Issue: 1221
· Bharti Airtel briefly
overtakes HDFC Bank to be second most valued firm.
· Prudential's India reboot
comes with a distribution problem and growth test.
· RBI elevated Gunveer Singh to
the rank of Executive Director (ED).
· Fuel price hike cuts OMC
losses by 25%; daily loss drops to Rs.750 cr
· Current account deficit to
widen to 2.3% of GDP in FY27 from 0.9% in FY26. HSBC report says.
To support farmers: After
gold, India may now make cooking oil imports costlier: India is considering a proposal
to raise import duties on vegetable oils as the government looks to support
local farmers and reduce pressure on the rupee, Bloomberg reported on Monday. According
to the report, officials are examining whether higher import taxes on edible
oils could help farmers secure better prices for their crops while also curbing
foreign-exchange outflows linked to heavy commodity imports. The discussions
come as the rupee remains Asia's worst-performing currency this year and as the
government steps up efforts to reduce dependence on imported commodities such
as vegetable oils, fertilisers, gold, and crude oil.
(Business Today)
Indian markets capable of
absorbing different types of shocks: SEBI chief on West Asia crisis: Volatility has shot up in the
financial markets due to the ongoing West Asia conflict, but the Indian bourses
have the capacity to “absorb different types of shocks”, SEBI Chairman Tuhin
Kanta Pandey said on Monday. When there is a crisis in one part of the world,
it also impacts the rest of the globe, Pandey told reporters here on the
sideline of the Regional Investors Seminar for Awareness. “Due to the
prevailing conflict in West Asia, the oil supply chain and its prices got
affected in the rest of the world. All the economies have been affected by this
and obviously, there are inflationary risks. Besides, spillover effect and
second-order effect will also come in,” he said.
(Business Line)
Unemployment among young
women rises to 18.7% in April: The unemployment rate among
women in the 15-29 age group rose to a 13-month high of 18.7% in April,
indicating fewer job opportunities and skill-mismatch in the country, according
to the Periodic Labour Force Survey data released by the Ministry of Statistics
and Programme Implementation (MoSPI). Among young males, the unemployment rate
stood at 14.1% in April. The data revealed a significant divergence between
rural and urban areas. While the unemployment rate for young women in rural
areas was recorded at 16.2%, it was 24.5% in urban areas. The unemployment rate
among young males in rural and urban areas stood at 13.3% and 15.9% respectively.
The overall youth unemployment rate under the current weekly status (CWS)
reached a 10-month high of 15.3% in April, with the male unemployment rate at
14.1% and the women’s rate at 18.7%.
(Financial Express)
FinMin’s latest austerity
push: Banks and financial institutions asked to shift to EVs, virtual meet: The Finance Ministry urged
public sector banks and financial institutions to adopt austerity measures and
shift to electric vehicles, according to PTI. The appeal came after Prime
Minister Narendra Modi, on May 10, urged the nation to use fuel carefully and
postpone gold purchases and foreign travel, among other measures, to strengthen
the economy. These austerity measures came against the backdrop of the West
Asia conflict, which has affected crucial supply chains, pushing crude oil
prices above $100. The Department of Financial Services, in a circular issued
to public sector banks (PSBs), regional rural banks (RRBs), public sector
insurance companies (PSICs) and financial institutions (PSFIs), urged them to
reduce travel expenses and adopt electric vehicles (EVs). All
meetings, reviews and consultations should be conducted through video
conferencing unless physical meetings are specifically required, it said.
(Financial Express)
PSU banks step up hiring in
cyber security, tech to tackle emerging risks: As banks increasingly deploy
artificial intelligence(AI) to enhance efficiencies, improve customer service
and also combat cyber risks, they are strengthening their IT systems and hiring
requisite talent. State Bank of India
Chairman C S Setty said recently the bank had made large-scale IT recruitments
last year and would look to fill more posts.
