QBiz: FM Lists Options to Use RBI Payout; Zomato in More Trouble
Catch the latest business news round-up in today’s QBiz.
1. FM Says All Options on the Table for Utilising RBI's ₹1.76-Trillion Funds
Finance Minister Nirmala Sitharaman on Tuesday indicated that all options are open for the government to utilize the Reserve Bank of India’s ₹1.76 trillion largesse.
Accepting the recommendations of the Bimal Jalan committee, the central board of RBI on Monday decided to transfer ₹1.23 trillion of its surplus and ₹52,637 crore of excess provisions, in a relief for the government struggling to meet revenue targets in a slowing economy.
2. Pay Interim Dividend Only in Special Cases: Jalan Panel
A Reserve Bank of India (RBI) panel, led by former governor Bimal Jalan, has recommended that the central bank pay interim dividend to the government, a practice that started in FY17, only under exceptional circumstances.
All the recommendations of the panel, set up to study the central bank’s economic capital framework (ECF), were accepted by RBI’s central board on Monday, although the report was published on Tuesday.
The Jalan committee has also recommended that RBI’s capital framework be reviewed every five years and its accounting year (July-June) be aligned with the fiscal year that ends on 31 March.
(Source: Hindustan Times)
3. More Trouble for Zomato as Restaurants Threaten to Log out Permanently If Concerns Not Addressed
Days after Zomato denied making further changes to its dining-out programme following restaurant body NRAI’s president Rahul Singh’s claims that changes made wouldn’t be of much help to the logout situation, the restaurant body on Tuesday said that in the absence of the required changes, restaurants will log out forever. “The choice is with him (Deepinder Goyal) what he wants to do with the product. We will be permanently logged out,” Anurag Katriar, Mumbai Chapter Head, NRAI told Financial Express Online.
Zomato’s founder Deepinder Goyal had tweeted last week that “Zomato is logging out of the logout campaign. We have said enough and we are getting back to work.” On Monday, NRAI had written to four leading food tech platforms including Swiggy, Uber Eats, Foodpanda and Zomato regarding eight concerns around delivery business vertical that restaurants highlighted in their meeting with NRAI in various cities.
(Source: Financial Express)
4. Indigo Board Accepts Key Gangwal Demand on Change in Policies
InterGlobe Aviation Ltd’s board has agreed to make policy changes only when all the proposed 10 directors are present, a key demand by co-founder Rakesh Gangwal, said a person aware of the board’s decision.
The issue of expanding the board’s strength to 10 was put to vote at the annual general meeting (AGM) in New Delhi on Tuesday.
5. J&J Ordered to Pay $572 Million for Opioid Crisis
An Oklahoma judge has ordered US healthcare giant Johnson & Johnson (J&J) to pay $572 million in damages for its role in fostering the state’s opioid addiction crisis.
In the first civil trial of a drugmaker over an epidemic that has caused hundreds of thousands of overdose deaths, judge Thad Balkman on Monday said prosecutors had demonstrated that J&J contributed to a “public nuisance” in its deceptive promotion of highly addictive prescription painkillers.
6. Cabinet May Ease FDI Norms Today
The Union cabinet on Wednesday will consider relaxing foreign direct investment (FDI) norms in several sectors, including single-brand retail and digital media, to attract overseas players, people familiar with the matter said. Other sectors where FDI rules would be eased are coal mining and contract manufacturing. The government may approve proposal to allow 100% FDI in contract manufacturing, they said.
In the existing foreign investment policy, 100% foreign direct investment is permitted in the manufacturing sector under the automatic route. A manufacturer is also allowed to sell products manufactured in India through wholesale and retail channels, including through e-commerce, without the government’s approval. However, the policy does not talk about the contract manufacturing and it is not clearly defined in the policy. “Big technology firms across the world are going for this, so there is a need for clarification on the matter,” the people familiar with the matter said.
(Source: Hindustan Times)
7. PNB, Allahabad Bank Launch Loan Products Linked to RBI Repo Rate
Leading state-owned lender Punjab National Bank and Allahabad Bank on Tuesday announced linking of their retail loans with the Reserve Bank’s repo rate, which will make loans cheaper.
Punjab National Bank launched PNB Advantage, a retail lending scheme linked with the repo rate effective on Tuesday.
“In the new schemes rate of interest will be 0.25 percent less than the existing applicable rates based on MCLR. The new rates will vary from 8.25 percent to 8.35 percent for housing loan borrowers and 8.65 percent for car loan borrowers,” PNB said in a statement.
8. HUL Reduces Lifebuoy, Lux Prices in Latest Sign of Weak Demand
Hindustan Unilever Ltd (HUL) has cut prices of its Lux, Lifebuoy and Dove soaps in the past month, passing on the benefit of cheaper inputs, as India’s largest consumer goods company aims to win customers amid stiff competition and weak demand.
“HUL does selective and judicious price changes across its portfolio in the normal course of its business. Given that the commodity prices are expected to remain benign for a certain time period, we have taken price reductions in the range of 4% to 6% in Lux and Lifebuoy portfolio, while it may be higher on certain packs in order to pass on the benefits to the consumers," a company spokesperson said on Tuesday.
9. Reliance Jio Beats Airtel, Vodafone Idea to Be Top Telecom Revenue Earner in June Quarter
Mukesh Ambani-led Reliance Jio pipped Bharti Airtel and Vodafone Idea in April-June as top revenue earner from telecom services at Rs 10,900 crore within three years of commencing commercial operations, according to the latest financial data released by telecom regulator Trai.
This assumes significance as Reliance Jio stormed into the highly-competitive telecom sector in September 2016 with its disruptive voice and data offerings, while Bharti Airtel had launched its services way back in 1995.
Vodafone Idea came into existence in August last year after merger of Vodafone India and Idea Cellular.
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