INX Media case: Karti Chidambaram appears before CBI for questioning

Karti Chidambaram. Photo: PTI

Karti Chidambaram, son of former finance minister P Chidambaram, on Wednesday appeared before the CBIin connection with a corruption case.Karti was directed by the Supreme Court to appear for questioning before the CBI.

The agency wants to examine him in connection with a Foreign Investment Promotion Board (FIPB) clearance given to media group INX Media for receiving funds from Mauritius when his father P Chidambaram was the Union Finance Minister.

It is alleged that a firm “indirectly controlled” by him received money from INX Media, run by Indrani and Peter Mukerjea.The CBI had issued a notice to Karti to appear for questioning in June but he had sought more time. Later, a look out circular was also issued against him to prevent him from leaving the country, CBI sources said.

A bench comprising Chief Justice J S Khehar and Justice D Y Chandrachud allowed Karti to be accompanied by a lawyer at the CBI headquarters during the questioning.The CBI had registered the case on May 15 against Karti, his company Chess Management Services, INX Media

Tata Motors net up 42% on one-time JLR gain

Guenter Butschek MD and CEO, Tata Motors

A one-time gain of Rs 3,609 crore (£437 million) embellished Tata Motors net profit for the April-June quarter. The company, which also owns luxury car brand Jaguar Land Rover (JLR), posted a 41.6 per cent growth in profit at Rs 3,200 crore, against Rs 2,260 crore it posted in the same quarter last financial year.

Without the one-time gain that came from changes in JLR’s pension plans, the company would have reported a loss on forex impact. The performance is, therefore, below analysts’ expectations of Rs 1,415-1,480 crore

Consolidated profit for the quarter was lower by Rs 793 crore due to translation impact from British pound to rupee,” the company said in its filing. Income for the quarter declined 9.59 per cent to Rs 59,972 crore, as its operating performance was hit by lower wholesale volume sales of Jaguar Land Rover, excluding sales from the group’s China joint venture, and a slowdown in its heavy vehicle business, among other factors.

The standalone business (which primarily includes the domestic commercial and passenger vehicle) remained in the red, like in last few quarters. The loss here was Rs 467 crore, against Rs 26 crore profit in the corresponding period of the previous financial year. Sales declined over 11 per cent to Rs 9,207 crore. Volumes sold (including exports) of commercial and passenger vehicles for the quarter stood at 111,860 units, down 11.8 per cent. The decline was mainly on account of 35 per cent drop in sales of medium and heavy commercial vehicles

12 PSU banks firming plans to raise funds from markets 

PSU, Public Sector Undertakings

As many as 12 public sector banks including PNB, Bank of India and Indian Bank have lined up plans for raising funds from markets to shore up their capital base to meet global risk norm, Basel III.

About 6-7 lenders including Andhra Bank expect to close their capital raising plan by the end of the current fiscal, sources said.The remaining would raise funds through follow on public offer (FPO) or Qualified Institutional Placement(QIP) from the market during course of the next fiscal, they added.

Lenders including Allahabad Bank, Andhra Bank, Bank of India, Central Bank of India, Dena Bank, IDBI Bank, Indian Bank and Punjab National Bank (PNB) have already got permission from the government to raise capital from the market through QIP or FPO or preferential allotment.

Similarly, Syndicate Bank, UCO Bank, United Bank of India, Vijaya Bank also got approval from the government and some of them have already started the process. Board of PNB has given its approval for raising equity capital to the tune of Rs 3,000 crore through FPO, QIP or rights issue.

RBI group to study MCLR regime so that your bank reduces loan rate 

RBIVoicing displeasure over banks not doing enough to reduce lending rates, the Reserve Bank of India (RBI) said an internal group would review the working of the system to improve transmission.The central bank will also explore ways to link bank lending rates directly to market-determined benchmarks

Though the marginal cost of funds-based lending rate (MCLR) system is an improvement over the base rate system, monetary transmission by banks has not been “not entirely satisfactory”, the RBI said in statement on developmental and regulatory policies

“The decision to review the MCLR system with a view to improve monetary policy transmission is a welcome move as a large section of any bank’s portfolio is still anchored to the base rate. The MCLR in its present form is grossly misused by a few players to create an artificial pricing structure,” said R P Marathe, managing director and chief executive, Bank of Maharashtra.

