Volume XXXIII Number 19 February 5, 2018

Weeklies

BI – Business India

BusW – Business World

BusT – Business Today

CMar – Capital Market

EPW – Economic and Political Weekly

SE – Southern Economist

Eco – Economist

For(Asia) – Fortune AsiaCI – Corporate India

Newspapers

BS – Business Standard

ET – Economic Times

FE – Financial Express

FT – Financial Times

H – Hindu

HBL – Hindu Business Line

HT – Hindustan Times

IE – Indian Express

TI – Times of India

Mint – Mint

Classifications

Economy Banking Agriculture & Rural Development Industry Small Scale Industry

International Economics Labour & Personnel Management Management Miscellaneous Books

CONTENTS

A. ECONOMY 1

B. BANKING 2

C. AGRICULTURE & RURAL DEVELOPMENT 12

D. INDUSTRY 12

E. SMALL SCALE INDUSTRY 13

F. INTERNATIONAL ECONOMICS 13

G. MANAGEMENT 13

– 1 –

BANKERS' BRIEF Vol. XXXIII No. 19February 5, 2018

ECONOMY"Fiscal road map has been rendered obsolete" – Edited excerpts from an interview with Chief Economic

Advisor Arvind Subramanian. – (BS Jan 31, 2018 pp 1,10)

"I am not a big believer in one number for debt or deficit: there is a classic case for fiscal consolidation,says CEA Arvind Subramanian" – Excerpts from an interview with Chief Economic Adviser to the FinanceMinistry Dr Arvind Subramanian. – (HBL Jan 31, 2018 p 4)

"India needs a massive push in infra spending to attract private players" – Edited excerpts from aninterview with Richard, Koo, Chief Economist, Nomura Research Institute. – (ET Jan 31, 2018 p 10)

"The Indian economy is getting formalized" – This will increase the state's capacity and the incentives, forcitizens to demand better governance. An article. – (Mint Jan 30, 2018 p 18)

Bhattacharya, Pramit – "The story of the Indian economy in 10 charts: the risks to India'smacroeconomic stability have grown over the past few months" – An article.– (Mint Jan 31, 2018 p 10)

BUDGET 2018-19"Expect improvement in tax collections: Goyal" – Ashima Goyal, a member of the Economic Advisory

Council to the Prime Minister, Samiran Chakaraborty, chief economist at Citibank India' Deepali Bhargava,economist at Credit Suisse in India, and Sajjid Chinoy, Asia economist at JP Morgan, talk about the comingbudget. Edited excerpts from a discussion. – (Mint Jan 30, 2018 p 12)

"I think govt maintaining fiscal prudence is important: Shah" – Edited excerpts from a panel discussionwith Ridham Desai, MD, Morgan Stanley India; Abhay Laijawala, head, India Research, Deutsche Equities;Nilesh Shah, managing director Kotak Mahindra AMC; Sajjid Chinoy, chief India economist, JP Morgan; andDinesh Kanabar, CEO, Dhruva Advisors. Ahead of the Union budget, there various expectations on what thegovernment could do to raise revenues, including politically tough measures such as taxing agriculture, innovativemethods such as taxing bonus shares, and plugging various loopholes. – (Mint Jan 26, 2018 p 16)

ECONOMIC SURVEY 2017-18"Growth in fiscal 2019 seen at 7 - 7.5%: pitches for shrinking unviable banks, Air India sale; says 'a

fiscal consolidation pause cannot be ruled out'" – The Economic Survey for FY18 tabled in Parliamentpredicted India's FY19 real gross domestic product growth in a rather broad range of 7-7.5%, up from alikely, more-closely read 6.75% in the current financial year, but still below the potential rate of 8%. Astabilising GST, the likelihood of a revival of exports and private investments, are what the survey primarilyinvests its confidence in. The survey, however, tinged its forecast with some variables. A report.– (FE Jan 30, 2018 pp 1,2)

"There's robust and broad-based revival in Indian economy" – Edited excerpts of the Economic Survey2017-18. – (ET Jan 30, 2018 p 14)

Sabnavis, Madan – "Eco Survey: it's all about interpretation: the Survey, for example, is not tooconcerned about savings flowing out from banks to the capital market" – An article.– (HBL Feb 1, 2018 p 8)

Subramanian, Arvind – "Answering some tough questions about the economy" – Economic convergence,gender inequality, climate change impact on agriculture are some of the long-term challenges confrontingIndia. Increasingly, a number of universities are adopting the Survey as a pedagogical tool for courses on theIndian economy. An article. – (FE Jan 30, 2018 p 10)

– 2 –

Subramanian, Arvind – "The Economic Survey: an overview" – As in last year's survey, Big Data hasbeen mined to shed light on the economy, and there have been some moments of epiphanic understanding. Anarticle. – (Mint Jan 30, 2018 p 19)

Subramanian, Arvind – "The story of the Economic Survey, 2018" – The Indian economy is so complex,it constantly throws up opportunities for investigation and calls for rigorous research. An article.– (HBL Jan 30, 2018 p 10)

EMPLOYMENT"Sharp dip in employment levels in 2015-16: Survey" – Employment levels particularly for women in

2015-16 is against 2005-06 have registered a sharp dip though women were employed in larger proportionsthan men in occupations such as professional, technical, administrative and managerial the national familyhealth survey has found. A slightly higher percentage of women at 10% than men at 8% are employed in aprofessional, technical, administrative or managerial occupations. Interestingly 11% women who worked inpast year were self employed. Employment levels have come down to 24% in 2015-16 for women, ascompared to 36% in 2005-06. The figure is less stark for men but there is still a drop, with percentagecurrently employed down from 85% to 75% in the past decade. A report. – (TI Feb 1, 2018 p 9)

