARY POLICY TRANSMISSION

Iyer, Aparna - "New lending rate regime: is RBI fixing what is not broken?" – The RBI is clearly afrustrated central bank when it comes to monetary policy transmission. After changing the way banks chargetheir borrowers twice and brow-beating them countless times, the regulator is nowhere close to pushinglenders to swiftly transmit its policy rate measures. An article. – (Mint Oct 10, 2017 p 4)

MICROFINANCE SECTOR

–DEMONETISATION

Gaurav, Sarthak and Mankar, Pravin - "Demonetization's blow to microfinance sector" – Demonetisationhas adversely affected the growth in clients, loans disbursed and repayment rates. An article. – (Mint Oct 10,2017 p 15)

MOBILE WALLETS"Interoperable mobile wallets in 6 months: RBI" – The RBI directed companies and banks to make KYC

compliant prepaid payment instruments (PPI) such as mobile wallets interoperable within the next six months.A report. – (Mint Oct 12, 2017 p 6)

"Mobile wallets to get new lease of life with interoperability : from April next, consumers will be ableto undertake inter-wallet transactions" – With interoperability in place, wallet players would have towork on ways to differentiate themselves from others and not use cash-backs and discounts as the only pull-factors, according to the Mobile Wallet CEO, Vinay Kalantri. A report. – (HBL Oct 7, 2017 p 6)

MONETARY POLICYPan, Indranil - "Rate cut on hold and rightly so" – The RBI has avoided acting in haste in the face of

confusing signals. An article. – (HBL Oct 9, 2017 p 11)

Prasanna, B - "Hawkish tilt to dovish hold" – The RBI's language clearly indicates that inflation targets areparamount. An article. – (HBL Oct 9, 2017 p 11)

MONETARY POLICY TRANSMISSION"Banks passed on lower rates to borrowers, shows RBI data" – Banks have fully passed on the benefits

of lower policy rates set by the RBI to customers, contrary to the picture the RBI projected earlier when itexpressed disappointment over banks not passing on the benefits. Commercial banks have lowered theirbenchmark lending rates by 100 basis points between April 2016 and September 2017, while RBI lowered therepo rate by 50 basis points in the same period. A report. – (ET Oct 12, 2017 p 15)

NON-PERFORMING ASSETS"Bad loans at banks hit record $ 146 bn" – Indian banks' sour loans hit record 9.5 trillion rupees at the end

of June. Unpublished data shows, suggesting Asia's third-largest economy is no nearer to bringing its baddebt problems under control. A review of RBI data obtained through right-to-information requests shows

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banks' total stressed loans - including non-performing and restructured loans rose 4.5% in the six months toend-June. In the previous six months, they had risen 5.8%. A report. – (H Oct 11, 2017 p 13)

NPA RESOLUTION"Banks look to resolve stressed assets from RBI list outside: NCLT" – Banks are unwilling to refer

stressed assets for insolvency proceeding to the NCLT and are looking to resolve these cases outside theNCLT, according to the sources close to the development. Higher provisioning requirement for assets thathave been referred to the NCLT and a wider range of options available for resolutions of these assets outsidethe NCLT are the key deterrents, the sources added. A report. – (FE Oct 11, 2017 p 10)

"IMF thumbs up to measures to clear up bad loans" – Welcoming the slew of measures taken by thegovernment in the recent past to clean up bad loans, the IMF said that though the steps are in the positivedirection more needs to be done as Indian banking sector as well as Indian corporate sector remain vulnerable.A report. – (HBL Oct 12, 2017 p 4)

–PUBLIC SECTOR BANKS

Vaidyan, M G - "Thinking out of the box for bank NPAs" – Almost all PSBs require recapitalization andthe government cannot provide all the money. Sustainable solutions are needed. An article. – (Mint Oct 9,2017 p 14)

PAYMENTS BANKS

–INDIA POST PAYMENTS BANK

"India Post Payments Bank will push financial inclusion: Sinha" – Communication minister Manoj Sinhasaid the government is working on establishing 650 branches for India Post Payments Bank to facilitatefinancial inclusion, and unveiled two new offerings by the postal department. A report. – (HBL Oct 10, 2017p 10)

