OPINION, P6 MONEY & MARKETS, P10 EDITORIAL RBI must increase liquidity first, wait to raise repo rates INTERNATIONAL, P14 RUCHIR SHARMA NEW ROLE PRIVACY CONCERNS Exodus of millionaires from countries like India makes it clear policy corrections needed IDBI Bank's MK Jain appointed RBI deputy governor Facebook gave device makers deep access to data on users, friends MUMBAI, TUESDAY, JUNE 5, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOLUME XXXXXV NO. 376, 14 PAGES, `7.00 P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 35,011.89 ▼ 215.37 NIFTY: 10,628.50 ▼ 67.70 NIKKEI 225: 22,475.94 ▲ 304.59 HANG SENG: 30,997.98 ▲ 505.07 `/$: 67.11 ▼ 0.05 `/€: 78.74 ▼ 0.26 BRENT: $76.30 ▼ $0.49 GOLD: `30,716 ▼ `48 LOAN WRITE-OFFS Maruti in the 20-million club Going overseas? Don’t forget to buy travel insurance Travel insurance covers medical costs abroad, loss of passport, loss of baggage, missed flights, flight delays and natural calamities leading to cancellation of trip. For more than two trips a year, go for an annual policy ■ Personal Finance, P13 The rise of virtual assistants: A marketer’s arsenal? As the Alexas and Siris of the world become a part of millennials’ daily habits, marketers are bound to use them as a platform to reach out to their target group. Will we an onslaught of voice based ads in India? ONGC asked to prove 50% KG fields in deep water ONGC HAS been asked to prove that at least 50% of the fields in the KG block are in deep water in order to get a special pricing dispensation, reports Saurabh Kumar in New Delhi. It had written to the government to allow 'marketing freedom' for gas produced from its block in the KG Basin or be able to sell at the higher price for difficult fields. PAGE 2 ‘India flouting global laws by taxing international air tickets’ THE INTERNATIONAL Air Transport Association (IATA) on Monday castigated India for taxing international tickets, reports PTI. “India helped develop resolutions prohibiting tax on international tickets. Yet it persists in taxing it,” IATA's DG and CEO Alexandre de Juniac said, apparently referring to the GST and enhancement of its rates on international air tickets. PAGE 6 EXPRESS PHOTO: MAYUR BARGAJE 15,175 8,310 Madhya Pradesh’s failure to offer price support triggered farmers’ agitation PRABHUDATTA MISHRA New Delhi, June 4 ILLUSTRATION: SHYAM some of the loan amount. Most of these near-bankrupt companies have found buyers under the Insolvency and BankruptcyCode (IBC) but the sales would necessitate banks taking haircuts anywhere in the range between 30% and 70%. InthecaseofBhushanSteel the haircut has been just about 33% of the admitted claims of `56,000 crore and should UltraTech Cementwins Binani Cement, bankers would get backalmost90%oftheirdues. However in the case of Electrosteel Steels, bagged by Vedanta, the hit to banks is a much bigger 60%. Continued on Page 2 AVERAGE PRICES (`/quintal) Apr-May 2017 486.24 Lasalgaon (MH) IN KEY MANDIS close to major onion production centres, farmers are currently fetching `5.50-10.60perkgforthevegetable, compared with `3.906.60 per kg a year ago, market data reviewed by FE show. Assuming that the benchmark priceof`8perkgassuredbythe MadhyaPradeshgovernmentis remunerative for farmers in other states also, at least sections of onion farmers are not selling thevegetable at losses. However,farmersareagitat- Apr-May 2018 685.82 664.52 1,054.35 Alwar (Raj) 669.82 484.22 Pimpalgaon (MH) 549.07 393.92 Indore (MP) Source: NHRDF ing nowwith more vigour than during the last harvest season because of greater cohesion among organisations across political lines.Also,the Madhya Current policies +4.7 C o Pledges o +4 C +4.0oC +3.2oC +2.6oC +3.4oC +3oC +2.5oC Pradeshgovernment’sfailureto ensure the promised `8 per kg toonionfarmersinthestate,by payingthedifferentialbetween the (lower) market prices and the benchmark, angered the farmersinthestateandsetoffa chainreactionamongvegetable growersinotherstatestoo,market observers said. At the four major production centres in Maharashtra, MPandRajasthan,oniongrowershave,onanaverage,received 38-59% higher realisation in April-May this year compared with the same period last year. The average mandi price of onion at Lasalgaon in Maharashtra, for example, was `685.82 per quintal during April-May this year, compared with `486.24 a quintal a year earlier,an increase of 41%. 