MARKETS, P6 COMPANIES, P4 INTERNATIONAL, P7 ‘NO SCOPE FOR COMPLACENCY’ ‘PRIORTISED SECONDARY MATTERS’ ON BACK OF PROFITABLE 2023 RBI guv asks banks to maintain vigil around build-up of risks Byju’s founder and investors responsible for downfall: Screwvala Uber unveils first-ever share-buyback for up to $7 billion KOLKATA, THURSDAY, FEBRUARY 15, 2024 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL 33 NO. 90, 46 PAGES, `12.00 (NORTH EAST STATES & ANDAMAN `12.00) P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 71,822.83 ▲ 267.64 NIFTY: 21,840.05 ▲ 96.80 NIKKEI 225: 37,703.32 ▼ 260.65 HANG SENG: 15,879.38 ▲ 132.80 `/$: 83.03 ▼ 0.02 `/€: 88.85 ▲ 0.55 BRENT: $83.28 ▲ $0.51 GOLD: `61,249.00 ▼ `905 IN THE NEWS WPI INFLATION EASES TO 3-MONTH LOW OF 0.27% THE WHOLESALE PRICE index (WPI)based inflation eased to a three-month low of 0.27% in January due to moderation in prices of key food and industrial input items, data released showed on Monday, reports Priyansh Verma. ■ PAGE 2 RILAMONG TOP 50 GLOBAL FIRMS IN TERMS OF M-CAP THE market capitalisation of RIL closed above `20 trillion on Wednesday and it is now among the top 50 global firms, ahead of Pepsico, Shell and PetroChina, reports PTI. ■ PAGE 6 NOTYET DONE WITH INFLATION FIGHT: CEA THE WORLD IS not yet done with the fight against inflation as supply-side constraints may continue, but India has learnt to manage it, CEAVAnantha Nageswaran said on Wednesday. ■ PAGE 2 FE S P E C I A L S MOVE AFTER REGULATOR’S DIRECTIVE Mastercard, Visa halt commercial card payments Non-KYC compliance, laundering suspicion likely behind RBI action COMPLIANCE FIRST ■ Acommercial credit card can only be used for business payments ■ There seems to be AJAY RAMANATHAN Mumbai, February 14 THE RESERVE BANK of India (RBI) has asked MastercardandVisatosuspendcommercialpaymentsmadebycompaniesthroughcards. AccordingtoaletterissuedonFebruary8,the banking regulator directed these firms to suspend all business payment solution providers’ (BPSP)transactionstillfurthernotice. These players, including some bankers, approached RBI on Wednesday to clarify the businessmodeltobefollowedincorporatecardto-business account money transfer transactions,saidreports. “VisareceivedacommunicationfromtheRBI onThursday,February8inwhatappearstobean industry-wide request for information on the role of business payment solution providers (BPSPs) in commercial and business payments. Thatcommunicationincludeddirectionthatwe holdallBPSPtransactionsinabeyance,”saidVisa inanemailstatement.Thestatementalsoadded thatBPSPsareregulatedandlicensedbytheRBI underthePA/PG(paymentaggregator/payment gateway)guidelines. concerns that some ofthese end-users are not genuine ■ The central bank is seeking clarity on the small businesses who are receiving the money and wants to know whether proper KYC has been done ofthese endusers ■ The total monthly transaction size of such payments is in excess of `20,000 crore, said industry players “Visaisproactivelyengagedandcontinuesto beindiscussionswiththeRBIandourecosystem partners to ensure compliance.If you have further questions,those may be better directed to theBPSPs,”itadded. Continued on Page 10 ‘If liquidity is short, interest rates will remain high’ Although the Centre’s market borrowings will be smaller in FY25,State Bank of India chairman Dinesh Kumar Khara believes lenders will find it hard to pass on any rate cuts by the central bank if they are short on deposits.Excerpts from an interview with Ajay Ramanathan and Shobhana Subramanian. Benchmarkyieldsaretrendingdown,do youseeinterestratesalsocomingdown? These benchmarks are more indicative in nature.The way the asset–liabilities are stacked up in the system today, liquidity is short, especially for lenders who have 100% creditdeposit ratios.For any lenderto give a loan or make an investment, there must be matchDINESH ing liabilities. If liquidityin the system is KUMAR short, there will be a KHARA, CHAIRMAN, SBI liquiditypremium,so the end rate of the corporate bond to the borrower will remain high. This is one reason why in the past,we have not seen transmission of rates to the extent of the policy rate changes. & Whendoyouthinkliquiditywillease? Mysenseisthatwhenwestartgrowing at7-7.5or8%GDP,thetotalpieoftheliquiditywill get enlarged.There needs to be morespending,weneedamultipliereffect. So even if RBI cuts rates, it may not get fullytransmitted? It is true that half the loans in the systemarelinkedtotheexternalbenchmarks. However,if a bank does not have liquidity, it will price loans accordingly.How much they can pass on to borrowers will depend onthecostoftheirliabilities. Can SBI grow its balance sheet at a compounded15%overthenextfewyears? atabout14-15%whiledepositsaregrowing at 13-14%. So, a 15% kind of compoundedgrowthrateshouldbepossibleto achieve.I am also mindful of the fact that the government is clearly focused on growth. Whichwouldbethekeyareasthatwould drivegrowth? I think both SME and retail sectorswill beanopportunity.Corporateloangrowthis also picking up,we have moved to double digitgrowth.Also,wecanalwayssubscribe to corporate bonds as part of our investments.Today,companiesarelookingto