QBiz: Govt Brings Measures to Stabilise Rupee; Forex Reserves Fall
Top business stories of the day.
1. SBI Denies Laxity in Dealing with Vijay Mallya Case
India’s biggest lender the State Bank of India (SBI) said on Friday, 14 September, there was no laxity on its part in dealing with loan default by now defunct Kingfisher Airlines of fugitive liquor baron Vijay Mallya.
The comments by the SBI came after reports suggested that the bank, which was the lead lender to Kingfisher Airlines, was in February 2016, advised to move the Supreme Court to stop Mallya from fleeing the nation, but the lenders moved the apex court only after the tycoon had left the country four days later. Mallya left the country on 2 March 2016 while 13 banks moved the apex court four days later seeking its intervention to prevent the businessman from leaving the country.
2. Govt Announces Five Measures to Stabilise Rupee, Curb Current Account Deficit
Finance Minister Arun Jaitley on Friday, 14 September, announced a series of measures to boost market confidence, curb the widening current account deficit and stabilise the rupee after a marathon meeting with Prime Minister Narendra Modi to discuss the nation’s economy.
Jaitley said five decisions have been taken to address the issue of the current account deficit, which touched 2.4 percent of gross domestic product in the June quarter.
Mandatory hedging conditions for infrastructure loans through the external commercial borrowing (ECB) route will be reviewed and a 20 percent exposure limit on investments by foreign portfolio investors in debt to a single corporate group will be removed.
3. Infosys Spends $76 Million to Buy Finnish Firm Fluido
Infosys, one of India’s largest IT services firm, has agreed to spend $76 million to buy Fluido, a Salesforce consulting partner in the Nordics in Europe, the company said on Friday, marking the second acquisition under chief executive officer (CEO) Salil Parekh, who took over nine months ago.
Finland-based Fluido is a privately held firm that was founded in 2010. Infosys did not disclose the revenue of Fluido but said it expects to close the acquisition during October-December.
“Fluido will be an important addition to the Infosys family, bringing a unique combination of market presence, deep salesforce expertise, agile delivery and training, that combined with our existing capabilities will help companies reimagine and transform their businesses,” said Ravi Kumar S, president and deputy chief operating officer of Infosys.
4. India Moves One Rank up in HDI, Inequality Stays a Major Concern
India climbed up a spot to rank 130 out of 189 countries in the latest human development rankings released on Friday by the United Nations Development Programme (UNDP). However, inequality and gender gap remain a major cause of concern.
India’s Human Development Index (HDI) value for 2017 is 0.640, which puts the country in the medium human development category. Between 1990 and 2017, India’s HDI value rose from 0.427 to 0.640, an increase of nearly 50 percent, indicating rapid progress in poverty eradication.
However, when India’s HDI value was discounted for inequality it fell to 0.468, or a loss of 26.8%. Neighbouring nations such as Bangladesh and Pakistan show losses because of inequality of 24.1 percent and 31 percent, respectively, the report said.
5. Forex Reserves Fall Below $400 Billion For The First Time In 2018
India’s foreign exchange reserves fell further as the central bank continues to intervene in the currency markets to cushion the fall in the rupee, which has depreciated more than 12 percent so far this year.
Forex reserves fell to $ 399.3 billion as of 7 September 2018, a drop of $819 million over the previous week. Foreign currency assets, the largest segment of reserves, fell $887 million in a week, showed data released by the RBI.
India’s forex reserves have fallen from a peak of $426 billion in April to just below $400 billion now.
6. India’s Trade Deficit Narrows In August To $17.39 Billion
India’s trade deficit narrowed in August from a five-year high, adding to comfort along with a rebound in the rupee and a fall in sovereign bonds yields in the last two days.
The gap between exports and imports stood at $17.39 billion, compared with $12.72 billion in the same month last year, according to data from the Ministry of Commerce. The trade gap had widened to a five-year high of $18 billion in July.
A slightly narrower trade shortfall provides relief for Prime Minister Narendra Modi as he prepares to meet policymakers in an attempt to stem the rout in the rupee, which is Asia’s worst performing currency this year. The Indian rupee strengthened for two straight days to 71.85 per dollar after retail inflation eased to less than 4 percent.
7. Delhi High Court Allows Wockhardt To Sell Its FDC Drug Till 18 September
The Delhi High Court allowed Indian pharma major Wockhardt to sell its anti-inflammatory medicine till next Tuesday. The drug is among the 328 fixed dose combination drugs banned by the Centre a week ago.
Justice Vibhu Bakhru, in an interim order, allowed the company to sell its drug – Ace Proxyvon – till 18 September, the next date of hearing, and asked the Health Ministry to place before it all relevant records based on which it had arrived at the decision to ban the medicine.
Additional Solicitor General Maninder Acharya and central government standing counsel Anil Soni appeared for the ministry. Soni told PTI that the court has allowed Wockhardt to continue selling its drug till 18 September.
8. NCLT Allows Shivinder To Withdraw Case Against Brother Malvinder Singh
The National Company Law Tribunal allowed Shivinder Singh to withdraw his petition he filed against brother Malvinder Singh and long-time associate Sunil Godhwani for alleged “oppression and mismanagement” of group companies.
"...my primary goal remains to address and resolve the group’s issues through constructive and transparent engagement with Daiichi Sankyo and our other creditors. It is clear that my brother and I cannot do so together. To that end, I intend to use the mediation process to get to a critical decision,” Shivinder said in a press statement on Friday, 14 September.
“Namely, whether my brother or I take full responsibility for resolving the group’s issues with Daiichi Sankyo and other lenders."
9. US Firm Asked to Pay over $300,000 to 12 H-1B Workers for Giving Low Wages
A US-based IT staffing company has been asked to pay over $300,000 to its 12 H-1B employees for paying them far below their salary and imposed a penalty of over $45,000 for violating the labour provisions, amidst the Trump administration's crackdown against the abuse of the visa category popular among Indian professionals.
The US Department of Labour Wage and Hour Division (WHD) during an investigation found the Redmond-based company, which has offices in Bengaluru and Hyderabad, violated the labour provisions of the H-1B visa programme by paying its guest workers far below the required wages, a media release said Thursday, 13 September.
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