1. Bank of Baroda Initiates Forensic Audit of DHFL Loans
Public sector lender Bank of Baroda has initiated a forensic audit of loans to Dewan Housing Finance Corporation Ltd, after news website Cobrapost alleged that the company has re-routed loan funds back to promoter group entities.
According to three people in the know, Bank of Baroda initiated the forensic audit after it received a letter from the Ministry of Finance directing it to do so. A similar letter was sent to State Bank of India as well. Consultancy firm KPMG has been appointed by Bank of Baroda for this audit.
According to DHFL’s latest investor presentation, the firm had about Rs 38,000 crore in outstanding bank loans at the end of December, 2018.
(Source: BloomberQuint)
2. Parliament Panel Seeks Probe Into LIC, Rating Agencies’ Role in IL&FS Fiasco
A parliamentary panel demanded that the government probe the IL&FS group’s largest stakeholder, the Life Insurance Corporation of India, as well as agencies that gave high ratings to entities of the insolvent infrastructure group.
“The governance failures and indecision/indiscretion on the part of the IL&FS Board should also be thoroughly probed,” the Parliamentary Standing Committee on Finance said in a report titled “Strengthening the Credit Rating Framework in the country” that was tabled in Parliament today.
The parliamentary panel’s recommendation comes just days after former Reserve Bank of India YV Reddy questioned the risk assessment capabilities of LIC and State Bank of India, given that they were two of the largest shareholders of IL&FS.
The IL&FS group has been defaulting on loan and bond repayments since August last year, sparking risk-aversion in the financial markets, particularly towards non-bank lenders.
(Source: BloombergQuint)
3. Tata Steel UK CEO Bimlendra Jha Quits
Tata Steel UK’s Chief Executive Officer Bimlendra Jha resigned from the post, a source said.
NatSteel Holdings’ Ashish Anupam will now takeover the role. Tata Steel UK is a unit of Tata Steel Europe, which comprises European operations of the Indian steel major.
“Bimlendra Jha, the CEO of Tata Steel UK, has resigned. Ashish Anupam of NatSteel Holdings will be looking after the business,” the source said. The source, however, did not divulge information about the reason for resignation.
(Source: BloombergQuint)
4. Fearing Backlash at WTO, India Rules out Import Duty Hikes for Copper, Iron
Fearing backlash at the World Trade Organization (WTO), India has ruled out any import duty hikes for commodities such as aluminium, iron ore, and copper, in the short term.
As the trade war between the United States and China has drastically altered global supply lines, domestic metal manufacturers as well as user industries have sent repeated requests to the commerce department to secure their businesses, often accompanied by threats of job losses across sectors.
(Source: Business Standard)
5. Bank Credit up 14.5% to Rs 94.29 Trn, Deposits Rise 9.63%: RBI Data
The pace of growth in bank credit, as well as deposits, has moderated on a fortnightly basis. While credit grew 14.5 percent to Rs 94.29 trillion, deposits rose a tepid 9.63 percent to Rs 121.22 trillion for the fortnight ending 1 February, according to the latest RBI data. In the fortnight ended 18 January, deposits had increased by 9.69 percent to Rs 119.86 trillion and credit grew 14.61 percent to Rs 93.32 trillion, the RBI data showed.
The gap between pace of credit disbursal and deposits mobilisation is widening. This would maintain the pressure on deposits rates. According to bankers, these may not soften, even though the RBI reduced policy repo rate by 25 basis points, bankers said.
(Source: Business Standard)
6. SBI, Bank of Baroda Among 4 PSU Banks Penalised Crores of Rupees by RBI
The Reserve Bank of India has imposed crores of rupees worth of monetary penalty on four PSU banks, including the large ones State Bank of India (SBI) and Bank of Baroda. The monetary penalty has been imposed for non compliance with various directions issued by the RBI.
RBI has slapped a penalty of Rs 1 crore on SBI — India’s largest bank, it said. Further, it has levied a penalty of Rs 1 crore on Bank of Baroda too — another large PSU bank. Union Bank of India also has been fined to the tune of Rs 1 crore. Corporation Bank has been slapped with a penalty of Rs 2 crore.
(Source: Financial Express)
7. MC Aviation to Decide on Taking Back Five Jet Airways Planes
MC Aviation Partners Inc, the wholly owned aircraft leasing unit of Japan’s Mitsubishi Corp, said it will decide after 21 February on whether to repossess five Boeing Co. 737 planes it has leased to cash-strapped Jet Airways.
Jet Airways, which has lease rentals overdue with MC Aviation, has convened an extraordinary general meeting of shareholders next week to decide on a proposal to convert a portion of its large debt into equity.
“Jet Airways hasn’t paid dues to MC Aviation Partners since October 2018," a senior official of the leasing firm said on Wednesday. The official declined to be named.
(Source: Livemint)
8. Coal India Share Price Feels the Pressure of Flagging Volume Growth
Beset by production challenges and lower price realisations in recent times, Coal India Ltd’s share price fell to an all-time low of Rs 214 on 11 February on the National Stock Exchange.
For all the pessimism, though, Coal India surprised the Street with better-than-expected volume growth and higher realisations. This was topped off with good discipline in operating expenditure, resulting in better operating margin.
The company achieved a substantial 13 percent increase in FSA realisations to Rs 1,334 a tonne. (FSA is the fuel-supply agreement the company has inked with power producers.)
(Source: Livemint)
9. NCLT Allows Amtek Auto’s Debt Resolution Process to Start From Scratch
The Chandigarh bench of the National Company Law Tribunal (NCLT) on Wednesday allowed the committee of creditors of Amtek Auto to start the resolution process from scratch, 18 months after the process was first initiated, according to two people aware of the matter.
The NCLT said that the process should be completed within 150 days. It decided to give additional time on account of the period between the date of submission of the first set of resolution plans in March 2018 and the date on which the bench approved UK-based Liberty House as the winning bidder for Amtek Auto.
(Source: Livemint)
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