SERVICES SECTORSontanam, Satya – "Services are in the fast lane" – The services sector, a major contributor to the country's

gross value added, has been clocking good growth thanks to higher demand in some pockets. This translatesinto healthy revenues for the Centre. A graphical report. – (HBL Jan 26, 2018 p 9)

BANKING

GENERAL"Banking sector performance remains subdued" – Bad loans: situation likely to improve with banks diligently

following on recoveries. A report. – (BS Jan 30, 2018 p 13)

"FinMin not to create omnibus development bank" – Finance ministry has decided not to recreate anomnibus development bank. Instead with at least one international rating agency having pushed up India'scredit rating, it will push state-owned and supported entities to take advantage of the favourable conditions toraise more money from the markets. For this purpose, the ministry has cleared proposal from at least one lineministry to create a specialised financing arm quite like the Indian Railway Finance Corporation. A report.– (BS Jan 29, 2018 p 10)

"Huge surge in flows into financial savings: Kochhar" – India is seeing a huge surge in the next inflowsinto financial savings and has reached nearly Rs 28 lakh crore in the last 18 months - an amount equivalent tothe entire GDP of countries like Thailand, according to ICICI Bank Chief Chanda Kochhar. An importantoutcome of demonetisation has been the structural shift in terms of financialisation of savings, she added. Areport. – (FE Jan 26, 2018 p 10)

"IBC, bank recap plan to restart corporate spending and infra lending: Survey" – The EconomicSurvey of 2017-18 believes that the government's twin reforms of the IBC and the bank recapitalisation planwill help companies resume their spending activities. Also, banks would be better positioned to increase theirlending to critical, but currently stressed sectors of infrastructure and manufacturing. A report.– (BS Jan 30, 2018 p 13)

"Need complementary reforms to shrink unviable banks" – Addressing twin balance sheet challengethrough effective resolution of stressed assets and bank recapitalisation should remain among top agenda ofthe government next year, said the Economic Survey. A report. – (BS Jan 30, 2018 p 13)

"SBI chief expects loan demand to rise with bank recap plan" – Demand for loans from Indian companiesis still muted but should increase following more government spending on infrastructure projects, according toSBI Chief. He expected the government to strictly monitor corporate governance and other reform measuresafter a $33-bn capital injection to bail out the state-run banking sector. A report. – (FE Jan 26, 2018 p 10)

– 3 –

AXIS BANK"Axis Bank launches 4th edition of Evolve" – Axis Bank launched the fourth edition of 'Evolve', an annual

multi-city knowledge series for SME customers in Coimbatore. The current edition, titled 'Transform yourfamily business into your dream company', will empower the SMEs understand the winning strategies andbest practices that have helped some of the leading family businesses grow into reputable enterprise. Thisedition will span across 30 cities including Nagpur, Surat, Rajkot, Pune, Vishakhapatna, Trichy, Kanpur,Ludhiana and Jamshedpur. – (FE Jan 30, 2018 p 12)

BANK OF BARODA"BoB to sell stakes in many of its arms to build value" – Bank of Baroda plans to sell strategic stakes in

many of its subsidiaries to build value and capitalise from them as it embarks on a new strategy to boost itsfree income and steer away from traditional consortium banking. The bank is likely to monetise its investmentsin subsidiaries such as BoB Capital Markets, BoB Financial Solutions, Baroda Pioneer Asset management,Nainital Bank. A report. – (ET Feb 1, 2018 pp 1,15)

BANK OF INDIA

– RECOVERY OF NPAs

"BoI recovers Rs.3,000-cr bad loans in a month" – Bank of India has recovered Rs.3,000 crore in the lastmonth by invoking standby letter of credit, SBLC, and guarantees of defaulters, said its chief executive.Since the time RBI has imposed PCA we have recovered Rs.3,000 cr by invoking SBLC, according to chiefexecutive Dinabandhu Mohapatra. A report. – (ET Jan 31, 2018 p 17)

BANK OF MAHARASHTRA"Capital infusion will help BoM meet regulatory requirements" – The government's booster shot of Rs

3,173 crore into the Bank of Maharashtra will help the lender meet its minimum regulatory requirements forup to two years and be left with Rs 500-600 crore for growth, according to Ravindra Marathe, MD & CEOBank of Maharashtra. A report. – (TI Jan 26, 2018 p 24)

FEDERAL BANK"Fresh capital, budget proposals to fuel economy: stability in West Asia is rising, which means

remittances to India are increasing, says Federal Bank MD" – Private lender Federal Bank has beengrowing at more than 20% in the last few quarters. An interview with Shyam Srinivasan, Managing Director,Federal Bank. – (H Jan 29, 2018 p 14)

ICICI BANK"Domestic loan growth will continue to be above 15%" – ICICI Bank's MD and CEO Chanda Kochhar

said provisions will remain at an elevated level because the bank still has to make provisions for the nextround of NCLT cases and for ageing as well. Excerpts from an interview with Chanda Kochhar, MD &CEO, ICICI Bank. – (FE Feb 1, 2018 p 10)

