1. COVID-19 Lockdown Impact: Unemployment Rate Rises to 23.4%
Early estimates of jobs data indicate that the coronavirus effect may have left a devastating impact on the economy, sending the urban unemployment rate soaring to 30.9 percent. Overall unemployment rose to 23.4 percent.
The figures, based on the Centre for Monitoring Indian Economy’s weekly tracker survey, have held steady for two weeks now. The latest data for the week ended 5 April was released on Monday, 6 April, evening. CMIE’s estimates on unemployment shot up from 8.4% in mid-March to the current 23 percent.
Based on a rough calculation, about 50 million people might have lost jobs in just two weeks of the lockdown, said Pronab Sen, a former chief statistician of India.
(Source: Livemint)
2. Yes Bank Can't Declare Firm NPA for Non Payment of Loan Due to Coronavirus: HC
The Delhi High Court on Monday, 6 April, said that prima facie Yes Bank could not have declared a private company's account as non-performing asset (NPA) for its failure to pay loan installments due to coronavirus pandemic.
Justice Sanjeev Sachdeva, who conducted the hearing through video conferencing, took on record the statement made by the counsel for Anant Raj Ltd that it will make payment on or before 25 April, the instalment which fell due as on 1 January 2020 along with the interest accrued till the date of payment irrespective of the lockdown position.
(Source: The Economic Times)
3. RBI Special Wing for Banking Fraud Oversight Soon
The Reserve Bank of India (RBI) is putting together an exclusive wing for banking fraud oversight. It is bringing together teams for data processing and analysis, artificial intelligence analysis units, along with pro-active risk assessment cell.
The reason behind developing these new teams is, they can prevent any future Yes Bank kind of event. Sources said, within the next month the new team is likely to be formed, with the capacity of up to 600 officers. The Yes Bank case has had the banking regulator sped up the process.
RBI is also planning to bring in experts from the private sector. People from the private sectors working in all these domains could be brought in to train them in the fraud oversight wing. The idea for the fraud oversight wing is to train the teams in the latest technologies, as most banking officials have never done credit risk assessment or are not accustomed to new technology.
(Source: The Financial Express)
4. Demand on Shaky Ground but Lower Crude Softens Blow for Cement Firms
After subdued volumes between April and October 2019, the cement industry had started witnessing a demand pickup from November. But the good times did not last long due to the covid-19 outbreak, and the resultant demand slump.
In keeping with the changes, analysts at Emkay Global Financial Services Ltd now expect an industry volume decline of 2.4% in FY20, compared to 13.3% growth in FY19.
True, shares of cement firms reflect the change in business conditions, declining sharply along with the broader market. No doubt, valuations are undemanding.
(Source: Livemint)
5. Canara Bank to Cut Repo-Linked Lending Rate by 75 bps
State-owned Canara Bank on Monday, 6 April, said it will reduce its repo linked lending rate (RLLR) by 75 basis points to 7.30 per cent from 7 April.
The lender has announced to reduce its marginal cost of funds based lending rates (MCLR) by up to 35 basis points across tenors, effective 7 April. The one-year MCLR has been cut by 35 basis points to 7.85 per cent, and for six-month by 30 basis points to 7.80 per cent.
Three month MCLR has been revised lower by 20 basis points to 7.75 per cent.
Canara Bank, which amalgamated Syndicate Bank with itself on 1 April, said the new rates will be applicable for the amalgamated entity.
(Source: The Financial Express)
6. Pandemic Impact: Mukesh Ambani's Net Worth Drops 28% to $48 Billion in 2 Months
The net worth of India's richest man Mukesh Ambani dropped 28 percent or $300 million a day for two months to $48 billion as on 31 March due to the massive correction in stock markets, a report said on Monday, 6 April. The chairman and managing director of the diversified Reliance Industries saw his wealth decline to $19 billion, taking his global ranking down eight places to 17th, the Hurun Global Rich List said.
Other Indian businessmen who have seen a major drop in wealth include Gautam Adani whose wealth eroded by $6 billion or 37 percent, HCL Technologies Shiv Nadar ($5 billion or 26 percent) and banker Uday Kotak ($4 billion or 28 percent), it said.
(Source: The Economic Times)
7. Petrol Sales Shrink 15.5%, Diesel 24% in March as Lockdown Wipes Demand
India’s petrol sales shrank by 17.6 percent and diesel demand tanked nearly 26 percent in March as the economy froze under the nationwide lockdown announced to check the spread of COVID-19.
Also, aviation turbine fuel (ATF) sales fell by 31.6 percent as flights got suspended alongside the shutting of businesses and most vehicular traffic going off-road.
Petrol sales dropped to 1.943 million tonnes in March sold in the same month in 2019, according to provisional industry demand numbers.
Diesel, the most consumed fuel in the country, saw demand contract by 25.9 percent to 4.982 million tonnes.
(Source: The Financial Express)
8. Commerce Ministry Wants to Take Upcredit Woes of Exporters With the RBI
The Commerce Ministry is seeking a meeting with the Reserve Bank of India (RBI) to discuss the acute credit crunch being suffered by exporters, especially due to the blockage of payments due to the COVID-19 crisis, and ways to ease the situation for them.
“Senior officials in the Commerce Ministry are trying to fix a video conference with the RBI as the banking and credit issues being faced by exporters need to be immediately addressed,” a government official told BusinessLine.
The Federation of Indian Export Organisations (FIEO) has also written to the RBI Governor, seeking a meeting to apprise officials of the various banking challenges being faced by them.
(Source: The Hindu BusinessLine)
9. Growth in Services Sector Dips in March as Virus Curbs Demand
Growth in India’s services sector contracted in March after posting the strongest rise in business activity in more than seven years in February, as the COVID-19 outbreak dented demand, particularly in overseas markets, a survey by IHS Markit showed.
The impact of the pandemic is set to worsen in the coming months with the government enforcing an unprecedented 21-day nationwide lockdown from 25 March which has left industries and shops shut, the data analytics firm said.
The Services Purchasing Managers’ Index (PMI), which had touched an 85-month high of 57.5 in February, fell to 49.3 after rising for five consecutive months, the survey showed. A figure of above 50 indicates expansion, while a sub-50 print signals contraction.
(Source: Livemint)
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