Issue: 1203
· RBI finalises Expected Credit
Loss (ECL) norms, rollout confirmed from April 1, 2027.
· RBI tightens bad loan recognition
rules, aligning Indian banks with global standards.
· MobiKwik receives RBI
approval for NBFC licence, expanding fintech lending space.
· Sensex rises ~639 points to
close above 77,300; Nifty crosses 24,000.
· Goldman Sachs cuts India’s
growth forecast to 5.9% due to oil price risks.
· AU Small Finance Bank reports
65% jump in Q4 profit driven by lower provisions.
· CII flags loan recovery
delays and legal hurdles as key banking challenges.
India- New Zealand-FTA
could absorb at least 12% of India’s Gulf exports: New Zealand could absorb at
least 12 percent of India’s exports currently exposed to the Strait of Hormuz
if disruptions in the key shipping route persist, according to a Moneycontrol
analysis of trade data. The estimate assumes a prolonged blockade of the Hormuz
corridor and a slower recovery in demand from affected Gulf markets. India
and New Zealand on April 27 signed a free trade agreement (FTA), concluding 13
months of negotiations. The pact is expected to significantly boost bilateral
trade, with Wellington offering zero-duty access to 100 percent of Indian
exports. New Delhi, in turn, has agreed to eliminate tariffs on 70 percent of
tariff lines, covering about 95 percent of New Zealand’s exports by value,
while keeping sensitive sectors such as dairy outside the agreement.
(Moneycontrol)
NSO moots a new Index of
Service Production with 2024-25 as base year: The National Statistics Office
(NSO) on Monday proposed using aggregated goods and services tax (GST) data to
monitor the progress of the services sector through an Index of Service
Production (ISP) with 2024-25 as the base year. This initiative by the
country’s statistics machinery addresses the need for high-frequency indicators
to track the short-term performance of the services sector, which contributes
over 50 per cent to gross value added (GVA). The core need stems from the
absence of an index that would provide economic trends, which would complement
the Index of Industrial Production (IIP) on short-term movements in the
economy.
(Business Standard)
West Asia crisis: India
expects FY27 fertiliser subsidy bill to rise 20%: India, the world’s biggest
urea importer, expects its fertiliser subsidy bill for the current financial year
(FY27) to swell by about 20 per cent due to a surge in global prices amid the
West Asia crisis, a senior official said on Monday. Addressing an
inter-ministerial briefing on the impact of recent developments in West Asia,
Aparna S Sharma, additional secretary in the Department of Fertilisers,
however, added that the retail prices of urea and di-ammonium phosphate (DAP)
would remain unchanged, and that there was adequate supply of fertilisers for
the kharif season. “Despite the actual (non-subsidised) price of a 45 kg urea
bag being at Rs. 4,000, the Centre will continue to provide the same at a
highly affordable rate of Rs. 266.5 per bag,” Sharma said. A jump in subsidies
is projected as the country plans to import 6.4 million tonnes (mt) of urea and
1.9 mt of other fertilisers at high prices this kharif season.
(Business Standard)
RBI to introduce ECL
provisioning framework for banks and FIs from April 1, 2027: Banks and Financial
Institutions will face tighter norms relating to asset classification and
provisioning, whereby they will have to adopt a staging criteria for asset
classification under the Expected Credit Loss (ECL) approach against the
current incurred-loss-based provisioning framework. Further, they will have to
introduce additional early warning indicators for spotting stressed assets. The
aforementioned norms, which will come into effect from April 1, 2027, are as
per RBI’s amendment directions for dealing with stressed assets. As
per the amended prudential norms on capital adequacy, banks and FIs will
introduce a staging criteria for asset classification (Stage-1: loans with low
risk; Stage-2: loans with increased risk; and Stage-3: impaired loans) under
ECL approach even as extant norms for Non-performing Asset (NPA) classification
continue. ECL approach requires pro-active provisioning rather than waiting for
an asset to turn non-performing.
