OPINION, P6 MARKETS, P10 BASKAR REDDY & ANISH KUMAR Use agri reforms to create a roadmap for agri transformation INTERNATIONAL, P8 EDITORIAL BAD DEBT PROBLEM BYTE DANCE CONTINUES Vested interests fanning farmers' protest; PunjabHaryana will lose mandi taxes, arhatiyas face competition Privatise select PSU banks, dilute role of DFS: Raghuram Rajan Trump says US no TikTok deal if China maintains control NEW DELHI, TUESDAY, SEPTEMBER 22, 2020 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. XLVI NO. 175, 14 PAGES, `6.00 (PATNA `6.00, RAIPUR `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: 38,034.14 ▼ 811.68 NIFTY: 11,250.55 ▼ 254.40 NIKKEI 225: 23,360.30 ▲ 40.93 HANG SENG: 23,950.69 ▼ 504.72 `/$: 73.40 ▲ 0.05 `/€: 86.74 ▲ 0.34 BRENT: $42.13 ▼ $1.02 GOLD: `51,572 ▼ `47 IN THE NEWS Foodgrain output target set at record 301 MT THE GOVERNMENT HAS set foodgrain production target at a record 301 million tonne for the 2020-21 crop year, reports PTI. This is up nearly 1.5% from the previous year's output, on the back of good monsoon rains and higher acreage in the kharif season. HDFC Bank denies allegations made in US lawsuits HDFC BANK ON Monday issued a statement in response to the lawsuits filed against it by multiple law firms in the US, denying the allegations made therein, reports fe Bureau in Mumbai. The bank said that the litigant was a single security holder, who was purporting to represent a class of its shareholders. SBI raises `7k cr through Basel III compliant bonds FARM BILLS ILLICIT FUNDS REPORTS AIR INDIA SALE Mandi tax reason Allow bidders to quote HSBC, StanChart for Punjab anger? own terms, says panel shares fall to 22-year lows PDS purchases only through mandis boost state’s coffers PRABHUDATTA MISHRA New Delhi, September 21 SHIROMANIAKALI DALleader Harsimrat Kaur’s resignation from the Narendra Modi Cabinet over the farm Bills has fuelled protests against the reformist legislations, culminating in a ruckus in Parliament,butwhatliesunderneath Kaur’s dramatic move is nothing but survival instinct of the keygrain-producingstate’soligarchic mandi system. AnypoliticalpartyinPunjab with real chances of being in government would avoid antagonising the mandi lobby because their networks enrich thestate coffers,through compulsory levies collected from thegovernment-rungrainpro- Taxes on agri trade 8.5% 6% Punjab* Pan-India average *market fee 3%, rural development cess 3%, arhtiya commission 2.5% Central Pool's outgo on paddy, wheat purchases (Pan-India, ` crore, FY20) 4,000 3,600 Market fee Arhtiya commission Mandi fees collected on all crops (FY20) Punjab 1,750 8,600 All India curement agencies. Continued on Page 2 Mandis and MSP will stay, says PM, Page 2 Centre raises rabi MSP by 2-6% STATE BANK OF India on Monday said it has raised `7,000 crore by issuing Basel III compliant bonds, reports PTI. The bonds qualify as tier II capital of the bank, and has face value of `10 lakh each, bearing coupon rate of 6.24% per annum payable annually for a tenor of 10 years, it said. THE CABINET COMMITTEE on Economic Affairs (CCEA) on Monday approved 2-6% increases in the minimum support prices for the 202021 rabi season, reports fe Bureau in New Delhi. Even as the winter sowing is yet commence,the expectations of a bumper crop has brightened,sinceabundantrainsin themonsoonseasonhaveled to improved soil moisture conditions. ■ Page 2 Potential buyer may get more leeway on job cuts, debt, asset sales ALTERED PLAN Report card (` crore) Revenue EBITDA PRASANTA SAHU New Delhi, September 21 STATE BANK OFIndia(SBI)will hive off its digital platform YONO (you only need one) into aseparateentityallowingother banks to use it, chairman RajnishKumartoldFE.Usinga‘pay per use model’, the lender expects to attract small banks,regionalruralbanks(RRBs)andcooperativebankstotheplatform. Kumarsaidotherbankscan use YONO platform without using the brand. Other banks, the chairman explained, need to connect with the YONO API (application programming interface) without going through the SBI’s core banking system.