The Federal Reserve slashed interest rates by half a percentage point, attempting to boost the US economy in the face of concerns about the coronavirus outbreak. The government asked telecom companies to pay remaining AGR dues. The Supreme Court set aside a Reserve Bank of India order asking banks to stay away from dealing in cryptocurrencies, including Bitcoin. Here is more on what made news this week.
- The government has approved a rescue plan for Yes Bank Ltd. involving a capital injection by a consortium led by State Bank of India, Bloomberg News reported citing unnamed sources. State Bank of India, the country’s largest lender, has been authorised to pick other members of the consortium. Yes Bank has struggled to raise capital it needs to stay above regulatory requirements as it battles bad loans in troubled sectors. It has been trying to raise $2 billion in fresh capital for two quarters.
- The Supreme Court allowed banks to handle cryptocurrency transactions from exchanges and traders, overturning a Reserve Bank of India ban that dealt the thriving industry a major blow. The central bank had, in April 2018, ordered financial institutions to break off all ties with individuals or businesses dealing in virtual currency such as Bitcoin within three months. The court said it was it was setting aside the order "on the ground of proportionality".
- The U.S. Federal Reserve cut interest rates in a bid to shield the world’s largest economy from the impact of the coronavirus, making such a decision for the first time outside of a regularly scheduled policymaker meeting since 2008 at the height of the financial crisis. India’s Reserve Bank of India (RBI) said it was ready to ensure that confidence was maintained after fears about the disease’s impact roiled financial markets.
- In a first by an Indian telco, Reliance Jio has sought permission from the government to undertake 5G trials based on technology and design developed by it. Sources familiar with the development said that if the 5G technology foray was successful, the design and technology for equipment could be outsourced for manufacturing to third-party players.
- Jack Welch, the champion of corporate efficiency who built General Electric (GE) into one of the world’s largest firms and influenced generations of business leaders, has died. He was 84. The former GE chairman and chief executive officer, whose blunt style and ceaseless cost cutting earned him the sobriquet “Neutron Jack,” mentored proteges who went on to run some of the world’s best-known companies.
- The government asked Bharti Airtel, Vodafone Idea and other telecom companies to pay remaining AGR (Adjusted Gross Revenue) dues as per the Supreme Court order without further delay, according to sources. The telecom department wrote to all telcos asking them to pay balance dues "without delay" and submit detailed bifurcation of payments (explanation of self-assessed amounts), which it said are necessary for proper reconciliation of legitimate AGR dues.
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A few links for further reading
Hard path to growth
The signals for the economy are not positive: overall demand is yet to pick up; the share of total exports in India’s GDP is declining, and industrial output pattern remains worrying.
Small savings scheme
Investors breathed a sigh of relief when the government announced that interest rates on these instruments would not be revised for the fourth quarter of the calendar year.
Invest and emigrate
The great Indian dream of settling abroad is achievable if one has a few crores to invest. Rich nations offer a variety of investment options in a quid pro quo arrangement: immigrants get a better quality of life and revenue from them helps these countries’ finances. Wealthy Indians, troubled by polluted cities and the red tape holding up entrepreneurship, may want a quick ticket out of the country. Sanjay Kumar Singh lists a range of options: from a Canadian province’s investor programme to America’s US EB-5 plan.