Volume XXXII Number 26 March 27, 2017

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 14

D. INDUSTRY 15

E. SMALL SCALE INDUSTRY 16

F. INTERNATIONAL ECONOMICS 17

G. LABOUR & PERSONNEL MANAGEMENT 17

H. MANAGEMENT 17

I. MISCELLANEOUS 17

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BANKERS' BRIEF Vol. XXXII No. 26March 27, 2017

ECONOMY"Govt decides to extend CEA's tenure by 2 years" – The government has decided to give two more years,

till October 2019, to Chief Economic Advisor Arvind Subramanian. He was appointed the CEA in October2014 for a three-year tenure. He was closely involved in drafting the Goods and Services Tax (GST) Act.– (FE Mar 17, 2017 p 1)

"Moving towards a larger formal economy" – One-time initiatives like currency swap might signal intent,but increasing the size of India's formal economy will require a sustained effort. An article. – (Mint Mar 20,2017 p 14)

"To fund growth, India needs strong banking system: Milne" – Edited excerpts from an interview withStuart Milne, Chief Executive, HSBC India. India needs a strong banking system to fund its growth. Creatinga bad bank is one possible solution for resolution of non-performing assets (NPAs). Milne said the UttarPradesh election results were an endorsement of the government's approach by the electorate. He said hehopes that with the strong mandate, the government will be able to tackle some of the more difficult problemsthat India faces. Milne expects the government to achieve its disinvestment target of Rs.72,500 crore thisyear. He also said the government needs to take some bold steps to resolve issues and get the Goods andServices Tax (GST) implemented. – (Mint Mar 22, 2017 p 13)

Merwin, Radhika – "Look beyond bank credit numbers" – For a while now, industry and market playershave been fretting over bank credit growth slipping to multi-year low levels of 5 per cent. Given that bankcredit has always been a powerful indicator of the economic activity within the country, such abysmal paceof lending activity has, no doubt, raised concerns. But in recent years, the link between credit growth and thepace of economic growth has been gradually weakening. Credit growth, which grew at 2.5 to 3 times the realGDP growth in the past, is down to 1.2 to 1.4 times over the past two years. An article. – (HBL Mar 20, 2017p 11)

MAHARASHTRA"Maha economy likely to grow by 9.4% in 2016-17" – Maharashtra's economy is expected to grow by 9.4

per cent in 2016-17 over the previous year, according to the Economic Survey for 2016-17 presented in theState Legislature. A report. – (FE Mar 18, 2017 p 2)

BLACK MONEYSabnavis, Madan – "The parallel economy: An attempt to explain what constitutes black money and

if demonetisation helped to check it" – Understanding the Black Economy and Black Money in India:An enquiry into Causes, Consequences and Remedies by Arun Kumar. A book review. – (FE Mar 19, 2017 p 5)

CURRENCY MARKET"Patel fights rupee surge with one hand tied by inflation" – The Reserve Bank of India's muted response

to this week surge in the rupee suggests policymakers have grown more tolerant of currency gains. While thecentral bank was said to have purchased dollars in each of the past three days, the intervention has been farless aggressive given the currency's move, according to FirstRand Ltd. and RBL Bank Ltd. The reason:dollar-buying will boost rupee liquidity at a time when India's banking system is already flooded with cash,thus threatening to stoke inflation and jeopardise RBI Governor Urjit Patel's monetary policy. A report.– (BS Mar 18, 2017 p 3)

ECONOMIC REFORMSMulraj, J – "Expect economic reform to be fast-tracked" – When foreign investors come in, there is

always wider fluctuation in prices. Australia has a model to smoothen fluctuations, which can be looked at.An article. – (HBL Mar 18, 2017 p 12)

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EXPORTS"Sustaining exports" – While the recent recovery is heartening, India needs to diversify its export markets by

focusing on other countries, especially in Asia. An editorial. – (HBL Mar 18, 2017 p 8)

FOREIGN EXCHANGE MARKETRao, V Mohan – "Foreign exchange market and exchange rate" – An article. – (SE 55(21) Mar 1, 2017

pp 7-8)

GST"Cabinet approves draft GST Bills" – Likely to be introduced this week in Parliament as money Bills, on

target for July 1 rollout. It is expected that implementation of the GST will lead to an increase in the grossdomestic product by one to two per cent, leading to more employment and productivity. A report. – (BS Mar21, 2017 p 4)

"GST Council caps cess on luxury goods at 15%: All five Bills cleared paving way for new indirecttax regime roll-out from July 1" – The all-powerful GST Council, at its meeting in New Delhi, cleared allpending Bills so that these could be presented before Parliament in the current session, and respective stateAssemblies, to enable the roll-out of the indirect tax regime from July 1. A report. – (BS Mar 17, 2017pp 1, 16)

REFORMS"Lok Sabha clears finance bill, mini-reforms package: Government to reduce number of tribunals in

bid to ensure faster disposal of cases" – What are the bill's aims?: (1) Anti-black money: * LinkingPermanent Account Number with Aadhaar; * Legal cash transaction limit set at Rs.2 lakh; * Streamliningpolitical funding. (2) Ease of doing business: * Faster disposal of cases with merger of tribunals and payparity for judges; * Ambiguity over taxation of foreign portfolio investors removed. (3) Less-cash economy:* Payments regulator to be set up within the central bank; * Tax breaks to point-of-sale manufacturers andfor small businesses using digital modes of payment collection. A report. – (Mint Mar 23, 2017 p 1)

UNIVERSAL BASIC INCOME SCHEMENandi, Aurodeep – "Universal basic income: Going the MGNREGA way" – The one irrefutable lesson

from MGNREGA, is that once introduced, there will be no going back. Politics around such a scheme wouldmake it a persistent feature on fiscal balance sheets regardless of whether the economics of it add up. Anarticle. – (FE Mar 20, 2017 p 7)

BANKING

ALLAHABAD BANK"Allahabad Bank raises Rs.300 crore" – Allahabad Bank said it has 'successfully' raised additional Tier 1

capital through private placement of 'perpetual bonds' aggregating Rs.300 crore. – (HBL Mar 21, 2017 p 10)

AXIS BANK"Axis Bank dismisses buzz on MD & CEO's resignation" – Axis Bank had said its MD & CEO Shikha

Sharma is not resigning. '..The news appearing in section of social media stating the impending resignation ofthe MD & CEO of the Bank, which please note is false, speculative and is being circulated with the mala fideintention of misleading the investors and the general public,' Axis Bank said in a clarification to the BSE.– (FE Mar 23, 2017 p 10)

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BANK OF BARODA"Bank of Baroda said to consider cutting insurance firm stake" – Bank of Baroda, India's third-largest

state-run bank by assets, is considering a sale of some of the minority stakes it holds in its insurance andasset-management ventures, according to people familiar with the matter. Any sale would help the bank freeup capital to bolster its balance sheet. – (Mint Mar 23, 2017 p 5)

CITY UNION BANK"Our conservative approach saved us from NPA tsunami" – Excerpts from an interview with N Kamakodi,

Managing Director & CEO, City Union Bank. – (FE Mar 23, 2017 p 10)