"ICICI Bank Q3 net dips 32%, higher provisioning weighs" – ICICI Bank reported a 32% y-o-y declinein its standalone net profit to Rs 1,650 crore for the December quarter of FY18, owing to higher provisionsand lower other income. Its provisions for the quarter at Rs 3,570 crore were up 32% from the same periodlast year. A report. – (FE Feb 1, 2018 p 10)

Iyer, Aparna – "ICICI Bank flatters on asset quality but niggling concerns remain" – As ICICI Bankfocused all its energies into fixing its loan book and going back to strong quality growth, peripheral activitiespulled down its operating profit. An article. – (Mint Feb 1, 2018 p 4)

Merwin, Radhika – "No surprises on the asset quality front" – While the bank reported lower slippages,sustainability of this trend will be important. An article. – (HBL Feb 1, 2018 p 10)

– 4 –

IDBI BANK"IDBI Bank narrows Q3 loss on better margin" – IDBI Bank narrowed its losses to Rs 1,524.31 crore in

the quarter to December from Rs 2,255 crore a year ago driven by higher margin and lower operational cost,which offset a massive spike in bad loans which jumped to 25%. A report. – (FE Feb 1, 2018 p 10)

"IDBI Bank: Unaudited financial results for the quarter and nine months ended December 31, 2017"– An advertisement feature. – (FE Feb 1, 2018 p 21)

"We'll be able to cut net NPAs substantially by Q1: IDBI Bank" – Mahesh Kumar Jain, MD and CEO ofIDBI Bank, said the lender is in the process of narrowing losses but losses will continue for one or two morequarters because of higher provisioning requirements and because of certain slippages into the non-performingloans category. Edited excerpts from an interview with Mahesh Kumar Jain, MD & CEO, IDBI Bank.– (Mint Feb 1, 2018 p 14)

IDFC BANK"IDFC goes to the market to save merger of its banking arm and Capital First : may buy IDFC Bank

shares for Rs750 cr to abide by RBI norm on banking licence" – To save the merger deal betweenIDFC Bank and Capital First , the former's parent company IDFC- will make an open-market purchase ofequity shares. This is being done to comply with the RBI requirement on new bank licensing norms. At IDFCBank's current market price (Rs57.20 at close on the BSE on Tuesday). IDFC may have to spend aroundRs750 crore to buy up additional shares. According to RBI norms on new bank licensing, IDFC, the promoterentity, is required to maintain 40 per cent shareholding in IDFC Bank till 2020. A report.– (HBL Jan 31, 2018 p 1)

INDIAN OVERSEAS BANK"IOB to set up currency recycler machines" – Indian Overseas Bank has planned to set up 704 more multi-

functional machines like currency recyclers, instead of plain cash dispensing ATMs by March 2018. Currently,it has 400 multi-functional machines across the country. Post the expansion, the total number of recyclers willstand at 1104. – (FE Jan 30, 2018 p 12)

– INSOLVENCY RESOLUTION

"IOB transfers its Rs.748 crore claim on Bhushan Steel to an ARC" – The insolvency resolutionprofessional (IRP) for Bhushan Steel Ltd, informed the National Company Law Tribunal (NCLT) that IndianOverseas Bank, one of the lenders, assigned a debt amount of Rs.748 crore to Assets Care & Reconstruction,an asset reconstruction company (ARC). The leader of creditors' consortium, State Bank of India, had filedan insolvency resolution against Bhushan Steel in July, 2017 for recovery of over Rs.44,000 crore.– (Mint Jan 26, 2018 p 6)

JAMMU & KASHMIR BANK"J&K Bank Q3 net profit at Rs 72 cr" – Jammu & Kashmir Bank reported a net profit of Rs 72.47 crore

during the third quarter ended December 31, 2017. The bank had reported a net loss of Rs 498.47 crore in theOct-Dec quarter of 2016-17. A fall in bad loan proportion helped the bank report profit on its books.– (FE Feb 1, 2018 p 10)

"J&K Bank: extract of standalone reviewed financial results for the quarter and nine months ended31st December, 2017" – An advertisement feature. – (FE Feb 1, 2018 p 24)

KARUR VYSYA BANK"Karur Vysya Bank Q3 net slips to Rs.71 crore" – KVB's net profit for the quarter ended December 2017

slipped to Rs.71 crore from Rs.106 crore during the corresponding quarter of the earlier fiscal. Operatingprofit was up 25 per cent at Rs.421 crore (Rs.335 crore). A report. – (HBL Feb 1, 2018 p 10)

– 5 –

"Karur Vysya Bank: reviewed financial results for the quarter / nine months ended 31st December2017" – An advertisement feature. – (HBL Feb 1, 2018 p 3)

LAKSHMI VILAS BANK"Lakshmi Vilas Bank posts loss of Rs 39 crore in Q3" – Lakshmi Vilas Bank slipped into the red during

the third quarter of this fiscal. For the quarter ended December 31, 2017, the bank has reported a net loss ofRs39 crore, compared with a net profit of Rs78 crore in the same period of the previous year on the back oflower operating profit. There was a significant drop in other income and higher provisions made forcontingencies. A report. – (HBL Jan 31, 2018 p 5)

"Lakshmi Vilas Bank: unaudited financial results for the quarter / nine months ended 31st December,2017" – An advertisement feature. – (BS Jan 31, 2018 Pt.II p 7)

ORIENTAL BANK OF COMMERCE"OBC Q3 net loss widens to Rs 1,985 cr" – Oriental Bank of Commerce said its net losses widened to Rs

