The shareholders of the 94-year-old Lakshmi Vilas Bank (LVB) may not be getting anything as per the Reserve Bank of India’s (RBI) draft scheme for its amalgamation with DBS Bank India.
The draft scheme also states the employees of the LVB will become the employees of the DBS Bank and the latter can discontinue the services of key managerial personnel of the former following due procedure after the appointed date.
On Tuesday, the RBI announced its decision to amalgamate the LVB with the DBS Bank India.
It also placed the LVB on moratorium for 30 days and superseded its Board, owing to serious deterioration in the lender’s financial position. T.N. Manoharan, a former Non-Executive Chairman of Canara Bank, has been appointed as the Administrator of the bank.
As per the draft amalgamation scheme, the RBI has said on and from the appointed date, the entire amount of the paid-up share capital and reserves and surplus, including the balances in the share/securities premium account of the transferor bank (LVB), shall stand written off.
On and from the appointed date, the transferor bank shall cease to exist by operation of the scheme, and its shares or debentures listed in any stock exchange shall stand delisted without any further action from the transferor bank, transferee bank (DBS Bank India) or order from any authority.
As regards LVB employees, they will continue in service and be deemed to have been appointed in the DBS Bank India at the same remuneration and on the same terms and conditions of service, as were applicable to such employees immediately before the close of business on November 17.
However, the RBI scheme also provides for DBS Bank India to discontinue the services of key managerial personnel of LVB after following the due procedure at any time, after the appointed date, as it deems necessary and providing them compensation as per the terms of their employment.
Similarly, DBS Bank India shall have the option of merging LVB branches according to its convenience and may close down or shift the existing branches as per the extant instructions issued by the RBI. It was following an application submitted by the Reserve Bank of India (RBI), the Central government on Tuesday brought Lakshmi Vilas Bank under moratorium for 30 days, restricting withdrawals to Rs 25,000.
The Centre issued the moratorium notification under Section 45 (2) of the Banking Regulation Act, 1949. The moratorium came into effect from 6 p.m. on Tuesday and will be in place up to December 16, 2020.
The bad loan scenario in Indian banks has improved as the net non-performing loans (NPL) are at a six-year-low.
According to a report by Kotak Institutional Equities, net NPLs for banks are now closer to FY2014 levels.
“Impairment ratios showed further improvement with gross NPLs declining 40 bps qoq to 6.7 per cent (30 bps decline qoq to 8.5 per cent for public banks and 40 bps decline qoq to 3.9 per cent for private banks). Net NPLs declined 36 per cent yoy and 15 per cent qoq to 2 per cent of loans with most of the decline seen for public banks,” it said.
It further said that the improvement is less relevant in the context of the Supreme Court ruling, which has prevented banks from recognizing fresh bad loans leading to negligible slippages while there was improvement in recovery and higher write-offs.
It said that banks under its coverage delivered 75 per cent yoy earnings growth with modest revenue growth (7 per cent yoy) but aided by flat provisions. Revenue growth had tailwinds from decline in cost of funds (NII up 16 per cent yoy).
“Sequentially, we saw a sharp recovery in business activity reflected by better fee income trends and reversal in operating expenses. Unlike the previous few quarters, Covid provisions were restricted to a few banks,” the report said.
It also said that NBFCs surprised with better-than-expected core earnings reflecting an unprecedented combination of high moratorium, improving disbursements, decline in cost of funds and strong expense management.
“Significantly improving collection efficiency data has excited the Street even as this will be put to test over the next two quarters. In the interim, strong new business momentum, high ECL buffer and access to funding provide comfort,” it said.
Ethiopia’s Prime Minister said that his army is advancing on the capital of the northern region of Tigray where soldiers from the region are fighting the central government.
The government accused Tigray’s forces of destroying bridges near the city of Mekelle to halt the advance, the BBC reported.
Hundreds of people have reportedly died in nearly two weeks of clashes.
Prime Minister Abiy Ahmed suggested on Tuesday that the fighting was coming to an end, saying “the final critical act of law enforcement will be done in the coming days.”
The conflict is rooted in long-standing tension between powerful Tigrayan party the Tigray People’s Liberation Front (TPLF) and Ethiopia’s central government.
When Abiy postponed a national election due to coronavirus in June, tension escalated between the two groups. The TPLF sees the central government as illegitimate, arguing Mr Abiy no longer has a mandate to lead the country.
The government accused the TLPF of attacking a military base to steal weapons, which the TPLF denied. In response, Abiy ordered a military offensive, accusing the TPLF of treason.