FEDERAL BANK"Federal Bank on digitisation drive to grow customers" – Federal Bank is looking to go slow on branch

expansion even as it targets customer acquisition by upping the ante on digital offerings. According to ShyamSrinivasan, MD and CEO, Federal Bank will look to deploy more customer-relationship managers at itsexisting branches. – (HBL Mar 21, 2017 p 10)

HDFC BANK"We want to stay ahead of the banking industry's curve" – Excerpts from an interview with Paresh

Sukthankar, Deputy Managing Director, HDFC Bank. – (FE Mar 22, 2017 p 10)

IDBI BANK"Work out turnaround plan for IDBI Bank, house panel tells finance ministry" – A Parliamentary Panel

has asked the Finance Ministry to work out a 'transformational plan' for IDBI Bank, which is facing mountingbad loans, in such a manner that it does not surpass the 'point of recoverability'. – (HBL Mar 21, 2017 p 10)

– BANK CAPITAL

"IDBI Bank to get Rs.1,900-cr capital infusion: Bank board approves preferential issue of capital ofup to Rs.2,500 crore" – IDBI Bank said its board has approved the proposal for preferential issue ofcapital to the government and other financial institutions aggregating up to Rs.2,500 crore. As at December-end 2016, the government and LIC held 73.98 per cent and 14.37 per cent stakes, respectively, in the publicsector bank. – (HBL Mar 22, 2017 p 10)

IDFC BANK

– SALE OF NPAs

"IDFC Bank puts Rs.4k-cr loans to Essar Power, others up for sale" – IDFC Bank has put up for saleloans worth Rs.4,000 crore to Essar Power, Unitech and Ruchi Soya to asset reconstruction companies(ARCs), according to sources aware of the development. Some of these loans were part of the bank's legacyaccounts and are being resolved on a priority basis, they added. – (FE Mar 21, 2017 p 10)

INDIAN BANK

– IDBI BANK

"Before CEOs swapped, IDBI Bank ran into huge losses, but Indian Bank's profit grew manifold" –In the light of the government swapping chiefs of IDBI Bank and Indian Bank, a look at the performance ofthose banks during the tenure of their managing director & CEOs shows that while IDBI Bank ended up asa loss-making entity during Kishore Kharat's tenure, Indian Bank profit grew manifold under Mahesh KumarJain, reports fe Bureau in Mumbai. For the purpose of comparison, FE has compared their performances inQ3 FY17 to the quarter in which they assumed charge. A report. – (FE Mar 23, 2017 p 10)

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"Indian Bank staff say swapping bosses may not help IDBI Bank" – Indian Bank employees said thegovernment could have chosen other ways to find a new chief for IDBI Bank rather than swapping theirbosses. Indian Bank's stock declined for the second day after the government announced the swapping ofKishor Piraji Kharat, Managing Director And Chief Executive Officer of IDBI Bank, with Mahesh KumarJain, Managing Director and Chief Executive Officer of Indian Bank. A report. – (BS Mar 22, 2017 Pt.II p 2)

"Novel bid to turn around fortunes - Indian Bank and IDBI set to swap their top 'Assets': Aftersuccessful stint at Indian Bank, M K Jain to exchange places with IDBI's Kishor Kharat" – Thegovernment is likely to tap Indian Bank chief executive M K Jain to try and turn around troubled IDBI Bankafter seeing his hand in the stunning transformation of the Chennai-based lender. Jain, who is credited withmaking Indian Bank profitable, would swap positions with IDBI Bank chief Kishor Kharat, who would moveto head Indian Bank. This is the first time in recent memory that such a move is being considered. A report.– (ET Mar 18, 2017 p 1)

INDIAN OVERSEAS BANK"IOB to get Rs.1,100-crore capital infusion" – Indian Overseas Bank will receive a capital infusion of

Rs.1,100 crore from the Centre. – (HBL Mar 23, 2017 p 6)

INDUSIND BANK"IndusInd Bank raises Rs.1,000 crore" – IndusInd Bank has raised Rs.1,000 crore by issuing bonds compliant

with Basel III standards. – (HBL Mar 21, 2017 p 10)

KOTAK MAHINDRA BANK"CCI rejects plea against Kotak Mahindra Bank" – The Competition Commission has dismissed allegations

of abuse of dominance against Kotak Mahindra Bank. The complaint was filed by four Tamil Nadu basedentities - Aditya Automobile Spares, Rajkrishna Aditya Auto Store, Aditya Auto Store and Aditya GlobalTrading - belonging to Aditya Group. It was alleged that the lender denied enhancement of various creditlimits and delayed handing over of documents/ title deeds mortgaged with it. – (FE Mar 18, 2017 p 11)

"Kotak Bank seeks nod to raise foreign investment limit" – Kotak Mahindra Bank said it will seekshareholders' approval to raise foreign investment limit to up to 49 per cent from existing 42 per cent atpresent. – (FE Mar 18, 2017 p 10)

"Maybe it's time we saw some hostile takeovers: Uday Kotak" – Exited excerpts from an interview withUday Kotak, founder and Chairman of Kotak Mahindra Bank. – (Mint Mar 23, 2017 p 16)

STATE BANK OF INDIA"After Axis Bank, SBI may trim credit limit for some snapdeal sellers" – After Axis Bank withdrew

sanctioned credit limits to a few Snapdeal sellers, it's the turn of the State Bank of India to raise alarm bellsover falling sales of several retailers associated with the troubled online platform. The public sector lenderhas sent notices to several sellers and sought immediate repayment of outstanding loans above their drawingpower. – (ET Mar 20, 2017 p 14)

"Expect FY18 to be better than this year with credit growth of 8-9%" – Excerpts from an interview withB Sriram, Managing Director, State Bank of India. – (FE Mar 21, 2017 p 10)

"Need to keep to the spirit of GST: SBI" – Edited excerpts from an interview with Arundhati Bhattacharya,Chairman, State Bank of India. She said after the merger, it would take at least 2-2.5 years for RoE to returnto double digits. – (Mint Mar 17, 2017 p 14)

"SBI closes doors to other insurance cos" – Bank says it needs to train staff on insurance products; Saleof own policies limited to some branches. A report. – (ET Mar 21, 2017 p 17)

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"SBI lost Rs.100 cr in MDR, Rs.120 cr in interchange fee after demonetisation" – State Bank of Indiahas lost Rs.220 crore so far in merchant discount rate (MDR) and interchange fee receivables as a result ofwaiving these charges in the wake of demonetisation, according to a senior banker. The bank lost Rs.100crore as a result of waivers on MDR charges and Rs.120 crore in interchange fees. – (FE Mar 22, 2017p 10)

"SBI to tap overseas bond market again, eyes $1.5 bn in dollar debt" – State Bank of India has said it islooking to tap the overseas bond market to raise up to $1.5 billion in FY17 and FY18. In a regulatory filing, thebank said that its central board will meet on March 24 to consider a proposal to issue 'Reg-S/Standalone Rule144A senior unsecured debt up to $1.5 billion in multiple tranches/currencies with tenor not exceeding 5.5years during the current year and FY18'. – (FE Mar 22, 2017 p 10)

