IMF has warned that global public debt is expected to exceed 100% of the GDP in 2020-21, and the average overall fiscal deficit is expected to soar to 14% of the GDP in 2020. Never before has public debt and deficits risen so high and so fast. Public debt is the total amount borrowed by the government of a country. In the Indian context, public debt includes the total liabilities of the Union government that have to be paid from the Consolidated Fund of India. The term is also used to refer to overall liabilities of central and state governments.
Top five private sector banks may see their slippages double to 5% this fiscal from 2.3% in FY19 and 2.7% in FY20, due to the poor loan offtake and the moratorium-driven contraction in net interest margins. Slippage Ratio can be defined as (Fresh accretion of NPAs during the year/Total standard assets at the beginning of the year)*100. As loan demand remains tepid, banks are parking their excess liquidity in low yielding instruments such as government bonds and top-rated corporate securities, even as deposit inflows have been robust. Growth in deposits for these top five private banks in FY20 was 18.8%.
E-commerce firms, manufacturers and marketing agencies of imported packaged items will face fines of up to Rs 1 lakh and one year jail, if they don’t display “country of origin” of the product. “If a manufacturer or marketing firm fails to comply with this, it will be fined with Rs 25,000 for first offence, Rs 50,000 for second and Rs 1 lakh for subsequent offence or one year jail or both where the items are sold through shops. This will be applicable for e-commerce firms, if they don’t display the details on their website,” said consumer affairs secretary Leena Nandan.
Property developers are using drone services to give customers live experience of construction sites. Since a prospective buyer is unable to visit actual site to survey the property, the marketing team is hiring drones to give live status of the property during webinar with customers along with the view from the floor they are planning to purchase. Developers are using drone shoots to create virtual tours, which can provide real time experience to customers. They are also updating the shoots on a monthly basis so that customers are well aware of the real time progress that the project is making.
Additional Tier-1 (AT-1) Bonds are unsecured, perpetual bonds that banks issue to raise their Tier-1 capital and meet the Basel-III norms. AT-1 bonds are listed and traded on exchanges thus offering exit route to the investors. These bonds do not have a fixed maturity date. Usually, these bonds pay a slightly higher rate of interest compared to similar non-perpetual bonds. Investors cannot return these bonds to the issuing bank and get the money. The RBI can direct the bank to cancel its outstanding AT-1 bonds if it feels the bank is in a financial mess and needs to be rescued.
The Council for the Indian School Certificate Examinations (CISCE) declared the results of ICSE Class 10, ISC Class 12 board examinations on July 10. The Class 10 and Class 12 board exam results 2020 are now available on the CISCE official websites www.cisce.org and www.results.cisce.org. The CISCE board exams 2020 had got postponed due to the outbreak of the coronavirus pandemic. The pending exams that were supposed to be conducted in July, had to be cancelled eventually in view of the COVID-19 situation in the country. A total of 2,07, 902 candidates appeared for the ICSE Class 10 exams 2020
Indonesia's resort island of Bali reopened after a 3-month lockdown, allowing local people and stranded foreign tourists to resume public activities. Foreign tourist arrivals will resume in September but tourists will face stringent rules in hotels, restaurants and on beaches. The government established guidelines for reopening tourist spots and may close certain areas again if infections spike. Tourism is the main source of income for the island. More than 5 million foreigners arrived in Bali each year prior to the pandemic. Occupancy rate at Bali's starred hotels plunged to 2.07% in May from 62.5% in December, before the outbreak hit.
A rally of over 7% in June 2020 has fuelled hopes of another blockbuster month in July but a spike in coronavirus infections across the globe and June quarter corporate earnings disclosures could hurt investor sentiments. Historically, the bulls have controlled the D-Street in July in six of the last ten years. The Nifty50 has rallied by about 30% from the March lows but the market looks overbought in the near-term and there is a stiff resistance near 10,900-11,000. Nifty has already risen more than 4% in July on hopes of a vaccine development, positive macro data and global liquidity.
The second tranche of the Bharat Bond ETF will open for subscription from July 14 till July 17. The second tranche will be offered in two variants: a 10-year ETF that will mature in April 2031 and a 5-year ETF that will mature in April 2025. The ETF will invest in constituents of Nifty Bharat Bond Indices consisting of AAA-rated public sector companies such as Power Finance Corporation, REC, Power Grid Corporation and National Housing Bank. The second tranche is expected to raise between Rs 3,000 to Rs 14,000 crores. Of the offer size, 25% is reserved for retail investors.
Lateral hiring is the process of sourcing suitable candidates to fill a niche, specialized or executive positions. These people are not found in the company’s internal talent pool. Lateral hiring is most commonly found in professions like law, science, IT, and medicine. The hired expert usually is from another company/ organization. The employee already has the required skills, so it is a matter of luring with incentives or better compensation package to get him on board. When considering lateral hiring, the HR must carefully investigate the job skills of the potential recruit because he/she has no resume to work from.
The Delhi High Court has asked Oyo Hotels and Homes to file an affidavit within two weeks on its unencumbered assets. A case was filed by Hospitality firm Anam Datsec which accused Oyo of non-payment of dues and sought more than Rs 8 crore in damages. Datsec claimed that Oyo had agreed to pay Rs 14 lakh a month as the minimum guaranteed amount in terms of management service agreement for its Golden Sands property in Goa in 2018. It said Oyo did not provide necessary and accurate revenue statements and carried out “substandard and hazardous construction” on the property.
Capital to Risk (Weighted) Assets Ratio (CRAR), also called Capital Adequacy Ratio, measures a bank’s capital adequacy compared to the riskiness of the assets or loans given. Higher CRAR indicates a bank is better capitalized to absorb losses and protect depositors’ interest. For e.g. investment in government securities carries zero risk weight but loans to real estate sector carry higher risk weight and hence requires higher capital base by banks to cushion against bad loans. Capital Adequacy Ratio is measured as (Tier I + Tier II) /Risk weighted assets. Banks are required to maintain a minimum CRAR of 9% anytime.
India’s second largest lender PNB declared its Rs 3688 crore exposure to bankrupt mortgage lender Dewan Housing Finance Limited (DHFL) as fraud. Under the present rules, 100% provisioning is required in fraudulent accounts spread across a period of four quarters. The lender has so far made a provision of Rs 1246.58 crore in the account. SBI and Union Bank of India have already red-flagged DHFL as fraud account. Private sector lender IndusInd Bank has also reportedly taken a similar action. DHFL, which is the first financial entity to undergo corporate insolvency process, owes over Rs 85,000 crore in accumulated debt.
Constant currency refers to a fixed exchange rate that eliminates the effect of currency fluctuations when calculating financial performance for publication in financial statements. Results based on ‘constant currency’ show how a company would have fared for the reporting period (quarter or year), had exchange rates between the rupee and the dollar/euro/yen not changed at all during the periods being compared. Constant currencies can be calculated in numerous ways. One approach is to convert the current year figures using the prior period’s average exchange rate. Another option is to adjust previous years’ numbers to reflect the current year’s exchange rate.
TCS India's biggest IT company, on Thursday reported 13.81% year-on-year fall in profit at Rs 7,008 crore for the first quarter ended June 30. Consolidated revenue of the company was marginally higher by 0.39% YoY to Rs 38,322 crore. Revenue in constant currency terms witnessed a drop of 6.3% YoY. The board recommended a dividend of Rs 5 per share. The interim dividend shall be paid on July 31 to the equity shareholders of the company whose names appear on the register of members of the company as on July 17 which is the record date fixed by the company.