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FS Daily Bytes: 8th June

India

  1.  HDFC Life & Max Life merger received a 2nd jolt after IRDAI (Insurance regulator) refused to approve the merger in the current form. As per regulations (Sec 35 of IRDA act) does not allow merger between a financial services company & an insurance company. HDFC though reiterated its commitment for the merger.
  2. Beleaguered IDBI plans to raise 5000 crores by divesting non-core assets
  3. IDBI also has set up a special NPA cell to deal with stressed assets/ bad loans.
  4. The finance ministry is examining potential merger of 2 state run financial institutions; IIFL (India Infrastructure Finance Company) and IFCI (Industrial Finance Corporation of India) to create an institution big enough to be able to finance large infrastructure projects
  5. Moody’s investor service said that 11 state run banks will need INR 95,000 crore in equity capital by March 2019 far above the 20,000 crores planned by Government. This must be understood in context of the progressive Basel III commitment due for full loading by March-19
  6. Trade body Assocham believes that the NPA is the biggest roadblock to economic recovery & growth for the country and urged RBI to be more flexible & pragmatic with norms
  7. HDFC bank plans to make UPI transaction chargeable with minimum charge of INR 3 from 1st July. Consider this against yesterday news where NPCI had asked banks to keep UPI free to enable better adoption of digital payments. In a later tweet, a banks spokesperson mentioned that the bank is reconsidering the same. SBI & other banks are also playing safe and not charging considering the NPCI viewpoint
  8. The farm loan waiver is sending shock waves across the country both in terms of political & economic fall out

No major highlights observed in the global space except the reiteration that buy out of the Banco Popular Spanish bank was necessitated by a probable bank run.

Source

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