Investments in domestic capital markets via participatory notes (P-notes) have surprisingly surged to 4-month high of Rs 1.78 lakh crore at the end of March despite stringent norms put in place by Sebi to curb inflow of illicit funds. P-notes are issued by registered Foreign Portfolio Investors to overseas investors who wish to be a part of the Indian stock markets without registering themselves directly. They however need to go through a proper due diligence process.
According to Sebi data, total value of P-note investments in Indian markets – equity, debt and derivatives -increased to 1,78,437 crore at March-end, from Rs 1,70,191 crore at the end of February. Prior to that, the total investment value through P-notes stood at Rs 1.75 lakh crore in January-end and Rs 1.57 lakh crore in December-end. In March, investments through the route had touched the highest level since November, when the cumulative value of such investments stood at Rs 1,79,648 crore.
The RBI has said deposits of demonetised notes with a value of over Rs 5,000 would be allowed just once in a bank account between now and December 30.
The announcement not only lengthened the list of abrupt changes enforced since the note recall was announced on November 8 but also fuelled suspicion that the government is trying to dissuade people from depositing demonetised notes.
The value of such deposits is said to have touched Rs 14 lakh crore, a tad shy of the original estimate of Rs 15.44 lakh crore worth of the demonetised Rs 1,000 and Rs 500 notes.
A high percentage of such deposits would suggest only an insignificant amount of black money was being kept as high-value notes and/or dodgers found some way to beat the system. Another possibility is that a sizeable chunk of counterfeit notes may have entered the banking system, taking advantage of the chaos that followed demonetisation.
However, there seemed to be an attempt to shift the goalposts once again with the RBI apparently suggesting in a reply to a Right to Information (RTI) query that the total number of demonetised notes was actually more than Rs 20 lakh crore — a surprising 30 per cent increase, compared with what the government had said earlier.
Public sector banks (PSBs) have written off Rs 1.54 lakh crore of bad loans between April 2013 and June 2016, Parliament was informed today. During 2013-14, all PSBs written off Rs 34,409 crore non-performing assets (NPAs). The amount increased further to Rs 49,018 crore in the following year. Banks wrote off NPAs of Rs 56,012 crore during 2015-16, Minister of State for Finance Santosh Kumar Gangwar said in a written reply to the Rajya Sabha.
He further said that Rs 15,163 crore write-off of NPA has taken place during the first quarter of the current fiscal.
Replying to another question, Gangwar said, there were 661 NPA accounts above Rs 100 crore amounting to Rs 3.78 lakh crore from public sector banks as on March 31, 2016.
As on September 30, gross NPAs of public sector banks rose to Rs 6,30,323 crore as against Rs 5,50,346 crore by June end. This works out to an increase of Rs 79,977 crore on quarter on quarter basis.
Underlining that 87 persons owe more than Rs 85,000 crore to public sector banks (PSBs), the Supreme Court said on Monday that the Reserve Bank of India (RBI) should not work in the interest of the banks but in the interest of the country which calls for disclosing the names of the biggest defaulters.
After going through a list of defaulters submitted in a sealed cover envelope by the RBI, a bench led by Chief Justice of India T S Thakur disclosed that there are 87 individuals who owe Rs 500 crore or more to the banks and bad loans on account of their default to repay totalled Rs 85,000 crore.
“See this amount…if we had asked for details of those who owe Rs 100 crore, this could be another Rs 1 lakh crore…why should we not put the names of these defaulters in public domain? The RBI publishes a list of wilful defaulters every year. It does not matter whether they are wilful defaulters or not but they certainly owe Rs 500 crore and more to the banks… people may have a right to know,” said the bench, also comprising Justices D Y Chandrachud and L N Rao.
RBI was asked to explain the huge amount of loans written off by PSBs in the last five years after the top court took suo motu cognizance of The Indian Express report dated February 8, 2016, that Rs 1.14 lakh crore had been written off as Non-Performing Assets (NPAs) by 29 state-owned banks in the last three years.
All-India Bank Employees Association (AIBEA) today threatened to make public the names of top 7,000 wilful corporate loan defaulters who have defrauded around Rs 70,000 crore.
