QBiz: Rajan on RBI-Govt Tiff; Govt Set To Amend Companies Law

Here’s a quick wrap of the top business stories of the day.  

4 min read
Govt and RBI Have to Respect Each Other’s Turf, says Raghuram Rajan.

1. India Seeks to Cut Trade Deficit with China; Talks Greater Market Access

India has sought greater market access for areas like agriculture products, pharmaceuticals, IT services and tourism in China, with a view to bridge the widening trade deficit with the neighbouring country, the commerce ministry said on Tuesday, 6 November.

The issues were discussed during the meeting between Commerce Secretary Anup Wadhawan and Wang Shouwen, Vice Minister of China's Commerce Minister in Shanghai.

(Source: Business Standard)

2. Why The Government Thinks The RBI Has Rs 3.6 Lakh Crore In Excess Capital

The stand-off between the government and the Reserve Bank of India is boiling down to one number – Rs 3.6 lakh crore. While the points of difference between the two are many, it is the issue of the central bank’s balance sheet that has become most contentious.

In a demand conveyed earlier this year, the government suggested that the RBI is sitting on excess capital of Rs 3.6 lakh crore. The estimate, first reported by Cogencis news agency, was confirmed to BloombergQuint by a person familiar with the matter. The government wants the RBI to transfer this amount back to the government but the central bank has so far resisted.

(Source: BloombergQuint)

3. Government Set To Further Amend Companies Law

The government plans to make more amendments of “urgent nature” to the companies law, including to certain provisions regarding Corporate Social Responsibility spending, according to a notice.

Days after promulgating an ordinance to amend the Companies Act, 2013, the Corporate Affairs Ministry has now sought comments from stakeholders for proposed changes to the law. In a notice, the ministry said certain amendments of “urgent nature would be required to further strengthen the corporate governance and enforcement framework.”

A committee to review the penal offences under the Act had suggested various amendments to the law. Pursuant to the recommendations, an ordinance was promulgated on 2 November. Now, the ministry has sought comments from stakeholders on the fresh set of proposed amendments by 20 November.

(Source: BloombergQuint)

4. HDFC Bank Hikes Deposit Rates by Up To 0.5% for Various Tenors

Signalling tightening of rates, HDFC Bank on Tuesday, 6 November, raised interest rates on deposits by up to 0.5 percent for various tenors, while Bank of Baroda hiked lending rates by 0.1 percent.

In a statement, HDFC Bank said the new interest rate on deposits below Rs 1 crore for various tenors will come into effect from Tuesday.

The rate on deposits with tenor of 5-8 years and 8-10 years has been increased to 6.5 percent from 6 percent.

The rate has been hiked to 7.25 percent for fixed deposits of 3-5 years from the earlier 7.1 percent.

The fixed deposit rate for one-year tenor has been fixed at 7.3 percent, up from 7.25 percent.

(Source: LiveMint)

5. Govt and RBI Have to Respect Each Other's Turf, says Raghuram Rajan

Former Reserve Bank of India (RBI) Governor Raghuram Rajan on Tuesday, 6 November, said the rift between the central bank and the government could be resolved if both sides respected each other’s intent and autonomy.

“The RBI is something like a seat belt. As a driver, the driver being the government, it has the possibility of not putting on a seat belt, but of course if you do not put on your seat belt you get into an accident, and the accident can be quite severe,” he told CNBC TV18.

(Source: Business Standard)

6. CCI Rejects Price Fixing Allegations Against Ola, Uber

The Competition Commission of India on Tuesday, 6 November, rejected allegations of price fixing against app-based taxi service providers Ola and Uber.

The fair trade regulator said that the drivers acceding to “algorithmically determined prices” by the platforms does not amount to collusion between them. In a 13-page order, the CCI also dismissed complaints that Ola and Uber were imposing a resale price maintenance system on the drivers as well as an alleged price discrimination.

(Source: BloombergQuint)

7. India Loses Row Over Safeguard Duty on Hot-Rolled Steel at WTO

India lost a major trade dispute at the World Trade Organization (WTO) on Tuesday, 6 November, after a dispute settlement panel largely upheld Japan’s complaint that New Delhi’s imposition of safeguard duty on imports of hot-rolled steel flat products during September 2015 and March 2018 violated core global trade rules.

A three-member panel ruled that the safeguard duties imposed by India at different periods during 2015 and 2018 are inconsistent with core provisions of the WTO’s Safeguards Agreement.

(Source: LiveMint)

8. Dhanteras, Diwali Shopping Provide Some Relief to Traders and Retailers

Despite fears of massive losses during this festive season, Dhanteras and Diwali shopping provided some relief to traders and retailers.

In fact, many shops in different parts of the country even witnessed robust sales.

Some of the major metros such as New Delhi, Bengaluru, Mumbai, Chennai, and other big cities like Ahmedabad, Surat, Kanpur and Lucknow saw a healthy rise in sales.

(Source: Business Standard)

9. India Aims to Sign an Initial Pact With Iran to Settle Oil Trade in Rupees

India aims to sign an initial agreement with Iran this month to settle all their oil trade in rupees through UCO Bank, two Indian government sources said.

“We have to do some paper work. It should be signed as early as possible. We are aiming for this month,” one of the sources said.

India, which got a waiver from the latest tougher US sanctions against Tehran on Monday, 5 November, used a similar mechanism in the previous round of sanctions but settled only 45 percent of the payments in rupees.

(Source: Business Standard)

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