1,985.42 crore in the third quarter ended December 31, mainly due to an uptick in bad loans that requiredhigher allocation as reserve money. The bank's net loss was at Rs 130.01 crore in the same quarter of theprevious fiscal. – (FE Jan 31, 2018 p 10)

"Oriental Bank of Commerce: extracts of reviewed financial results for the quarter- nine monthsended December 31, 2017" – An advertisement feature. – (BS Jan 31, 2018 p 5)

STATE BANK OF INDIA"SBI gets nod to divest 4.40% stake in CCIL" – SBI has received board approval to divest 4.40% stake

in clearing corporation of India. – (FE Feb 1, 2018 p 10)

"SBI inks information utility agreement with NeSL" – SBI has signed an Information Utility agreementwith National E-Governance Services to share financial and security information under the Insolvency andBankruptcy Board of India Regulation, 2017. A report. – (HBL Feb 1, 2018 p 10)

"SBI to invoke guarantees despite IBC proceedings: to send 200 notices to guarantors of defaultingcompanies" – SBI has decided to invoke personal and corporate guarantees of defaulting firms even whenthey face bankruptcy proceedings but the move could face legal challenges from promoters, unwilling to partwith their assets. A report. – (ET Jan 26, 2018 p 1)

"SBI to offer credit cards to farmers" – SBI is exploring the possibility of issuing credit cards to farmers.The bank, through its credit card arm SBI Card, a joint venture company between SBI and GE Capital,currently issues credit cards to farmers on pilot basis in the states of Rajasthan, Gujarat and Madhya Pradesh.A report. – (HBL Jan 31, 2018 p 12)

– INTEREST RATES

"SBI's deposit rate hike sets stage for rise in lending rates" – State Bank of India raised rates on bulkdeposits by 50-140 bps, a move that may prompt rival lenders to increase interest rates, given tight liquidityconditions and the expected rise in loan demand. This is the second such rate hike by SBI on deposits overRs1 crore, usually referred to as bulk deposits, in two months. SBI's bulk as well as retail term deposit ratesrange between 5.25% and 6.25%. A report. – (Mint Jan 31, 2018 p 1)

UNION BANK OF INDIA"Union Bank sells entire stake in Experian Credit" – Union Bank of India has sold its entire 10% stake in

Experian Credit Information Company for an undisclosed amount. – (FE Feb 1, 2018 p 10)

– 6 –

YES BANK"Yes Bank prices dollar bonds at 130 bps over 5-year US treasury yield" – Yes Bank priced its five-year

dollar bonds at 130 basis points over the five-year US Treasury yield. Sources aware of the deal confirmed.Moody's Investors Service has assigned a Baa3 rating to Yes Bank's proposed senior unsecured notes,issued under its $1-bn Medium Term Note Programme. The drawn is from its IFSC Banking Unit Branch inGIFT City. A report. – (FE Jan 30, 2018 p 12)

ASSET RECONSTRUCTION COMPANIES

– EDELWEISS ARC

"Sale of assets to ARCs continues even for IBC cases, says Siby Antony of Edelweiss" – Excerptsfrom an interview with Siby Antony, Chairman, Edelweiss ARC. The deadline for the first set of largeaccounts under Insolvency and Bankruptcy Code (IBC) is fast approaching. But the resolution of stressedassets does not stop with large defaulters alone. Given that a default of just more than Rs.1 lakh can triggerinsolvency under the IBC, the large number of smaller bad loan accounts that could enter the system in thecoming months present a huge challenge for banks as they may not have the bandwidth to handle all thecases. Asset reconstruction companies (ARCs), given their expertise and capital base, can help banks offloadsome of these accounts to ensure more focused and efficient resolution. Currently, the company has 25cases under IBC for resolution. – (HBL Jan 26, 2018 p 5)

BANK CAPITAL

– PUBLIC SECTOR BANKS

"Banking on good faith: more structural reforms are needed to maximise the bank recapitalisationeffort" – An editorial. – (H Jan 29, 2018 p 8)

"Banks can keep recap bonds in HTM category minus any limit" – The Government has detailed, in agazette notification the nature of recap bonds worth Rs.80,000 crore to be issued to banks, clearly indicatingtheir maturities, yields and other characteristics, prime among them being that these bonds will be eligible tobe classified under the HTM category without any limit and that they will be non-transferable. Expertsbelieve the HTM eligibility without any limit is a big relief to the lenders, as most banks have already utilisedtheir limits for HTM holdings, at 19.5% of their SLR. A report. – (FE Jan 31, 2018 p 2)

"Capital infusion credit positive for PSBs: S&P" – The latest infusion of capital in the state-run banks bythe government is credit positive but lenders also need to improve efficiency and put better risk managementpractices, says a report. A report. – (FE Jan 26, 2018 p 11)

"FinMin notifies Rs.80,000 cr recap bonds for PSBs" – The Finance Ministry has notified the recapitalisationbonds that will allocate Rs.80,000 crore to 20 public sector banks. The bonds, which are split into six instalments,will bear interest rates between 7.35 per cent and 7.68 per cent and will mature between 2018 and 2033. Areport. – (HBL Jan 31, 2018 p 12)

"Recap to mitigate PSB risks but NPAs to impact performance: Fitch" – The government's Rs 88,139crore capital infusion in struggling public sector banks should help in part to mitigate risks but resolution of badassets and continued high credit costs hinder the sector's near-term performance, Fitch Ratings said. Areport. – (FE Jan 26, 2018 p 11)