–JIO PAYMENTS BANK

"Jio Payments Bank likely to begin operations in December" – Jio Payments Bank, 70-30 joint venturebetween Reliance Industries and SBI, will begin operations in December, according to three people aware ofthe plans. The payments bank was expected to launch its operations in October. The launch got delayed asthe RBI has asked them to demonstrate its capabilities to ensure it is ready for a glitch-free launch. Thelaunch will now be in December. A report. – (Mint Oct 9, 2017 p 5)

PAYMENTS SYSTEMS

–CHINA

"Cash is becoming obsolete in China :electronic payments in China will reach a volume of $ 45million by 2021:CLSA" – There are more ways to pay for goods and services now than ever before andas such paper money seems increasingly old fashioned. In China, cash is all but dead thanks to more convenientoptions. Last year, the volume of mobile payments in China more than doubled, surging to a total of $ 5 trillion.Figures from the first three months of 2017 suggest that Alipay and WeChat Pay are the two services thatdominate the market, with the former accounting for 54 percent of transactions and the later making Chinamoney up 40 percent. A report. – (ET Oct 11, 2017 p 9)

PEER-TO-PEER LENDING"On steadier ground" – While the RBI's norms for P2P platforms provide credibility to the online marketplace,

blanket caps on lending could impede growth. An editorial. – (HBL Oct 12, 2017 p 8)

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RECOVERY OF LOANS, NPAs

–HAIRCUT

"Banks unwilling to go for large haircuts in valuation: bankers indicated a haircut of 5-10% is feasible"– Prospective investors in stressed companies - private equity firms, stressed asset funds and corporates -are expecting banks to take large haircuts in return for an equity infusion. Investors want lenders to take a hitof as much as 50-60% on their dues. Most companies are near bankrupt and have been admitted by theNCLT for insolvency proceedings. A report. – (FE Oct 10, 2017 p 10)

SMALL FINANCE BANKS"Small finance banks raising deposits to replace high-cost loans" – With eight out of 10 small finance

banks having become operational, aggressive deposit mobilisation in the first year has turned out to be the keystrategy for almost all the new entities. In addition, the new-age banks are betting big on technology to reducethe cost of operations. A report. – (BS Oct 10, 2017 p 4)

–AU SMALL FINANCE BANK

"AU Bank ropes in SunTec to assist in GST transition" – AU Small Finance Bank has tied up with SunTecBusiness Solutions to help it transit to the GST regime and deliver seamless service experience to clients.Based in Thiruvananthapuram, SunTec offers GST management as an over-the-top (OTT) solution whichcan easily integrate into the AU Bank existing IT landscape. This 'out-of-the-box' solution can be nimblyconfigured, aiding banks with a hassle-free experience when they transit into the GST regime. AU Bank willuse this solution for tax segregation, tax accounting, generating tax invoice and for data filing. – (HBL Oct 6,2017 p 10)

RBI CIRCULARS"Auction of Government of India Dated Securities" – (RBI Circular RBI/2017-2018/73 Ref. No. IDMD/

937/08.02.032/2017-18 dated 09.10.2017)

"Exim Bank's Government of India supported Line of Credit of USD 1 billion to the Government ofMongolia" – (RBI Circular RBI/2017-2018/78 A.P. (DIR Series) Circular No. 10 dated 12.10.2017)

"Exim Bank's Government of India supported Line of Credit of USD 318 million to the Governmentof Sri Lanka" – (RBI Circular RBI/2017-2018/77 A.P. (DIR Series) Circular No. 09 dated 12.10.2017)

"Interest rates for Small Savings Schemes" – (RBI Circular RBI/2017-2018/74 DGBA.GBD.954/15.02.005/2017-18 dated 12.10.2017)

"Master Circular - Scheme of Penalties for bank branches based on performance in renderingcustomer service to the members of public" – (RBI Circular RBI/2017-2018/76 DCM (CC) No.G-3/03.44.01/2017-18 dated 12.10.2017)