(Business Line)
RBI sets 6-month deadline
to classify wilful defaulters after NPA tag: RBI said that if a wilful
default is observed during an internal preliminary screening, a bank shall
complete the process of classifying or declaring the borrower as a wilful
defaulter within six months of the account being classified as an NPA. This
RBI directive on Commercial Banks – Treatment of Wilful Defaulters and Large
Defaulters (Amendment Directions) will come into effect from April 1, 2027. A
wilful default occurs when a unit has defaulted in meeting its payment /
repayment obligations to the lender, even when it has the capacity to honour
the said obligations; has siphoned off the funds; has disposed off or removed
the movable fixed assets or immovable property given by it for the purpose of
securing a term loan without the knowledge of the bank/lender.
(Business Line)
Banks trim workforce as
digital push reshapes operations: Indian banks are tightening
their workforce, with fresh data showing a steady reduction in employee
strength. The trend points to a structural shift in banking operations. As
digital transactions rise and physical branch footfalls stabilise, lenders are increasingly
relying on automation and artificial intelligence-led underwriting. Among large
private lenders, HDFC Bank saw its total employee count decline from 2.15 lakh
in FY25 to 2.11 lakh in FY26. Similarly, Axis Bank trimmed its workforce to
1.01 lakh in FY26 from 1.04 lakh in FY25 and 1.04 lakh in FY24.
(Financial Express)
SBI cards sells
Rs 1,800-crore bad loans to Integro Finserv: SBI Cards has taken a bold step in
fortifying its financial health by offloading a considerable portion of its
stressed credit card debt, valued at approximately Rs. 1,800 crore, to Integro
Finserv. This transaction is a critical aspect of SBI Cards' plan to address
mounting delinquencies and elevate the overall quality of its credit card
offerings.
(Economic Times)
MobiKwik gets
RBI nod for NBFC licence, to launch in-house lending arm: Financial Technology company One MobiKwik
Systems said it has received an approval from the Reserve Bank of India for a
non-banking financial company (NBFC) licence on Monday, paving the way for the
launch of its in-house lending business. The company will set up a wholly owned
subsidiary, MobiKwik Financial Services Private Limited, to expand its
regulated lending operations and roll out new credit products for consumers and
merchants.
(Economic Times)
Corporate credit
card overdue applicable only to corporate entity: RBI: RBI said that for corporate credit cards
issued under the joint liability structure, overdue reporting and asset
classification will be applicable only to the corporate entity. In the new
asset classification, provisioning, and income recognition directions, the RBI
said, “…in cases of corporate credit cards issued under the joint liability
structure, overdue reporting and asset classification actions shall be
applicable only for the corporate.” In the notification, the RBI has retained
that card issuers shall report a credit card account as 'past due' to credit
information companies (CICs) or levy penal charges, that is, late payment
charges and other related charges, if any, only when a credit card account
remains 'past due' for more than three days.
(Business Standard)
Amazon to scale ‘Amazon
Now’ to 100 cities, 1,000 micro-fulfilment centres: Amazon on Monday said it will expand its
ultra-fast delivery service, Amazon Now, to 100 cities across India,
significantly ramping up its quick commerce footprint as competition
intensifies in the segment. The company plans to scale its specialised
fulfilment infrastructure to over 1,000 micro-fulfilment centres (MFCs) to
support the rollout. Amazon Now offers a curated range of thousands of
daily essentials—including groceries, fresh produce, frozen foods, personal
care items, beauty and fashion products, small appliances, baby products, pet
supplies and healthcare supplements—delivered within minutes.
(Business Line)
Sun Pharma inks
‘transformatory’ agreement to buy US-based Organon for $11.75 billion: Sun Pharmaceutical Industries has inked an
agreement with United States-based Organon & Co to script the largest
overseas buy for the company, and indeed the domestic pharmaceutical industry,
besides being among the largest deals for corporate India. Sun is set to
acquire all outstanding shares of Organon for $14 per share in an all?cash transaction with an enterprise valuation of
$11.75 billion.