– VARIABLE PAY STRUCTURE

"State Bank may introduce variable pay structure" – State Bank of India (SBI) might revive an old salarystructure proposal that the bank always wanted to implement but could not because of union pressure. Thestructure entails that the salaries of officers in scale four to seven be divided into fixed and variable components.Fixed will club basic, dearness allowance, house rent allowance and the rest would be performance-linkedvariable. The new structure, if adopted, would be applicable for the employees of associate banks, too, oncethey become part of SBI after April 1. Pay pangs: *Basic pay, dearness allowance and house rent allowanceto be clubbed under fixed component; * Rest of the compensation would be under variable; * Associate bankemployees would have to accept this structure after merger; * Associate bank employees also fear loss ofseniority; * Several branches might be closed. A report. – (BS Mar 18, 2017 p 3)

STATE BANK OF TRAVANCORE"SBT cuts deposit rates by 10-50 bps" – State Bank of Travancore has cut interest rates on some retail

deposits by 10-50 basis points, according to data on the lender's website. – (HBL Mar 21, 2017 p 10)

TAMILNAD MERCANTILE BANK"TMB rolls out new credit, debit cards" – Tamilnad Mercantile Bank has introduced its new credit and

debit cards in association with Mastercard International. – (HBL Mar 23, 2017 p 6)

UCO BANK"Liberty Videocon in corporate agency pact with UCO Bank" – Liberty Videocon General Insurance

Company has signed a corporate agency agreement with UCO Bank for bancassurance business.– (FE Mar 17, 2017 p 10)

UNITED BANK OF INDIA"UBI gets Rs.418-cr capital infusion" – United Bank of India has received a capital infusion of Rs.418

crore from the Centre under its turnaround-linked capital infusion plan. – (HBL Mar 18, 2017 p 10)

YES BANK"YES Bank's scholarship programme gets enthusiastic response" – YES Bank has come up with an

initiative, Yes Aspire to Innovate, a scholarship programme which recognises and rewards 30 exceptionalscholars for their entrepreneurial vision, leadership qualities and holistic academic performance. The ExpressGroup is the media partner for the programme. The programme offers a scholarship of Rs.2 lakh, a pre-placement interview opportunity and a year-long mentorship by the YES Bank senior leadership to each ofthe 30 scholars chosen from 15 select B-schools across the country. – (FE Mar 17, 2017 p 10)

"YES FINTECH selects 12 start-ups for cohort" – YES FINTECH, a start-up accelerator programme byYES BANK, has selected 12 start-ups for its 15-week-long cohort to leverage their innovations and solutionsto provide sustainable and market-ready products to the bank customers. – (HBL Mar 21, 2017 p 6)

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EUROPE"ECB ups the ante as banks take to the 'cloud' to cut costs: Some of Europe's banks are choosing

outside companies to host data" – The European Central Bank is keeping a close watch on lendersincreasing adoption of cloud computing technology, according to an official at the euro areas' top bankingsupervisor. Cost cutting and competitive pressures are increasingly pushing banks toward the cloud, whichlets users store and process information at third-party data centres. A report. – (HBL Mar 21, 2017 p 10)

USA

– FEDERAL RESERVE

"Fed chooses to walk rather than run" – Delivery of a 'dovish rise' sends unhurried signal but hawkishpotential remains. A report. – (FT Mar 17, 2017 p 22)

"Fed increases interest rates as inflation pressures loom" – The US central bank has raised short-terminterest rates for only the third time since the financial crisis, stepping up the pace of tightening as policymakersgrow increasingly confident that America enduring recovery will lift inflation. The Federal Reserve raised thetarget range for the federal funds rate to 0.75 per cent to 1 per cent, in a move that has come earlier thanmarkets were expecting as recently as last month. A report – (FT Mar 16, 2017 p 1)

– INVESTMENT BANKS

"US banks break cover on Brexit" – Top executives from two of the world's biggest investment banks havepublicly warned about the impact of Brexit, saying they have begun to firm up plans to uproot jobs fromLondon ahead of Britain's departure from the EU. A report. – (FT Mar 22, 2017 p 13)

"US investment banks strengthen lead over European peers: US banks now take in two-thirds shareof the investment banking revenue pie" – JP Morgan retained its place atop the global investmentbanking league table last year, with the top five places now firmly in the hands of US banks, reflecting theirdomination over struggling European peers. A report. – (HBL Mar 23, 2017 p 6)

BAD BANK

– NON-PERFORMING ASSETS

"NPA clean-up must not be seen as a bailout using taxpayers' money: Parekh" – Amidst a debate onthe need for a 'bad bank' to tackle mounting NPAs, eminent banker Deepak Parekh has said 'it is time to bitethe bullet' but cautioned against any such move being seen as a government bailout using the taxpayers'money. Besides, a clean-up by the government should not signal that errant borrowers can get away withdefaulting on their loans, according to the veteran industry leader. A report. – (HBL Mar 17, 2017 p 11)

"PMO to have last word on bad bank" – As the stressed loans crisis looms large, the Prime Minister'sOffice (PMO) has stepped in with greater vigour and will have the final say on key measures - includingwhether to set up a bad bank - to resolve the vexed issue. Talks with ministries representing some of thestressed sectors with huge exposure to banks are being stepped up to gauge the true nature of crisis.– (FE Mar 22, 2017 p 3)

BANK CAPITAL

– PUBLIC SECTOR BANKS

"FinMin okays capital infusion for 10 public sector banks" – Coming to the support of weak and non-performing public sector banks (PSBs), the Finance Ministry has chalked out a turnaround-linked Rs.8,586-crore capital infusion plan for 10 PSBs. The capital allocation would be linked to quarterly milestones onwhich all related parties - Banks Board, management, employees and unions must commit, the Departmentof Financial Services has said. The 10 banks identified are Allahabad Bank (Rs.418 crore); Andhra Bank(Rs.1,100 crore); Bank of India (Rs.1,500 crore); Bank of Maharashtra (Rs.300 crore); Central Bank of

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India (Rs.100 crore); Dena Bank (Rs.600 crore); IDBI Bank (Rs.1,900 crore); Indian Overseas Bank(Rs.1,100 crore); UCO Bank (Rs.1,150 crore) and United Bank of India (Rs.418 crore). A report. – (HBLMar 20, 2017 pp 1, 13)

"Govt lays down strict conditions for capital infusion in govt banks" – The conditions imposed by thegovernment include: active bad loan management, arranging capital from the market, a continuing plan forselling non-core assets, shutting money-losing branches and temporarily paring employee benefits, if necessary.A report. – (Mint Mar 20, 2017 p 1)

BANK CHARGES"Should banks charge for services?" – Recently, many banks have increased their charges on banking

services. Banks review these charges almost every year. Here is what the experts have to say about therationale and impact of these charges. Excerpts from discussion with Neeraj Vyas, deputy managing directorand chief operating officer, State Bank of India; Naveen Kukreja, chief executive officer and co-founder,Paisabazaar.com; Adhil Shetty, founder and chief executive officer, BankBazaar.com; Jose K Mathew, generalmanager, retail business, Federal Bank Ltd. – (Mint Mar 21, 2017 p 13)

Nathan, Narendra and Khatri, Yogita – "Is your bank robbing you?" – Banks have reintroduced thecharges suspended during the demonetisation phase and added new ones. Here's how you can avoid payingtoo much. An article. – (ET Wealth Mar 20, 2017 pp 2-5)