"Risk Management and Inter-Bank Dealings - Facilities for Hedging Trade Exposures invoiced inIndian Rupees" – (RBI Circular RBI/2017-2018/75 A.P. (DIR Series) Circular No. 08 dated 12.10.2017)

"Sovereign Gold Bond Scheme" – (RBI Circular RBI/2017-2018/71 IDMD.CDD.No.929/14.04.050/2017-18 dated 06.10.2017)

"Sovereign Gold Bonds Scheme, Operational Guidelines" – (RBI Circular RBI/2017-2018/72IDMD.CDD.No.927/14.04.050/2017-18 dated 06.10.2017)

– 16 –

AGRICULTURE & RURAL DEVELOPMENT

NABARD"Nabard buys 7% more in Sidbi from IDBI Bank for Rs 900 cr" – The rural finance institution's largest

ever investment raises its shareholding in Sidbi to 10%. IDBI Bank had put its 16.25% shareholding in SIDBIon the block in August. A report. – (Mint Oct 9, 2017 p 3)

RURAL WAGESHimanshu - "Face the decline" – To suggest that demonetisation improved rural wages on the basis of rise

in income of some workers is misleading. It halted the recovery of the rural economy, which had begun afterthe 2016 monsoon. An article. – (IE Oct 6, 2017 p 11)

INDUSTRYFrancis, Smitha - "Finally, working on an industrial policy" – The industry policy discussion paper could

have taken a more holistic view on FDI, technology development and trade. An article. – (HBL Oct 11, 2017p 8)

CORPORATE DEBT"India Inc: Debt profile stays weak" – With more than four down-grades a day, the debt profile of Indian

companies and banks remains fragile. Data from Bloomberg shows there were 807 downgrades in the sixmonths to September compared with 787 upgrades. With more companies stressed, several banks are beingdowngraded. A report. – (FE Oct 9, 2017 pp 1,2)

EXIM BANK"As NPAs jump, Exim Bank turns cautious on loan book growth" – With its gross NPAs crossing over 9

per cent in FY17, EXIM Bank is looking to grow its loan book cautiously. According to Debasish Mallick,Deputy Managing Director, Exim Bank, the lender might witness about 9 -10 per cent growth in advancesand guarantees this fiscal. In FY17, its total advances and guarantees stood at about Rs 1,15,000 crore. Areport. – (HBL Oct 11, 2017 p 10)

MUTUAL FUNDS"Merger of MF schemes will bring down investor costs" – The new SEBI norms streamlining the plethora

of mutual fund schemes under five distinct heads - equity, debt, hybrid, solution-oriented and others will leadto a merger of schemes and bring down costs for investors. The new regulations will also lead to churning ofthe portfolios by MFs over the next six months as they segregate investments to align schemes according tothe SEBI parameters. A report. – (HBL Oct 11, 2017 p 14)

"Sebi classified mutual fund schemes to help investors" – The Sebi has asked mutual fund houses toclassify their schemes under five broad categories to cut through the clutter and make it easier for investorsto compare plans. The move is expected to force fund houses to merge schemes and reduce their number byhalf. A report. – (HT Oct 7, 2017 p 13)

NON-BANKING FINANCE COMPANIES"NBFCs record 13% credit growth in FY17" – NBFCs in the non-deposit taking systemically important

segment recorded a credit growth of 13% y-o-y in FY17, as compared to 5.4% for banks, provisional datareleased by the RBI showed. NBFCs disbursed Rs 1.24 lakh crore to the commercial sector in FY17, upfrom Rs 84,000 crore from FY16. A report. – (FE Oct 12, 2017 p 10)

Sinha, Shilpy - "When losers can also be winners: No bank licence no problem for NBFCs" – Formany of the NBFCs which missed out on a universal bank licence, it appears to be a blessing in disguise.

