Government to hold talks with RBI to leave more capital with banks
The government will hold talks with the Reserve Bank of India (RBI) on relaxing capital norms for banks and bringing them in line with less stringent Basel III guidelines, said a senior government official. Such a move would free up an estimated Rs 60,000 crore of capital at state-owned lenders, allowing them to step up lending to fuel the reviving economy, bolster weaker banks and reduce pressure on the government to provide capital. This follows discussions by the finance ministry with Niti Aayog and other stakeholders. The minimum common equity (CET) Tier-I ratio as prescribed by RBI — money that banks need to set aside — stands at 5.5% of risk weighted assets against 4.5% under Basel III norms.
Britannia Industries to split stock, issue bonus debentures
FMCG major Britannia Industries Ltd today said it may opt for stock split and issue bonus debentures to shareholders. Speaking at the company’s AGM here, Chairman Nusli Wadia said the issue of stock split would be decided at the next board meeting. Wadia said the company would incur a total cost of Rs 1,000 crore for issuance of bonus debentures and to pay dividend to the shareholders. The bonus debentures would be issued at Rs 60 each and be non-convertible. The company will launch new products in the next six months and expand business outside India, he said, adding, it is open to acquisitions.
Bhushan Power: NCLAT allows bids to be filed by August 13
The insolvency process for Bhushan Power and Steel (BPSL) is interestingly poised with the Supreme Court now set to hear Tata Steel’s appeal on August 10. This is ahead of the August 13 deadline set by the National Company Law Appellate Tribunal (NCLAT) for filing revised and unconditional bids. Three companies are interested in acquiring BPSL: Tata Steel, Liberty House and JSW Steel. To that extent, Monday’s decision by the NCLAT granting the bidders a one-week extension for revised bid is a relief for Tata Steel; the company had appealed in the Supreme Court on August 3 against the NCLAT’s August 1 order that allowed the bidders to submit revised bids for the company by August 6.
RCom expects to complete Rs 25,000-crore assets sale by August end; to pay Ericsson Rs 550 crore
Debt-ridden Reliance Communications is looking to complete the sale of its business assets worth Rs 25,000 crore by the end of this month and has also agreed to pay Rs 550 crore towards settlement to telecom gearmaker Ericsson by September-end. Reliance Communications in a regulatory filing said that it has “agreed to pay a settlement amount of Rs 550 crore to Ericsson on or before September 30, 2018”. The Supreme Court of India on August 3 approved the settlement arrived at between RCom and Ericsson India Pvt Ltd over a payment dispute and asked the Anil Ambani-led firm to pay Rs 550 crore to the Indian arm of Swedish firm by September 30.
PSBs recover Rs 222 billion from NPA accounts via one-time settlement
Public Sector Banks (PSBs) have recovered over Rs 222 billion through one-time settlement (OTS) in 2.44 million accounts over the last three years as a part of cleaning up balance sheet. Banks seemed to have stepped up efforts the most in 2017-18 to get about Rs 90 billion from close to one million accounts. This assumes significance in the light of Sashakt panel’s advice for banks to resort to recoveries through schemes akin to OTS to settle dues of Non-Performing Assets (NPAs) up to Rs 500 million. The information presented in the Lok Sabha covers 19 nationalized banks. It does not cover State Bank of India group and IDBI Bank.
NCLT asks Deccan Chronicle RP to refer Srei arm’s revised proposal to CoC
The Hyderabad bench of National Company Law Tribunal (NCLT) on Monday directed the resolution professional (RP) of Deccan Chronicle Holdings Limited (DCHL) to place the revised resolution proposal of Srei’s investment arm, Vision India Fund, before the Committee of Creditors(CoC) for consideration. In June, the resolution professional had approached the adjudicating authority, seeking directions in this regard as the resolution applicant had filed its modified plan at the last hour on the concluding day of mandatory resolution period after the CoC rejected the original plan with close to 44 per cent dissenting votes.
Errors of reasoning and of law in NCLT order: Cyrus Mistry camp to NCLAT
Ousted Tata Sons Chairman Cyrus Mistry’s petition before the National Company Law Appellate Tribunal (NCLAT) has alleged that the lower court’s judgment is replete with errors of reasoning and errors of law. The plea before NCLAT is slated to come up for hearing on Tuesday. Mistry has filed the appeal with NCLAT again through two family-run investment firms — Cyrus Investments and Sterling Investments Corp. This is to continue with the fight for the rights of minority shareholders and to uphold the highest standards of governance expected from the House of Tatas, said sources briefed on the matter.
DoT asks industry to explore ways to block social media apps
The Department of Telecom has asked the industry to explore ways to block social media applications such as Facebook, WhatsApp and Instagram. In a notice issued to all major industry stakeholders on July 18, the Department said it wants to explore the option of blocking these apps under the directions of the Cyber Law Division of the Ministry of Electronics and Information Technology (MeitY). “Issues have been raised by the Ministry of Electronics and IT and law enforcement agencies have raised issue around blocking of certain mobile apps like Instagram, Facebook, WhatsApp, Telegram etc to meet requirement under Section 69A of IT Act,” said an industry source.
ICICI Bank masked bad loans through change in accounting policy
As a multi-agency probe into dealings by ICICI Bank Ltd and its chief executive Chanda Kochhar has gathered pace in recent weeks, more skeletons are tumbling out of the closet of the country’s second-largest private bank. As financial year 2016-17 drew to a close, the ICICI Bank management wrote off unsecured portions of doubtful corporate loans totaling 5,000-5,600 crore, according to a note Kochhar sent to the bank’s board in early April. The change in accounting policy that enabled these “technical write-offs” was cleared by the bank’s board only in the new financial year, and never communicated to shareholders, as required by banking and market regulators.
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