The union also demanded filing criminal cases against these defaulters.
AIBEA General Secretary C H Venkatachalam also said around 10 lakh employees and officials would go on a one-day strike, called by nine unions on July 29 to oppose what he calls the “anti-people banking reforms being pushed by the government.”
“Wilful defaulters have taken loans for some purpose but have diverted and misused the money. There are around 7,000 big companies who are wilful defaulters and they owe Rs 70,000 crore to the system. We will reveal their names in a few days,” Venkatachalam said here.
He accused the government of going soft on these big defaulters saying, “we believe the government is soft on wilful defaulters. We want to know why no criminal action is taken against them, but only civil suits are being filed against them?”
Expressing concern over the delay in implementation of projects related to investments, Assocham said it could adversely impact the ‘Make in India’ programme launched by Prime Minister Narendra Modi. “The campaign launched with much fan-fare aimed to provide domestic and overseas investors with an environment that is conducive to manufacturing, but the delay in implementation of investment projects is denting the sentiment of the investors. Assocham Secretary General DS Rawat told PTI.
“This even may put an adverse impact on hopes for the success of Make in India campaign,” he said. Investment announcements were being made, but ultimately investments were not happening at the ground level. At the same time some of the investments have been facing long time delays mainly due to red tapism, which hurt the sentiment of investors and also incur huge loss to the investors, Rawat said. “In such a situation government needs to have a strong plan to prioritise for cleaning up of delayed projects in the form of effective implementation and it would be only possible when appropriate target-oriented roadmap has been created for authorities as well as investors,” he said. Therefore, Government needs to limit the timeframe for each clearance authority, failing which it should be penalised.
BAD LOANS For the year-ending March 2015, gross NPAs of scheduled commercial banks stood at Rs 3.02 lakh crore in absolute terms, or 4.6 per cent of total advances. Six months later, this rose to 5.1 per cent. The stressed advances ratio — stressed assets is defined as bad loans plus loans that have been restructured by banks — increased to 11.3 per cent in September 2015 from 11.1 per cent in March. Private estimates of stressed assets, however, are significantly higher and vary between 17.5 per cent and a quarter of all bank advances.
Incremental investments, or projects being implemented, saw an uptrend in Q3FY16, reports fe Bureau in Mumbai, citing CMIE data. However, the uptick appears unsustainable since it was driven by a one-off spend by a private telecom player and, moreover, the government is expected to prune capex towards the end of the year so that it can rein in the deficit. Given how stalled projects increased for the second consecutive quarter, albeit at a gradual pace, it’s hard to see any meaningful improvement in the investment climate.
Standard Chartered points out that Rs 10.8 lakh crore of aggregate stalled projects pose a major headwind to any revival.
New announcements slowed in the three months to December, led by the private sector; this is the first slowdown since late 2013. Given capacity utilisation is at around 70-75%, capex will pick up in FY17 only if there’s better visibility on demand and the global economy shows signs of a sustainable recovery.
“In response to a number of inquiries Qualcom has received from various Indian wireless operators regarding the sale of Qualcomm’s BWA spectrum, Qualcomm.
The 7th Pay Commission’s recommendations will take a heavy toll on fragile finances of states and force them to scale back their development spends, Niti Aayog Member Bibek Debroy says.
He felt that once the Centre implements the recommendations, it’s “impossible” for the states to hold back a hike in their employees’ salaries.
“There are serious repercussions arising from the 7th Pay panel report, as in the two earlier Pay Commissions, on finances of states, which will go for a toss,” he told PTI over the weekend here.
“Typically, what every state does is that if starved for cash, slash capital expenditure or development spends,” Debroy, one of three full-time members of the National Institution for Transforming India (Niti Aayog), said.
Over the years, most states have improved their finances on the back of faster growth and the states are better-placed than the Centre on the fiscal front.
He added that the Railways, which is already reeling under financial constraints, will also suffer as wages go up.
In a big bonanza for the central employees and pensioners, the Pay Commission last week recommended a 23.55 per cent increase in salaries, allowances and pension, along with a virtual one-rank-one-pension for civilians, involving an additional outgo of Rs 1.02 lakh crore per annum.