BANK CONSOLIDATION

– SBI / BMB

"Bharatiya Mahila Bank branches to run as SBI: RBI" – The Reserve Bank of India said that all branchesof Bharatiya Mahila Bank Ltd. will function as branches of State Bank of India from April 1, 2017 andcustomers, including depositors of Bharatiya Mahila Bank Ltd. will be treated as customers of SBI witheffect from April 1, 2017. – (FE Mar 23, 2017 p 10)

"Govt announces merger of BMB with SBI" – In further consolidation in the banking sector, the governmenton Monday announced the merger of the Bhartiya Mahila Bank (BMB) with the State Bank of India (SBI).'This would ensure greater banking services outreach to a larger number of women, at a faster pace. Theobjectives of affordable credit to women as well as propagation of women-centric products need to bequickly achieved through a wider network and lower cost of funds,' said the Finance Ministry in a statement.– (HBL Mar 21, 2017 p 10)

BANK DEPOSITS"12.7% rise in bank deposits, public currency holding down" – While aggregate deposits of banks crossed

the Rs.105 lakh crore mark to Rs.105.42 lakh crore as on March 3, 2017, currency with public fell Rs.4,67,000crore, according to the RBI weekly statistical supplement. A report. – (IE Mar 19, 2017 p 17)

"After note ban, how sticky are deposits made in banks?" – After demonetisation, when banks wereinundated with cash deposits, one frequent question was: how much of these extra deposits would be permanent?Would bank customers withdraw the money after the situation went back to normal, or would they decide notto keep so much cash in hand, and rather keep it in the bank? The answer would determine whether the surgein bank liquidity would continue and, therefore, mean lower interest rates on bank deposits for longer. Thechart shows the year-on-year (y-o-y) percentage rise in bank deposits up to 3 March 2017, the latest date forwhich Reserve Bank of India (RBI) data is available. – (Mint Mar 20, 2017 p 4)

BANK LENDING"Poor demand crimps banks' credit growth in Jan-March" – The last quarter of the current financial year

is proving to be very challenging for banks in the matter of credit growth. Relatively, demand for bank creditis lower this year in the traditionally busy quarter (fourth quarter) compared to the year-ago quarter. Bankerssay demonetisation has crimped demand in the economy, resulting in tepid credit appetite. This is despite

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banks cutting lending rates in the wake of huge deposit inflows during the demonetisation phase. Accordingto PTI, State Bank of India Chairman Arundhati Bhattacharya, who spoke at a CII event, observed thatbanks are facing twin challenges - growth capital and asset quality concerns. A report. – (HBL Mar 18, 2017p 10)

– PUBLIC SECTOR BANKS

"The shrinking share of public sector banks" – The chart shows the steady erosion in the share of lendingby public sector banks. It hasn't been a one-way street, though. Ten years ago, in 2006-07, the share ofnationalized banks in total credit was 47.56%. State Bank of India (SBI) and its associates had a 23% shareand private banks had 20%. By 2010-11, the share of nationalized banks in total credit had jumped to 52.99%;that of SBI and associates was 21.89% and private banks had 28.46%. But that bout of lending by thenationalized banks seems to have been mostly imprudent. The upshot has been mounting bad loans and theinability to lend further as their capital got eroded. That has led to a decline in the share of lending by publicsector banks, while the private sector has stepped in. A report. – (Mint Mar 20, 2017 p 4)

BANKING SECTOR REFORMSPushpa, B V – "Union Budget 2017: An analysis of banking and financial sector reforms" – An article.

– (SE 55(21) Mar 1, 2017 pp 11-12)

COOPERATIVE BANKS

– ABHYUDAYA COOPERATIVE BANK

"Premnath Salian as managing director of Abhyudaya Bank" – The fourth largest multistate cooperativebank with a total business mixd of more than Rs.16,000 crore has appointed 37 years bank veteran MrPremnath Salian as the new Managing Director effective 4th March 2017. – (FE Mar 22, 2017 p 4)

CORPORATE DEBT RESTRUCTURING"Corporate loan recast to miss March deadline: 200 accounts to become NPAs as bankers want

immunity from future prosecution" – A large number of corporate debt proposals would miss the March-end deadline and fall into the non-performing assets (NPAs) category, with banks refusing to clear the filesunless given immunity from prosecution, bankers and chief executive officers said. Over 200 accounts arein different stages of getting approval for loan restructuring and the 'go-slow' approach by banks would hitcorporates hard in making investment decisions for the next financial year (FY18), beginning April. A report.– (BS Mar 20, 2017 pp 1, 4)

CREDIT INFORMATION"Lenders seek data for credit appraisal: New customers or existing ones wanting better credit scores

can go through this process" – A good credit score can help you get a loan easily. But what if you don'thave a credit score? The bank may look at your mobile connection - whether it is post-paid or pre-paid. Orwhether you pay your utility bills regularly. Of if you are speaking to the same set of persons on a regularbasis. These are some additional metrics that lenders today are looking at, in the absence of a traditionalcredit score. A report. – (BS Mar 21, 2017 p 10)

CURRENCY CIRCULATION

– REMONETISATION

"Currency in circulation 30% short of pre-demonetization levels: RBI data" – Currency in circulation in Indiastood at Rs.12.45 trillion as on 10 March, showed data from the Reserve Bank of India. Although the pace ofremonetisation was quicker in the week to 10 March compared to the two previous weeks, currency incirculation is still at about 70% of pre-demonetisation levels. A report. – (Mint Mar 18, 2017 p 20)

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CURRENCY NOTES

– DEMONETISATION

"Note ban to cut banks' costs: A bank incurs about Rs.65 on a manual cash transaction, while on amobile it is Rs.2" – Demonetisation will start showing positive results on the banks' bottomlines in thecoming years as operating costs decline, according to Arun Tiwari, chairman and managing director of UnionBank of India. 'Demonetisation is a bold step,' Mr Tiwari, who will be retiring soon. Most of its impact on thebanking sector is going to be positive. A report. – (H Mar 22, 2017 p 14)

Krishnan, Aarati – "The note ban: Who won, who lost" – Recent GDP data and India Inc Decemberquarter results shed light on what really transpired during those months. An article. – (HBL Mar 17, 2017 p 8)

DEBIT CARDS"29 lakh debit cards subjected to malware attack" – A total of 29 lakh debit cards were subjected to

malware attack last year through ATMs that were connected with the switch of Hitachi, according to thegovernment. As reported by commercial banks, 2.9 million cards were used at ATMs that were connected toswitch of Hitachi, which was subjected to malware attack, according to the Minister of State for FinanceSantosh Kumar. However, he said the successful attempts of misuse of compromised cards as reported tothe RBI by banks was only 3,291. – (FE Mar 18, 2017 p 10)

"Value of debit card transmissions at PoS jumps 165% in 11 months" – The value of debit card transactionsat point-of-sale (PoS) machines rose by more than 165% between April 2016 and February 2017, datareleased by the RBI showed. A report. – (FE Mar 18, 2017 p 10)

DIGITAL CURRENCY

– BITCOIN

Lokeshwarri S K – "Due diligence: Why bitcoins are a bit risky" – While bitcoin usage could increase, itis not a substitute for normal currency. An article. – (H Mar 19, 2017 Sec.II p 9)