BANK LENDING"Minimum exposure clause could limit lending by State-run banks" – Private banks may gain market share

at the expense of their public sector peers as a consequence of Wednesday's decision mandating state-runbanks to have minimum 10% exposure to a large loan to be part of the lenders' consortium, since the weakcapital position of many state-run banks will limit higher lending. Besides, if they take higher exposure, thesebanks could end up breaching various central bank rules on lending limits aimed to prevent concentration ofbank loans in a few companies, and be forced to make higher provisions. A report. – (Mint Jan 26, 2018 p 6)

– 7 –

BANKING ABROAD

– PUBLIC SECTOR BANKS

"Public sector banks to rationalise 41 overseas units" – Public sector banks (PSBs) have kick-started thereview of their overseas operations by identifying 41 units for 'rationalisation' as part of the larger reformprocess. Rationalisation could be in terms of consolidation of operations, trimming of staff strength, exitingsome of the non-core and non-profit activities or closing down some of unviable overseas offices. A report.– (HBL Jan 26, 2018 p 5)

BANKING REFORMSMukherjee, Andy – "Making Indian banks become whole again" – State-run banks misprice risk knowing

taxpayers' capital is free, while privately run lenders do so because their bosses love their stock options. Anarticle. – (ET Jan 26, 2018 p 12)

– PUBLIC SECTOR BANKS

Krishnan, Ravi – "Banking reforms package needs more punch" – If well-begun is half done, then therecapitalisation programme will indeed go a long way in putting state-owned lenders on the path to recovery.Yet, as one digs deeper, the overwhelming feeling, especially with the sketchy details released so far, is thatthe government could have gone much further to truly reform public sector banking. An article.– (Mint Jan 26, 2018 p 7)

CORPORATE INSOLVENCY"Creditors to now talk only to highest bidder: The decision was taken at a meeting which was held by

the IBA" – Bankers have decided that they will negotiate only with the highest bidder when resolving casesof corporate insolvency. The decision was taken at a meeting held by the IBA following consultations withthe IBBI and resolution professionals. The IBC hasn't laid down any rules on this matter. Conventionally, thecreditors negotiate with the top few bidders to get the best value for the insolvent company. A report.– (ET Jan 31, 2018 p 1)

DEPOSITS -- FIXED"Should you go for sweep-out deposits?" – These days, many banks offer sweep-out fixed deposits to

customers where their savings account balances beyond a pre-decided threshold are moved to term deposits,Shaikh Zoaib Saleem spoke to experts to understand if this is a good deal for retail consumers. Expert views.– (Mint Jan 30, 2018 p 17)

DIGITAL BANKING

– AXIS BANK

"Is digital banking paying off?: delivering services through use of technology has helped manageoperational risk" – India is still a cash-driven economy and hence, the opportunity to go digital is huge. Buteach of these players will have to find their niche and compete on the turf. Excerpts from an interview withRajiv Anand, Executive Director of Retail Banking at Axis Bank. – (HBL Jan 29, 2018 p 10)

DIGITAL CURRENCIES"Investors in a bind as banks pull the plug on bitcoin accounts" – The uncertainty over regulating crypto-

currencies seems to have left hundreds of Indian investors in the lurch. A number of retail investors who hadbought bitcoins over the past few months are now stuck as some banks are not allowing them to depositmoney earned from trading on bitcoin exchange platforms. A report. – (HBL Jan 29, 2018 p 1)

– 8 –

Rodrigues, Ryan – "Crypto-Currency: the roller-coaster ride" – Investors flock towards crypto-currencieseven as regulators flag warning signs around consumer protection. Can this ride continue? An article.– (BI (1036) Jan 15-28, 2018 P 46)

DIGITAL PAYMENTS

– SUBSIDY

"E-Payments subsidy poses liquidity headache for banks: bankers say pushing the billing for e-transactions by 3 months by issuing banks could reduce stress" – The government's decision tosubsidise digital payments below Rs 2,000 is cumulating problems for the banks in the merchant acquiringbusiness. With the subsidy amount expected to be released after three months and the charges for the issuingbanks and card schemes to be paid monthly, acquiring banks are trying to find out ways to reduce the liquiditystress that they will have to face. A report. – (ET Jan 29, 2018 p 8)

EDUCATION LOANSShaikh, Zoaib Saleem – "Learning to get the best deals on education loans" – Many students depend on

education loans to fulfil their dreams of high-quality higher education. However, they also need to learn howto make the most of the education loan offers that are out there. An article. – (Mint Jan 31, 2018 p 16)

FINANCIAL RESOLUTION AND DEPOSIT INSURANCE BILLNangia, Meera – "Conservative banking, not bail-in, will bail us out" – Risk is in-built in banking. If one

day, all the customers of any bank turn up demanding their deposits, the bank would be unable to repay them.Banks don't face a run on their deposits because customers trust banks. Governments often bail out banks,and don't liquidate them, because they support the business of banking. The FRDI Bill 2017 now pendingbefore the joint committee of Parliament contains a new method for saving a falling bank - a bail-in ofcustomers deposits instead of bail-out by the government. An article. – (H Jan 29, 2018 p 14)

FINANCIAL SECTOR REFORMSAgarwal, Isha and Prasad, Eswar – "Fixing financial system key to high growth" – An article.

