1. Govt to Reintroduce FRDI Bill, No Timeline Yet: Sitharaman
The government is in the process of reintroducing the Financial Resolution and Deposit Insurance (FRDI) Bill, but the timeline has not been decided, Finance Minister Nirmala Sitharaman said on Friday, 7 February.
FRDI was withdrawn in August 2018 after a backlash on a clause that put the onus on depositors to ‘bail in’, in case of bank failure. Considering that the deposit insurance cover was only Rs 1 lakh at the time, the Bill led to a huge outcry as it said deposits could be used to nurse a failing bank back to health.
In the recent Budget, the government increased deposit insurance cover to Rs 5 lakh. Besides, insolvency laws were also tweaked to accommodate financial institutions.
(Source: Business Standard)
2. Tata Steel Reports Rs 1,228 Crore Net Loss in Oct-Dec
Tata Steel on Friday, 7 February, reported a consolidated net loss of Rs 1,228.53 crore for the quarter ended on 31 December 2019, mainly due to lower sales and impairment provisions for its European operations.
Tata Steel had posted a consolidated net profit of Rs 1,753.07 crore during the same quarter a year ago, the company said in a BSE filing.
Its gross sales fell to Rs 34,774 crore in October-December 2019 from Rs 38,086 crore in the year-ago period. Its expenses were at Rs 35,849 crore as compared to Rs 35,930 crore in the preceding fiscal.
(Source: The Financial Express)
3. Credit Suisse CEO Tidjane Thiam Toppled by Espionage Scandal
Tidjane Thiam has quit as Credit Suisse chief executive after a spying scandal that has hit the reputation of one of Europe's largest banks and shocked Switzerland's financial community.
Thomas Gottstein, who is head of the Swiss business at Credit Suisse, will take over from Thiam, the Zurich-based lender said on Friday, 7 February. His departure ends a conflict with Chairman Urs Rohner after revelations that the bank had snooped on former executives raised questions over its culture.
The espionage involving Credit Suisse surfaced in September when former star wealth manager Iqbal Khan, after defecting to rival UBS, confronted a private detective who was following him and his wife through Zurich.
(Source: Mint)
4. Indian Railways to Increase Speed of Passenger Trains
Indian Railways eyes faster train travel! With upgradation of railway infrastructure and commissioning of the dedicated freight corridors, Indian Railways is aiming to increase the speed of its trains – news that will bring big cheer to passengers. Piyush Goyal-led Railway Ministry is undertaking measures for improving the speed of both passenger trains and freight trains on the Indian Railways network.
According to the information given by the Railway Minister in a written reply to a question in Lok Sabha recently, Indian Railways is constructing more than 3,000 km of Dedicated Freight Corridor (DFC).
This project, which is being implemented by the Dedicated Freight Corridor Corporation of India (DFCCIL), would enable freight trains to run at speed of 100 km per hour. Additionally, with dedicated tracks for the movement of freight trains, there would be less congestion on the mainline routes, allowing faster movement of passenger trains.
(Source: The Financial Express)
5. WhatsApp Pay Set for Phased Roll Out in India; Granted NPCI Permission
Facebook-owned messaging service WhatsApp has secured regulatory approval for launching its digital payment platform — WhatApp Pay — in a phased manner, close to two years after the US-based company’s pilot run.
The National Payments Corporation of India (NPCI) granted permission to the California-headquartered company on Thursday to operate WhatsApp Pay, which will cater to 10 million users in India during the first phase, a person in the know said.
The NPCI approval follows the Reserve Bank of India’s go-ahead. WhatsApp has assured the RBI and NPCI that it will comply with the data localisation norms, a source said. WhatsApp’s resistance to the government’s stand on data localisation was a key reason behind the delay in the company’s payment service launch.
(Source: Business Standard)
6. Govt Mulls Banning Non-Audit Services by Statutory Auditors
The Ministry of Corporate Affairs is considering a series of tough steps to safeguard the independence of statutory auditors including a possible ban on these entities offering any non-audit services.
The ministry is also exploring ways to break the “oligopoly" of the Big Four accounting firms to make the audit market more competitive and transparent, including possibly by limiting the number of statutory audits one firm can take up, according to a discussion paper prepared by the ministry of corporate affairs. Mint has seen a copy of the discussion paper.
The paper, which will form the basis for consultation among various regulatory bodies and the government, lists ban on providing non-audit services by auditors and disclosure of previous relationship with the audit client in the audit report as ways of improving audit quality.
(Source: Mint)
7. PhonePe to Create World's Biggest ATM Network of 2 Mn in India by Year End
PhonePe says it will by the end of this year create an Automated Teller Machine (ATM) network of 2 million, helping the Walmart-owned service to fight rivals Alibaba-backed Paytm, Google Pay and Amazon Pay as they compete in India’s crowded digital payments market. The service—billed as India’s first and world’s largest—enables neighbourhood stores to act as ATMs for PhonePe users.
It had a pilot run in Delhi-NCR and is now being rolled out across 500,000 shops in 300 cities.
(Source: Business Standard)
8. SBI Cuts MCLR for Ninth Straight Month Making Auto, Home Loans Cheaper
State Bank of India (SBI) has decided to reduce its marginal cost of funds-based lending rate (MCLR) by 5 basis points (bps) across all tenors. The 1-year MCLR comes down to 7.85 per cent per annum from 7.90 per cent, with effect from 10 February. This is the ninth consecutive cut in MCLR in FY20, SBI said in a statement. This will lead to a reduction in home and auto loan rates.
The lender also decided to slash interest rates on term deposits — retail and bulk — by 10-50 basis points (bps) across various tenors, as it is sitting on a pool of surplus funds. The revised rates will come into effect from 10 February 2020.
(Source: Business Standard)
9. Hiked Fares Will Make Up Only 5% of Rs 55000 Cr Loss: Piyush Goyal
Indian Railways has made a "miniscule" hike in fares of up to 4 paisa per km that will barely compensate 5 per cent of the Rs 55,000-crore losses incurred during the year, Railways Minister Piyush Goyal said in Rajya Sabha on Friday, 7 February.
Railways hiked passenger fares with effect from 1 January this year.
"As against Rs 8,000 crore which was the loss on passenger services in 2004, in the current period we are losing about Rs 55,000 crore on passenger services provided throughout the country. However, passenger fare increase is a very sensitive subject.... A very nominal increase was done," Goyal said replying to a query during Question Hour.
(Source: Mint)
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