– 17 –

Their businesses have soared and so is their market value. But a turn in rate cycle could put them understress if risks aren't managed well. An article - (ET Oct 11, 2017 p 14)

SMALL SCALE INDUSTRY

MUDRA YOJANA

–WEST BENGAL

"Mudra scheme: Bengal banks disburse Rs 7,178-cr loans so far this fiscal" – Banks in West Bengalhave disbursed close to Rs 7,178 crore worth loans to small and tiny enterprises so far during the currentfiscal under the Pradhan Mantri Mudra Yojana. The state had disbursed Mudra loans worth Rs 15,480,03crore in 2016-17 a 100 per cent growth over Rs 7,740 crore in 2015-16. A report. – (HBL Oct 10, 2017 p 10)

SIDBI

-MSMEs

"SIDBI has a vision 2.0 to strengthen advisory services for MSMEs: agency's makeover plan comesas MSMEs are reeling under the impact of demonetisation and GST" – Plans for MSME uplift -SIDBI's ambitious makeover plan includes. * Strengthening advisory services for MSMEs in areas oftechnology, taxation and issues which normal business encounters. * Creating an index gauging businesssentiment for MSMEs. * Broadening its fintech platform to help MSMEs access loans from banks andNBFCs. A report. – (ET Oct 12, 2017 p 15)

INTERNATIONAL ECONOMICS"IMF chief asks world to seize opportunity of global recovery" – IMF chief Lagarde said that long

awaited global recovery is taking roots and asked global community to seize this opportunity of the upswingto create a more inclusive economy that works for all. Referring to IMF research that has shown thatreforms are more potent and easier to implement when economies are healthier. International communityneeds to use this time frame to lifting incomes, creating jobs, investing in people's futures and fosteringinclusive growth. A report. – (FE Oct 7, 2017 p 2)

"IMF upbeat as global economy surges: Funds twice-yearly report raises growth forecasts and predictslow inflation" - A report. – (FT Oct 11, 2017 p 4)

"IMF upgrades global growth forecast to 3.6% for 2017" – The current broad-based global economicupswing will likely be sustained this year and next, the IMF said, with gains in most of the world offsettingsluggish outcomes in the US, Britain and India. The IMF upgraded its global economic growth forecast for2017 by 0.1 percentage points to 3.6%, and to 3.7% for 2018, from its April and July outlook, driven by apickup in trade, investment, and consumer confidence. While the forecasts for euro zone, Japan, China,emerging market Europe and Russia were all revised upwards, the US outlook was unchanged. A report.– (FE Oct 11, 2017 p 16)

Bhattacharya, Pramit - "The economics of Richard Thaler: the winner of the economics Nobel haschallenged the way we think about the economy, and has helped revolutionize the field ofeconomics." – The winner of the Nobel Prize in economics this year, Richard Thaler of Chicago Universityis widely recognized as one of the chief protagonists of the behavioural economics revolution that has challengedsome of the standard assumptions and theories of economic theory. An article. – (Mint Oct 10, 2017 p 9)

Roubini, Nouriel - "Three scenarios for the global economy: will the recent growth spurt continueover the next few years or is the world experiencing a temporary cyclical upswing?" – The risks ofmuddling through go far beyond mediocre economic performance. An article. – (Mint Oct 12, 2017 p 15)

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EUROPEAN INVESTMENT BANK"We're making a contribution to India's green targets; projects worth Euro 2 bn being appraised" –

Excerpts from an interview with European Investment Bank Vice-President Andrew McDowell. – (IE Oct9, 2017 p 11)

FUND MANAGEMENT"Global fund management" - A weekly report. – (FT Oct 9, 2017 Supl. pp 1-14)

NOBEL PRIZE"Rajan in running for Nobel Prize" – Former RBI governor Raghuram Rajan features in the list of probables

for this year's Nobel Prize in Economics, The Wall Street Journal has reported. He is one of the six economistson the list of probable winners compiled by Clarivate Analytics, a company that does academic and scientificresearch and maintains a list of dozens of possible Nobel Prize winners based on research citations. A report.– (FE Oct 8, 2017 p 3)