– (BS Jan 30, 2018 p 9)

HOUSING FINANCESinha, Shilpy and Rangan, Govardhana – "Can NHB be India's Fannie Mae?" – Housing finance is the

darling of investors given the growth potential. The NHB is pushing the envelope. While there could beaccidents along the way, the road ahead is long and prosperous if one moves with prudence. An article.– (ET Jan 31, 2018 p 16)

IBA"Usha Ananthasubramanian is first woman IBA chief" – Usha Ananthasubramanian, MD and CEO,

Allahabad Bank, has been elected the first woman chairman of Indian Banks' Association (IBA). Usha waselected IBA Chairman for the year 2017-18 by its Managing Committee. – (HBL Jan 26, 2018 p 5)

INSOLVENCY AND BANKRUPTCY CODE"I believe it is myopic to look at initial failings of a new law, says S Ramann" – Edited excerpts from an

interview with S Ramann, Managing Director of National e-Governance Services Ltd. (NeSL). One of thecornerstones of the new insolvency framework is information utilities, which will store data on borrowing,default and security interest with safeguards like authenticating the terms of contract. India's first informationutility (IU) for bankruptcy cases, talks about the importance of sharing financial information. He also saidthat it is myopic to look at the failings of a new law. – (Mint Jan 26, 2018 p 12)

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"More amendments likely in insolvency law" – The insolvency law might be amended depending onrecommendations of the panel reviewing issues related to the legislation, including those pertaining to homebuyers, a senior government official said. While everything is time-bound under the IBC, Corporate AffairsSecretary Injeti Srinivas said the issue is how the interests of stake-holders are to be balanced. A report.– (BS Jan 29, 2018 p 10)

Upadhyay, Jayshree P and Archana, Alekh – "A year later, the insolvency code is still evolving" – Itwas touted as the magic wand to resolve huge pile of stressed loans that plagued the balance sheet of thebanks. A year since the Insolvency and Bankruptcy Code came into effect, it is still evolving as courtsinterpret the law and stakeholders get a measure of the system. While it is too early to decide if the Insolvencyand Bankruptcy Code has been successful, but it has instilled a sense of urgency, among all stakeholders, toresolve bad loans. An article. – (Mint Jan 26, 2018 pp 12-13)

– CORPORATE INSOLVENCY

"IBBI Boss Sahoo defends 94% haircut for stressed firm" – The IBBI Chairman M S Sahoo defendedthe large haircut lenders had to take in the case of Synergies Dooray. He said that was the best option.Lenders took a haircut of 94%, stirring a controversy. A report. – (BS Feb 1, 2018 pp 1,10)

– INSOLVENCY RESOLUTION

"Resolution under IBC has not been significant so far: Eleven big accounts referred by the RBI areyet to be resolved" – The survey talks at length of the IBC, touted as a key reform to address the festeringtwin balance sheet problem. While the Code is indeed a giant leap forward from the earlier regimes, the dataput out in the Survey does not recount any meaningful success story thus far. While all the first set of largeaccounts referred by the RBI to the NCLT, have asked for an extension of the 180-day deadline, the 10cases where resolution has been approved by NCLT are too small to matter. A report.– (HBL Jan 30, 2018 p 6)

– NPA RESOLUTION

"Bidders may not be able to sell stressed assets for 5 years" – Bidders for assets of companies undergoinginsolvency proceedings face up to a five-year lock-in for the shares they acquire. Lending banks are insistingon this to deter sales of the assets by the new promoter at a profit within months of the takeover. It is a goodstrategy that the applicant's shares held in the restructured company be locked in for a reasonable period oftime. This will provide comfort to creditors who have agreed to take a haircut in an attempt to revive thestruggling company, according to Sumit Binani, a resolution professional. A report. – (BS Feb 1, 2018 p 1)

"First 10 cases under IBC: creditors recover 33.5% of total dues from defaulting borrowers: lowestrecovery rate of 6% witnessed in the case of Synergies Doorey Automotive" – In the first ten casefor which resolution plans were approved under the IBC between Aug and Dec 2017, financial creditorswere able to recover 33.53 per cent of total claims outstanding from the defaulting borrowers. The latest dataon insolvency cases released in the Economic Survey 2017-18 shows that the financial creditors could recoverRs.1,854.40 crore out of the total claims of Rs.5,530.30 crore from companies including Synergies DooreyAutomotive, Shree Metalik, Kamineni Steel & Power India, Shirdi Industries among others. A report.– (IE Jan 31, 2018 p 15)

"The grand finale: the top 12 companies under insolvency will see results soon" – A report.– (BI (1036) Jan 15 - 28, 2018 pp 54 - 57)

– SALE OF NPAs

"Stressed corporate assets: for bidders, it's all or nothing: In the recent Roofit Industries case, theNCLT ruled against piecemeal asset sales" – Bidders looking to buy select assets of a distressedcorporate under the IBC process may be in for a disappointment. A recent ruling by the Mumbai bench ofNCLT makes it plain that bidders have to acquire all the assets of a distressed corporate debtor put on theblock. A report. – (HBL Jan 30, 2018 p 1)

– 10 –

INTEREST RATES

– DEPOSITS

"Banks likely to hike deposit rates with rise in credit demand: ICRA" – Banks are expected to hikedeposit rates in the near term as incremental credit has outpaced deposits over the last quarter, which haspushed up the credit-deposit ratio of the banking system, according to credit rating agency ICRA. A report.– (HBL Jan 31, 2018 p 12)

MICROFINANCE"Human beings are born as entrepreneurs, not as job-seekers" – In 2006, Bangladesh economist

Muhammad Yunus won the Nobel Prize for Pewace for unique microfinance model Grameen Bank. In Indiafor the launch of his book, he talks to the Indian Express about his work, flaws in the banking system andentrepreneurship. Excerpts from an interview. – (IE Jan 26, 2018 p 10)

