Issue: 1271
· Groww displaces Angel One to
become the largest commodities derivatives player by value.
· RBI approves Rajiv Kumar's
appointment as HDFC Bank's part-time chairman.
· Tatas to foray into
shipbuilding biz, eye $1 billion Kerala project.
· India at risk of 100% US
tariff for purchases of Russian crude oil.
· India's female unemployment
rate rises to 15-month high of 5.9% in June.
· Cabinet unveils Rs.1.9
trillion semiconductor, smartphone manufacturing plans.
· Govt approves greenfield
shipbuilding cluster in Gujarat's Porbandar.
· Brics adopts labour
declaration, launches India-backed CONNECT platform.
India-UK trade pact takes
effect, promising tariff cuts and services boost: India ?and Britain’s
comprehensive trade pact took effect on Wednesday, ?cutting tariffs on thousands
of goods and widening access for services firms and professionals in both
markets. The India-UK Comprehensive Economic and Trade Agreement gives Indian
exporters ?immediate duty-free access to most British tariff lines, benefiting
labour-intensive sectors such as textiles, leather, footwear, marine products, ?gems
and jewellery, and processed foods. Britain gains wider access to ?one
?of the world’s fastest-growing
major economies, with phased tariff cuts ?and quotas for sectors such as
automobiles, and openings in procurement, financial services, education,
insurance and professional services.
(Business Line)
India posts $2 bn current account deficit in May as trade gap widens: India recorded a current account deficit of $2 billion in May 2026 as imports exceeded merchandise exports, according to preliminary balance of payments (BoP) data released by the Reserve Bank of India (RBI) on Wednesday. The current account had recorded a surplus of $0.7 billion in May 2025. In the April-May period of FY27, India's current account surplus stood at $2.8 billion, reversing a deficit of $4.1 billion in the corresponding period of the previous year, mainly due to higher net transfers. In May, the merchandise trade deficit widened to $27.9 billion from $22.6 billion a year ago. Exports rose to $46.1 billion from $38.7 billion, while imports increased to $74 billion from $61.3 billion in the same period last year.
(Business Standard)
Fed's Warsh says AI-driven price pressures may not prove
inflationary: Federal
Reserve Chairman Kevin Warsh said higher prices driven by the build-out of
artificial intelligence (AI) infrastructure are not necessarily inflationary. In
an exchange with lawmakers on the impact of the AI boom, Warsh said
policymakers will debate how inflationary that proves to be, and he
acknowledged the investments were already raising the prices of computer chips.
“I don’t view a one-time change in prices as necessarily being inflationary
because there’s a supply response,” Warsh said Wednesday in response to a
question during his testimony before the Senate Banking Committee. “In that
way, this is different from a foreign conflict and what it might do, which tends
to reduce the supply side of the economy.”.
(Business Standard)
Union Bank profit climbs
30% on NII growth: Union Bank of India on
Wednesday reported a 29.6% year-on-year rise in its net profit to Rs 5,332
crore for the quarter ended June, aided by a strong growth in net interest
income (NII) and improved asset quality. “We have improved our credit growth
and asset quality, which have led to higher profits during the quarter. We are
bringing down high-cost deposits and making efforts to boost lower-priced CASA
(current account savings account) deposits,” Managing Director and CEO Asheesh
Pandey said. The NII rose 10.1% YoY to Rs 10,037 while the net interest margin
(NIM) improved to 2.80% from 2.76% in the year-ago period. The
asset quality improved with the gross non-performing assets (NPA) declining to
2.65% from 3.52% a year ago and 2.82% in the previous quarter.
(Financial Express)
RBI’s governance revamp
raises the bar for bank boards, say experts: RBI has proposed easing the
approval process for institutional investors looking to acquire shares in
commercial banks, a move aimed at reducing regulatory friction for mutual
funds, insurance companies and pension funds while maintaining oversight over
significant shareholdings. In a draft amendment to its Reserve Bank of India
(Commercial Banks – Acquisition and Holding of Shares or Voting Rights)
Directions, 2025, the central bank has proposed introducing a one-time approval
mechanism for eligible institutional investors making subsequent acquisitions
of major shareholding in the same banking company.
(Financial Express)
RBI rewrites bank board
playbook from October 1: The Reserve Bank of India
(RBI) on Tuesday overhauled the framework governing matters to be placed before
bank boards, replacing the existing seven-theme structure with a
principle-based approach aimed at allowing directors to spend more time on
strategic priorities and risk oversight. The revised directions will come into
effect from October 1, with the central bank extending the implementation
timeline by a month following feedback from stakeholders. The draft guidelines
were issued on April 8. Under the earlier framework, board agendas had to be
structured around seven broad themes — business strategy, risk, compliance,
financial reporting and integrity, customer protection, financial inclusion,
and human resources.
(Financial Express)
RBI eases stake purchase
norms in banking companies by mutual fund houses, insurers and pension funds: The Reserve Bank of India
(RBI) proposed today that while AMCs, insurance companies and pension funds
will be required to get an approval from RBI for initial acquisition of major
shareholdings, all subsequent stake purchases could be made with a one-time approval.
Once received, this approval will be valid unless it is revoked by the RBI.
Currently, any AMC, insurance company or pension fund is required to get an
approval from RBI for an initial stake purchase of five per cent or more in a
bank or any subsequent stake purchase if its aggregate shareholding in the bank
falls below five per cent at any point of time. Once the one-time approval is
obtained, these entities will also be required to report any increase or
decrease in the stake above or below five per cent to RBI and the concerned
banking company within one day of such an event.
(Financial Express)
SBI appoints Sunil Agrawal
as chief financial officer: State Bank of India has
appointed Sunil Agrawal as its new Chief Financial Officer. Agrawal previously
served as the Chief Financial Officer for LIC, the nation's largest life
insurer. He brings twenty-seven years of extensive experience in financial
services and strategic planning. His expertise includes financial planning,
capital management, and regulatory engagement.
