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APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL LXIV NO. 172, 34 PAGES, `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: 80,604.65 ▼ 738.81 NIFTY: 24530.90 ▼ 269.95 NIKKEI 225: 40,063.79 ▼ 62.56 HANG SENG: 17,417.68 ▼ 360.73 `/$: 64.9187 < > 0.00 `/€: 91.03 ▲ 0.42 BRENT: $84.35 ▼ $0.76 GOLD: `73,168 ▼ `758 — RAGHAVENDRA KAMATH Mumbai, July 19 A WEAKER PERFORMANCE from the oil–to-chemicals division drove down Reliance Industries’(RIL) net profit for the June quarter by 5.5% year-on-year and 20% quarter-onquarter to `15,138 crore. The oil-to-retail conglomerate onFridayreportedasequentialcontraction in its Ebitda (earnings beforeinterest taxdepreciationand amortisation) margin at 16.4%, down from 17.7% in the March quarter. The company’s reported Ebitda came in at `38,765 crore, a shade slightlyhigherthan `38,093 crore posted in Q1FY24. Revenues for the quarter came in at `2.32 trillion, up 12% y-o-y but down nearly 2% sequentially. The retail and telecom businesses fared reasonablywell. The O2C segment’s Ebitda was down 14.3% y-o-y and 22% sequentially to `13,093 crore as transport fuel cracks declined and margins fordownstream chemicals weakened. Continued on Page 12 INSIDE JSW Steel net profit declines 64% PAGE 11 Wipro Q1 misses Street estimates PAGE 4 UltraTech June quarter profit flat PAGE 4 WE DON’T NEED PROLIFERATION OF BANKS, BUT SOUND AND WELL-GOVERNED ONES, SAYS DAS AT FE'S BFSI SUMMIT Credit growth can’t exceed deposit by miles: Governor FE BUREAU Mumbai, July 19 SHAKTIKANTA DAS, GOVERNOR, RBI RESERVE BANK OF India governor Shaktikanta Das said on Friday that the slow growth in deposits could expose the financial system to structural liquidity issues. Speaking at the Financial Express Modern BFSI Summit here,Das said the gap between credit and deposit growth must be bridged “There will always be a gap between the two.But credit growth should not run ahead of deposit growth by miles,” he said. He also warned banks that there has been a noticeable trend of households increasingly shifting their investments to capital markets and other financial intermediaries,even though bank deposits continue to remain dominant as a percentage of financial assets owned by the households. The shift in deposit preferences from current account and savings account deposits (CASA) hasvarious implicationswhich banks need to keep in mind. “With credit growth remaining strong, banks need to continuously focus on improving and refining their credit underwriting standards and pricing of risks,” he said. INSIDE A STABLE INFLATION AT 4% WILL BE THE BIGGEST CONTRIBUTOR TO OUR GDP NO ONE EXPECTS THE RBI TO BE A CHEERLEADER FOR THE GOVERNMENT While defaults in the agricultural credit were the highest at 6.4% in FY24, Das said that they have come down from over 10% a few years. Also, an expected credit loss framework was in the works. Das said that the banking regulator will continue to unambiguously focus on inflation. “We are mandated to maintain price stability keeping in mind the objective of growth,” Das said, adding in all the monetary policy decisions, growth has always Insurance moving to a principle- Deposit growth will come back, ■ PAGE 6 say bankers ■ PAGE 6 based set-up: Panda been kept in mind. He also explained that the neutral rate of 0.8 to 1% was in the aftermath of Covid where the potential growthwas low.Nowwith Covidwell behind, and the potential growth up, the range of neutral rate is between 1.4% and 1.9%. So even if one were to argue that the real rate is high, it is not so. “Our target is inflation and we are supposed to keep growth in mind. The target is not neutral interest rate that is subject to a lot of uncertainty. It is dependent of your assessment of potential growth versus mine versus someone else’s… Neutral rates etc. are theoretical, abstract concepts that cannot determine policy in the real world,” said Das. He also added that “a stable inflation at 4% will be the biggest contributor to our GDP”. Continued on Page 12 Strict action should give investors ■ PAGE 7 confidence: BSE MD Stranded passengers at the Kempegowda International Airport in Bengaluru amid the Microsoft outage on Friday PTI Tech outage hits multiple sectors The Reserve Bank of India,however,saidthatoveralltheIndianfinancial sector in its domain remained insulatedfromtheglobaloutage. Whattriggeredthesystemsfailure, which cybersecurity experts called “unprecedented”even in the wake of JATIN GROVER & the outages in recentyears,wasyet to SWARAJ BAGGONKAR be fully ascertained. But it occurred New Delhi/Mumbai, July 19 alongwith disruptions of Microsoft’s cloudplatformAzureandits COMPUTER SYSTEMS 365officesoftwareservices. INSIDE WORLDWIDE faced perMinister for railways, sistingoutagesthroughFri- Indigo information & broadcastday, after Microsoft Win- cancels ing,electronics & informadows developed sudden 200 flights tion technology, Ashwini problems, causing disrupVaishnawsaid,“Thegovern■ PAGE 22 tions across the financial, mentiscontinuallyintouch tech and travel worlds,and with Microsoft, which in considerable slowing of economic turnisactivelyworkingwithimpacted activities across sectors and regions. entities,”who areworking to bring up The impactwas felt in India too,lead- theirsystems. ingtomassiveflightcancellationsand technicalsnagsatbrokerages. Continued on Page 12 BSOD error seen on devices in banks, airlines,brokerages EXPRESS PHOTO BY PRADIP DAS O2Cweighs on RILQ1; net profit falls 5.5%