QBiz: RBI Fines ICICI, SBI & 17 Others; Unemployment Rises in Feb

A quick round-up of top business stories for the day.

5 min read
The Reserve Bank of India (RBI) seal on a gate outside the RBI headquarters in Mumbai. 

1. RBI Fines ICICI, SBI And 17 Other Banks For Non-Compliance On SWIFT Use

The Reserve Bank of India (RBI) has fined at least 19 lenders, including top banks such as ICICI Bank and State Bank of India, for failing to comply with its guidelines on the use of global payments network SWIFT.

The RBI imposed the fines over the past four days, according to stock exchange filings by the banks, though specifics of the non-compliance were not disclosed.

Four bankers whose institutions were fined said that most of the issues related either to interpretation of the RBI's guidelines or minor technical matters.

(Source: Business Standard)


2. February Unemployment Rate Climbs To Its Highest In Over Two Years

The unemployment rate in India rose to 7.2 percent in February 2019, the highest since September 2016, and up from 5.9 percent in February 2018, according to data compiled by the Centre for Monitoring Indian Economy (CMIE) that was released on Tuesday, 5 March.

The unemployment rate has climbed despite a fall in the number of job seekers, Mahesh Vyas, head of the Mumbai-based think tank told Reuters, citing an estimated fall in the labour force participation rate. The number of employed persons in India was estimated at 400 million in February compared with 406 million a year ago, he said.

The CMIE numbers are based on a survey of tens of thousands of households across India. The figures are regarded by many economists as more credible than the jobless data produced by the government. The figures will be unwelcome news for Prime Minister Narendra Modi ahead of a general election due to be held by early May.

(Source: Financial Express)

3. Government To Focus On Lowering Tax Rate And Widening Base: Arun Jaitley

Finance Minister Arun Jaitley on Tuesday told an industry delegation that the focus of the government was on lowering tax rates and expanding the base. Interacting with a delegation of the Federation of Indian Chambers of Commerce and Industry (Ficci), Jaitley said reforms in direct and indirect taxes would continue to further ease the business environment in the country.

Later, Ficci President Sandip Somany said the FM promised the delegation that the government would lower the corporation tax rate to 25 per cent for all companies once the goods and services tax (GST) collection improved. Currently, the corporation tax rate is 30 per cent.

(Source: Business Standard)


4. Trump Scraps Preferential Trade Treatment For India, Government Plays Down Impact

Ending months of speculation, the Donald Trump administration cut off India from duty-free access to the US market under its largest preferential trade scheme, but New Delhi played down the impact of the move and is unlikely to contest it. Scrapping the benefits under the Generalized System of Preferences (GSP) will take at least 60 days, officials said.

India was caught off guard late on Monday night when the United States Trade Representative’s (USTR’s) office announced that India and Turkey would henceforth not be able to claim duty-free trade benefits under the GSP. Talks on the issue had been dragging on for months.

The Indian government on Tuesday, 5 March, made light of the development, saying it was not keen on seeking an overturn of the USTR's order, given that lengthy talks on the matter had broken down earlier.

(Source: Business Standard)

5. ED Tracks Money Trail: Videocon To Chanda Kochhar Husband’s Firm

The ongoing Enforcement Directorate (ED) investigation into transactions between Videocon Group and Deepak Kochhar’s NuPower Renewables Pvt Ltd, has unearthed a money trail that allegedly shows diversion of loan funds by Videocon International Electronics Ltd (VIEL), in a transaction involving transfer of Rs 64 crore to NuPower Renewables, sources told The Indian Express.

This was done a day after ICICI Bank disbursed a Rs 280-crore rupee term loan to Venugopal Dhoot-promoted VIEL on September 7, 2009. Deepak Kochhar is the husband of former ICICI Bank managing director and chief executive officer Chanda Kochhar.

(Source: The Indian Express)


6. Mukesh Ambani is the 13th Richest Person in World: Forbes

Richest Indian Mukesh Ambani jumped six positions to rank 13th on Forbes World’s Billionaire list released on Tuesday, 5 March, that was again topped by Jeff Bezos.

E-commerce colossus Amazon founder Bezos, 55, remains the world’s richest person, ahead of Bill Gates and Warren Buffett, as his riches swelled by USD 19 billion in one year and is now worth USD 131 billion, Forbes said. Ambani, 61, saw wealth soar from USD 40.1 billion in 2018 when he was placed 19th richest in the world, to USD 50 billion to be rank at 13th in 2019.

“Ambani chairs and runs USD 60 billion (revenue) oil and gas giant Reliance Industries, among India’s most valuable companies,” Forbes said.

“In 2016, Reliance sparked a price war in India’s hyper-competitive telecom market with the launch of 4G phone service Jio.” Jio, it said, has signed on 280 million customers by offering free domestic voice calls, dirt-cheap data services and virtually free smartphones.

(Source: The Indian Express)

7. ‘Amazon, Flipkart Linkage With Small Traders Necessary For E-Commerce Growth’, Says Amitabh Kant

Niti Aayog CEO Amitabh Kant today called for linkage between e-commerce giants Amazon and Flipkart, and small traders for e-commerce growth. Amitabh Kant was speaking at an event organised by traders’ body Confederation of All India Traders (CAIT). His comments come a month after the government launched the revised FDI policy for e-commerce companies backed by foreign investors and operating as a marketplace in India to ensure there is no favouritism to select sellers in which they have equity stakes.

The linkage of Amazon and Flipkart with small traders is all the more necessary. They should do business by helping evolve small traders as they have capital and resources except for the network that traders’ have. So if there is a linkage it will be good for the Indian economy, CAIT’s Secretary General Praveen Khandelwal told Financial Express Online citing Amitabh Kant as saying.

(Source: Financial Express)


8. No Violation By Coca-Cola Beverages, Inox Multiplex; CCI Dismisses Unfair Trade Pleas

The CCI has dismissed a complaint alleging unfair trade practices against multiplex chain operator Inox and Hindustan Coca-Cola Beverages, the bottling arm of Coca Cola in India, with respect to selling of beverages in multiplexes. There was no violation of Section 3 of the Competition Act that pertains to anti-competitive agreements, the CCI observed while disposing of the matter.

The ruling came on a complaint filed by Telangana-based Vijay Gopal who alleged that Inox has colluded with Coca Cola by entering into exclusive supply/sale agreement to sell water/beverages within the multiplexes at higher prices.

(Source: Financial Express)

9. Cement Prices Hike to Rs 25 Per Bag In February

Cement prices increased by Rs 24-25 for a 50 kilogram bag in February as compared to the previous month amid falling cost and rising demand, according to a report.

The hike in the cement prices came after a “protracted stall” following the rollout of the goods and services tax in July 2017, said Crisil Research in its report.

The increase would help the cement industry increase profitability and margins, it added. “The recent steep hikes in cement prices will boost the operating profitability of manufacturers even as costs are descending and demand growth ascending,” Crisil said.

The southern region had the steepest hike, where Hyderabad witnessed a rise of Rs 77 per bag, followed by Rs 62 per bag in Chennai and Rs 52 per bag in Bengaluru.

(Source: BloombergQuint)

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