POLICY
Lights off in the power sector
The disproportionate impact felt by the thermal sector will have additional ramifications on the banking sector, which could in turn hamper efforts to boost the economy through credit growth.
ECONOMY
Is India staring at stagflation?
Rising inflation will have an immediate effect on consumption demand. On the other hand, there's only so much rate cuts can do.
ECONOMY
NBFCs under IBC: An experiment worth considering
A resolution corporation as envisaged by the withdrawn FRDI bill is necessary from a long-term perspective. However, a quicker term fix for the NBFC sector, which would hopefully stoke credit growth, and hence economic growth, would be bringing it under the existing IBC.
BUSINESS
Adverse ruling in WTO? India needs to find ways to improve export competitiveness
For exports to increase, competitiveness has to improve and Indian companies need to find out ways to be part of global value chains. Obviously, subsidies won’t do that as they will be subject to challenges at WTO
BUSINESS
Markets | Sensex hits 40k for the first time since July. False dawn or new hope?
The key question is, whether this confidence in no more earnings downgrades is justified by the state of the economy? The answer is a resounding no.
BUSINESS
The big themes investors need to watch in Samvat 2076 | Markets
These are the themes investors should watch for in the new year ahead, to know whether markets will fare better or not in Samvat 2076
ECONOMY
India’s ease of doing business rank has jumped. Does it matter?
India should not rest on its laurels despite what the rankings suggest. There is a need to improve contract enforcement, introduce factor reforms so that companies are not encumbered with burdensome labour and land regulations, focus on upskilling the labour force and improve the quality of institutions.
MARKETS
Early Q2 results flag continuing asset quality pressures at banks
The risk is high especially from the real estate sector where credit from NBFCs has been choked off. Starved of liquidity, builders are struggling to pay their non-bank lenders, who in turn are defaulting on their dues to banks.
BUSINESS
What the RBI MPC minutes mean for the markets
Easing will continue as long as growth doesn’t pick up and inflation remains within target. For Indian stocks, this is an additional liquidity tailwind domestically
COMPANIES
Corporate Corridor | Tata’s Chandra says won’t sell JLR. Is it pride or business sense speaking?
The future is uncertain with Brexit, US tariffs and shift to electric vehicles.
ECONOMY
Policy | Tinkering with the bankruptcy law will send a wrong signal to the markets
The fact that so few cases are resulting in resolution is not necessarily a function of the IBC process itself. It is the function of a slowing economy.
SECTOR
RBI has rejected Indiabulls Housing–Lakshmi Vilas Bank merger. What next?
RBI’s rejection of the deal basically indicates that it does not trust the books of non-bank companies, particularly, those with links to the real estate sector. That would have ripple effect across the sector and increases the risk of contagion as fear and a trust deficit spreads throughout the financial system.
COMPANIES
Corporate Corridor | Smaller companies bearing the brunt of the slowdown
RBI analysis shows that the manufacturing sector was worse off than the services sector in the June quarter.
ECONOMY
Chart of the Day | Funding to the economy has collapsed
Risk aversion among lenders and lack of demand are the key culprits
ECONOMY
Monetary policy review | A small rate cut belies dovish statement
What’s left unsaid in the monetary policy resolution are the concerns about the fiscal situation.
ECONOMY
Macro Matters | Investment demand continued to be tepid in the September quarter
The sharp cut in corporate tax rates especially for new projects should help propel an investment demand recovery in the December quarter.
COMPANIES
Lakshmi Vilas Bank problems show continued weakness in financial system
To allow the Lakshmi Vilas – Indiabulls housing merger or not? It’s a tough choice for RBI.
ECONOMY
Two charts that show you why the FM is stressing on loan outreach programmes
If there is no shortfall of demand, why hasn’t credit picked up yet?
ECONOMY
PMC Bank crisis begs the question: Are co-operative banks RBI's step children or orphans?
Lax supervision – whether it is RBI’s fault or because it has to jointly supervise cooperative banks with state governments – ultimately ends up hurting depositors.
ECONOMY
Shamiana Banking | At what cost, loan growth?
Setting a target of five new customers for every old one is the perfect formula to undermine credit underwriting practices and mess up the balance sheets of banks again just when they are in the final phase of a painful clean-up.
ECONOMY
Disinvestment policy should look beyond current revenue collection
It should not be viewed as selling the family silver but for changing the structure of PSUs and improving their efficiency.
COMPANIES
Is Altico default the canary in a coal mine for real estate NBFCS?
Funding is the oxygen for real estate developers. Starved of liquidity, projects will remain stuck and builders will develop cash flow problems. That will lead to asset quality problems for NBFCs which in turn will exacerbate the crisis.
ECONOMY
External benchmarking of lending rates – right intent but wrong approach
For better transmission, the structural factors should first be resolved. That’s a tough task and prescribing interest rate formulae is the easy way out.
BUSINESS
PSU Bank Mergers | The more things change…
The timing of the merger is questionable. Bank management bandwidth will be occupied by the merger instead of pushing through loans with proper due diligence