DIGITAL PAYMENTS"How India switched to digital payments methods" – After the government banned Rs.500 and Rs.1,000

notes in November '16, digital activity levels were low in the initial weeks as people were busy depositing orexchanging the banned notes. But it increased from December as remonetisation progressed. Growth wasgood in October 2016, mainly on account of festive season. But it continued further from November '16 toJanuary '17 as well. This was a positive fallout of demonetisation. However, the pace of growth moderatedsomewhat in February 2017. A graphical report. – (ET Mar 22, 2017 p 18)

DIGITAL PAYMENTS (BHIM) APP"BHIM app crosses 18 million downloads" – Indigenous digital payments app BHIM, launched by the

central government last December for fast and secure cashless transactions, has recorded 18 million downloadsso far, according to Amitabh Kant, CEO, Niti Aayog. #BHIMApp breaks all records! Crosses a record of 18million downloads since its launch on Dec 30 2016. #GoCashlessGoDigital. – (FE Mar 18, 2017 p 2)

EMPLOYEE BENEFITS"Bank unions to discuss benefit curtailment plan" – Bank unions will meet in Kolkata on March 24 to

formulate a strategy to counter the government's directions to banks seeking curtailment of employee benefitsto avail capital infusion. Recently, the government had sent letters to 10 banks, asking them to lay out a roadmap for revival. The letter also states that some staff benefits could be restructured on a temporary basis.The meeting has been convened by the All India Bank Employees Association. A report. – (BS Mar 22, 2017p 4)

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EXECUTIVE APPOINTMENTS

– PUBLIC SECTOR BANKS

"Appointment of directors in banks to be streamlined: Banks Board Bureau working on method toensure appointees have the skills to address the bad loans challenge" – The Banks Board Bureauhas embarked on an exercise to evolve a methodology for appointment of whole-time directors on the boardsof public sector banks and financial institutions. This move comes in the backdrop of these financialintermediaries facing serious challenges on the bad loans front, which in turn is undermining their profitability.The six-member Banks Board Bureau was set up by the government on April 1, 2016, to improve governancein public sector banks. A report. – (HBL Mar 23, 2017 p 6)

"Heads of some PSBs likely to be shuffled" – The government is considering a proposal to shuffle theheads of some public sector lenders, including IDBI Bank, to improve their performance and resolve theissue of bad loans. There is a proposal for swapping of MD level position in banks which is being looked into.The final decision would be taken after careful consideration. There are also talks of the CEO and managingdirector of IDBI Bank, Kishor Kharat, being moved to another bank. – (FE Mar 18, 2017 p 10)

"Panel shortlists 14 names for top jobs in PSU banks: In a first, bankers face psychometric tests" –With more than half a dozen posts of chief executives of public sector banks getting vacant next financialyear ending March 2018, a selection panel has shortlisted 14 candidates who will be appear for an interviewslated during the last week of March. Top posts in lenders such as the Union Bank of India, Syndicate Bank,Allahabad Bank, will fall vacant in 2017-18. Fourteen bankers from various public sector banks have beenshortlisted for the selection. Sources said the selection committee will identify candidates for four banks inthis round for vacancies that are arising until December. – (H Mar 23, 2017 p 13)

FINANCIAL TECHNOLOGY FIRMSShukla, Saloni and Bhakta, Pratik – "The world is enough: Fintechs, banks learn to live under same

sun" – With high mortality in fintech sector and banks realising they can't turn away from technology, thetwo have understood the need for co-operation. An article. – (ET Mar 22, 2017 p 18)

FOREIGN BANKS

– DEUTSCHE BANK

"Deutsche Bank: blues in a different key" – Germany's biggest bank changes course. An article. – (Eco422(9031) Mar 11, 2017 p 64)

FOREIGN BANKS IN INDIA

– DEBT RESTRUCTURING

"18 foreign lenders agree to $550 mn debt recast of JSPL: Lenders agree to moratorium of three tofive years on repayments" – Eighteen foreign banks, including Standard Chartered Plc., Barclays Plc. andDeutsche Bank AG, have agreed to restructure loans to the tune of $550 million given to Jindal Steel andPower Ltd (JSPL), according to two people aware of the development. A report. – (Mint Mar 21, 2017 p 5)

– VTB BANK (RUSSIA)

"Russian bank VTB says to shut only office in India" – Russian bank VTB has decided to close its onlyoffice in India to cut costs but will continue to work in India. – (FE Mar 22, 2017 p 10)

IFRS"Moody's plays down capital impact of IFRS 9" – Fewer than one in eight banks expect a change in the

way they account for bad loans to wipe more than 0.5 percentage points off their core capital ratios whenthey are introduced next year, according to new research. A report. – (FT Mar 17, 2017 p 17)

– 11 –

MOBILE PAYMENTS APP - CHILLR

– UPI

"Mobile payment platform Chillr to launch UPI: 1.50 crore customers likely to on-board the platformby end-FY18, says CEO" – India's first multi-bank mobile payment platform Chillr is all set to launch itsUnified Payments Interface (UPI) facility by March-end, which will enable customers of nearly 45 banks tomake payments on a single platform. Chillr is a multi-bank mobile banking app that enables users to send andreceive money to/from anyone in their phone book. It differs from online wallets as all fund transactions arebetween bank accounts. – (HBL Mar 21, 2017 p 10)

MONETARY POLICY"Next RBI move likely to be a rate hike" – With the damaging effects of demonetisation on the economy

waning and retail inflation slowly inching higher, the likelihood that the next move of the Reserve Bank ofIndia (RBI) would be a rate hike is getting stronger. Nomura Securities' proprietary heat maps show thateffects of demonetisation were transitory, with most segments showing modest to high improvement. TheNomura RBI Policy Signal Index (NRPSI), which measures the likelihood of monetary easing versus tighteningin the near term, edged higher in February, but remains in the neutral zone. The brokerage firm expects policyrates to remain on hold in 2017, but the rising NRPSI value suggests that the next move will likely be a hikerather than a cut triggered by higher inflation and narrowing interest rate differentials. – (Mint Mar 22, 2017p 4)

"RBI may keep rate on hold at next month's policy review" – The 25-basis-point hike in the US Federalfunds target rate by the US Federal Reserve and the higher domestic retail inflation reading may prompt theReserve Bank of India to keep its policy rate on hold in its first bi-monthly monetary policy review of the newfinancial year, scheduled for early next month. A report. – (HBL Mar 17, 2017 p 11)

"RBI policy unlikely to be impacted by Fed rate hike" – The US Fed rate hike is no surprise and may notimpact RBI's policy next month as it had already factored in the global development and will be guided bylocal factors, according to the experts. – (FE Mar 17, 2017 p 10)

Anand, Abhishek – "US Fed rate hike: Options and implications for India" – With the exchange ratestable and capital inflows robust, expect RBI to have a neutral stance on key rates. An article. – (FE Mar 23,2017 p 8)

Bhalla, Surjit S – "An inter-meeting RBI rate hike?" – With CPI inflation at near-historic lows, this mustmean, according to the RBI law of mean reversion, that the future will bring high inflation. Isn't it a 'historicalfact' that if US short-term rates go up, Indian rates must go up by at least the same amount? Else capital willflee the country, as Indians find it worthy to invest in 2 per cent yields in the US and not the 7.5 per cent yieldsin India. An article. – (FE Mar 18, 2017 p 8)

