1. Only a Few Can Match Raghuram Rajan, Says Mohammed El-Erian: ET
Raghuram Rajan has received the endorsement of chief economic officer of Allianz SE, Mohammed El-Erian, for a second term as the governor of Reserve Bank of India. According to an Economic Times report, El-Erian said that financial markets will not respond well if Rajan is not given another term.
He is rightly deemed as one of the very best central bank governors in the world. Indeed, few can match his expertise, experience and knowledge.Mohammed El-Erian, Chief Economic Officer, Allianz SE
Raghuram Rajan’s three year term is set to expire in September 2016. While the government has said it will take a decision on the RBI governor’s post closer to September, many BJP leaders like Subramanian Swamy have raised question marks on Rajan’s ‘commitment’ towards India.
2. Flipkart to Reduce 30-Day Window on Returns: ET
India’s leading e-commerce space, Flipkart has decided to change its return policy. According to an Economic Times report, for almost all the top-selling products on the website, the return period will be slashed from 30 days to just 10 days.
The return policy has created some logistical issues for the e-commerce websites in the past. The return shipping also becomes an added expense for sellers.
The company will also inform sellers that they will have to increase their commission from 20 June. Flipkart’s chief rival Amazon had also raised its commission charges recently.
3. RBI May Leave Repo Rates Unchanged: Livemint
Due to lack of clarity on various issues in the global as well domestic landscape, the Reserve Bank of India (RBI) may not make any changes in the repo rate. According to a survey conducted by Livemint, economists and bankers expect a status quo on rates.
The RBI interest rate decision is slated for Tuesday and it is expected that the central bank will keep the repo rate at 6.50 percent. Given the US Federal Reserve meeting on 15 June and the referendum for ‘Brexit’ on 23 June, markets are bracing themselves for a volatile period ahead, experts say.
On the domestic front, India’s wholesale inflation has seen positive growth for the first time in the last 18 months. The RBI is yet to consider the impact of the Seventh Pay Commission on inflation. Hence, it is highly unlikely that RBI will risk any changes in interest rates.
4. Star India Scores Big Through IPL-9: Livemint
Star India’s risky yet ambitious investment in Indian Premier League’s digital rights seems to have paid off well. Its mobile streaming app, Hotstar, doubled its viewership from 41 million in 2015 to over a 100 million in 2016, according to a Livemint report.
Online viewers are no longer a small, niche category; it’s a large user base now. We believe we have made a huge contribution to the IPL by bringing in a new audience base to the tournament.Ajit Mohan, Executive Vice President, Star India
The milestone has given the company confidence to put its live sports content behind a paywall in the next few months. This may help the company – which media buyers estimate generates about Rs 40-50 crore in advertising revenue from an IPL season – bring in additional revenue.
Star India had received the global Internet and mobile rights for the IPL for three years in February 2015. They placed a bet of Rs 302.2 crore to outbid Times Internet and Multi-Screen Media.
5. India May Approach WTO Against H-1B Visa Fee Hike by US: The Hindu
Indian authorities are preparing themselves to take on the US at World Trade Organisation (WTO) over a recent law in America that has hiked visa fee for non-immigrant workers.
According to The Hindu Business Line, if Prime Minister Narendra Modi fails to address the issue during his upcoming US visit, India may take up the matter in the WTO.
The controversial US law has added an additional fee of $4,000 and $4,500 for certain categories of H-1B visas and L-1 visas respectively. The law was passed in December 2015 and is basically a more stringent form of a previous law that lapsed in September 2015.
6. Govt to Widen Banking Sector Reforms: BS
In an attempt to get rid of bad loans and improve the banking sector, the government is planning to expand its Indradhanush scheme. According to Business Standard, Indradhanush-II will mostly focus on resolving non-performing assets (NPA).
Amid rising stress levels in India’s public sector banks (PSBs), some ideas for Indradhanush-II were discussed during the second edition of Gyan Sangam, a bankers’ retreat held in March.
The proposed resolution process for banks is also being discussed by the department of economic affairs.
Apart from resolving NPAs, risk management, financial inclusion, expansion of digital banking, credit growth and use of modern technology are among the areas that are likely to find a mention in Indradhanush-II.
7. Standard Chartered to Hire 1,000 People: ET
Standard Chartered Bank has indicated that it will step up recruitment in its Indian branches in the upcoming month. According to an Economic Times report, the bank will hire 1,000 people this year over next few quarters.
We are hiring about 1,000 people this year. Retail is one of our strong points, but at about 20 percent of our loan book in India, it is still a small part.Zarin Daruwala, Chief Executive, Standard Chartered Bank
The bank will target its rivals and try to get some of their experienced employees. India is the biggest market for Standard Chartered in South Asia with over 7,000 employees.
The bank will also invest in technology in the front and back ends, especially in mobile and online banking, as part of this retail thrust. This follows the realisation that Standard Chartered has neglected the retail segment so far and most of its woes in India stem from the wholesale side of the business.
8. Swiss Voters Reject Basic Income Proposal: FE
Citizens of Switzerland on Sunday voted against a proposal to provide the entire population with a basic income even if they are unemployed.
According to Financial Express report, 78 percent of voters have opposed the proposal. The group behind the initiative has suggested paying 2,500 Swiss francs ($2,500/2,300 euros) a month to each adult — considerably less than most workers earn — and 625 francs for each child.
The supporters of the idea argue that it will help in fight against poverty while the critics argue that it is a “Marxist Dream” that will lead to economic chaos.
9. Opinion: India Needs to Strengthen Cross-border Insolvency Laws
Growth in international trade and commerce has led to a rise in the number of multinationals operating in India through a branch, subsidiary or some form of collaboration. This expansion brings with it an increasing problem of cross-border insolvency.
Sumant Batra, writing for the Livemint, explains why India needs a better framework to resolve such insolvency.
In renewable energy, foreign direct investment up to 74 percent is allowed automatically, and 100 percent by approval. Many foreign companies, which have access to low-cost funds, are setting up subsidiaries in India to develop solar power projects. Expansion in international trade has brought with it the increasing possibility of cross-border insolvency proceedings.The filing of Chapter 11 proceedings by US solar power firm SunEdison has once again highlighted the need for a cross-border insolvency law in India. The company has sizeable investment in India’s solar capacity. It faces about two dozen legal claims, mainly by shareholders who accuse it of misleading them about its financial position.Sumant Batra
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