(Business Line)
Department of Posts and
DTDC Sign MoU to Strengthen Logistics and E-Commerce in India: In a significant development to enhance
India’s logistics and e-commerce ecosystem, the Department of Posts (DoP) and
DTDC Express Limited have signed an MoU. This partnership aims to leverage DoP’s vast
infrastructure and network, coupled with DTDC’s logistics experience, to
significantly improve parcel delivery operations across India.
(PiB)
Govt reviews divestment
plans, IDBI Bank stake sale: Government officials are
reviewing the IDBI Bank disinvestment strategy. This comes after weak investor
interest and market volatility impacted the proposed sale. A core group of
secretaries is deliberating on revised valuations and timelines. Finance
Minister Nirmala Sitharaman confirmed the strategic sale will proceed. The
government aims to conclude the IDBI Bank transaction soon.
(Economic Times)
RBI asks banks
to report overseas rupee OTC derivative contracts to CCIL: The RBI on Monday asked banks to report
all over-the-counter (OTC) foreign exchange derivative contracts involving the
rupee undertaken globally by their related parties to Clearing Corporation of
India, while providing them certain operational flexibility. In
a move aimed at improving transparency in the derivatives market, the central
bank has issued directions on 'Reporting Instructions for Authorised Dealer
Category - I Banks'. OTC derivatives mean derivatives other
than those which are traded on stock exchanges and include those traded on
electronic trading platforms.
(Economic Times)
RBI eases
risk-weight trigger for unrated big-ticket loans, tweaks norms: The threshold for applying a 150 per cent
risk weight on unrated exposures to corporates and non-banking financial
companies (NBFCs) has been raised to Rs. 500 crore from the Rs. 200 crore
proposed earlier, according to the final directions on Basel III capital charge
for credit risk under the standardised approach, which will be implemented from
April 1, 2027. The RBI has also withdrawn the provision requiring higher risk
weights for exposures that were previously rated but subsequently became unrated.
For bank exposures, the RBI has discontinued the proposed SCRA-based grading
framework for unrated exposures. Instead, it has prescribed a uniform risk
weight of 100 per cent for long-term exposures and 50 per cent for short-term
exposures. In the case of foreign bank branches in India, external credit
ratings of the parent bank may be used to compute risk weights. The regulatory
retail exposure framework has been expanded to include all small businesses,
including non-micro, small, and medium enterprises, with turnover of up to Rs. 500
crore on a standalone or group basis. The exposure limit for classification
under regulatory retail has been increased to Rs. 10 crore per counterparty
from Rs. 7.5 crore earlier.
(Business Standard)
WAGE DRIFT
· Wage
drift is defined as the difference or change in the wage actually paid to a
worker as compared to a locally negotiated wage. The increase could be due to
several reasons such as overtime, bonus payment paid out by the company etc.
·
Wage drift is the difference
between the rates negotiated by a company and wages actually given to a worker
by the end of a period. Due to uneven demand, the company at times asks
employees to put in extra work hours to meet the demand. In that case, a
company has to pay overtime to the workers on an hourly basis. Overtime would
result in a higher wage given to an employee when compared with the one
negotiated by a company at the beginning of the contracts. This is because the
wage would now include the overtime component.
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 : 94.2168
INR
/ 1 GBP : 127.5287
INR
/ 1 EUR : 110.4654
INR
/100 JPY: 59.1400
EQUITY INDEX
Sensex:
77303.63 (+639.42)
NIFTY:
24092.70 (+194.75)
Bnk NIFTY: 56264.30 (+174.55)
Historical
events: April 28 marks
significant historical milestones, notably the 1740 death of Maratha leader
Peshwa Bajirao I, the 1952 end of the war between India and Japan, and the 1945
execution of Italian dictator Benito Mussolini. It is observed globally as the
World Day for Safety and Health at Work.
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