“Once the integration isdone,otherbankscanusethe platform by connecting the API with their back end. This 446 2,260 -1,366 Jul Aug 63,200 30,512 -52 3,348 Source: AI estimate quoted by Transction Adviser year post-acquisition of the national carrier by the buyer. On the both these suggestions, the IMG, according to a note circulated within the government and reviewed by FE, holds the view that a decision could be taken during the actual signing of share purchase agreement (SPA) or at the request for proposal (RFP) stage. The current EoI was preparedinJanuary.WithCovid-19 hittingtheaviationsectorhard, Air India has estimated that its cashlosseswouldclimb80%on yearto `6,000 crore in FY21. Keepinginviewtheprevailing situation in the domestic and international aviation industry and a worsening of the national airline’s performance, the TA has presented fouroptions tothe IMG forAI’s strategic disinvestment. Continued on Page 2 58,24,855 8,34,749 67,25,696 16,04,600 1,00,59,225 1,19,55,917 14,30,872 4,70,45,262 71,72,208 GANDHI-GIRI Derek O'Brien of TMC and other MPs in front of Mahatma Gandhi’s statue in Parliament, hoping to give their protest against suspension of MPs some heft will enable other banks to use YONOplatformwiththeirown branding,”Kumar said. Monday mayhem Continued on Page 2 Markets crash amidst global meltdown FE BUREAU Indian shares ended lower on Monday, dragged by banking and metal stocks, as a rise in coronavirus cases at home and abroad dented investor sentiment. QuickPick IT firms must move from reactive to proactive problem-solving: Murthy INFOSYS CO-FOUNDER NR Narayana Murthy on Monday said Indian IT firms must move from reactive problem solving to having a proactive problem recognition and solution mindset which will help increase its per capita revenue productivity, reports PTI. Speaking at an AIMA event, Murthy said Indian IT companies will continue to grow anywhere between 7 to 10% with operating margins being between 15 and 20%. PAGE 4 ALUN JOHN, SUMEET CHATTERJEE & LAWRENCE WHITE Hong Kong/London, September 21 HSBC'SSHARESINHongKong and Standard Chartered’s in London fell on Mondayto their lowest since at least 1998 after media reports that they and otherbanks,includingBarclays and Deutsche Bank, moved large sums of allegedly illicit funds over nearly two decades despite red flags about the origins of the money. The BuzzFeed and other media articles were based on leaked suspicious activity reports (SARs) filed by banks and other financial firms with theUSdepartmentoftreasury’s Financial Crimes Enforcement Network (FinCen). HSBC shares in London fell as much as 5%, their lowest Sensex Bank Nifty Nifty Metal Nifty Realty Intra-day, Sept 21 39,050 38,812.69 Intra-day, Sept 21 22,250 38,800 22,000 2,350 225 38,550 21,750 2,300 220 Prev close 38,300 38,845.82 38,050 37,800 Close 21,250 21,000 Prev close 215 226.75 Prev close 2,250 2,362.20 21,366.80 Open Intra-day, Sept 21 230 227.20 2,367.20 Prev close 21500 22,031.05 38,034.14 Open Intra-day, Sept 21 2,400 21,983.40 Close 2,240.35 2,200 2,150 Open Close 213.95 210 205 Open Close AS MANY AS 14,510 cases involving defaults of `5.13 lakh crore were withdrawn by July 31 from various benches of the National Company Law Tribunal (NCLT) before the applicationswere admitted by the adjudicating authority, sincetheInsolvencyandBankruptcy Code (IBC) came into being in late 2016, according to the latest official data. Thissuggests,inmostcases, creditorshaverecoveredmoney from debtors by just applying for insolvency proceedings, reinforcing the efficacy of the IBC as a potent tool for bad loan resolution even before its actualuse.Asfordefaultingpromoters,thefearthattheircompanies will change hands once the IBC is applied, has forced them to payup. As of end-July,2,789 cases – with a combined default of `1,96,171crore–filedbyfinancial creditors under section 7 of the IBC were withdrawn. Similarly,11,581cases,filedbyoperational creditors under Section 9, with a total default of `1,63,927 crore and 140 cases (default of `1,53,372 crore) Deterrence value `1,96,171 cr China’s air force video shows nuclear-capable H-6 bombers carrying out a simulated attack on what appears to be US’ Andersen Air Force Base in Guam SARs were filed with the US department of treasury’s Financial Crimes Enforcement Network More than 2,100 SARs were sharedwith the International Consortium ofInvestigativeJournalists and other media organisations HSBC, StanChart, Barclays and Deutsche Bank appeared most often in the FinCEN documents intraday level since 2009,after the lender’s Hong Kong shares earlier touched a 25-year low. Thestockhasnownearlyhalved since the start of theyear. Continued