1.94 2.13 Omni 1.94 Swift Source: Suzuki Global Details on Page 6 Continued on Page 2 DIRECT BENEFIT TRANSFER WORLD ENVIRONMENT DAY THE WORLD WILL FRY BY 2100 India is on track to meet Paris commitments and help keep global temperatures from rising by more than 2°C by 2100, but world will heat up by 3.4°C as US actions will heat globe beyond 4°C and China by 3-4°C Savings up 58% to `32,984 cr in FY18 Russian Federation Canada `90,013 cr US China Cumulative DBTenabled savings in FY15-FY18 +2 C o +1.5oC +1.3oC `32,984 cr Savings via key DBT schemes (` crore) Savings in FY18 Brazil +0oC Cumulative FY18 ` Global mean temperature increase by 2100 ● TRADE WAR THREATS International QuickPicks growth may Finmin asks PNB to step up retail slow by 100 lending, non-core asset sale THE FINANCE ministry has asked fraud-hit Punjab bps: S&P National Bank to expedite the sale of non-core assets and step up retail lending to cut excessive reliance on corporate banking, as part of reforms to turn the corner at the earliest, reports Banikinkar Pattanayak in New Delhi. PNB gave two presentations to the finance ministry recently on its financial health status and unveiled concrete plans for a quick turnaround. PAGE 2 5,545 *Includes sale of loans Wagon R 4,332 Special Features Source: Bank presentations ICICI Bank* Canara Bank *Phased out in 2014 16,073 Continued on Page 2 Bank of Baroda Maruti 800* 15,708 AFTER A THREE-WEEK hospitalisation fora kidneytransplant and post-surgery care at theAll India Institute of Medical Sciences (AIIMS), Arun Jaitley was discharged from the hospital on Monday. Jaitley,65,was admitted to AIIMs on May 12 and underwent a surgery for the transplant on May 14. Following the operation, he was kept in an isolation ward to avoid infection. “Delighted to be back at Home. My gratitude to the doctors, nursing officers and the paramedics who looked after me for over the past three weeks. I wish to thank all well-wishers, colleagues and friends who were very concerned and continued to wish me for my recovery,”Jaitley tweeted. Punjab National Bank State Bank of India Onion prices up 40-60% y-o-y in key mandis 29,708 AT A TIME when capital is scarce,a clutch of 10 banks has writtenoffloansworth`1lakh crore in 2017-18. That’s 50% higherthan thewrite-offs that these banks took in the previous financial year, data compiled by FE show. State Bank of India (SBI), which refers to write-offs as advance under collection account (AUCA), wrote off `40,196 crore in 2017-18 as against `20,570 crore in 2016-17. While it is possible banks may recover some of this money, the write-offs are expected to be sizeable in the current year too. The hits will come following the insolvency proceedings initiated for a dozenlargecompaniestowhich lendershaveatotalexposureof `2.4 lakh crore. While banks have made provisions for these assets, in keeping with the Reserve Bank of India’s rules, they may need to written off 2.91 FIELD REPORT 42,275 FE BUREAU New Delhi, June 4 3.17 Alto FY18 4,948 4,348 7,407 9,205 SHAYAN GHOSH Mumbai, June 4 Units sold till date (in million) 9,112 FY17 (` crore) 40,196 That’s about half as much more than in previous fiscal; expected to be sizeable in the current year too 20,570 In FY18, 10 banks took `1 lakh cr hit Jaitley back home from hospital after surgery 12,506 ● RECOVERY MODE FE BUREAU New Delhi, June 4 GLOBAL ECONOMIC GROWTH could slow down by 1 percentage point — or more than a quarter of the expansion rates projected by various international bodies — if US President Donald Trump’s