NCLT

– INSOLVENCY RESOLUTION

"Resolution will happen in most accounts under NCLT" – Banks are expecting a write-back in provisionsfor some of the large 11 accounts referred to the NCLT, SBI deputy MD (Corporate accounts group) SunilSrivastava, expects competitive bidding for these assets and going forward, sees a decline in the rate ofgrowth of NPAs. Edited excerpts from an interview with Sunil Srivastava, Deputy MD, SBI.– (FE Jan 30, 2018 p 12)

NON-PERFORMING ASSETS"Banks' bad loans shrink from record peals" – India's stock of soured bank loans shrank slightly in the

quarter to 30 September last year, the first pullback since a drive to clean up record levels of non-performingassets (NPAs) began in 2015 and signalling that tighter rules and the insolvency and bankruptcy code may bestarting to show results. Stressed loans, which include NPAs as well as restructured or rolled-over loans,eased 0.4% from three months earlier to Rs.9.46 trillion ($148.3 billion) at the end of September, according tounpublished RBI data reviewed by Reuters. The last data seen by Reuters showed bad loans hit a recordRs.9.5 trillion as of end-June last year, accounting for 12.6% of total loans. The new data shows that the ratiodeclined to 12.2% in the period to end-September. A report. – (Mint Jan 26, 2018 pp 1, 5)

– POWER SECTOR

Sharma, Vivek – "Three ways to minimize power sector NPAs" – There is a conspicuous lack of offtake,lack of power purchase agreements, and availability of coal. An article. – (Mint Feb 1, 2018 p 18)

NPA RESOLUTION"Banks to be forced to vote at other forums like in IBC" – Bankers plan to replicate the rigid timelines

and forced decision making that is ingrained in the IBC in other forums where they meet to decide onresolution of bad loans outside bankruptcy proceedings. A report. – (TI Jan 31, 2018 p 21)

PAYMENTS BANKSSharma, Misha – "Payments banks: a reality check" – Lack of customer awareness and proper incentives

for agents have stalled progress of the banking model in rural areas. An article. – (HBL Feb 1, 2018 p 9)

– 11 –

PERSONAL LOANS

– GOLD / JEWELLERY

"Banks to treat loans to Jewellery as personal loans" – Banks will treat loans on Jewellery to consumersas personal loans even though the gold trade is seeking concessional rates for such loans. The trade hasappealed to the government to introduce a separate jewellery purchase loan that will be paid by consumers inEMIs for 22 carat gold jewellery. – (ET Jan 30, 2018 p 18)

PROMPT CORRECTIVE ACTION

– PUBLIC SECTOR BANKS

"Prompt Corrective Action: performance review of PSB heads by finmin soon" – RBI has put 12 PSBsunder PCA framework for lagging on certain performance parameters like unexpected level of high NPAs,low capital level, low return on assets. The Finance Ministry would soon initiate a performance review ofheads of PSBs that are under PCA as part of the reform process, according to official sources. A report.– (FE Dec 29, 2018 p 2)

PUBLIC SECTOR BANKSSrinivasan, Karthik – "PSBs need to adapt to stay competitive" – To bridge the market share gap, PSBs

have to improve their financial and business profile. An article. – (HBL Jan 29, 2018 p 11)

– CORPORATE FINANCE

"Small PSBs in drive to shed corporate loans" – The government has asked small public sector banks toreduce corporate loan exposure but many of them are under a PCA plan and already at work to sell big sizebad loans, limit further exposure and trim the loan book through securitisation. A report.– (BS Jan 29, 2018 p 4)

– FINANCIAL PERFORMANCE

"Finmin asks state-run banks to Swap assets, optimise Ops: move aimed at limiting banks' corporateexposure at 25% of their total risk weighted assets" – North block has asked state-run banks toconsider asset swaps, including exchange of their corporate portfolios and branches, to optimise nation-wideoperations even as consolidation emerges as an option to revive the financial performance of the government-controlled lending system. Banks may also swap same rated loans - both in corporate and retail segments toobtain a more cohesive portfolio, according to a senior Finance Ministry official. A report.– (ET Jan 26, 2018 p 13)

RECOVERY OF NPAs

– DRTs

"NPA recovery through DRTs rise 156%" – Non-performing assets recovered by banks through DebtRecovery Tribunals showed a rise of 156% during 2016-17 but the recovery under the SARFAESI Actdeclined, according to the RBI data. A report. – (IE Jan 26, 2018 p 15)

SMALL FINANCE BANKS

– AU SMALL FINANCE BANK

"AU Small Finance Bank Q3 net down 5%" – AU Small Finance Bank reported a fall of nearly 5% in its netprofit at Rs.78.92 crore in the third quarter ended December on uptick in bad loan provisions and higherexpenses. It had earned a net profit of Rs.82.92 crore in the similar quarter of the previous fiscal. Totalincome of the bank, however, was higher at Rs.570.20 crore as against Rs.353.23 crore in same period ayear ago. A report. – (FE Jan 31, 2018 p 10)

– 12 –

"AU Small Finance Bank: statement of unaudited financial results for the quarter and nine monthsended December 31, 2017" – An advertisement feature. – (ET Feb 1, 2018 p 11)

– EQUITAS SMALL FINANCE BANK

"Equitas Bank launches digital wealth mgmt" – Equitas Small Finance Bank announced the launch of itsdigital wealth management service. The bank has collaborated with Valuefy Solutions - a fintech start-up - tocreate an online platform where customers can make paperless investments in mutual funds and otherproducts. With the launch, ESFBL aims to provide to its clients the facility to invest in mutual funds digitally.A report. – (FE Jan 30, 2018 p 12)

WEAK BANKS"Unviable banks must go - one-time recapitalisation not a panacea for them" – An editorial.

