Issue: 1361
· Alphabet shares crash 13%,
wiping out $500 billion as weak ad sales fuel AI concerns.
· Noel Tata to retire as
chairman of Trent on Nov 11; Bahram Vakil to take over.
· US sues Google over failure
to reinstate Army Reservist after military leave.
· US economy grows
faster-than-expected 3.4%, most in a year.
· IDBI Bank employees oppose
Fairfax deal, seek review of proposed stake sale.
· Equitas SFB shares crash 20%
as CEO Vasudevan resigns to remove ‘overhang’.
· India Post and UTI Mutual
Fund Strengthen Partnership to Expand Pan-India KYC Verification Services.
Finance Ministry projects
Q2 GDP growth at 7.35%: The Indian economy is estimated to have grown by 7.35% in the second
quarter of the fiscal, as per the finance ministry’s nowcasting model, and
domestic demand, investment activity and structural reforms are expected to
support growth through the remainder of the year. “Building on growth of 7.8%
in Q1, the Department’s nowcasting model estimates real GDP growth at 7.35% in
Q2 FY27,”said the finance ministry’s Monthly Economic Review (MER), which was
released on Thursday.
(Business Today)
IMF flags Super El Niño
risks to India’s growth, says impact yet to materialise: According to the IMF, India
continues to act as a significant growth engine within the global economy.
Despite looming threats posed by weather phenomena like Super El Nino, these
risks have yet to materialize. Recent adjustments have raised growth forecasts
to 7 percent for the fiscal years 2027 and 2028, reflecting robust domestic
demand and a thriving service sector.
(Economic Times)
Services growth widens in
August; 13 of 19 sectors post double-digit gains: Thirteen of the 19 services
sub-sectors recorded double-digit growth in August, up from 10 in July,
according to the fifth print of the trial Index of Services Production (ISP)
released by the National Statistical Office (NSO) on Thursday. Overall, 17
sub-sectors expanded -- same as the previous month. An upward growth momentum of
double digits is shown by the ISP since June 2026, with an average growth of
13.6 per cent during the three months till August 2026. Given the weight of services
sector in overall GDP, these trends indicate the potential of a healthy GDP
growth for the second quarter of 2026-27. This is also confirmed by the second
quarter IIP growth, which averaged 7.3 per cent.
(Business Standard)
FinMin defends IDBI Bank
stake sale valuation, says panel discretion raised deal value by Rs 3,917 crore: The Ministry of Finance on
October 29 issued a detailed clarification defending the valuation and bidding
process for the strategic restructuring of IDBI Bank, stating that special
powers delegated to the Core Group of Secretaries on Disinvestment (CGD)
allowed it to determine the "best-round" procedure and boost the
overall transaction value by Rs 3,917 crore. The procedure for the
"best-offer" round was determined by the CGD itself, the ministry
said. "The reserve price was neither decreased, nor increased, and the
first round itself became functus officio after the initial bids were not
approved." On October 14, the Cabinet
Committee on Economic Affairs approved the strategic privatisation and sale of
a combined 60.72% stake in IDBI Bank to Canadian investment firm Fairfax
Financial Holdings. The total value of the stake sale stood at approximately Rs
53,000 crore, with the approved acquisition bid priced at Rs 81 per share.
(Moneycontrol)
Health insurers seek
expense cap tweaks: Standalone health insurers
have requested that mandatory insurance products be excluded from
expense-of-management calculations. They argue that including these products
creates an imbalance for their business model. The Insurance Regulatory and
Development Authority of India is considering changes to EoM regulations and
limits. Insurers believe that the exclusion would help provide a more equitable
competitive landscape. The proposed changes aim to revise expense calculation
methods and set product-wise commission caps.
(Economic Times)
West Asia conflict drives
15-20% rise in corporate working-capital demand at banks: Working-capital demand from
banks has increased significantly due to the ongoing conflict in West Asia.
Higher raw-material costs and elongated shipping timelines have led to greater
funding needs for corporates. Mid- and large-sized companies reported a 12-20%
increase in working-capital requirements. Several private sector banks have
recorded strong growth in corporate lending during the recent quarter. This
momentum was driven primarily by working capital needs and refinancing efforts.
(Economic Times)
Fintechs to lay out a code for technology vendors amid rising
cyberthreats and security risks: Unified Fintech Forum is
developing a framework to encourage best practices among technology service
providers. This initiative aims to improve cybersecurity preparedness and
operational resilience in the fintech sector. Banks and fintech companies
increasingly rely on third-party vendors for various services and their
failures can impact regulated entities. Registration with the Forum may provide
these vendors with preference during selection by financial institutions.
(Economic Times)
PNB suspends 12 employees,
files CBI case over alleged bank fraud involving Rs.10 crore: Punjab National Bank has taken
action by suspending twelve staff members linked to unauthorized fund transfers
utilizing the branch manager's password. Evidence points to a female employee
collaborating with external parties in these transactions. Current estimates of
the losses indicate they are below Rs 10 crore, contradicting widespread claims
online.