Priya, Prachi and Agarwal, Anuj – "Time's right to cut rates" – RBI's neutral stance in its latest monetarypolicy statement has been primarily driven by its long standing argument of 'stickiness of core inflation'. Anarticle. – (FE Mar 17, 2017 p 9)

Raghu, S A – "RBI's rate setting will be a tight-rope walk: It will have to balance between growth andmaintaining stability in value of the rupee" – Bonding with FPIs: The RBI's neutral stance could makedomestic bond yields more attractive for Foreign Portfolio Investors and bring back inflows. Pain points: *Rupee depreciation may worsen trade deficit; * Foreign investors may pull out funds; * Inflation can movehigher. An article. – (HBL Mar 20, 2017 p 11)

NON-PERFORMING ASSETS"As deadline nears, banks race to get books in order: Joint lender forum meetings have picked up

steam ahead of 31 March deadline even as bankers dither on taking a haircut to sell bad loans" –Banks are scrambling to get their books in order to meet a 31 March deadline set by former central bankgovernor Raghuram Rajan to clean up their balance sheets but the scale of the problem means a resolution is

– 12 –

unlikely in a matter of days. The number of meetings of joint lender forums (JLF) are increasing and banksare hawking around Rs.15,000 crore of bad loans to asset reconstruction companies (ARCs), said bankersaware of the development. But very few expect this deadline to be met. Indian banks are carrying about Rs.7trillion of bad loans on their books, as of 31 December 2016. A report. – (Mint Mar 20, 2017 p 6)

"Expand ambit of oversight panel to curb bad loans" – Concerned over rising bad loans, Banks BoardBureau (BBB) Chairman Vinod Rai has written to the Centre seeking a new approach to deal with issue. Ina letter to the Finance Ministry, Rai has said that the ambit of the oversight committee could be expanded toprovide guidance to banks on how to effectively utilise mechanisms such as debt restructuring. A report.– (HBL Mar 20, 2017 p 13)

"Fresh plan to let PSBs take bigger haircut on bad loans: Process expected to be initiated with top50 non-performing assets in the banking sector" – The government is looking to set up a mechanismfor faster resolution of stressed assets that will allow state-run lenders to take a bigger haircut on their badloans without fear of vigilance action. Government is working in consultation with the Reserve Bank of Indiato provide such comfort to bankers to fast-track the process on bad loans. A report. – (ET Mar 22, 2017 p 13)

"Govt plans to auction stressed assets to reduce banks' NPAs" – Centre keen on cash-rich PSUs buyinga portion of the mortgaged assets in their respective sectors. Focus on steel, power sectors: * The idea forpublic auction of stressed assets was also discussed in the parliamentary Consultative Committee meetingheld last week on the subject of NPAs; * Sources said the finance ministry is in favour of PSUs operating inthe steel and power sector bidding for assets put up for sale by the banks that may be useful for them. Areport. – (IE Mar 23, 2017 p 13)

Chadha, Gunit – "NPA problem: Bankers alone are not to blame" – One significant reason for NPAs hasbeen Indian banks' focus on security, rather than projected operating cash flows, in their credit assessments.An article. – (ET Mar 22, 2017 p 18)

Malkan, Deven – "Who will bell NPA cat?" – An editorial. – (CI 10(1) Mar 15, 2017 p 3)

Mohan, T T Ram – "H T Parekh Finance Column: Twin balance sheet problem: Causes, consequences,remedies" – An article. – (EPW 52(9) Mar 4, 2017 pp 12-13)

Sastry, V V L N – "Alarming NPAs: Need for immediate fixation" – An article. – (CI 10(1) Mar 15, 2017p 6)

– BANKS BOARD BUREAU

"Vinod Rai reaches out to PMO on bad loans, suggests action plan: Banks Board Bureau chief'sletter outlines actions to fast track the resolution process for stressed bank assets" – The letterswere sent earlier this month after a meeting on bad loans at the PMO that was also attended by Rai. Theboard is not in favour of a state-backed bad bank, given that the required skillset won't be available in thepublic sector. A report. – (ET Mar 17, 2017 p 13)

PAY EQUALITY

– PUBLIC SECTOR BANKS

"Bank officers want pay equality with central govt officers" – At a time when the government iscontemplating cutting employee benefits to 10 laggard public sector banks, bank officers have demanded thatthey should be given revised basic pay at par with central government officers on the same principles of 7thPay Commission. The negotiations have not started yet, as not all banks have given the mandate to IndianBanks Association (IBA) to negotiate on their behalf. A report. – (BS Mar 22, 2017 p 4)

– 13 –

PAYMENTS BANKS

– PAYTM

"Paytm hopeful of commencing payments bank by month-end" – Paytm Payments Bank, which got thefinal approval from the Reserve Bank in January, hopes to start operations by the month-end, according toPaytm founder and chief executive Vijay Shekhar Sharma. A report. – (FE Mar 18, 2017 p 10)

– VODAFONE M-PESA LTD

"Vodafone yet to seek final RBI nod for payments bank: Delay indicates firm may be hanging up onits venture" – Vodafone m-pesa Ltd., one of the 11 entities which received in-principle approval from theReserve Bank of India (RBI) in 2015 to start a payments bank, has not yet applied for a final licence. Thedeadline for obtaining final approval is end-March. A report. – (H Mar 21, 2017 p 13)

PLASTIC CURRENCY NOTES"RBI gets nod to print plastic Rs.10 notes: Govt" – The government said the RBI has been authorised to

conduct field trials of plastic notes of Rs 10 that have a longer life span. In a written reply in the Lok Sabha,Minister of State for Finance Arjun Ram Meghwal said 'it has been decided' to conduct a field trial withplastic banknotes at five locations of the country. – (FE Mar 18, 2017 p 10)

"RBI to conduct trials of plastic Rs.10 notes" – The Reserve Bank of India (RBI) will conduct five-citytrials of a new polymer-based Rs.10 banknote, the government said in Parliament, declaring a move to plasticmoney to fight counterfeiting and reduce wear and tear. Plastic notes were first adopted by Australia in 1988and are now used in more than 20 countries. These are smaller and stronger than cotton-based paper notes,with more security features that make them harder to counterfeit. In India, the Central government hadinformed Parliament before that a billion 10-rupee plastic notes would be introduced for field trials in fivecities - Kochi, Mysore, Jaipur, Shimla and Bhubaneswar. – (HT Mar 18, 2017 p 1)

PREPAID INSTRUMENTS ISSUERS"RBI seeks to raise entry barriers, tighten controls for mobile wallets, gift cards" – The Reserve

Bank of India (RBI) proposed to raise the entry barrier for prepaid instrument (PPI) issuers such as mobilewallet and gift card companies by seeking a higher positive net worth. According to draft guidelines thebanking regulator released on its website, non-bank PPI issuers will need to have a minimum positive networth of Rs.25 crore, as compared to the existing minimum of Rs.1 crore. – (Mint Mar 21, 2017 p 6)

PUBLIC SECTOR BANKS"Closed airlines caused Rs.6,769-cr loss to PSBs" – Public sector banks have suffered a loss of Rs.6,769

crore due to default by shuttered airlines, according to the government. Without giving specific details, Ministerof State for Finance Santosh Kumar Gangwar told the Lok Sabha that public sector banks make all efforts torecover the dues. Public sector banks have reported loss of Rs.6,769 crore as on December 31, 2016 onaccount of default by shut down or closed airlines. A report. – (FE Mar 18, 2017 p 10)

