QBiz: Gita Gopinath Appointed Chief Economist at IMF & More
Catch the latest business stories of the day here.
1. Gita Gopinath Appointed IMF Chief Economist
India-born economist and Harvard professor Gita Gopinath will be the new chief economist at the International Monetary Fund.
Gopinath will succeed Maurice ‘Maury’ Obstfeld, who would retire at the end of 2018, the IMF said in a statement on 1 October.
“Gita is one of the world’s outstanding economists, with impeccable academic credentials, a proven track record of intellectual leadership, and extensive international experience,” IMF Managing Director Christine Lagarde said in a media statement.
Gopinath was born and grew up in India. She received her PhD in Economics from Princeton University in 2001 after complete earning a BA from the University of Delhi and MA degrees from both the Delhi School of Economics and University of Washington, IMF’s statement said.
2. NCLT Allows Government to Take Over IL&FS
The government will take over Infrastructure Leasing & Financial Services Ltd as defaults by the infrastructure group and its subsidiaries triggered fears of a contagion in the financial markets.
The National Company Law Tribunal allowed the government’s petition to replace all board members. IL&FS’ suspended directors shall not represent the company anywhere, the NCLT ordered.
The new board shall hold a meeting before 8 October and submit a road map to the NCLT before the next haring on 31 October. Here are the members of the new board: Uday Kotak, Vineet Nayyar, GN Bajpai, GC Chaturvedi, Malini Shankar and Nand Kishore
The new board will elect a chairman among themselves.
3. Paytm Leads in UPI Payments with over 33% Market Share
Paytm, India’s largest payments company owned by One97 Communications, on Monday became the leading contributor to UPI Payment with over 33 percent of the overall transactions.
In a press release, the company said Paytm registered over 137 million UPI transactions in September 2018. "Paytm is enabling and promoting BHIM UPI for offline payments and over 5 million offline merchants out of its 9.5 million merchant-base," states the company.
Commenting on the development, Paytm Senior Vice President Deepak Abbot said India is embracing digital payments for their everyday use.
More than 20 percent of all payments on Paytm are made using BHIM UPI with mobile recharge and payments, electricity and water bills and DTH recharges, among other payment use-cases witnessing the highest adoption rate.
(Source: Deccan Herald)
4. H1 Passenger Vehicle Sales in the Slow Lane
Sales of passenger vehicles in the first-half of FY19 moderated for the country’s top two carmakers, Maruti Suzuki India (MSIL) and Hyundai Motors India (HMIL), with the former growing at 10.5 percent against 16.6 percent in the same period last year and the latter seeing a growth of 4.5 percent against 5.5 percent last year.
The slowdown has come due to a combination of factors which kicked in during the last three months, like a high base effect, floods in several parts of the country affecting demand, and the late onset of the festival season this year.
The result is that dealers are saddled with high inventories crossing the 4-6 week mark, which has seen manufacturers like Maruti offering discounts on even its new models.
(Source: The Indian Express)
5. HDFC Increases Lending Rate, Days Ahead of RBI Rate Review
HDFC, the country’s largest mortgage financer, has increased its lending rate, following the footsteps of other lenders. The HDFC rate hike will be effective from 1 October.
“HDFC has increased its retail prime lending rate (RPLR), on which its adjustable rate home loans are benchmarked, by 10 basis points, with effect from 1 October 2018,” the lender said in a statement to the BSE. The HDFC move comes in wake of an overall increase in the interest rate in the financial system.
In August, the Reserve Bank of India (RBI) had resorted to a back-to-back interest rate hike for the first time in almost five years to curb inflation. The RBI is set to again review interest rates on 5 October.
The RBI’s monetary policy committee (MPC) may raise policy rates by 25 basis points on 5 October for the third time this year amid surging crude oil prices and weakening rupee.
6. Bandhan Bank Shares Slump 20% After RBI Action
Shares of Bandhan Bank Ltd hit their lower circuit of 20 percent in their biggest single-day decline since listing on Monday, 1 October after the Reserve Bank of India barred the lender from opening branches without its approval and ordered the freezing of the salary of its CEO Chandra Shekhar Ghosh due to failure to meet shareholding rules.
The move follows the private lender’s failure to meet the RBI’s banking licence guidelines, which require the bank’s promoter, Bandhan Financial Holdings Ltd, to reduce its stake from 82 percent to 40 percent within three years of commencing business. The deadline for Bandhan Bank was 23 August.
Thereafter, bank promoters are required to reduce their shareholding to 20 percent and 15 percent within 10 years and 12 years, respectively.
7. Air India to Sell 14 Properties, Eyes Rs 250 Crore
National carrier Air India on Monday, 1 October sought bids for the sale of 14 properties, through which the debt-laden airline aims to raise Rs 250 crore, a senior airline official said.
The government is looking to bolster the fortunes of the state-run carrier after the proposed strategic stake sale failed to take off in May.
Against this backdrop, efforts are continuing for the sale of the airline's non-core assets.
The properties, spread across Mumbai, Kolkata, Chennai, Bengaluru, Pune and Amritsar, include commercial and residential land as well as residential flats, according to an advertisement in a business daily.
According to its audited accounts, the airline's total losses stood at Rs 47,145.62 crore in 2016-17.
8. GST Collection Rises in September, but Still Short of Estimated Target
Collection from Goods and Services Tax (GST) has crossed Rs 94,000 crore in September. However, it is still below the Government’s estimate of Rs 1-1.10 lakh crore, as it aims to collect Rs 13 lakh crore during the current fiscal – 2018-19.
A Finance Ministry statement issued on Monday, said the revenues collected in September of Rs 94,442 crore, shows an upward trend as compared to that in August 2018 at Rs 93,690 crore.
Of the total collection, CGST (Central Goods and Services Tax) is Rs 15,318 crore, SGST (State Goods and Services Tax) Rs 21,061 crore, IGST (integrated Goods and Services Tax) Rs 50,070 crore (including Rs. 25,308 crore collected on imports) and cess Rs 7,993 crore (including Rs 769 crore collected on imports). The total number of GSTR 3B Returns filed for August up to September 30 was Rs 67 lakh.
(Source: Business Line)
9. TVS Motor Sales up 18% in September
TVS Motor Co on 1 October reported 18% rise in sales at 4,23,978 units in September as against 3,59,850 units in the same month last year. Total two-wheeler sales grew 17 percent at 4,10,696 units last month as compared to 3,50,854 units in the year-ago month, TVS Motor said in a statement.
Domestic two-wheeler sales were up 18 percent at 3,61,136 units last month as compared to 3,07,160 units in September last year, it added. Scooter sales were at 1,42,562 units last month as against 1,21,601 units in September 2017, a growth of 17 percent.
Motorcycle sales increased 16 percent to 1,66,489 units last month as compared to 1,43,923 units in September 2017, it said.
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