(Economic Times)
Post rate hike, highly
rated large companies step up rupee bond issuances: Shrinking liquidity surplus in the banking system, rising
Government Securities yields and bank lending rates, and the possibility of
further monetary tightening is prompting highly rated large companies, mainly
in the non-banking financial company space, to step up domestic rupee bond
issuance for raising funds. Companies that raised more than Rs.1,000 crore via
non-convertible debentures since the repo rate hike include SIDBI (Rs.5,176
crore for 38 months at a coupon rate of 8.05 per cent), NABARD (Rs.3,279 crore
for 39 months at 8.13 per cent), L&T Finance (Rs.1,500 crore for 35 months
at 8 per cent),
(Business Line)
Flipkart, Exim Bank lead
$8.13 billion external borrowing proposals in August: Indian companies have sought to raise a total
of $8.13 billion in external commercial borrowings. This amount represents a 6%
increase from the previous month's $7.70 billion. Notable proposals include
Flipkart Internet Pvt Ltd aiming for $1.14 billion through a foreign loan.
Additionally, the Power Finance Corporation and several other firms are looking
to raise significant amounts for various purposes.
(Economic Times)
Equitas Small Finance Bank
chief PN Vasudevan plans exit over perceived conflict involving daughter's NBFC: Equitas Small Finance Bank
founder cum managing director PN Vasudevan has announced his plan to step down
amid concerns over a perceived conflict of interest related to his daughter who
is a co-promoter of a non-banking financial company. The shares tanked 20% to Rs
52.04 as the sudden announcement stumped investors, before recovering to end at
Rs 56.99 on BSE, about 12.4% down from yesterday's close of Rs 65.05.
(PiB)
Supreme Court says banks
must compensate digital fraud victims for losses caused by negligence: The Supreme Court on Thursday said banks must
be made accountable to indemnify losses suffered by digital fraud victims, who
should receive compensation of at least the amount lost if an investigation
establishes that the offence resulted from a failure of due diligence by the
financial institutions.Observing that despite the fact that cyber crimes fell
by 50 per cent, yet victims lost Rs 800 crore so far this year, a bench
comprising Chief Justice Surya Kant and justices Joymalya Bagchi and V Mohana
said the proposed Reserve Bank of India (RBI) regulatory framework must
incorporate enforceable provisions for compensation, preventive intervention
and institutional accountability.
(Business Line)
SC acts tough, questions
MCA’s control over NCLT: The Supreme Court on Thursday questioned the
ministry of corporate affairs’ (MCA) alleged excessive control over the
functioning of the National Company Law Tribunal (NCLT), which is vested with
adjudicatory powers under the Companies Act and the Insolvency and Bankruptcy
Code. The apex court observed that the
NCLT’s administration had been “completely hijacked” by the ministry, raising
concerns over its autonomy. The court said the power to appoint staff should
rest with the NCLT president and issued notice to the Centre on a petition
challenging the outsourcing of recruitment to a private company. It also
directed the presidents of the NCLT and the National Company Law Appellate
Tribunal (NCLAT) to submit detailed proposals within four weeks on their
staffing, buildings, land and other infrastructure needs.
(Financial Express)
New RBI forex derivative
rules make FCNR(B) hedging costlier for banks: Hedging dollar interest payments on foreign
currency non-resident (bank), or FCNR(B), deposits is set to become costlier
for banks, with the RBI requiring the lenders to set aside cash equivalent to
20 per cent of the exposure under its Foreign Exchange Risk Reserve (FERR)
framework introduced earlier this month. The 12-month dollar-rupee forward premium has risen
by 102 basis points in October so far, increasing the cost of hedging future
dollar payments. The premium, which reflects the difference between forward and
spot exchange rates, rose to 4.38 per cent on Thursday from 3.36 per cent at
the end of September. The RBI introduced FERR to curb volatility in the
rupee. Under the framework, the reserve is equivalent to 20 per cent of the
rupee value of the notional amount of eligible foreign exchange derivative
contracts. It applies to specified rupee-linked contracts where users buy
foreign currency to hedge current account transactions and the notional value
exceeds $2 million. Banks must also maintain the reserve for eligible contracts
undertaken to hedge currency risks on their own assets and liabilities.
(Business Standard)
MERCANTILISM
Ø Mercantilism was an economic practice from the 16th
to 18th century, where nations sought to increase wealth through export surplus
and controlled trade.
Ø
The
system emphasized accumulating precious metals and often used military force to
protect trade interests and enforce monopolistic practices.
Ø
Although
considered outdated, elements of mercantilism persist today, with countries
like China and Russia controlling trade and imposing tariffs.
Ø
The
rise of capitalism offers more consumer choice and less government control in
trade compared to the restrictive practices of mercantilism.
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 : 95.3688
INR
/ 1 GBP : 126.9581
INR
/ 1 EUR : 106.2145
INR
/100 JPY: 60.4200
EQUITY INDEX
Sensex:
74151.04 (+905.01)
NIFTY:
22936.75 (+237.90)
Bnk NIFTY: 54909.65 (+642.25)
****WISHING A NICE DAY****
Visit our website www.thebankingupdates.com
For Regular updates, Monthly e-magazines &
Promotion Study materials
CLICK HERE TO JOIN OUR COMMUNITY/GROUP FOR
DAILY UPDATES
CLICK HERE TO JOIN OUR CHANNEL FOR DAILY
UPDATES & QUIZ
Contact us: # 8261802533
Email: bankingupdates2020@gmail.com
CLICK HERE TO ORDER BANK PROMOTION KIT