He added some mid-level specialised positions, particularly in the
cybersecurity space, would be filled this year. Banks’ increased focus on
cybersecurity follows Finance Minister Nirmala Sitharaman’s flagging of risks
tied to Anthropic’s Claude AI model in a meeting with banks last month. The
ministry also urged banks to adopt proactive measures against emerging risks
from AI to safeguard their systems, data, and customers’ money.
(Financial Express)
Prudential buys 75% stake
in Bharti Life: UK-based
insurance giant Prudential will pick up a 75% stake in Bharti Life Insurance,
marking the first major foreign investment in the life insurance sector after
the government raised the FDI limit to 100% from 74%. The transaction, to be
funded through existing resources, involves an initial cash consideration of Rs.3,500
crore, and implies a valuation of around Rs.4,670 crore. The deal also involves
a potential contingent consideration of up to Rs.700 crore linked to the
fulfilment of certain conditions. Including the contingent payout, Bharti Life
Insurance could be valued at a higher Rs.5,600 crore.
(Financial Express)
Credit card profit pool
shrinks as revolvers evolve: "The decline in the level
of revolvers has impacted profitability," ICICI Bank group CFO Anindya
Banerjee said, adding that the business remained profitable and retained
multiple levers-including cost management and rewards optimisation-to sustain
returns. "It is a business one would continue to have a very strong focus
on."
(Economic Times)
UPI processes 85% of
India's payment volumes but just 9.5% of value; RTGS dominates at 68.6%: UPI processed 85.5% of all
payment transactions in India by volume in the second half of CY 2025 but
accounted for just 9.5% of the total value — while RTGS, handling a mere 0.1%
of volumes, dominated with 68.6% of total transaction value, according to the
Reserve Bank of India's Payments System Report for December 2025.
(Economic Times)
SBI employees' federation
stages dharna in Kolkata, plans nationwide strike on May 25-26: State Bank of India Staff
Federation protested in Kolkata demanding recruitment and an end to mis-selling
insurance. Employees will strike nationwide on May 25 and 26. The federation
alleges issues with resolving employee concerns and agreements. Previous
protests included badge-wearing and demonstrations. Future actions involve
candle marches and the planned strike.
(Economic Times)
US Justice Department drops
all charges against Adani, case closed permanently: The U.S. Department of Justice has permanently
dropped all criminal charges against Indian tycoon Gautam Adani and his nephew
Sagar, bringing high-profile securities and wire fraud case in New York to a
complete close after prosecutors concluded they could not sustain the
allegations. With this, multiple US regulatory and legal investigations
involving the group have all closed in the last couple of days. Last week, the US
Securities and Exchange Commission settled civil allegations against the two
men tied to disclosures made to investors in connection with solar energy
projects in India. Court filings showed Gautam Adani agreed to pay USD 6
million and Sagar Adani USD 12 million, without admitting or denying
wrongdoing.
(Business Standard)
FCI to raise Rs 50,000 cr
to address cash flow mismatch: To meet cash flow mismatches and provide
temporary working capital, the Food Corporation of India (FCI) will raise
short-term loans of Rs 50,000 crore from scheduled banks for a three-month
tenure, with a green shoe option to mop up an additional Rs 25,000 crore. According
to a tender floated by the FCI, these loans will be unsecured, and offers will
remain valid up to August 31, with loan disbursals made in tranches according
to FCI’s operational requirements. “The rising cost of holding hugely surplus
foodgrains continues to boost food subsidy expenditure while short-term loans
are used to bridge the gap between the periodic allocation under food subsidy
and rising costs,” an official told FE.
(Financial Express)
India Targets $1 Trillion
Exports This Year, $2 Trillion in Five Years: Union Minister of Commerce and Industry Shri
Piyush Goyal today said that India has set a target of achieving exports worth
1 trillion dollars this year and 2 trillion dollars over the next five years,
asserting that this would be the true hallmark of an Atmanirbhar Bharat.
