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QBiz: RBI Says Coronavirus Hangs Over Future Like a Spectre & More

Catch all the top business headlines here.  

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1. RBI Says Coronavirus Hangs Over Future Like a Spectre

The outlook for the Indian economy has been drastically altered by the coronavirus outbreak, the central bank said in its biannual monetary policy report, without specifying how fast it expects the country to grow, but added that its forecast would depend on the intensity, duration and spread of the pandemic.

The pandemic is ravaging the world at a time the Indian economy was showing incipient signs of a recovery, but COVID-19 now “hangs over the future, like a spectre," the Reserve Bank of India (RBI) said on Thursday, 9 April.

(Source: Livemint)

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2. Chorus Grows for Rs 10 Trillion Stimulus as Lockdown Ravages Economy

Economists and business leaders are pitching for a massive Rs 10 trillion fiscal stimulus package to support people who have lost their livelihoods and businesses on the verge of collapse because of the coronavirus crisis, a suggestion first made by Mint in an editorial on 29 March.

Former chief economic adviser in the finance ministry Arvind Subramanian has said that the government will have to spend Rs 10 trillion, an amount equivalent to 5% of India’s gross domestic product, to deal with the disruption caused by the pandemic.

(Source: Livemint)

3. IDFC First Bank Says Retail Deposits Grew 16% q-o-q in Q4, Withholds Total Deposit Data

IDFC First Bank on Thursday, 9 April, said its retail deposits grew 16% sequentially during the quarter ended March to Rs 33,898 crore. The growth in retail deposits on a year-on-year (y-o-y) basis was 157%. The bank did not share the value of its institutional deposit base.

Over the past two weeks, several private banks have made disclosures about changes in their deposit base amid concerns of them losing institutional deposits in the wake of Yes Bank’s collapse in Q4FY20.

(Source: The Financial Express)

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4. Oil Prices Rise as OPEC+ Combine Reaches a Production Cut Deal

The Organization of the Petroleum Exporting Countries plus (Opec+) combine, which includes Russia, agreed on late Thursday, 9 April, night (Vienna time) for a production cut of 10 million barres per day (mbpd), ending its high-stakes game of flooding the global markets with high crude oil production amid the COVID-19 pandemic and slowing global growth.

Buoyed by the media reports of the largest such supply deal that brought an end to brinkmanship by these large oil producers, the global crude oil prices rallied on Thursday after crashing to the lowest level since 2002.

(Source: Livemint)

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5. COVID-19 Hits Fasal Bima: Delays Plague Crop Damage Estimate

Farmers wanting to be compensated by insurance companies for the crop damages during the unseasonal rains last month may have to wait longer, as the crop-cutting experiments (CCEs) designed to gauge crop losses on the fields, have been delayed in several states due to the lockdown. In major producing states like Uttar Pradesh and Madhya Pradesh, only 10-20% of the crop-cutting experiments have been completed so far.

The total premium collected by insurers under both the Prime Minister Fasal Bima Yojana (PMFBY) and Weather Based Crop Insurance Scheme (WBCIS) was about Rs 7,500 crore during rabi season of 2019-20 crop year (July-June). Since rabi crops are grown under largely assured irrigation systems, the major risk factors are unseasonal rains with strong wind and pest attacks, potentially lowering the yield.

(Source: The Financial Express)

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6. CBIC Orders Customs Refunds & Drawback

The Central Board of Indirect Taxes and Customs (CBIC) has begun a country-wide special drive to expedite customs refunds and drawback claims, which are pending as of 7 April. The Board issued a directive to all chief commissioners and principal chief commissioners on Thursday, 9 April.

The directive to field offices follows the finance ministry’s Wednesday order of immediately releasing Rs 18,000 crore in pending income tax, goods and service tax (GST) and customs refunds to individuals and businesses. About 50% of the amount is estimated to be for GST and customs refunds, officials said.

(Source: The Economic Times)

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7. Gold Prices Fall for Second Consecutive Day on Muted Demand, Silver Rates Slump

Gold prices in India fell for the second consecutive day on Thursday, 9 April, after it hit record high earlier this week. Following the weak global rates and muted demand, gold June futures were down  Rs 41 to Rs 44,900 per 10 grams. Silver May futures slipped 0.52 per cent or Rs 224 to Rs 42,915 per kg.

However, spot gold market in India remained closed amid a 21-day nationwide lockdown to contain the spread of deadly coronavirus. “MCX gold prices inched slightly lower ahead of US weekly jobless claims report as the dollar inched higher, while increasing appetite for risk on hopes that the new coronavirus pandemic is nearing a peak limited the metal’s upside,” Jigar Trivedi, Research Analyst- Commodities Fundamental, Anand Rathi Shares & Stock Brokers, told Financial Express Online.

(Source: The Financial Express)

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8. FY21 Gross State Borrowings to Touch Rs 7.8 L Cr on COVID Crisis

Domestic rating agency Icra has said states with higher patient count, returning migrant labour and daily wagers, as well as greater dependence on GST compensation, will face sharper risk of fiscal slippages this fiscal and has projected around 23 per cent spike in combined borrowings at around Rs 7.8 lakh crore.

The fear of massive fiscal slippages by the states was visible from the spike in interest rates that the states were forced to offer on their first tranche of the market borrowings on Tuesday, 7 April, with states like Kerala which has been leading the COVID fight, paying as much as 8.96 per cent on its Rs 6,000 crore borrowing.

(Source: The Economic Times)

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9. Banks Unclear on Classification of Rs 1 Lakh Crore as NPA in Q4

The fate of bad loans to the tune of Rs 1 lakh crore hangs in balance as bankers say they can’t give relief to cases that have turned into non-performing assets (NPAs) in March, despite the Delhi High Court (HC) interim order in the Anant Raj Industries case.

The Delhi HC on 6 April said Anant Raj cannot be classified as an NPA by Yes Bank during the moratorium period of three months from March 1 announced by the Reserve Bank of India (RBI).

The HC directive is widely considered as a relief for banks who wanted the moratorium to be applicable for companies that had defaulted from January 1, 2020, like Anant Raj. However, banks are awaiting a formal direction from the regulator on the same.

(Source: The Financial Express)

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