Overseas borrowing by India Inc falls
India Inc showed less enthusiasm in tapping overseas markets for meeting funding requirements in January this year in the backdrop of rising interest rates in the offshore funding markets and recovery in domestic credit demand. Funds raised by Indian Corporates via external commercial borrowings (ECBs) at $540.464 million in January was about 70 per cent lower compared with the $1.8 billion mopped up in the same month last year. By contrast, as per Reserve Bank of India data, non-food bank credit disbursed by scheduled commercial banks in India increased by 9.5 per cent year-on-year in January 2018, compared with an increase of 3.5 per cent in January 2017. ECBs are commercial loans raised by eligible resident entities from recognized non-resident entities.
India needs an independent audit regulator
Almost all major economies today have independent audit regulators, with the most prominent ones being set up between 2000 and 2005. The Public Company Accounting Oversight Board (PCAOB) in the US is one of the earliest regulators, set up as a result of the Sarbanes-Oxley Act of 2002. To share knowledge and experiences, the International Forum of Independent Audit Regulators (IFIAR) was set up in 2006. Today, IFIAR has 52 independent audit regulators worldwide. These facts indicate the significance, need and acceptability of independent audit regulators. Given the overwhelming support that the concept has garnered around the world, it would seem that it is hard to find an argument against setting up such a body.
RBI rejects pleas from mobile wallet entities for less stringent KYC rules
The Reserve Bank of India (RBI) has turned down a request from mobile wallet entities for less stringent Know Your Customer (KYC) rules. A few weeks earlier, major companies in this segment and in financial technology, along with senior members of the sectoral body, Payments Council of India (PCI), met RBI officials. They requested that if a general relaxation was not possible, it could be considered for at least transactions less than Rs 10,000 a month. Source say RBI would have none of it. Those in the sector say the infrastructure needed for the full KYC process is yet to be rolled out, a deterrent for many. “KYC norms for users of mobile wallets will be a deterrent to the growing wallet industry and might also kill smaller transactions.
RBI creates sub-targets for foreign banks to lend to farmers, MSMEs
The Reserve Bank of India (RBI) has directed foreign banks with more than 20 branches to mandatorily create sub-targets to lend a portion of their loan books to small and marginal farmers, as well as micro enterprises. Banks, including Standard Chartered, Citibank and HSBC, have more than 20 branches in India. Foreign banks in India will have to eventually lend 40 per cent of their total loan book to the priority sector by 2020. Banks have been complaining against this mandate, but the creation of a sub-target is likely to put them off even more. In a notification on its website, RBI said a sub-target of 8 per cent of net bank credit, or credit equivalent amount of off-balance sheet exposure, whichever is higher, “shall become applicable for foreign banks with 20 branches and above, for lending to small and marginal farmers from FY 2018-19.”
Delhi Development Authority proposes new building byelaws
Architects, structural engineers, construction companies, contractors and site engineers building three-storey flats or bigger shopping complexes may be responsible for any structural flaws or defects that occur within 10 years of the building being constructed. Tightening Delhi’s development control rules, the ministry of housing and urban affairs has proposed an amendment in Unified Building Bye-Laws for Delhi 2016, which would now hold responsible all contractors and even site supervisors of defects in a building constructed on plot size of 750 square meters and upwards. In simpler terms, it brings under the ambit of Unified Building Bye-Laws plots in swanky residential colonies like Greater Kailash Part I, Green Park, Vasant Vihar, Satya Niketan and Defence Colony. These posh colonies have seen increased building activity by private builders who build multiple flats on one residential plot with an average size of 750 to 1,000 square metres and sell them floor – wise.
Aviation sector on a high as UDAN spreads wings
India is rapidly expanding its aviation network beyond its biggest cities, developing airports at 18 smaller and unserved destinations over the past year and seeking to bring commercial flights to at least five more towns over the next few months. “By March end, we aim to operationalise others such as Adampur in Jalandhar and Salem in Tamil Nadu,” a senior official at the state owned Airports Authority of India (AAI) told ET. Another 12 airports, to be put up for bids, are in various stages of development and may take more than a year to be ready. To be sure, industry sources are somewhat sceptical about the fate of all of these links, and believe that some may require complex issues to be solved before flights were to begin.
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