OPINION, P6 ECONOMY, P2 SONAL VARMA & AURODEEP NANDI RBI moves positive; expect 50 bps cumulative cuts by Q1 2021 end INTERNATIONAL, P8 S SUBRAMANIAN STATE OF THE MATTER UNBOXING NOW Guv Das makes money cheaper for corporate and retail borrowers, shrugs aside inflation GST council can vote on borrowing options: Mitra Google tries to turn YouTube into a major shopping destination NEW DELHI, SATURDAY, OCTOBER 10, 2020 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. XLVI NO. 191, 18 PAGES, `10.00 (PATNA `9.00, RAIPUR `10.00) 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: 40,509.49 ▲ 326.82 NIFTY: 11,914.20 ▲ 79.60 NIKKEI 225: 23,619.69 ▼ 27.38 HANG SENG: 24,119.13 ▼ 74.22 `/$: 73.13 ▲ 0.11 `/€: 86.28 ▼ 0.14 BRENT: $43.21 ▼ $0.13 GOLD: `50,695 ▲ `515 IN THE NEWS Salesforce to add 5.48 lakh direct jobs in India CALIFORNIA-BASED SALESFORCE plans to add 5.48 lakh direct jobs in India in the near future and believes that the country has potential to become the second-largest in terms of GDP, reports PTI. Speaking at the Raise summit, Salesforce chief data evangelist Vala Afshar said the company will indirectly create 13 lakh jobs in India. Navy cancels Reliance Naval’s `2,500-cr contract THE INDIAN NAVY has cancelled Reliance Naval and Engineering's (RNEL) `2,500crore naval offshore patrol vessels (NPOVs) contract, reports PTI. The Navy cited delay in delivery of the vessels as reason for the move, according to sources aware of the development. LSE in talks with Indian tech firms to list overseas LONDON STOCK EXCHANGE is in talks with several Indian technology firms for their overseas stock listings, a senior British exchange executive told Reuters. This comes as New Delhi moves closer to allowing companies to directly access foreign markets. India is drawing up rules to allow companies to float overseas without having to first list shares in India. BATTING FOR GROWTH RBI moves to make money cheaper Rolls out measures to make it easier for banks, other lenders to give both corporate and retail loans FE BUREAU New Delhi, October 9 THE RESERVE BANK of India (RBI) on Friday went all out to ensure money remains affordableforgovernments,corporate borrowers and individuals.Disregardingtheelevatedinflation, the central bank pushed for growth, rolling out measures thatmakeiteasierforbanksand other lenders to give both corporate and retail loans. The moves to hold bigger auctions for open market operations (OMOs),special OMOs for state governments and easier terms for bank’s bond portfolios saw the yield on the benchmark fall 8 basis points to 5.939%; dealers said the yields on corporate bondsalsofell.Anon-tapTLTRO for`1 lakh crore,at cheap rates, to enablebanksto deployfunds in corporate bonds, CPs, NCDs Bank Nifty 24,000 23,800 23,600 23,400 23,200 23,000 22,800 Intra-day, Oct 9 23,846.8 23,312.6 Previous close 23,191.35 Open Close OMOs in state bonds to help lower yields FE BUREAU New Delhi, October 9 andevenbankloansshouldhelp lower lending rates.There was relief for small borrowers with the threshold exposure level being raised to `7.5 lakh crore from `5 crore. THE RBI’S ‘SPECIAL’ decision to purchase state government bonds in the secondary market via open market operations (OMOs)will ensure that a likely furthercrowdingofthemarket by revenue-scarce states in Q4 won’t inflate their borrowing costs to awkwardlyhigh levels. At least the 35 bps or thereaboutsextraspreadovernormal times between 10-year state development loans and G-secs —aswasfoundduringauctions on Tuesday — might get wiped outasaresultofthemove,marketwatcherssay.They,however, added that exact impact of the RBI move would depend on the modalities to be worked out by the central bank and the quantumofOMOsinSDLs.The Centre had earlier hinted at instituting a one-off mechanism to enable the states to reduce the interest costs on SDLs. Continued on Page 2 Continued on Page 2 10-year bond yield (%) Intra-day, Oct 9 6.050 6.025 6.000 5.975 5.950 5.925 5.900 5.999 Previous close 6.015 5.939 Open Close Shaktikanta Das, Governor RBI Spread between 10-year SDLand G-sec rose from 51 bps on Sept 1 to 86 bps on Oct 6 Borrowings costlier (Oct 6 issuances) for fiscally weaker states like (Spread over G-sec) Rajasthan: 89 bps Assam: 88 bps Jharkhand: 90 bps Uttar Pradesh : 88 bps ■~`10.7 LAKH CR States' revised borrowing FY21 limit, up 67% over initial estimate; GSTwindow to impact estimate ■ Apr-Dec calendar: States to borrow `5.07 lakh cr; already borrowed nearly 75% of this ■ Gross SDL issuance in Q4 seen at `4.77 lakh cr ■`10.3 LAKH CR Gross SDLissuance likely in FY21 (Icra estimate) ■ 12 LAKH CR Centre's revised FY21 borrowing limit, up 54% from original cap Less risk: High-value home loans possible at lower rates SHUBHRATANDON & RISHI RANJAN KALA Mumbai/New Delhi, October 9 Now all housing loans, even big oneswith low LTVwould carry low riskweight ` R R BORROWERS OF HIGH value home loans — `75 lakh and above — would