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FS Daily Bytes: 12th June

India

  1. Government ruled out centralized registration of banks which means that banks will now need to register individually with each of the states. This is unlike the current situation where banks, NBFCs can discharge their service tax compliance through a single centralized registration
  2. The GST rate for financial transaction is fixed at 18% which is 3% more than current rate of 15% implying a higher tax that individuals must fork out for every 100 INR transaction
  3. While RBI kept rates unchanged in recent monetary policy, the recent IIP data showing industrial output growth slipping to 3.1% in April (6.5% last year) and decline in consumer prices (2.18% compared to 5.76% in last May) will built more pressure on RBI to be less hawkish and provide a rate cut in its next monetary policy
  4. Finance Minister conveyed that RBI is finalizing the list of top defaulters against which it can direct the concerned banks/ JLF to initiate insolvency code as per the new powers conveyed under Sec 35AA & AB (new ordinance)
  5. IRDAI takes over management of Sahara Life Insurance Company Ltd. That will be another drag on the beleaguered Sahara group with its head being in & out of jail for long time on a case registered by SEBI in SC
  6. IRDAI rejection of latest HDFC Life- Max Life proposal has dampened the stocks & is expected to impact valuation of the sector. HDFC Life was supposed to launch a grand IPO before it announced the merger.
  7. Farm loan waiver sets disrupts credit discipline; says Kotak report. Also, banks share took a hit on the recent waiver in Maharashtra
  8. FM also reviewed the NPA scenario with the PSUs. FM also confirmed that the Gov is working actively towards bank consolidation
  9. Reliance General plans IPO
  10. LendingKart finance raised fresh debt funding from Yes Bank. LendingKart finance primarily targets SMEs in Tier 3 areas for collateral free loans and has already reached to 200,000 SMEs.
  11. Govt & BBB (Bank Bureau) set to start the hunt for the next SBI Chairman. All the 4 MDs in race though Rajnish Kumar & B Sriram have weaker case as they are due for retire in 2018
  12. An unlikely impact of demonetization has been on the ATM makers like NCR corp. The demand for new ATMs has reduced with shipping at 17000 per annum compared to earlier figures of 25000.

 

International:

  1. Mobile payment market in US is expected to revolutionize with the launch of ‘Zelle’; a digital payment network backed by nearly all large banks (30 including JP Morgan Chase, BOA, Citi, Wells Fargo etc). It will primarily cater to the peer to peer mobile number driven transactions. They will though have to compete with startups like Venmo, though analysts feels that the market is wide enough to accommodate multiple players.
  2. Mongolia, whose domestic banks (16 banks) are saddled with high NPL, is considering establishment of an asset management company to offload the non-performance loans. The detailed report from FT highlights that the reported NPL of 8.6% is practically a highly underreported value and it can be higher than 20%. The Mongolian government could secure a loan from IMF and further support from ADB, World Bank etc to help come out of this situation.
  3. Spanish stock market regulator, CNMV, banned short sales on trading stocks of Liberbank for 1 month. This was done based on the stock performance recently (lost 40% in last 10 transactions) & especially in the aftermath of the Banco Popular fiasco which had to be bought over to prevent run on deposits
  4. Analyst Mike Mayo returns to active employment after being enrolled by Wells Fargo

 

Source:

Various news feeds sourced under Top-News section.

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