"Risk of downgrades looms large over smaller PSBs" – CREDIT PROFILE MAY WORSEN A smallerproportion of retail segment, dependence on the govt for capital infusion are key reasons for banks' weakcredit profile. A report. – (ET Mar 22, 2017 p 12)

SMALL FINANCE BANKS

– ESAF SMALL FINANCE BANK

"Kerala's first small finance bank opens" – ESAF Small Finance Bank, Kerala's first small finance bank, istargeting businesses worth Rs.20,000 crore by 2020. Kerala chief minister Pinarayi Vijayan inaugurated theSFB in Thrissur. – (FE Mar 18, 2017 p 10)

– 14 –

STATE BANK OF INDIA ASSOCIATES"Associates to become SBI branches" – Branches of all five associate banks, which is merging with parent

State Bank of India, will begin functioning as SBI branches from April 1. 'Customers, including depositors ofState Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patialaand State Bank of Travancore will be treated as customers of State Bank of India with effect from April 1,2017,' the RBI said in a notification. – (HBL Mar 21, 2017 p 10)

SUSTAINABLE STRUCTURING OF STRESSED ASSETS"GVR Infra lenders send recast plan to overseeing panel: Recast of Rs.2,122-cr loan is proposed via

S4A route" – Lenders to Chennai-based GVR Infra Projects have sent their proposal to recast the company'sdebt of Rs.2,122 crore through the sustainable structuring of stressed assets (S4A) route to the overseeingcommittee (OC), mandated by the Reserve Bank of India (RBI), according to a senior bankers. A report.– (FE Mar 18, 2017 p 10)

WILFUL DEFAULTERS"Govt acts against willful defaulters" – Action has been taken against 6,207 willful defaulters under the

Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, minister ofstate for finance Santosh Gangwar said, adding that suits were filed against 8,364 defaulters who tookRs.85,258 crore loans, while FIRs were lodged against 2,024 willful defaulters who took Rs.29,557 croreloans. – (Mint Mar 18, 2017 p 20)

"Large wilful defaulters face criminal action: PMO, FinMin, RBI also plan one-time settlement schemefor some sectors" – In a concerted push to nab large loan defaulters and resolve the issue of rising non-performing assets, the Prime Minister's Office, the finance ministry and the RBI are devising a strategy toenable public sector banks recover their loans. Besides a one-time settlement scheme for certain sectors,criminal action is being mulled against big wilful defaulters. Seeking a solution to NPAs: * Criminal actionagainst large wilful defaulters of PSBs; * One-time settlement for certain sectors; * Encouraging banks to gofor haircut; * More oversight committees; * Tweaking joint lenders forum. A report. – (BS Mar 18, 2017 p 1)

RBI CIRCULARS"Risk Management and Inter-bank Dealings: Operational flexibility for Indian subsidiaries of Non-

resident Companies" – (RBI Circular RBI/2016-2017/254 A.P. (DIR Series) Circular No. 41 dated21.03.2017)

"Special Clearing operations on March 30 and 31, 2017" – (RBI Circular RBI/2016-2017/255DPSS.CO.CHD.No./2656/03.01.03/2016-17 dated 23.03.2017)

AGRICULTURE & RURAL DEVELOPMENT

AGRICULTURAL GROWTHDe Roy, Shantanu – "Economic reforms and agricultural growth in India" – It was argued that economic

liberalisation would ensure a favourable shift in the terms of trade for agriculture in India, enabling producersto plough back surplus from cultivation to make long-term improvements on land, and raise agriculturalproductivity and growth rate. Contrary to expectations, there was no noticeable improvement in the terms oftrade for agriculture during the reform period. Moreover, decline in capital formation in agriculture, inadequateexpenditure on irrigation and extension services in rural areas, and a dearth of cheap institutional credit,resulted in a slowdown of agricultural growth and heightened livelihood insecurity for a substantial proportionof those dependent on agriculture. An article. – (EPW 52(9) Mar 4, 2017 pp 67-72)

FARM LOAN WAIVER SCHEME"Compensate banks for farm loan waivers" – Raising farm incomes is the long-term solution. An editorial.

– (ET Mar 18, 2017 p 8)

– 15 –

Bandyopadhyay, Tamal – "Loan waiver is no solution to farmers' woes" – An article. – (Mint Mar 20,2017 p 6)

– UTTAR PRADESH

"A farm loan waiver will erode 8% of UP's revenue: SBI" – If Uttar Pradesh chief minister Yogi Adityanathwaives loans given to small and marginal farmers, as proposed by the BJP during the recent assemblyelection, the decision could result in writing off Rs.27,420 crore and eroding up to 8% of the state's revenue,according to State Bank of India report. The total outstanding exposure to agriculture sector in the state wasRs.86,241.2 cr at the end of March 2016. A report. – (ET Mar 22, 2017 p 9)

"UP farm loan waiver: Banks may take Rs.27,420-crore hit" – If the new Uttar Pradesh governmentfulfils its farmer loan waiver promise, banks are likely to take a hit of Rs.27,420 crore and the scheme willlead to some stress on the State's fiscal arithmetic, warns a report. The BJP had, in its UP election manifesto,promised to waive farmers' loans if elected to power. The party and its allies won 325 seats in the 403-member House. An SBI Research report states that scheduled commercial banks together had outstandingfarm credit of Rs.86,241 crore in UP. – (HBL Mar 21, 2017 p 10)

NABARD"Cabinet's capital booster to Nabard: RBI stake in Nabard to be transferred to Centre" – The Union

Cabinet gave its nod to a slew of proposals including raising the authorised capital of Nabard from existingRs.5,000 crore to Rs.30,000 crore. The authorised capital can be increased beyond Rs.30,000 crore inconsultation with the RBI, as deemed necessary from time to time. Besides, Nabard can now lend to MediumEnterprises and handlooms firms. The Cabinet also gave its nod for transfer of RBI's 0.4 per cent equity inNabard amounting to Rs.20 crore to the government. This will remove the conflict in RBI's role as bankingregulator and shareholder in Nabard. – (HBL Mar 23, 2017 p 4)

Rodrigues, Ryan Maxim – "The farmer's banker" – NABARD plays a key role in developing infrastructurein rural India. An article. – (BI (1015) Feb 27, 217 pp 48-51)

RURAL ECONOMY"Repair rural economy to sustain growth: SBI chief" – Calling for focussing on farm sector growth to

sustain higher overall growth, the State Bank of India said revival in credit demand will stay low until thebalance sheets of the rural households are repaired. A report. – (FE Mar 18, 2017 p 11)

Basole, Amit – "What does the rural economy need?: Analysis of the promises for rural India" – Theagricultural sector has performed worse than the other sectors over the years. The shares of non-agriculturalemployment and output have increased, while70% of agricultural households cannot meet their low consumptionneeds even after diversification of sources of income. An analysis of budgetary provisions for the ruraleconomy suggests that the government has not done enough to address some of these well-documentedproblems, and does not have the required vision to substantially increase rural employment opportunities. Anarticle. – (EPW 52(9) Mar 4, 2017 pp 40-43)

