1. Iran Sanctions: India Close to Winning US Sanction Waiver
India is close to a deal with the US that will allow it to continue buying crude oil from Iran without attracting any sanction after it agreed to cut imports and escrow payments, sources in know of the development said.
US sanctions on Iran’s oil buyers snap back on Monday, forcing importing countries to negotiate with the US for waivers by making cuts in purchases or risk getting blocked from the US financial system.
India, which is the second biggest purchaser of Iranian oil after China, is willing to restrict its monthly purchase to 1.25 million tonnes or 15 million tonnes in a year (300,000 barrels per day), down from 22.6 million tonnes (452,000 barrels per day) bought in 2017-18 financial year, sources said.
2. US Withdraws GSP Benefits of $70 Million as India Defers Retaliation
The US government withdrew GSP (Generalized System of Preferences) benefits to India worth $70 million on as many as 50 items effective from Thursday, 1 November, on a day the Indian government further deferred by 45 days tit-for-tat retaliatory tariffs against 29 American products to counter the US move to unilaterally raise import duties on Indian steel and aluminium products.
Indian officials said the withdrawal of benefits is part of the 94 products on which the US has revoked GSP benefits for all countries and is not a major portion of India’s $5.6 billion exports through duty-free entry of 1,937 products to the US under GSP.
“This will not affect the ongoing negotiations between the two countries for a trade package,” a commerce ministry official said under condition of anonymity.
3. Credit a Trickle, MSMEs Set to Get Stimulus Booster Today
Amid tepid credit growth for the Micro Small & Medium Enterprises (MSMEs), and this being one of the key points in the standoff between the Government and the Reserve Bank of India, Prime Minister Narendra Modi is expected to announce a slew of measures on Friday to boost credit availability for MSMEs and an “outreach” programme for units in the sector.
Sources said the government is working on steps to improve liquidity in the financial markets to provide relief to the Non Banking Financial Companies (NBFCs), which have a high exposure to the MSME sector along with measures to boost their access to the market as well as some hand-holding and facilitation support.
After banks, NBFCs are major lenders to the MSMEs.
(Source: The Indian Express)
4. GN Bajpai Resigns from New Board of IL&FS
GN Bajpai, one of the seven directors of the government-nominated board set up to rescue debt-laden Infrastructure Leasing and Financial Services Ltd (IL&FS), has stepped down, citing personal reasons. Bajpai’s decision to step down comes a day after the newly constituted board of IL&FS submitted its tentative revival plan to the National Company Law Tribunal (NCLT).
The six-member IL&FS board is chaired by Uday Kotak, managing director and CEO of Kotak Mahindra Bank Ltd. The board includes ICICI Bank Ltd chairman G C Chaturvedi, former bureaucrats Malini Shankar, Vineet Nayyar, Nand Kishore and C S Rajan.
“I have said that I’m stepping down from the board of IL&FS because of personal reasons. The fact is that I cannot devote enough time (to IL&FS),” Bajpai said in an interview.
5. Tata Steel Charges Bhushan Power Lenders with Violation of NCLAT Order
Tata Steel Ltd on Thursday, 1 November, alleged that lenders to debt-laden Bhushan Power and Steel Ltd (BPSL) have violated orders of the National Company Law Appellate Tribunal (NCLAT) by allowing rival JSW Steel Ltd to change the basic parameters of its bid three times after 13 August, 2018.
NCLAT had, in an interim order on 6 August, allowed all three contenders – Tata Steel, Liberty House and JSW – to file additional unconditional “resolution plans” by 13 August, improving their financial offer without compromising the basic parameters of the “resolution plans” already submitted by them.
However, the committee of creditors (CoC) allowed JSW to change the basic parameters of its resolution plans.
6. Banks’ Consumer Durable Loan Portfolio Falls 82% in Sept
Having lent large sums as consumer durables loans, over the past couple of years banks seem to be shying away from them possibly fearing delinquencies. Outstanding loans to the segment dropped a sharp 82% year-on-year (y-o-y) to Rs 3,225 crore on 28 September.
Banks may be letting non-banking financial companies (NBFCs) play in this space given how exposure to NBFCs jumped 41.5 percent in September.
Lenders say there is heightened risk aversion due to defaults on these advances which are given for the purchase of products such as smart devices and home appliances. A year ago, the outstanding credit to this space was Rs 17,846 crore, data released by the Reserve Bank of India (RBI) showed.
(Source: Financial Express)
7. Govt Delays Imposition of Retaliatory Tariffs on US Goods Till 17 Dec
India has delayed the implementation of higher tariffs on some goods imported from the United States to 17 December, according to a government order that put off for a third time retaliatory action against US import tariffs on steel and aluminium.
In September, India said it would raise tariffs on US goods on 2 November.
Trade differences between New Delhi and Washington increased since US President Donald Trump took office, but India’s decision to further delay the imposition of tariffs comes as the two countries negotiate a package to remove trade friction over a range of items.
8. ICICI Bank follows PNB, Raises Lending Rates by 5 BPS
ICICI Bank, the country’s second largest private-sector lender by assets, has raised its marginal cost of funds-based lending rates (MCLRs) by 5 basis points (bps) across tenures. Its one-year MCLR now stands at 8.70 percent while for other tenures they range between 8.45 percent and 8.60 percent. The revised rates came into effect on Wednesday, 31 October.
The bank follows Punjab National Bank (PNB) and Allahabad Bank in hiking lending rates. Earlier this week, PNB had raised its one-year MCLR by 5 bps for the month of November. The one-year MCLR at PNB now stands at 8.50 percent. Allahabad Bank also raised the corresponding rate by 5 bps to 8.55 percent.
(Source: Financial Express)
9. Anti-Tax Evasion Steps Push GST Collections to Rs 1 Trillion in Oct
Collections from the goods and services tax (GST) crossed Rs 1 trillion in October and are expected to rise further in the coming months, buoyed by an increase in consumption demand in the festive season and implementation of new anti-tax evasion measures.
The pickup in the pace of GST collections will provide a respite to a government struggling to meet its fiscal deficit target of 3.3 percent of gross domestic product. However, the challenge for the government will be to maintain the momentum in the second half of the fiscal if it wants to make up for the lagging first half collections.
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