Addressing the website launch ceremony of Bharatiya Vyapar Mahotsav in New
Delhi, he said exports this year have reached 863 billion dollars, nearly 5 per
cent higher than the previous year, despite global challenges. He said both
goods and services exports have increased, calling it a significant achievement
in the present global environment. Shri Goyal said this is not merely the
government’s target but the nation’s target, and the Central Government stands
ready to provide whatever support is needed to achieve it. He said that over
the last three-and-a-half years, efforts have been made towards Free Trade
Agreements with nearly 38 developed countries, which will provide preferential
access to large markets where Indian goods can be sold at lower import duties
compared to competitors. He said these agreements will gradually come into
effect, adding that the Oman FTA may come into force from 1 June, while other
finalised FTAs awaiting paperwork will also become operational subsequently.
(PiB)
Shri Saurabh Vijay assumes charge as Chief Executive Officer of UIDAI: Shri Saurabh Vijay assumed
charge as the Chief Executive Officer of Unique Identification Authority of
India (UIDAI) on Monday. He is an IAS officer of the 1998 batch of the
Maharashtra cadre. He was Principal Secretary
(Expenditure) in the Finance Department, Government of Maharashtra, prior to
joining UIDAI.
(PiB)
RBI withdraws
IFR requirement for banks maintaining market risk capital: The Reserve Bank of India (RBI) on Monday
removed the investment fluctuation reserve (IFR) requirement for banks
maintaining capital charge for market risk under the revised investment
portfolio framework, while allowing existing IFR balances to be recognised as Common
Equity Tier 1 capital after transfer to reserve or profit accounts. For
regulated entities that will continue under the IFR framework — including urban
co-operative banks (UCBs), small finance banks (SFBs), payments banks, and
regional rural banks (RRBs) — the central bank said the minimum IFR requirement
will now be assessed only on balance sheet dates instead of on a continuous
basis. The RBI issued the final amendment directions after examining
stakeholder feedback on the draft norms released on April 8. The draft
directions had proposed removing IFR requirements for bank categories
maintaining capital charge for market risk and following revised norms on the
classification, valuation, and operation of investment portfolios.
(Business Standard)
Stablecoins fail core tests
of money; CBDC not risky: Reserve Bank of India: The Reserve Bank of India
(RBI) has said stablecoins fail the core tests of money — “singleness,
elasticity and integrity” of payments — while reiterating that such virtual
digital assets pose jurisdictional and financial stability risks. The banking
regulator said that Central Bank Digital Currency (CBDC) instead offers similar
efficiencies without the risks that are associated with stablecoins. “The
traditional monetary system, globally, rests on a two-tier banking system,
wherein the central bank money-based settlement forms the edifice, while
commercial banks can issue money which is beyond their reserves held, as the
central bank can always provide liquidity for settlement, preventing a gridlock
scenario,” the RBI said in its Payments Systems Report.
(Business Standard)
W-SHAPED ECONOMY RECOVERY
§
A W-shaped economic recovery, also known as a
"double-dip recession," occurs when an economy experiences a sharp
recession, a brief period of growth, a second sharp decline, and finally a
sustained recovery. When charted on a graph, these economic indicators form the
letter "W".
§
A W-shaped cycle is notoriously painful for markets
and citizens. Because it represents an extended period of extreme volatility,
the fake-out recovery can cause investors to jump back into the market too
early and suffer heavy losses. Additionally, going through essentially two
recessions can utterly shatter both business and consumer confidence.
§ A notable example to this is; The
U.S. economy experienced a brief recession in 1980, followed by a fleeting,
year-long recovery period, before dropping into a much harsher and prolonged
recession in 1981–1982.
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 : 96.2948
INR
/ 1 GBP : 128.5439
INR
/ 1 EUR : 112.0416
INR
/100 JPY: 60.6100
EQUITY INDEX
Sensex:
75315.04 (+77.05)
NIFTY:
23649.95 (+6.45)
Bnk NIFTY: 53537.00 (-173.35)
Historical
events: May 19 marks key
milestones, including the death of Indian industrialist Jamsetji Tata in 1904,
the opening of the Indian Navy's first submarine base in 1971, and the birth of
Vietnam's revolutionary leader Ho Chi Minh in 1890. In 1954: The Government of
India formally constituted the National Film Board.
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