INDUSTRY

HOUSING FINANCE"Bonanza for home loan seekers as govt offers interest subsidy for those earning Rs.6 lakh-Rs.18

lakh: Ministry issues guidelines of Credit Linked Subsidy for Middle Income Groups" – Homeloan applicants with annual incomes from Rs.6 lakh to Rs.18 lakh per annum will be eligible for interestsubsidy on housing loans. Large scale incentivisation of affordable housing will boost real estate sector,resulting in employment generation as well. A report. – (HBL Mar 23, 2017 p 4)

– 16 –

MUTUAL FUNDS"AUM of Indian MF industry hits Rs.17.9 lakh crore in Feb" – Assets Under Management (AUM) of

the Indian mutual fund (MF) industry continued to surge largely due to sharp inflows into income and equityschemes. According to the data from the Association of Mutual Funds in India (Amfi), AUM of Indianmutual fund industry stood at Rs.17.89 lakh crore as on February 2017, compared to Rs.12.62 lakh crore inthe corresponding period of the previous year, registering a growth of 41.67%. – (FE Mar 17, 2017 p 11)

NON-BANKING FINANCE COMPANIES

– NPAs

"NBFCs' NPAs to linger on for 1-2 quarters more: Moody's" – With demonetisation affecting andcollections across asset classes, non-banking financial companies (NBFCs) are likely to see a spurt indelinquency levels over the next few quarters, according to Moody's. A report. – (FE Mar 22, 2017 p 10)

SEBI"World Bank, IMF to assess Sebi's regulatory framework" – The Securities and Exchange Board of

India (Sebi) will go through a third-party assessment of its regulatory framework by the World Bank and theIMF this year, an exercise which will help the former align itself closer to global regulatory standards and getfeedback on its current functioning. A report. – (BS Mar 23, 2017 p 12)

STEEL INDUSTRY

– DEBT RESTRUCTURING

"Steel sector debt being recast to lower interest burden on borrowers: Minister: Industry on path ofrecovery as Rs.1 lakh crore of stressed loans will be restructured" – The steel sector's debt is beingrestructured to lower the interest burden on borrowers, according to Chaudhary Birender Singh, Steel Minister.He said that debt worth Rs.40,000 crore had been restructured as of January-end. He added that nearly Rs.1lakh crore of debt will be restructured by this month-end. A report. – (HBL Mar 18, 2017 p 10)

SMALL SCALE INDUSTRY

MSMEsAnzer R N – "Performance analysis of MSME sector in India" – MSMEs have been recognised as engine

of economic growth. In India, MSMEs are the second largest source of employment after agriculture. Thissector has performed exceedingly well and enabled our country to achieve a wide measure of industrialgrowth and diversification. By its less capital intensive and high labour absorption nature, SME sector hasmade significant contributions to employment generation and also to rural industrialization. Under the changingeconomic scenario, MSME has both the challenges and opportunities before them. The trends in performanceof the SSI/MSME sector in India in terms of registered units, employment generated, production, investmentand exports are increasing in the pre globalization period, but this increase is at a lower rate in the postglobalization periods. The business can compete on cost, quality and products at domestic and internationallevel only if ideal investment in technology production process, Research and Development and marketingare made. Infrastructure bottlenecks are not completely solved. The promotional activities for MSME inIndia need to concentrates on improved credit flows, human resource development, appropriate technologyand funds for modernization. So, this is the appropriate time to set up projects in the Micro, Small and MediumEnterprise Sector. An article. – (SE 55(21) Mar 1, 2017 pp 13-18)

MUDRA BANK"Mudra shifts focus to credit guarantee" – After getting a muted response from banks to its refinance

facility, the Micro Units Development Refinance Agency (Mudra), non-banking finance (NBFC) arm of theSmall Industries Development Bank of India, will focus on credit guarantee. A little over 40 banks are in theprocess of availing a credit guarantee from Mudra. Another eight recently bought insurance cover to theextent of about Rs.5,000 crore, according to Jiji Mammen, chief executive. A report. – (BS Mar 20, 2017 p 8)

– 17 –

INTERNATIONAL ECONOMICS

USAEl-Erian, Mohamed A – "America's confidence economy" – The economy awaits a solid timeline for

policy announcements to evolve into detailed design. An article. – (FE Mar 22, 2017 p 8)

FUND MANAGEMENT"Global fund management" – A weekly report. – (FT Mar 20, 2017 Supl. pp 1-16)

LABOUR & PERSONNEL MANAGEMENT

HUMAN RESOURCE MANAGEMENTPanchanadan, Ravi – "Hiring trends in the times of Twitter" – HR departments are now continually

challenged to adopt newer hiring practices that are aligned with overall business goals of their organisations.An article. – (H Mar 22, 2017 p 4)

MANAGEMENT

LEADERSHIP"Becoming the world leader" – In the 3rd National Leadership Conclave of All India Management Association,

representatives from government and the industries sector came together to talk about Asia's consolidatingposition towards becoming a world leader and India's significant role in achieving the same. A report.– (ET Mar 23, 2017 p 9)

MANAGEMENT EDUCATIONGogate, Kanchan – "B-focussed: A paradigm shift" – Transcending the halls of learning, Indian management

education is taking a leap focussing on sharpening business skills and imparting practical lessons. Fromtraditional graduates to engineers, all are keen on joining postgraduate management programmes that havean entrepreneurial edge. An article. – (ET Mar 17, 2017 p 17)

MISCELLANEOUS"5 Indians on WEF's 2017 young global leaders list" – The under-40 achievers: The five Indians among

the 100 young leaders on World Economic Forum's list: Vijay Shekhar Sharma, Paytm founder and chiefexecutive officer (CEO); Shruti Shibulal, Promoter and director of The Tamara Hospitality; Ambarish Mitra,founder and CEO of Blippar; Hindol Sengupta, Editor-at-large of Fortune India; and Ritwika Bhattacharya-Agarwal, Founder and CEO of Swaniti Initiative. A report. – (BS Mar 18, 2017 p 12)

"India ranks 131 in Human Development Index, Norway No.1" – India's human development index(HDI) ranking for 2015 puts Asia's third largest economy among a group of countries classed as 'medium' inthe list, as opposed to 'low' in the 1990s, thanks to factors such as an increase in life expectancy and meanyears of schooling in the past 25 years. But the bad news from the report released in Stockholm is thatregional disparities in education, health and living standards within India - or inequality in human development- shave off 27% from India HDI score. As it stands, India is ranked 131 out of 188 countries in a list that istopped by Norway. – (Mint Mar 22, 2017 p 19)

"Norway happiest nation, India among least happy" – India is among the world's least happy nations, andbecame even less happy last year, showed a global list of rankings that identified Norway as the world'shappiest country. India ranked 122 out of 155 countries in the 'World Happiness Report 2017', four notchesbelow its previous rank of 118. The report was released at a United Nations event celebrating the InternationalDay of Happiness. After ranking fourth for the past two years, Norway emerged at the top, displacing three-time topper Denmark for the first time. Denmark dropped to second place, followed by Iceland, Switzerland,Finland, the Netherlands, Canada, New Zealand and Australia and Sweden (which tied for ninth place),according to the latest World Happiness Report. The US came in at 14th, dropping one notch. Germany camein at 16th for the second time, while the UK moved up four spots to 19th place. – (Mint Mar 21, 2017 p 18)

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