tariff threats against China and others escalate into a full-blown trade war, S&P Global’s chief economist cautioned on Monday. Speaking to CNBC’s “Squawk Box Europe”, Paul Gruenwald, chief economist at analytics firm S&P Global, said while it may not be a global recession but “one could imagine a scenario where rather than global growth in the threes we have global growth in the twos, where you get the US and Europe and China all pulling back at the same time”. Continued on Page 2 Critically insufficient (4°C+) 1.5°c paris agreement compatible (<1.5°C) Insufficient (<4°C) Source: Climate Action Tracker (April 2018) 2°c compatible (<4°C) Highly insufficient (<4°C) Role model (<<1.5°C) Pre-policy move PRASANTA SAHU New Delhi, June 4 FE BUREAU Bond yield zooms on RBI expectations The yield on the benchmark bond hit an intra-day high of 7.90% on Monday, the highest since May 21, before ending at 7.87%, even as Brent fell by almost $1 a barrel. Market players anticipate the RBI to hike its policy rate by 25 basis points either in the upcoming June 6 monetary policy or in the August policy. 8.130 10-year bond yield (%) 7.876 7.875 7.620 7.332 7.365 7.110 April 3, 2018 LPG-PAHAL Jun 4, 2018 TRANSFER OF ASSORTED subsidies and sops to the beneficiaries through the direct benefit transfer (DBT) route surged 2.5 times to `1.91 lakh crore in FY18 from the previous year, leading to savings to the government of `32,984 crore, up 58% yearon-year. Between FY14 (when the DBT scheme was launched) and FY18, close to `3.7 lakh crore had been transferred to the beneficiaries, mostly as cash paid to their bank accounts but also (increasingly) as in-kind benefits. The government’s total DBT savings since inception PDS MGNREGS of the programme till FY18end was `90,013 crore. The jump in DBT in FY18 could be largely attributed to increased use of Aadhaarenabled DBTplatforms for inkind food and fertiliser subsidy distribution. Out of the DBT-enabled gains of `32,984 crore in FY18, removal of fake beneficiaries helped in saving `15,708 crore (48%) in the public distribution system for food, `12,506 crore (38%) under LPG-Pahal scheme and `4,332 crore (13%) under the job guarantee programme (MGNREGS). The DBT-enabled savings were `20,885 crore in FY17. Continued on Page 2 ● DEBT RESOLUTION ● WITH RIDERS Sebi exempts IBC firms No finalisation of Binani Cement from delisting norms asset sale till further orders: SC FE BUREAU Mumbai, June 4 THE SECURITIES AND Exchange Board of India has exempted companies under theInsolvencyandBankruptcy Code from following the prescribednormsofdelisting,with certain riders. “Nothing in theseregulationsshallapplyto anydelistingofequitysharesof a listed entity made pursuant to a resolution plan approved under section 31 of the Insolvency and Bankruptcy Code, 2016,” a notification in the Gazette of India said. Sebisaidtheresolutionplan should lay down a specific proceduretocompletethedelisting or provide an exit option to the existingpublicshareholdersata price specified in the plan. Continued on Page 2 FE BUREAUS New Delhi/Kolkata, June 4 THE SUPREME COURT on Mondayrestrainedfinalisation ofthesaleofassetsofthebankruptBinaniCementwithoutits prior approval. However, it allowed the debt resolution process to go on.The top court also said that further proceedingswillbesubjecttoitsorders. This effectivelymeans that while the committee of creditors (CoC) and the National CompanyLawTribunal (NCLT) can carry on with the process, they cannot conclude the sale of the company to any of the bidderswithout SC’s approval. Avacation bench led by justice Adarsh Kumar Goel while issuing formal notice to UltraTech Cement, which has been voted as the highest bidder by the CoC,and others said:“In the meantime,nofinalordermaybe passed.Thisorderwillnotdebar further proceedings subject to ordersofthiscourt.”Thematter will be furtherheard on July2. Continued on Page 2
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