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QBiz: RBI’s Restrictions for UCBs; Soft Launch of Reliance JioMart

Find the top business stories of the day on QBiz. 

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1. RBI Restricts Urban Cooperative Banks From Offering Large Loans

The Reserve Bank of India (RBI) on Monday restricted urban cooperative banks (UCBs) from offering large corporate loans through several changes to lending norms, after depositors lost large sums of money following the crisis at Punjab and Maharashtra Cooperative (PMC) Bank.

The regulator slashed single and connected borrower exposure for UCBs, hiked the priority sector lending (PSL) target and specified a portfolio mix for at least half of their loan books. The guidelines will be applicable from 31 March 2023.

(Source: Livemint)

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2. SBI Cuts Home Loan Rates by 25 Bps to 7.9%

There is some New Year cheer for those planning to buy homes. The State Bank of India has reduced its home loan rates by a quarter percentage point, or 25 basis points (100 bps = 1 percentage point), to 7.9 percent from 8.15 percent earlier.

This follows an identical reduction in the bank’s external benchmark-based rate to 7.8 percent from 8.05 percent. In addition to new and existing home loan borrowers (whose loans are linked to the external benchmark), the reduction will benefit small businesses who avail loans from the bank.

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3. RIL Gears up to Take on Amazon, Flipkart With JioMart Launch

Billionaire Mukesh Ambani took the first step to challenge global e-commerce giants Amazon and Walmart in India’s fast-growing market with the soft launch of his “new commerce" venture.

Reliance Retail Ltd, the retail arm of Reliance Industries Ltd, on Monday began sending invites to Jio telecom users for registering on the new venture named JioMart. Calling itself “Desh Ki Nayi Dukaan”, JioMart will currently cater to online shoppers in the suburban Mumbai areas of Navi Mumbai, Thane and Kalyan.

A Reliance Retail official confirmed the launch, adding that the company would gradually scale up its presence.

(Source: Livemint)

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4. Jio Adds 9.1 Mn Users in October; Subdued Numbers for Airtel, Voda Idea

The festive season worked out favourably for Reliance Jio after the operator reported massive growth in subscriber addition for October, according to Telecom Regulatory Authority of India (Trai).

Jio reported 9.1 million subscriber additions in the month – the third time it added over 9 million subscribers in a month. It had reported 9.3 million additions in January and 9.4 million in February. Rivals Vodafone Idea and Bharti Airtel reported subdued numbers with 1,89,901 and 81,974 additions, respectively.

In terms of wireless subscription, Vodafone Idea has a market share of 31.49 percent followed by Jio (30.79 percent) and Airtel (27.52 percent). In September, the older telcos reported a combined loss of 4.9 million subscribers while Jio had slipped below its average performance with less than 7 million additions.

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5. IndiGo, Etihad Show Interest in Boarding Air India

IndiGo, India’s largest airline by market share, and Abu Dhabi-based Etihad Airways have met government officials and evinced interest in ailing national carrier Air India, a senior government official told The Economic Times.

“Representatives from these companies have met government officials and, unofficially, shown interest in the national carrier. The Tata Group, however, has not shown any interest yet,” said the official, who sought anonymity.

The government, which could not sell 76 percent in Air India last year, is offering 100 percent stake this time. But the response to road shows in Singapore and London were not encouraging.

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6. Dispose of 5-Year-Old Pending Cases by March, CBDT Tells Officials

In a bid to unlock revenue and improve litigation management, the Central Board of Direct Taxes (CBDT) has directed officials to dispose of cases which are pending at the commissioner’s level for over five years.

They have to do this by the end of the current financial year, according to two sources privy to the development.

The sources said about 31,000 cases worth about Rs 500 crore are pending before the commissioner of income tax (I-T) (appeals) for more than five years and have been stayed by the judicial authorities. The apex body wants to make this “nil” by 31 March 2020.

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7. Creditors of Cash-Strapped DHFL Claim Dues Worth Rs 87,905.6 Crore

Creditors to Dewan Housing Finance (DHFL) have claimed a total of Rs 87,905.6 crore in dues, according to the administrator appointed for the bankrupt company.

Meanwhile, the lenders of DHFL, in the first committee of creditors (CoC) meeting held on Monday, appointed R Subramaniakumar the resolution professional or administrator for the entire insolvency process. Also, the lenders have expressed an initial desire to segregate the loan portfolio of the mortgage lender into retail, wholesale and SRA loans and invite expression of interest from investors separately for all three categories, sources aware of the development said. The appointment of valuers will be done in the next CoC meeting, sources said.

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8. Adani Electricity Set to Raise up to $1.5 B Abroad

Adani Electricity Mumbai Ltd, the flagship power transmission and distribution company in Gautam Adani’s empire, is set to raise up to $1.5 billion in what could be one of the largest overseas borrowing exercises by an Indian company in the New Year.

The company, a subsidiary of Adani Transmission Ltd, is expected to raise about $1 billion via bonds and $400-500 million through syndicated loans, three people with direct knowledge of the matter told The Economic Times.

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9. PFC, NTPC Stake Sales Hit Borrowing Clause Hurdle

The government is facing hurdles in trimming its stakes in Power Finance Corp. Ltd (PFC) and NTPC Ltd, as the companies may breach a bond covenant that requires the companies to be majority-owned by the government.

Reducing the government’s stake to less than 50 percent will also increase overseas borrowing costs for these companies, as they will lose their quasi-government status as borrowers.

NTPC and PFC are among state-run companies in which the government plans to reduce its stake by selling shares through its two exchange-traded funds (ETFs), a basket of securities that trade on exchanges. The government sells its stakes in listed central public sector enterprises (CPSEs) through the CPSE ETF and Bharat 22 ETF.

(Source: Livemint)

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