QBiz: Trump Slaps Fresh Tariff on China, Govt to Merge Three Banks
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1. Trump Slaps Tariffs On $200 Billion In Chinese Goods
US President Donald Trump on Monday, 17 September, defied warnings and escalated trade confrontation with China, hitting the country with tariffs starting next week on another $200 billion in imports and threatening to target even more if Beijing retaliates.
Trump said China had refused to change the unfair practices that hurt US businesses and workers.
“For months, we have urged China to change these unfair practices and give fair and reciprocal treatment to American companies,” Trump said in a statement.
“These practices plainly constitute a grave threat to the long-term health and prosperity of the United States economy,” he said.
“But, so far, China has been unwilling to change its practices,” including theft and force transfer of technology.
2. Amazon India Plans To Become An Insurance Agent
Amazon.com Inc plans to sell insurance in India as the world’s largest online retailer looks to join local rivals in strengthening financial services offerings.
Amazon India wants to start by selling life, health and general insurance, according to its filings with the Registrar of Companies. The Seattle-based giant said it aims to carry out the business of soliciting, procuring and servicing insurance as a corporate agent.
India’s insurance industry is expected to be worth $280 billion by 2020, according to estimates by an Assocham-APAS report. Walmart-backed Flipkart has sought approval from the regulator to sell life and general insurance covers. SoftBank and Alibaba-backed Paytm already has a corporate agency licence.
3. Vodafone Idea to Merge Aditya Birla Telecom
Telecom operator Vodafone Idea Limited will merge Aditya Birla Telecom Limited, which holds 11.15 percent stake in telecom infrastructure firm Indus Towers, with it.
“The Board of Directors of Vodafone Idea Limited (VIL)...has considered and approved a scheme of amalgamation of Aditya Birla Telecom Limited (ABTL), a wholly-owned subsidiary of the company, with the company,” Vodafone Idea said in a regulatory filing.
With this amalgamation, Vodafone Idea will directly have shareholding in Indus Towers and take call on monetisation of the stake held by ABTL following simplification in the corporate structure.
4. IBM Faces Age Discrimination Lawsuit After Firing Thousands
A lawyer known for battling tech giants over the treatment of workers has set her sights on International Business Machines Corp.
Shannon Liss-Riordan on Monday, 17 September, filed a class-action lawsuit in federal court in Manhattan on behalf of three former IBM employees who say the tech giant discriminated against them based on their age when it fired them. Liss-Riordan, a partner at Lichten & Liss-Riordan in Boston, has represented workers against Amazon, Uber and Google and has styled her firm as the premier champion for employees left behind by powerful tech companies.
“Over the last several years, IBM has been in the process of systematically laying off older employees in order to build a younger workforce,” the former employees claim in the suit, which draws heavily on a ProPublica report published in March that said the company has fired more than 20,000 employees older than 40 in the last six years.
5. Govt Proposes Merger of Bank of Baroda, Dena and Vijaya Bank
The government’s decision on Monday to merge three banks it owns–Bank of Baroda, Dena Bank and Vijaya Bank–is expected to reduce the amount of capital it needs to pump into these lenders and help clean their balance sheets.
The merged entity, comprising two relatively stronger banks and a weak one, will be the third-largest lender in India after State Bank of India and HDFC Bank Limited, with a total business of more than Rs 14.82 trillion.
Finance minister Arun Jaitley said the government had been careful in not merging weak banks. “Two strong banks can absorb a third bank to create a globally competitive bank, he said. “No employee will face any adverse service conditions after the amalgamation.”
6. Interest Payable on Rupee Bonds Issued Abroad by Indian Companies Exempt From Income Tax
The government on Monday, 17 September, exempted from income tax the interest payable on rupee denominated bonds issued outside India by a company or a trust to a non-resident or a foreign company, a move aimed at increasing dollar inflow. The interest would be exempt on rupee denominated bond issued outside India during the period from 17 September, 2018, to 31 March, 2019, the Finance Ministry said in a statement.
As per I-T law, interest payable by an Indian company or a business trust to a non-resident, including a foreign company, on rupee denominated bond issued outside India before the 1 July, 2020, was liable for concessional rate of tax of 5 percent. Consequent to Prime Minister Narendra Modi reviewing the state of economy last week, the government had announced a multi-pronged strategy to contain the current account deficit (CAD) and augment the foreign exchange inflow.
7. RBI Rejects Maharashtra Bank Request to Set off Rs 2,543 Cr Losses Against Share Premium Amount
The Reserve Bank has rejected Bank of Maharashtra request to set off over Rs 2,543-crore losses against the balance in its share premium account. The Reserve Bank of India vide its letter dated 11 September, 2018 has intimated about its inability to accede to the request made by the bank for setting off the accumulated losses against the balance lying in share premium account of the bank, Maharashtra Bank said in a regulatory filing on Monday.
The Pune-headquartered state sector lender had got approval of board and shareholders to set off the accumulated loss of the bank as on 31 March, 2018 in its annual general meeting held on 21 June, subject to regulatory approvals. The bank had Rs 5,293.72 crore in its share premium account by the end of fiscal ended March 2018.
8. Supreme Court Allows Sale of Saridon, Three Other Drugs
Popular painkiller Saridon will be available on medical stores across the country, with the Supreme Court on Monday, 17 September, allowing the sale of the drug and three other banned fixed dose combinations.
A bench of Justice RF Nariman and Justice Indu Malhotra issued notice to the Centre and sought its reply on the plea filed by some drug makers and pharma associations.
The medicines whose sale was allowed were Piramal Healthcare's Saridon, GlaxoSmithKline's Piriton, Juggat Pharma's Dart and another drug, the details of which could not be immediately known.
The Supreme Court, however, did not grant any relief to the other medicines falling in the list of 328 FDC drugs which were banned by the Health Ministry by its 7 September notification. FDCs are two or more drugs combined in a fixed ratio into a single dosage form.
9. CNG, PNG Set to Get Costlier From Next Month as 12-14 Percent Increase in Domestic Natural Gas Price Expected
The price of CNG and PNG are set to rise from next month as the government will revise the prices of domestic natural gas for the October 2018-March 2019 period as per the new New Domestic Gas policy. Care Ratings has calculated that the rise in prices could by 12 percent from the current $3.06 per mmBtu to approximately, $3.43 per mmBtu.
As per the report, the rise in prices of natural gas will result in costlier CNG, PNG, manufacturing of urea and petrochemicals where natural gas is used as a feedstock. Earlier, news agency PTI had reported that the government might increase the price of domestic natural gas by 14 percent.
The revised price is likely to be announced on 28 September.
10. Govt Proposals Fail to Calm Markets; Rupee, Stocks Continue Slide
The rupee continued its downward spiral on Monday, 17 September, brushing off finance minister Arun Jaitley’s package of measures to restore confidence in the currency as traders judged them as inadequate to arrest the decline.
In the absence of steps that will provide immediate support, the government’s efforts failed to prop up the battered currency.
The rupee weakened 0.9 percent to 72.51 a dollar from its previous close of 71.86. The currency opened at 72.49 a dollar on Monday and touched a low of 72.69 in intra-day trading, despite the government’s five-point plan, which was announced on Friday, to boost capital inflows and shrink the widening current account deficit.
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