QBiz: Drop in Bad Loans; RBI Eases Norms for Basic Accounts

1. Bad Loans Fall, NPAs down 9.3% in FY19, Deeper Than RBI Estimate

The system-wide non-performing assets stock has declined massively to 9.3 percent in March 2019, much faster than the Reserve Bank’s estimate and steeply down from 11.5 percent the year before, says a report. The Crisil report comes at a time when most banks are at the cusp of an end of the NPA pains after a prolonged period, and are concentrating on the resolution now.

“System-wide NPAs have declined in fiscal 2019 to 9.3 percent as of March 2019 after tripling to 11.5 percent in the four fiscals till March 2018,” it said in a note Monday. In its half-yearly financial stability report in December, the Reserve Bank had estimated that the gross non-performing assets ratio might improve to 10.3 percent by March 2019 from 10.8 percent in September 2018.

(Source: Financial Express)

2. DHFL Pays Some Investor Dues, Completes Stake Sale in Aadhar Housing

Indian mortgage lender Dewan Housing Finance Corp Ltd (DHFL) said it has paid the interest and principal on certain debt instruments that was due on Monday and completed the stake sale in Aadhar Housing Finance Ltd to an entity backed by Blackstone Group LP.

DHFL paid 100.2 million rupees ($1.44 million) in interest on four non-convertible debentures (NCD) and principal of 350 million rupees on one of them, it said on Monday.

The payment comes after two major credit rating agencies – ICRA, an affiliate of Moody’s, and Standard & Poor’s local unit Crisil – last week categorised the company’s commercial paper at default levels for missing bond payments.

(Source: Financial Express)

3. RBI Relaxes Norms for No-Frills Accounts

Banks will now provide cheque books and other facilities to basic account holders, with the Reserve Bank of India relaxing the norms on Monday. However, the banks cannot ask the account holders to maintain any minimum balance in lieu of such facilities.

Earlier, additional facilities made these accounts like regular savings account, thus attracting requirement of maintaining minimum balance and other charges.

(Source: BusinessLine)

4. IL&FS Scam: Government Mounts Fresh Bid to Get Deloitte, BSR Banned

The corporate affairs ministry Monday filed fresh applications at NCLT to debar Deloitte Haskins & Sells and BSR Associates, an arm of KPMG, who are the auditors of IL&FS Financial Services from auditing for five years and also to appoint a new auditor for the crippled company.

IL&FS Financial Services is of the 348 subsidiaries of the crippled IL&FS group, which owes more than Rs 95,000 crore to the lenders. The group got into trouble after many of its subsidiaries began to default since last September and on 1 October that year, the government had suspended its board and taken over the company.

(Source: The Economic Times)

5. Essel Group Races to Meet Dues Deadline

Debt-ridden Essel group is looking to sell a minority stake in broadcaster Zee Entertainment Enterprises Ltd (ZEEL) to a financial investor by the end of July to meet immediate payment obligations, said two people directly aware of the matter.

This will be in addition to its ongoing efforts to find a strategic buyer, as well as sell some of the group’s infrastructure assets, the people said on condition of anonymity.

(Source: Livemint)

Also Read: IL&FS: SC allows reopening of last 5 years' accounts

6. State Government Takes Measures to Clean up J&K Bank

With instances of loans being granted and recruitment made allegedly on the recommendations of influential politicians coming to light, Jammu and Kashmir Bank’s promoter — the State-government — swung into action on Monday to limit the damage.

It announced a host of measures, including splitting of the post of Chairman and Managing Director, and bringing the bank under the purview of the Right to Information (RTI) Act and the Central Vigilance Commission (CVC).

(Source: BusinessLine)

Also Read: RBI's revised NPA circular credit positive: Moody's

7. Bharti Airtel to Pay Tanzania $26 Million, Cancel Debt at Unit to Settle Dispute

India's Bharti Airtel has agreed to pay 60 billion shillings ($26 million) over five years and cancel debt to resolve a dispute over ownership of its Airtel Tanzania unit, the Tanzanian government said on Monday.

Tanzania's minister for foreign affairs and east Africa cooperation, Palamagamba Kabudi, announced the deal at a ceremony to receive a three-month batch of monthly payments worth 1 billion shillings each due from April this year.

(Source: Livemint)

8. Mutual Fund Assets Rise to Rs 25.43 Lakh Crore in May

Fixed Maturity Plans witnessed outflow for the second straight month in May as investors pulled out Rs 1,797 crore from the schemes, amid many non-banking finance companies grappling with debt woes.

However, latest data from industry body Amfi Monday showed that average Assets Under Management (AUM) of mutual funds rose to Rs 25.43 lakh crore in May from Rs 25.27 lakh crore in the previous month on the back of increased inflows into equity-linked schemes.

(Source: The Economic Times)

9. Auto Sector on Thin Ice as Slowdown Persists

Plant shutdowns have become rather routine for automakers, with sales plummeting by the day and no signs of a reprieve in sight.

The first two months of this fiscal have seen sales in free-fall mode. Market leader Maruti Suzuki is reportedly contemplating cutting back on production in the coming weeks. Mahindra & Mahindra has already made its intent known in a communique saying it will go in for a closure of up to 13 days this quarter.

(Source: BusinessLine)

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