MANAGEMENT

CORPORATE GOVERNANCE"Board rooms to become more robust, transparent" – Corporate board rooms will go through a sea

change with the Kotak committee on corporate governance making some far-reaching recommendations oninducting more independent directors, timely disclosure of related-party transactions and splitting the role ofchairman and MD/CEO. The formalisation of information flow between promoters and companies will makesure that allegations made against Infosys and Tata Sons are not repeated, say CEOs and corporate lawyers.The recommendations are grounded in market realities and benchmark India against best global governancepractices. A report. – (BS Oct 7, 2017 p 6)

"Good recommendations but I expected more" – The Sebi's expert panel report on corporate governanceis good but more could have been done. Edited excerpts from an interview with former Sebi chairman, MDamodaran. – (BS Oct 9, 2017 p 4)

"Kotak panel bats for boards: Wants info flow to owners legitimised" – The Committee on CorporateGovernance headed by Uday Kotak has proposed an overhaul of the existing rules aimed at strengtheningthe role of independent directors and bringing more transparency to the functioning of boards. This assumessignificance in the light of recent boardroom battles at Tata Sons and Infosys. What the panel wants: Existingrule: * A minimum of three directors on the board of a public limited company; * At least one woman directoron the board of directors of every listed entity; * At least four board meetings every year; * Maximumnumber of public companies to which a person can be appointed as a director shall not exceed ten; * One-third of directors on listed companies should be independent; * Any listed entity should have at least sixdirectors on the company board; * Every listed entity should have at least one independent woman directoron its board; * Minimum meetings be increased to five; * Maximum number of directorships in listed entitiesshould be reduced to seven by April 1, 2020; * At least half the number of directors of a listed entity shouldbe independent by April 1, 2020. A report. – (HBL Oct 6, 2017 p 1)

"Moving towards better corporate governance" – The Kotak committee's recommendations will enhancetransparency and effectiveness in the way boards of listed companies function. An article. – (Mint Oct 9,2017 p 14)

"Our focus was on boards, auditors and the regulator" – Edited excerpts from an interview withKrishnamurthy Subramanian, associate professor of finance, Indian School of Business and a member of theSebi panel. The 25-member Uday Kotak panel on corporate governance submitted its report to the marketsregulator. Through the wide ranging recommendations, the committee has tried to create legitimate channelsfor information sharing, enhance board structures and look at the role of auditors. He said that the committeewas focused on the three gatekeepers of corporate governance - board, auditors and the regulator. – (MintOct 6, 2017 p 6)

– 19 –

"Reforming corporate governance" – Sebi should swiftly implement Kotak panel suggestions. An editorial.– (BS Oct 9, 2017 p 11)

Bhattacharyya, Asish A - "Corporate governance - Do we require new rules?" – In most family businesses,power is tilted towards controlling shareholder or management. So, the board is ineffective. This can't changesoon. An article. – (BS Oct 9, 2017 p 12)

Sundaresan, Somasekhar - "Kotak panel report: much to cheer, a few disappointments, too" – Anarticle. – (ET Oct 7, 2017 p 6)

–WOMEN DIRECTORS

"No independent woman director at about 38% of NSE-listed companies" – Around 637 or 38% of the1,670 companies listed on the NSE will need to appoint at least one independent woman director if therecommendations of Uday Kotak panel on corporate governance are accepted, according to a report byPrime Database. A report. – (FE Oct 12, 2017 p 11)

MISCELLANEOUS"Mukesh Ambani retains top slot in Forbes India rich list for tenth year in a row" – Reliance Industries

chief Mukesh Ambani emerged as India's wealthiest for the 10th straight year as his net worth swelled to $38billion (nearly Rs.2.5 lakh crore) while the wealth of 100 richest rose by 26% despite economic hiccups.Wipro Azim Premji was the distant second with a net worth of $19 billion, moving up two places from lastyear, while Sun Pharma's Dilip Shanghvi slipped from his earlier second place to the ninth now ($12.1 billion)on Forbes magazine's annual 'India Rich List 2017.' A report. – (FE Oct 6, 2017 p 6)

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