Issue: 1351
· India to cut prices of 137
cancer drugs by up to 70% from November 9.
· Government asks Meta to curb
misleading content and review Instagram, Facebook algorithms.
· FPIs pull out Rs.52,100 crore
from equities in Oct so far amid global headwinds.
· YES Bank Q2 PAT up 65%, AT-1
ruling poses Rs 5,217-cr loss threat.
· FSSAI Proposes Science-Based
Pesticide Residue Limits for Tea, Reaffirming Commitment to Consumer Safety.
· India's BoP surplus estimates
slashed as H2 headwinds loom
Europe refused US call to
impose tariffs on India, China over Russian oil: Scott Bessent: US Treasury Secretary Scott Bessent has said
European countries refused Washington's request to impose secondary tariffs on
India and China for buying Russian oil, questioning why the United States
should bear the economic burden of pressuring Moscow alone. In an interview with NBC,
Bessent said the Trump administration had approached European allies in the
spring to seek coordinated action against countries importing Russian energy. “So
we have asked in the spring, I asked our European allies to join us in putting
secondary tariffs on China, on India. They refused. So why should the US bear
the burden?” Bessent said.
(Moneycontrol)
India gets tariff reprieve
as Trump waives Russian oil penalties, but the threat lingers: US President Donald Trump’s
decision to waive punitive tariffs on countries buying Russian oil and gas
gives India relief from the threat of additional duties of up to 100 per cent
on its exports to the US. But it leaves Washington with the option of reviving
the penalties, potentially using them as leverage in ongoing bilateral trade
agreement (BTA) negotiations, experts noted. New Delhi’s position on sourcing
crude oil from Moscow and other countries will continue to be guided by its
national interest and energy security, even as the order provides for continued
US monitoring of Russian oil purchases and allows the US administration to
withdraw the waiver and reimpose punitive tariffs, sources tracking the matter
told businessline.
(Business Line)
Services exports decline
marginally in September amid AI-led muted growth of IT and software services: India’s services exports in
September fell marginally by about 0.87 per cent year-on-year to $36.4 billion
signalling slowdown in IT and IT-enabled services, which make up a chunk of the
country’s services exports. Analysts predict that slowing demand for IT
services in the Western world, advancements in AI and the impact of
geopolitical shifts on travel and logistics services, could be among key
reasons. India’s services exports, however, grew 8.7 per cent YoY to $216.3
billion in April–September 2026
(Business Line)
Farm loans lose share in
banks’ credit books as lenders turn cautious on rural exposure: Banks and non-banking financial
companies (NBFCs) are slowing the growth of their agriculture, rural and
farm-loan portfolios, reflecting a risk-off approach amid concerns over
deficient rainfall and potential fallout from El Nino conditions. Results
announced so far for the quarter ended September 2026 show agriculture and
rural lending losing share in banks’ loan portfolios, with agri loans either
contracting or growing more slowly than overall advances.
(Business Line)
Credit growth likely to see
addition up to 2% in the ongoing quarter, says PNB MD Chandra: In an interview with
BusinessLine, Ashok Chandra, MD and CEO of Punjab National Bank, noted that
this surge, along with other key factors, is projected to add up to 2
percentage points to the quarter’s growth. He added that the bank has deployed
its entire FCNR(B) deposits to pay down high-cost bulk deposits and
certificates of deposit, which will improve net interest margins.
(Business Line)
Banks eye margin recovery
in H2 as rate cycle turns: Banks expect net interest
margins (NIMs) to recover gradually in the second half of FY27 as the recent
policy rate hike begins to reverse the pressure on lending yields seen during
the earlier easing cycle. However, the recovery is likely to be uneven, with
changes in balance sheet composition, higher funding costs and the deployment
of foreign currency non-resident (FCNR-B) deposits expected to weigh on margins
at some lenders in the December quarter. The Reserve Bank of India’s
25-basis-point repo rate hike in October is expected to benefit banks with a
higher proportion of floating-rate loans, as lending rates reprice upwards. At
the same time, comfortable liquidity conditions could allow lenders to defer
raising deposit rates, providing some support to spreads.
(Financial Express)
HDFC Bank Q2 net rises 5%,
misses estimates: HDFC Bank’s net profit for the
quarter ended September increased by nearly 5% on year to Rs 19,510 crore. The
bank missed the analyst estimate of Rs 19,606 crore as per Bloomberg for the
bottom line. Explaining the relatively muted profit growth despite strong
business expansion, the management pointed to lower treasury gains compared
with the year-ago quarter. “Normalised for the treasury trading gains, you see
the year-on-year profit growth is 12.6%,” the management said. The net interest
income was up 9.7% on year to Rs 34,619 crore for the reporting quarter. Other
income was also lower by 3.6% on year due to lower treasury gains. Net interest
margin stood at 3.16% for the July-September quarter, lower as against 3.30% a
quarter ago. Analysts had pegged the net interest margins at 3.37% for the
reporting quarter.
(Financial Express)
ICICI Bank Q2 results: Net
profit rises 20.1% to Rs 14,843 crore, NII up 17.7%: ICICI Bank on Saturday
reported a 20.1% year-on-year increase in standalone net profit to Rs 14,843
crore for the July-September quarter of FY27, supported by strong net interest
income growth, lower provisions and an improvement in asset quality. The bank’s
loan portfolio grew 30% year-on-year during the quarter, while its net interest
margin (NIM) contracted by 0.12 percentage points to 4.18%. The bank also
reported an improvement in asset quality. Its gross NPA ratio fell to 1.20% at
the end of September 2026, compared with 1.38% in the preceding quarter and
1.58% a year earlier.