on Page 2 FM: Surge in cases unlikely after suspension is lifted FE BUREAU New Delhi, September 21 underSection10(meantforinitiation proceedings by corporate debtors),were withdrawn from the NCLTsince 2016. Interestingly, these gains to creditors are much higher than what they gathered from the resolution or liquidation of stressed companies where insolvency cases were fully pursued. Continued on Page 2 Continued on Page 12 `1,63,927 cr Default in 11,581 cases withdrawn by operational creditors `1,53,372 cr Default in 140 cases withdrawn by corporate debtors China releases video simulating attack on US CHINA’S AIR FORCE has released a video showing nuclear-capable H-6 bombers carrying out a simulated attackonwhatappearstobeAndersen Air Force Base on the US Pacific island of Guam,as regional tensions rise. The video, released on Saturday on the People’s Liberation Army Air Force Weibo account, came as China carried out a second dayof drills near Chinese-claimed Taiwan, to express anger at the visit of a senior US State Department official to Taipei. Guam is home to major US military facilities, including the air base, whichwould be keyto responding to Media articles were based on leaked suspicious activity reports filed by banks and other financial firms FINANCE MINISTER NIRMALA Sitharaman on Monday said a surge in insolvencycases isunlikelyoncethesuspension of such proceedings against Covid-related default is lifted, as other modes of debt resolutions are still operational and a largenumberofcompaniesare expected to get back on their feet by then. Withthepassageofamendments to the Insolvency and Bankruptcy Code (IBC) by the Lok Sabha on Monday, decks have been cleared to suspend, through Parliamentary clearance, insolvency proceedings for up to a maximum of one year against fresh Covidrelated defaults from March 25.TheRajyaSabhahasalready approved the IBC (Second Amendment) Bill, 2020. The Billwasbroughtintoreplacean ordinance that was promulgated in June to protect thousands of firms, ravaged by Covid,frombeingdraggedinto insolvencyproceedings. Default amount in 2,789 cases withdrawn by financial creditors by July 31 TAIWAN TENSION REUTERS Beijing, September 21 MONEYTRAIL ● INSOLVENCY Insolvency threat triggers `5-lakh-cr loan recovery BANIKINKAR PATTANAYAK New Delhi, September 21 16,43,978 Reports say banks moved large sums of allegedly illicit funds over nearly two decades despite red flags about origin POTENT TOOL 66,24,638 Transactions Total Registrations ASKMs* (m) *Available seat kilometers `15,435 crore 58,54,931 4,40,678 Jun 2,738 FY21 (projected) Financial cost on the exchequer to run the airline for FY21-FY22 12,17,331 May 79 (April-July, FY21 actuals) YONO during Pandemic Apr 5,955 Change (%, FY21 vs FY20) YONO to be stand-alone platform: SBI chairman Mar ‘20 3,323 -1,763 -48 GIVEN THE FRESH uncertainties caused by Covid-19, an inter-ministerial group (IMG) on Air India privatisation plan has favoured allowing bids for the loss-making carrier on the basis of its enterprisevalue,sans anypredetermined level of ‘sustainable debt’ for the potential bidders to reckon with. Under the current plan,the buyer is required to take over theairline’sestimatedresidual debt of `23,286 crore. EY, the transaction adviser (TA), in a presentation to the IMG, said the winning bidder may have the leeway to cut its workforce immediately after the acquisition — the current expression of interest (EoI) providesforaone-yearjobprotection for the state-owned airline’s over 9,600-strong permanent workforce. Also, the adviser sought removal of the `1,000-crore cap on asset sale in the first Cash loss -323 27,284 14,176 ● DIGITAL BANKING ANKUR MISHRA Mumbai, September 21 FY20 anyconflictintheAsia-Pacificregion. The Chinese air force’s two minute and 15 second video, set to solemn,dramatic music like a trailer for a Hollywood movie, shows H-6 bombers taking off from a desert base. The video is called “The god of war H-6K goes on the attack!” Halfway through,a pilot presses a button and looses off a missile at an unidentifiedseasiderunway.Themissilehomesinontherunway,asatellite image of which is shown that looks exactlylikethelayoutofAndersen.The musicsuddenlystopsasimagesofthe ground shaking appear, following by aerialviews of an explosion. Continued on Page 2 New Delhi
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