benefit by the ReserveBankofIndia'smoveon Fridaytorationaliseriskweightages attached to some categoriesofborrowingsinthissegment. As a result of this rationalisation, banks would havelessrisktobear,andhence, would be in a position to lend more,benefitingconsumersfor home loans as well as the weak real estate market which is in needofastimulus.Accordingto LiasesForas,around40%ofthe nearly 10 lakh unsold units in top eight cities lie in the `75 lakh and above range category. CommentingonRBI’smove, Keki Mistry,vice-chairman and CEO, HDFC, said it is the right policy as the risk is ultimately dependent on the amount of equity that the individual has put into the property and not dependent on the size of the ■ At present, riskweight on R R housing loans is based on the amount ofloan and LTV This has now been changed and linked with LTValone ■ Earlier, all loans above `75 lakh carried the same riskweight irrespective ofLTV Now, even big loans with low LTVwill carry low riskweight ■ Banks and HFCswill be able to sell bigger ticket size loans without providing larger capital, minimising the risk associatedwith loan.“What seems to have been doneisthatthecaponamounts have been removed,and therefore,everything is linked to the LTVratio which makes housing loans much safer,” he said. Continued on Page 2 On-tap TLTRO for `1 lakh cr, funds can be used for loans THE RBI EXPANDED on its liquiditymeasurestomake the targeted long-term repo operations (TLTROs) availableontapandextend the use of money raised underthiswindowtoloans given by banks, reports Shritama Bose in Mumbai. Industry executives and analysts saidwhile the expandedschemeismeant to enable smaller firms to accessfunds,detailsoneligibilitywillbekey.Thenew format is also aimed at leaving banks with few excusestonotlendaggressively,NBFC chiefs said. RBI governor Shaktikanta Das said that the central bank will conduct on-tap TLTROs with tenors of up to three years fora total amount of up to `1 lakh crore at a floating rate linked to the policy repo rate.■ Page 10 GDP to shrink 9.5%; growth urgent need, 'inflation hump transient' Festive boost: Credit limit for retail borrowers, small businesses hiked THE MPC-RBI on Friday shed their reticenceovermakingapreciseestimate of the country’s real GDP for FY21bypredictinga9.5%contraction in the pandemic-ravaged year, with“risks tilted to the downside”, reports fe Bureau in New Delhi. SMALL BUSINESSES, PROFESSIONALS like doctors and chartered accountants, and high networth consumers will likely see a greater flow of credit ahead of the festive season,as the Reserve Bank of India (RBI) on Friday decided to Among prominent global agencies, only S&P (-9%) has forecast a narrowercontraction forthe country. The RBI,however,has less certitude to offer on its retail inflation estimatefornow.TheheadlineinflationhadremainedabovetheMPC’s tolerancebandof4(+/-2)%foreight out of the past nine months. The MPC would just say the inflation “will remain elevated in theSeptemberprint,buteasegradually towards the target over Q3 and Q4”. ■ Page 2 allow lenders to raise their exposure to individual retail borrowers to`7.5crorefrom`5crore,reports feBureau in NewDelhi. Importantly, despite the higher threshold, the risk weight assigned to such loans has been retained at 75%, which will help reduce the cost of the extra credit amount. Under the extant guidelines, the 75% risk-weight is tied to certain conditions,including an individual exposure limit of `5 crore. ■ Page 10 COVID REPORT Special Feature Grand i10 NIOS turbo: More power to hatchback cars Buy it only if you want to make your everyday drive a little more enjoyable, a little more spirited. we wish Hyundai had differentiated it more as far as design is concerned ■ Motobahn, P9 KPCL buy to aid APSEZ’s post Covid-19 recovery Acquisition to be valueand earnings-accretive; FY21-23e ports Ebitda up 10-25%; target price raised to `435 from `400 to factor in transaction; ‘Buy’ rating retained ■ Investor, P9 QuickPicks Taxpayers to report only FY19 transactions in annual GSTR THE FINANCE ministry on Friday said taxpayers are required to report in the annual GST return of FY19 only the values of transactions pertaining to that fiscal, reports PTI. The ministry said certain representations have been received stating that certain tables in the auto populated GSTR-9 for the year 2018-19 also include the data for the financial year 2017-18. Loan recast eligibility: RBI says lenders have enough leeway THE RBI has stressed that banks have sufficient leeway to accommodate the impact of Covid19 while stipulating specific ratios for determining eligibility of loan resolution under the special window notified by it on September 7, reports Indu Bhan in New Delhi. Also, the lenders have been given the freedom to accommodate sector-specific characteristics. PAGE 2 ONGC pegs gas under-recovery at `7,000 crore in FY21 WITH THE government reducing the price of domestic