borrow locally THE GROSS NPAs ARE because it is more HARDLY ANYTHING. costlyto do so in the overseas market, WE DON’T HAVE A especiallyonafullyCHALLENGE ON hedgedbasis. UNSECURED LOANS The economy today is doing well and there is enough demand,supply and production, although there are some challenges on the external front.Our loan book today is growing ❝ Are there any concerns within the retailportfolio? It is a competitive market but our unsecured portfolio is better than our secured book.The gross NPAs are hardly anything. We don’t have a challenge on unsecured loans. Of course, the cost of supporting this asset has gone up post the rise in risk weights. SME offers a better mix and we have invested in the right skills and structure.Our SME book is now at about `3.8 trillion and we should be at `4 trillion soon, as we had targeted.We are also focusing on the agri and rural sectors. Continued on Page 10 Affordable housing needs Centre’s push,sayrealtors ‘Data use will speed up as AI makes access easier’ Interview with John Colgrove, founder & chief visionary officer, Pure Storage ■ EFE, P9 Farmers’ protest 2.0: What are they demanding now? A look at key issues associated with the farmers’ demands and the possible solutions ■ EXPLAINER, P9 RAGHAVENDRA KAMATH Mumbai, February 14 WITH AFFORDABLE HOUSING losing its sheen in the past couple of years,top property realtorsbelievethatinterventionfromgovernment,in terms of subsidyschemes forborrowers or reduction in interest cost for land acquisition is the onlywayto revive interest in it. In the past couple of years, the share of affordable housing in total property sales has been consistently falling. In 2020, it constituted of INSIDE 39% of total sales. This Sales of number has dwindled to luxury flats 19% in 2023, according rise 75% to data from Anarock ■ PAGE 18 Property. Pavitra Shankar, managing director, Brigade Enterprises said that they will look at launching new affordable projects if government comes outwith incentives for the segment. “There is definitely a need forgovernment intervention in the form of incentives for developers, if the affordable housing segment is to grow significantly,” Shankar said. With land prices in both metro and nonmetro cities on the rise,alongwith input costs NIRANJAN HIRANANDANI, MD, HIRANANDANI GROUP I FEEL SOME SORT OF INCENTIVE IS NEEDED FOR BUYERS TO BUY AFFORDABLE HOMES PAVITRA SHANKAR, MD, BRIGADE ENTERPRISES ...DEFINITELYA NEED FOR GOVERNMENT INTERVENTION IN THE FORM OF INCENTIVES FOR DEVELOPERS of construction material,it is highlychallenging for builders to create viable projects in the segment. Continued on Page 7 INVESTORS WARY AS CARRIER DELAYS RECURRING PAYMENTS Cloud over SpiceJet fund infusion FE BUREAU New Delhi, February 14 SURVIVAL BATTLE LOW-COSTCARRIER SPICEJETisstuckin turbulentweather,withinvestorsreportedly having second thoughts on their commitment to infuse `2,250 crore on a preferential basis. Amid the uncertainty surrounding the fund infusion, the company's share price closed 3.44% down at `63.37 on the BSE on Wednesday . In December, the company's board had approved fund raising proposal of `2,250 crore through issuance of securities on a preferentialbasis.OnJanuary26,thecarrier received`744croreasfirsttranche.Sources saidthatitisunlikelythatfurtherfundinfusionwill happen. Sources added that SpiceJet has delayed payment of January salaries to many of its employees.Ithasalsodelayeddepositingthe money into the pension funds and taxes deductedfromthesalaries. Whencontacted,acompanyspokesperson said that January salaries have been paid to80% of the employees.The amount dueforprovidentfundandtaxdeductedat committed to infuse funds worth `2,250 crore on a preferential basis, are having second thoughts due to acute liquidity crunch ■ Investorswho had ■ In Dec, the company's board had approved fund raising proposal of`2,250 crore through issuance ofsecurities on a preferential basis ■ OnJan 26, the carrier received `744 cr as first tranche source will be paid soon and within stipulated timeline. “Wehavesuccessfullycompletedthefirst tranche of capital infusion, amounting to `744 crore, and have received significant additionalsubscriptionspendingregulatory approval. The company has initiated the process to raise an additional `1,500 crore. SpiceJet alreadyhas thevalid and subsisting approval of shareholders for raising up to `2,500 through QIP,and for this process,it need not go to shareholders again.We want to clarify that regular payments are being ■ On Feb 12, SpiceJet said that it plans to bring down its annual cost by around `100 crore ■ When contacted, a company spokesperson said that January salaries to 80% of the employees have been paid made to lessors,and any reports suggesting outstanding amounts are baseless and denied,"thespokespersonforthecarriersaid. “The airline has extended many aircraft leases and has also signed up for fresh lease agreements starting in the summer schedule2024.SpiceJetisactivelyengagedindiscussions for long-term lease contractswith lessors, signalling our commitment to expand our fleet and network,” the spokesperson added. Continued on Page 10 Kolkata