(Financial Express)
Axis Bank Q2 results: Net
profit rises 37.6%, net interest income up 11.8%: Axis Bank reported a 37.6%
year-on-year rise in net profit to Rs 7,003.3 crore for the second quarter of
FY27 on Saturday (October 17), supported by lower provisions and higher net
interest income. The private sector lender’s net interest income, the
difference between interest earned and interest paid, increased 11.8% year-on-year
to Rs 15,371.4 crore. The private sector lender also reported an improvement in
bad-loan ratios as advances and deposits expanded. Profit stood at Rs 5,089.64
crore a year earlier. However, earnings slipped 1.6% from Rs 7,113.92 crore in
the June quarter. The gross non-performing asset
ratio declined to 1.16% at September-end from 1.28% in June and 1.46% a year
earlier. The net NPA ratio improved to 0.35%, against 0.39% and 0.44%,
respectively.
(Financial Express)
Public sector banks' Rs 7.8
lakh core corporate loan pipeline signals capex revival: Public sector banks have revealed a corporate loan
pipeline of approximately Rs.7.8 lakh crore signaling increased credit demand.
Companies are stepping up their investment, particularly in sectors like
renewable energy and semiconductor manufacturing. Banks report varied corporate
credit growth, with some institutions witnessing over 50% increase
year-on-year. Mid-sized and large companies are leading the way in capital
expenditure, while smaller suppliers are also finding opportunities.
(Economic Times)
Private banks' margins fall
as FCNR deposits raise funding costs: In the second quarter, leading private sector
banks in India reported a drop in net interest margins. This decline was
primarily caused by the costs associated with foreign currency non-resident
deposits. Analysts noted that the leveraged nature of these deposits
significantly impacted profitability. Additionally, banks faced pressure from
faster repricing of assets as interest rates declined.
(Economic Times)
PSUs tap GIFT City for
overseas mineral hunt amid critical supply push: State-owned NMDC Ltd and Steel
Authority of India Ltd (SAIL) have incorporated subsidiaries at the
International Financial Services Centre (IFSC) in GIFT City, according to
Ministry of Corporate Affairs (MCA) records. The move assumes significance amid
India’s quest to secure critical mineral supplies, including through ventures
to tap exploration and mining opportunities overseas. NMDC Global IFSC Limited
is proposed as a strategic investment and financial platform for overseas
mineral projects, particularly critical and strategic minerals, the company
said in response to a query from Business Standard. SAIL Global IFSC Limited is
primarily set up as a group treasury centre to manage cash, intra-group lending,
currency and trade finance, according to its memorandum of association accessed
from the MCA website.
(Business Standard)
Banks also count cost of
insurance payout curbs: Banks are assessing the impact of the proposed insurance
commission curbs. Central Bank of India is expecting a 33% drop in
bancassurance fees while Canara Bank is estimating a Rs.145-crore hit to fee
income, according to top executives of these lenders. The changes proposed by
the Insurance Regulatory and Development Authority of India (Irdai) to
insurance commissions seek to rein in distribution costs and improve
transparency in sales. For banks, which earn commissions by selling policies
through their branches and other channels, lower payouts could put pressure on
a key source of non-interest income.
(Economic Times)
RBI broadens rupee-support
measures through tighter monetary conditions: RBI was combining interest-rate action,
liquidity absorption and foreign-exchange measures to address pressure on the
rupee. The report cited sources indicating that further tightening remained
possible, depending on economic conditions. The policy challenge is to support
currency stability while limiting damage to growth and borrowers. Reuters noted
that higher rates can transmit quickly to externally benchmarked loans.
Expectations of another rate increase were attributed to sources and analysts;
they were not an announced Monetary Policy Committee decision.
(Reuters)
SEBI approaches IRDAI to
explore insurance details in consolidated account statements: SEBI Chairman Tuhin Kanta Pandey said the
regulator had written to IRDAI to explore including insurance-policy
information in investors’ Consolidated Account Statements. The initiative would
expand the statement’s coverage beyond securities investments. The broader aim
is a more comprehensive financial record covering investments, deposits,
pension savings and insurance. Such consolidation could help investors review
their financial holdings together. However, the reported development concerns
discussions between regulators; it should not be treated as a fully implemented
facility or a mandatory inclusion requirement.
(PTI)
DEBT DEFLATION
· Debt deflation is an economic situation where falling
prices increase the real burden of existing debt. As asset prices and incomes
decline, borrowers may find it harder to repay loans, leading to reduced
spending, investment and further economic contraction.
·
For banks, prolonged debt
deflation can result in higher defaults, deterioration in asset quality and
increased NPAs.
RBI KEY RATES
Repo
Rate: 5.50%
SDF:
5.25%
MSF
/Bank Rate: 5.75%
CRR:
3.00%
SLR:
18.00%
FOREX RATES (RBI REF. RATE)
INR
/ 1 USD : 95.0194
INR
/ 1 GBP : 126.4081
INR
/ 1 EUR : 106.6995
INR
/100 JPY: 60.1800
EQUITY INDEX
Sensex:
74729.27 (+413.66)
NIFTY:
23146.15 (+148.80)
Bnk NIFTY: 55844.00 (+33.50)
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