natural gas to $1.79 per mBtu, ONGC expects to face a loss of around `7,000 crore in FY21, reports fe Bureau in New Delhi. The average gas output cost of ONGC is $3.7 per mBtu, implying that there is an under-recovery of $2 per mBtu on gas production, Subhash Kumar, ONGC’s director (finance), said. PAGE 4 ● BATTLING HUNGER Delhi should prepare for 15,000 daily cases in winters, says NCDC UN's food programme wins Nobel Peace Prize PRESS TRUST OF INDIA New Delhi, October 9 ASSOCIATED PRESS Oslo, October 9 DELHI NEEDS TO be prepared forabout 15,000 fresh cases of Covid-19 per day taking into account the upcoming winter season-related respiratory problems, large influx of patients from outside and festivegatherings,areportdrafted bythe NCDC has warned. The report drafted by the National Centre for Disease Control(NCDC)undertheguidance of the expert group under thechairmanshipofNITIAayog member(Health)DrVKPaulhas recommended the Delhi governmenttomakearrangements forhospitalisationofaboutonefifthofthesepatientswithmoderate and severe disease. COVID-19 UPDATE 69,06,151 TOTAL CASES 1,06,490 DEATHS SO FAR 70,496 NEWCASES The NCDC in its “'Revised Strategy for control of Covid19 version 3.0” also observed that the overall Covid-19 case fatality rate in Delhi is 1.9%, which is higher than the national average of 1.5%. It stated that reducing mortality to the extent possible should be one of the key objectives of managing the pandemic. Continued on Page 13 China joins WHO vaccine programme CHINA WILL take part in a World Health Organizationbacked effort to provide a coronavirus vaccine to developing nations, filling a void in global health leadership after US President Donald Trump spurned SYMPHONY ON LAKE Police band performs during a water sports event ‘Jashen-e-Dal’ organised by Jammu and Kashmir Police at Dal Lake, in Srinagar on Friday DEMAND DRIVE New Creta bookings: Kia Sonet bookings: 35,000 1.15 lakh Kia Sonnet was launched on Sept 18, 2020 Total new Creta units sold since launch on Mar 16, 2020: 58,300 the programme, reports Bloomberg. Beijing on Thursday joined the $18-billion Covax initiative that aspires to give lower-income countries the same access to vaccines as wealthier nations. ■ Page 8 Mahindra Thar bookings: 9,000 Thar was launched on Oct 2 THE UNITED NATIONS'World Food Programme on Friday won the 2020 Nobel Peace Prize for its efforts to combat hunger and food insecurity around the globe. It provided assistance to almost 100 million people in 88 countries around the world last year. “I thinkthisisthefirsttimeinmy life I’ve been without words,” WFP’s head David Beasley told TheAssociated Press.“I was just so shocked and surprised.” The Nobel Committee said thatthecoronavirus pandemic has added to the hunger faced by millions of people around the world, and called on governments to ensure that WFP and other aid organisations receive the financial support necessary to feed them. “With thisyear’s award,the (Committee)wishestoturnthe eyes of the world to the millionsofpeoplewhosufferfrom or face the threat of hunger,” said Berit Reiss-Andersen, the chair of the Nobel Committee, announcing the award in Oslo. Continued on Page 2 CRACKDOWN Facebook,Twitter dismantle global array of disinformation networks JACK STUBBS & CHRISTOPHER BING London/Washington, October 9 FACEBOOK AND TWITTER saidonThursdaytheyhadtaken down more than a dozen disinformation networks used by political and state-backed groups in multiple countries to deceiveusersontheirplatforms. In separate statements,the two companies said they had identified and suspended more than 3,500 accounts between them, which used fake identities and other deceptive behaviors to spread false or misleading information. The networks targeted users in a wide selection of countries,includingtheUnited States where officials have ROHNIT PHORE warned that foreign governments are attempting to influence the outcome of November’s presidential election. After coming under heavy fire for failing to stop alleged Russian efforts to sway the 2016 US election, Facebook and Twitter have announced a string of highprofiletakedownsintheweeks leading up to this year’s presi- dential vote. In multiple cases,the social media companies have worked with US law enforcement to track and dismantle political influence campaigns targeting US voters which have been attributed to foreign states, most notably Iran and Russia. Tehran and Moscow have repeatedly denied the allegations. The takedowns announced on Thursday covered networks New Delhi with a global reach far beyond the US election.The operations targeted Internet users in at least16othercountriesranging from Azerbaijan to Nigeria and Japan, Facebook and Twitter said.Twitter said the five networks it had suspended were separately linked to groups withtiestothegovernmentsof Iran, Saudi Arabia, Cuba,Thailand and Russia. Continued on Page 2
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