– (FE Jan 31, 2018 p 8)

RBI CIRCULARS"Auction of Government of India Dated Securities" – (RBI Circular RBI/2017-2018/126 Ref. No. IDMD/

1937/08.02.032/2017-18 dated 29.01.2018)

"Small Saving Schemes - Payment of Agency Commission" – (RBI Circular RBI/2017-2018/127DGBA.GBD.No.1972/15.02.005/2017-18 dated 01.02.2018)

AGRICULTURE & RURAL DEVELOPMENT

AGRICULTURE

Sabnavis, Madan – "What can the Budget do for agriculture?" – The issues are specific and relate to pre-and post-harvest expectations and concerns, calling for holistic solutions. An article.– (HBL Jan 26, 2018 p 8)

RURAL ECONOMY"Rural roll call: distress signals: can the government boost the rural economy without increasing

unproductive subsidies and controlling the deficit target" – India's rural economy has a huge footprint,supporting 70 per cent of the country's population and accounting for almost half of India's GDP and privateconsumption. An article. – (HBL Feb 1, 2018 p 8)

RURAL INDIA"Rural India to get more access to banking, insurance products" – The Ministry of Electronics and IT

has allowed its 2.70 lakh common service centres to partner with HDFC Bank and LIC for selling bankingand insurance products across the country. LIC has offered full support to Common Service Centres (CSCs)to make their endeavour to transform rural India a grand success. – (FE Jan 28, 2018 p 3)

INDUSTRY

INFRASTRUCTURE SECTOR"Core sector growth slows to 5-mth low" – Growth of the eight core sectors slowed to a five-month low of

4% in December 2017 due to negative performance of segments like coal and crude oil, official data showed.The output growth recorded in December is the lowest since July 2017, when these core sectors had witnessed2.9% expansion. A report. – (FE Feb 1, 2018 p 2)

MANUFACTURINGGopalan, R and Singhi, M C – "How can the government revive manufacturing?" – Manufacturing

growth will remain subdued until 2018-19 and achieving 7.5%- plus GDP growth after that will require aseries of measures for manufacturing. An article. – (Mint Jan 26, 2018 p 15)

– 13 –

SMALL SCALE INDUSTRY

ENTREPRENEURSHIP"Entrepreneurs and their journey: It can be a long road to success" – Entrepreneurs have different

personality traits to corporate managers, scoring far higher on qualities such as curiosity, innovation, self-discipline and motivation. A report. – (Mint Jan 30, 2018 p 13)

MSMEsJayakumar, Tulsi – "Budgetary expectations for MSMEs" – Credit disbursal under the Mudra scheme

hardly addresses the crux of the MSMEs' financing problem. Much of the current debate has been takingplace in the absence of accurate data and analysis. An article. – (Mint Jan 30, 2018 p 18)

SMEs"SMEs switching to LLPs as promoters get dragged to court" – A large number of small and medium

businesses are now choosing to register as Limited Liability Partnerships to ring fence the liabilities of promotersand partners with more promoters being dragged to courts by lenders over unpaid loans. According to datafrom the Min. of Corporate Affairs registration of new LLPs have increased in India since 2014-15. The datasuggests that the number of new LLPs registered in the country has doubled from 14,682 in 2014-15 to29,403 in 2016-17. A report. – (IE Jan 29, 2018 p 13)

INTERNATIONAL ECONOMICS"IMF chief warns against steps to restrict international trade: Lagarde says 'opening barriers' is

always a welcome step" – IMF chief Christine Lagarde cautioned against any measure that may stifleinternational trade, saying any such step would undermine the recovery in global economic growth. She saidthere is a need to fire on all cylinders for sustained growth and trade is a very important part of that and anymeasure that seeks to restrict trade will hurt growth in a big way. A report. – (BS Jan 26, 2018 p 6)

CHINA"China will surprise world with reform: Xi adviser" – China will introduce more reform measures to open

up its economy this year, according to Liu He, the top financial and economic adviser to President Xi Jinping.Some measures will exceed the expectations of the international community, Liu said. A report.– (BS Jan 26, 2018 p 6)

EURO-ZONE"Euro zone growth at 10-yer high in 2017" – The euro-zone economy expanded at its fastest rate in a

decade in 2017, preliminary data showed, and sentiment remained high at the start of 2018 despite a slight dipfrom a 17 year peak, signalling a strong start to the year. A report. – (H Jan 31, 2018 p 13)

MANAGEMENT

BUSINESS SCHOOLS

– MANAGEMENT EDUCATION

"ISB top among Indian B-schools on FT Global MBA Rankings" – Indian School of Business hasretained its position as the top ranked Indian Business School for its one-year executive postgraduateprogramme in the Financial Times Global, MBA, 2018 rankings. While the institute fell one place to rank at28th position, against 27th in the rankings last year. ISB saw itself among top five globally in terms ofpercentage salary increase and placement three months after graduation. The FT Global MBA Rankings,which ranks 100 top global one-year and two-year postgraduate programmes for candidates with prior workexperience, surveyed around 155 B-Schools for the same. A report. – (BS Jan 30, 2018 p 17)

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