The MCLR was introduced in April 2016 for improving the monetary transmission. The MCLR, the internal benchmark lending rates, have to be revised monthly. This move was in response to banks failing to transfer the benefit of rate cuts by the RBI to its customers. The MCLR rates, unlike base rates, have to take the change in repo rates into consideration and revise lending rates accordingly.

YES Bank net profit up 32%; board okays 5:1 stock split

YES Bank net profit up 32%; board okays 5:1 stock split

The news for not so pleasant reasons, the sentiment is improving for YES Bank. The stock rose six per cent on Wednesday, on strong June quarter (Q1) performance. The board of directors had also approved a 5:1 stock split, another reason supporting the price move.

Net profit rose 32 per cent year-on-year to Rs 965 crore, helped by 44 per cent growth in net interest income (difference between interest earned and expended) to Rs 1,809 crore. Other income rose 17 per cent to Rs 1,132 crore.

Net interest margins (NIMs), an indicator profitability, rose from 3.4 per cent a year before to 3.7 per cent. This was aided by a surge in low-cost current and savings account (Casa) deposits. The ratio of these to the total improved to 36.8 per cent, backed by 52 per cent year-on-year growth in Casa.

Strong balance sheet growth, equally led by advances and deposits, was reflected in the performance. Advances for the quarter grew by 32 per cent to Rs 1,39,971 crore. Multifold expansion in the retail. and business banking segment, 32 per cent of total advances, fuelled the loan book growth. Total deposits grew by 22 per cent to Rs 150,241 crore.

YES Bank hopes to maintain the ratio at 40 per cent, by reducing branch model costs and focusing on digital channels.

Banks’ exposure to telecom sector at Rs 97,681 crore, says Jaitley

Banks' exposure to telecom sector at Rs 97,681 crore, says Jaitley

Finance Minister Arun Jaitley on Tuesday said bankshave an exposure of Rs 97,681 crore in the telecom sector, which is grappling with financial stress.In a written reply to the Rajya Sabha, Jaitley said SBI Chairman has pointed out that stress in the telecom sector has reached “highly unsustainable levels” due to the erosion of topline and earnings of the service providers.

Quoting the Reserve Bank of India figure, Jaitley said total outstanding (funded) advances by public sectorbanks to the ‘communications’ sector stood at Rs 63,415 crore, while total exposure to the sector worked out to be Rs 97,681 crore.

‘Communications’ sector includes telecom — fixed network; telecom towers; telecommunications and telecom services. For public sector banks, the gross Non Performing Asset (NPA) ratio and stressed advances ratio for the sector stood at 3.68 per cent and 11.29 per cent respectively, at the end of 2016-17 fiscal.

The suggestions, include aligning deferred payment liabilities for spectrum for its life, rationalisation of regulatory charges, quick resolution of litigation on the definition of adjusted gross revenues, easing regulation of merger and acquisition.”Government has already constituted an Inter-Ministerial Group for the sector,” the financed minister said.

India-focused funds, ETFs mop up $5 bn in Jan-June

India-focused funds, ETFs mop up $5 bn in Jan-June

India-focused offshore funds and exchange tradedfunds (ETFs) have received net inflow of $4.8 billion in the first six months of the year, the second highest in five years. The category had seen net inflow of $7.3 billion during the same period in 2015; however, it saw net outflows in 2013, 2014 and 2016 for the period.

The flow this year largely came into India-focused offshore funds, which signify long-term money, against India-focused offshore ETFs, where the money is largely short-term. India-focused offshore funds received net inflows of $3.8 billion, compared with inflow of $1 billion for that of ETFs.

“While FPIs (foreign portfolio investors) are looking at India from a long-term perspective, this could reverse if expectations of the managers on economic growth are not met,” said Himanshu Srivastava, senior research analyst – manager research, Morningstar Investment Adviser India.

The portfolio of India-focused offshore funds and ETFs showed an affinity sectors that stand to benefit from the fall in interest rates, a turnaround in the economic cycle and a rise in urban consumption demand.There has been interest in financial services and consumer cyclicals, particularly automobiles and auto ancillaries, followed by basic material sectors such as…Read More