(Economic Times)
India doubles down on
mobile manufacturing; Cabinet approves Rs 62,500 crore mobile PLI 2.0: The Union Cabinet has approved a new Rs 62,500
crore Mobile Phone Manufacturing Scheme (MPMS). This replaced the earlier PLI
scheme for electronics manufacturing, which officially ended on March 31, 2026.
The scheme will help India to move beyond assembling and manufacturing
smartphones and build its own smartphone brands and design phones within India.
And develop homegrown technology and intellectual property (IP). The programme
will be in effect for five financial years, beginning in 2026-27 and ending in
2030-31.
(Business Today)
IFSCA proposes direct
listing framework in GIFT City, offering firms an IPO-free route to public
markets:
Companies
looking to go public without raising fresh capital could soon have a formal
route to list in GIFT City, with the International Financial Services Centres
Authority (IFSCA) proposing a regulatory framework for the direct listing of
equity shares and convertible securities without an initial public offering
(IPO). In a consultation paper released on July 13, the regulator proposed
detailed eligibility norms, disclosure requirements and pricing mechanisms for
companies seeking to list on recognised stock exchanges in the International
Financial Services Centre (IFSC) without undertaking a public offer.
(Business Line)
Banks courting
corporate clients for merger and acquisition financing: Leading domestic lenders have begun
approaching their big corporate clients, including conglomerates, to position
themselves for merger and acquisition (M&A) financing, after the Reserve
Bank of India’s (RBI’s) norms allowing banks to fund such transactions came
into effect on July 1. State-owned lenders are exploring tieups with foreign
banks, while private-sector peers are banking on existing corporate
relationships to participate in M&A financing as deals materialise.
(Business Standard)
Income Tax Act 2025: New
presumptive tax rules may raise tax burden for small businesses, professionals: The Income Tax Act, 2025 has retained
the basic framework of presumptive taxation but introduced a significant change
that could increase the tax burden for many small businesses and professionals.
While the turnover limits and presumptive income rates remain largely
unchanged, the new law consolidates the provisions into a single section and
bars taxpayers from claiming losses, allowances and several deductions against
presumptive income. Under the Income Tax Act,
1961, presumptive taxation was governed by three separate provisions, Section
44AD for eligible businesses, Section 44ADA for specified professionals and
Section 44AE for transporters. These prescribed fixed presumptive income rates
of 6 percent/8 percent for businesses, 50 percent for professionals and
vehicle-based income for transport operators. The turnover limit for businesses
was Rs 2 crore, extendable to Rs 3 crore where cash transactions did not exceed
5 percent. Income Tax Act, 2025 unifies presumptive taxation under Section 58
but bars all loss set-offs and deductions against presumptive income,
tightening compliance while raising the tax burden on small taxpayers with
commission income or brought-forward losses. The new provision could result
in higher tax liability because presumptive income can no longer be reduced
through various losses and deductions.
(Moneycontrol)
NPS PRIDE-Disha launched:
New PFRDA tool lets subscribers compare SIP-like pension fund returns: PFRDA) has launched NPS PRIDE-Disha (Pension
Fund Returns for Informed Decision & Empowerment), a digital
decision-support tool that allows National Pension System (NPS) subscribers to
compare the historical performance of pension funds using SIP-style return
calculations instead of relying only on traditional lump-sum return metrics. The new tool is designed
to help subscribers make better investment decisions while choosing or
switching pension funds. PFRDA has also directed all Central Recordkeeping
Agencies (CRAs) to make the PRIDE-Disha link available on subscriber login
portals and nodal office interfaces during the pension fund and scheme
selection process.
(Business Today)
Sebi tightens code of
conduct for board members on conflict of interest: Sebi has overhauled its governance framework
for board members, introducing a detailed code on conflict of interest that
significantly tightens rules on disclosures, recusals, and non-permitted
investments. The new code shows a shift from broad ethical guidelines to a more
prescriptive, compliance-driven regime in comparison to the 5-page code put in
place in 2008. The revised code explicitly bars whole-time members (WTMs) and their
families from making fresh investments in non-permitted instruments during
their tenure, while also mandating detailed disclosures of such holdings. Board
members will not be permitted to have investments in equity, any instrument
convertible into equity, or trading in derivatives of equity or commodities.
(Business Standard)
KNOWLEDGE ECONOMY
§ The
knowledge economy is an economy of products and services produced with human
capital, knowledge, skills, and intellectual property, rather than physical
assets such as land and physical labor.
§ It
refers to the ability to capitalize on scientific discoveries and applied
research.
§ The
knowledge economy represents a large share of the activity in most highly
developed economies.
§ A
significant component of its value might be intangible assets, such as the
value of its workers' knowledge or of intellectual property such as patents and
proprietary procedures.
RBI KEY RATES
Repo
Rate: 5.25%
SDF:
5.00%
MSF
/Bank Rate: 5.50%
CRR:
3.00%
SLR:
18.00%
FOREX RATES (RBI REF. RATE)
INR
/ 1 USD : 96.2219
INR
/ 1 GBP : 129.0746
INR
/ 1 EUR : 110.0798
INR
/100 JPY: 59.3300
EQUITY INDEX
Sensex:
77185.43 (+130.49)
NIFTY:
24078.50 (+26.45)
Bnk NIFTY: 57757.85 (+295.55)
Historical events: July 16 holds
profound significance: in India, the landmark Hindu Widows' Remarriage Act was
enacted in 1856, legalizing marriage for Hindu widows. On the world stage, the
historic Apollo 11 mission launched in 1969, marking the dawn of the first
successful manned lunar landing.
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