QBiz: LoUs Abolished; 41.2 Lakh SBI Accounts Shut Over Min Balance
Top business news of the day.
1. Customs Duty Hike on Car Parts May Put Brakes on Luxury Car Sales
Increases in customs duty on some imported engine components and completely knocked down (CKD) units are set to put a brake on the surging sales of luxury cars. Audi India, which had forecast double-digit growth this year, now expects sales in the year to be little changed over 2017.
Vikram Pawah, president of BMW India, said sales would have grown faster had it not been for the sudden increase in taxes, which will force the company to raise prices from April.
And, according to India’s largest luxury car maker Mercedes-Benz, their cars will get dearer by 3 percent to 5 percent.
2. Yes Bank Acquires 17.3% In Fortis Healthcare After Credit Default
Yes Bank Ltd has acquired 17.3 percent stake in Fortis Healthcare Ltd after the promoter group of India’s second largest hospital chain defaulted on loans provided by the Mumbai-based private lender.
It acquired 8.97 crore shares of Fortis on invocation of a pledge after promoter group companies defaulted in credit facility provided by the bank to them, according to stock exchange filing. This will make Yes Bank the biggest shareholder in Fortis.
The comes after the Supreme Court ordered that financial institutions holding pledged shares of Fortis Healthcare are free to sell them amid the company’s mounting troubles.
3. To Counter Jio, Airtel to Raise Rs 165 Billion via NCDs, Foreign Currency Bonds
Telecom major Bharti Airtel on Monday received approval from the board to raise up to Rs 165 billion for refinancing debt and paying for spectrum liabilities.
The board of the company approved "issuance of non-convertible debentures (NCDs) of up to Rs 100 billion on a private placement basis" and "issuance of foreign currency bonds up to a limit of $1 billion or equivalent in one or more tranches", Airtel said in a regulatory filing.
The NCDs of up to Rs 100 billion can be raised in tranches or a series at rates may be approved from time to time.
(Source: Business Standard)
4. Give 4G Spectrum to BSNL, MTNL At the Earliest: Parl Panel
The Standing Committee of Information Technology has asked government to allocate 4G spectrum to state-run telecom firm BSNL and MTNL at the earliest to help them compete and survive in the market.
"The Committee is of the view that both BSNL and MTNL will lose the data market, if they are not given 4G services soon. To compete and survive in the telecom market, the Committee feels that 4G spectrum should be given to them at the earliest," the committee, chaired by BJP MP Anurag Singh Thakur, said in its report tabled in Parliament today.
MTNL and BSNL have submitted proposals for allotment of spectrum with government support for launching 4G services in the telecom circles where they operate.
5. Clean Fuel, Not Electric Vehicles, Should be India’s Goal
The regulatory vacillations around India’s electric vehicles plans are becoming all too frequent, reflecting the underlying stresses of what is certainly a potential game changer for the auto industry but also a hugely disruptive threat for the incumbents.
In April last year, then power minister Piyush Goyal declared that by 2030, no petrol or diesel cars would be sold in India, a declaration that was reaffirmed forcefully in September by Nitin Gadkari, minister for road transport, highways and shipping, when he warned India’s automobile industry that it would have to adopt electric standards on its own or be forced into doing so.
6. RBI Discontinues Letters Of Undertaking For Trade Credit For Imports
The Reserve Bank of India on Tuesday decided to discontinue issuance of letters of undertaking (LoU) and letters of comfort (LoC) for trade credit for imports into India.
Authorised dealer-1 (AD-1) category banks will not be allowed to issue LoCs and LoUs for this line of business, the regulator said in a notification on its website. Most universal banks, domestic and foreign, come under this category, according to two bankers in the know.
Banks may continue to issue letters of credit and bank guarantees for trade credit for imports into India as per the current guidelines applicable, the notification added.
7. Government to Sell 10% Stake in HAL Through Rs 42.30 Billion IPO
As part of the divestment process, government will divest 10 percent of its stake in the public sector chopper-maker Hindustan Aeronautics, which launched a Rs 42.30 billion initial public offer.
As part of the IPO that hits the market on 16 March, the Maharatna company will also sell 10.20 percent of its equity through and offer-for-sale route.
The firm, which gets over 91 percent of its sales from the defence sector including the Coast Guard, has fixed a price band at Rs 1,215-1,240 per equity share for the offer that will hit the market on 16 March and close on 20 March.
(Source: Business Standard)
8. RBI Report Says Demonetisation Led to Fall in Households’ Financial Assets
The Reserve Bank of India’s (RBI’s) recently published Quarterly Estimates of Households’ Financial Assets and Liabilities shows the total amount of households’ gross financial assets fell from Rs 141 trillion in September 2016 to Rs 137 trillion by end-December 2016.
As a proportion of gross domestic product (GDP), the total amount outstanding in households’ financial assets fell from 95.2 percent of GDP in September 2016 to 89.2 percent by end-December 2016. At end-September 2017, the latest date for which the data is available, this metric was still below what it was in September 2016.
9. SBI Closes 41.2 Lakh SB Accounts for Not Keeping Minimum Balance
State Bank of India has closed as many as 41.16 lakh savings accounts between April-January in the current fiscal year for not maintaining the average monthly balance, reveals an RTI query.
Last April, the nation's largest lender had re-introduced the penal charges on non-maintenance of average monthly balance after a gap of five years. Later in October, it had revised down the charges to some extent.
"Due to provisions of penalty on non-maintenance of minimum balance, the bank has closed 41.16 lakh savings bank accounts between 1 April 2017 and January 31, 2018," the bank replied to an RTI query filed by Chandra Shekhar Gaud from Neemuch in Madhya Pradesh.
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