Ethiopia, Nov. 12 (Xinhua) — People display photos of Tigrian deceased fighters during the 45th anniversary of the founding of the Tigray People’s Liberation Front (TPLF) at Mekelle Stadium in Mekelle, northern Ethiopia. (Xinhua/Michael Tewelde/IANS)
A three-day deadline given by Prime Minister Abiy to Tigray’s forces to surrender expired on Tuesday.
As government forces advanced on Mekelle, Abiy’s officials said that Tigrayan soldiers responded by destroying four bridges and a section of a road between the city and towns of Shire and Axum.
The TPLF have not commented on the accusations.
At least 27,000 people have fled over the northern border to Sudan as the UN warned a “full-scale humanitarian crisis” is unfolding.
TPLF adviser Fesseha Tessema, a former Ethiopian diplomat, told the BBC that civilian sites in Mekelle were being bombed by federal forces.
“[The people of Tigray] haven’t done anything wrong, they are in their own homes, churches,” Fesseha said.
The federal government has denied targeting civilians and said that air attacks are aimed at the Tigrayan military.
Abiy suggested that a number of TLPF fighters had switched sides to the government but he did not say how many.
He added that his government was “ready to receive and reintegrate our fellow Ethiopians fleeing to neighbouring countries”.
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Prime Minister Boris Johnson has outlined his 10 climate pledges for a green industrial revolution for 2,50,000 jobs and ending the sale of new petrol and diesel cars and vans by 2030.
Covering clean energy, transport, nature and innovative technologies, the Prime Minister’s blueprint launched on Tuesday will allow the UK to forge ahead with eradicating its contribution to climate change by 2050, particularly crucial in the run up to the COP26 climate summit in Glasgow next year.
The plan — which is part of the PM’s mission to level up across the country — will mobilise £12 billion of government investment to create and support up to 2,50,000 highly-skilled green jobs in the UK, and spur over three times as much private sector investment by 2030.
At the centre of his blueprint are the UK’s industrial heartlands, including in the North East, Yorkshire and the Humber, West Midlands, Scotland and Wales, which will drive forward the green industrial revolution and build green jobs and industries of the future.
The Prime Minister’s ten points, which are built around the UK’s strengths, are:
Offshore wind: Producing enough offshore wind to power every home, quadrupling how much it produces to 40GW by 2030, supporting up to 60,000 jobs.
Hydrogen: Working with industry aiming to generate 5GW of low carbon hydrogen production capacity by 2030 for industry, transport, power and homes, and aiming to develop the first town heated entirely by hydrogen by the end of the decade.
Nuclear: Advancing nuclear as a clean energy source, across large scale nuclear and developing the next generation of small and advanced reactors, which could support 10,000 jobs.
Electric vehicles: Backing world-leading car manufacturing bases, including in the West Midlands, North East and North Wales, to accelerate the transition to electric vehicles, and transforming the national infrastructure to better support electric vehicles.
Public transport, cycling and walking: Making cycling and walking more attractive ways to travel and investing in zero-emission public transport of the future.
Jet Zero and greener maritime: Supporting difficult-to-decarbonise industries to become greener through research projects for zero-emission planes and ships.
Homes and public buildings: Making homes, schools and hospitals greener, warmer and more energy efficient, whilst creating 50,000 jobs by 2030, and a target to install 6,00,000 heat pumps every year by 2028.
Carbon capture: Becoming a world-leader in technology to capture and store harmful emissions away from the atmosphere, with a target to remove 10MT of carbon dioxide by 2030, equivalent to all emissions of the industrial Humber today.
Nature: Protecting and restoring natural environment, planting 30,000 hectares of trees every year, whilst creating and retaining thousands of jobs.
Innovation and finance: Developing the cutting-edge technologies needed to reach these new energy ambitions and make the City of London the global centre of green finance.
The UK Prime Minister said: “Although this year has taken a very different path to the one we expected, I haven’t lost sight of our ambitious plans to level up across the country.
“My ten point plan will create, support and protect hundreds of thousands of green jobs, whilst making strides towards net zero by 2050.
“Our green industrial revolution will be powered by the wind turbines of Scotland and the North East, propelled by the electric vehicles made in the Midlands and advanced by the latest technologies developed in Wales, so we can look ahead to a more prosperous, greener future.”
Following extensive consultation with car manufacturers and sellers, the Prime Minister has confirmed that the UK will end the sale of new petrol and diesel cars and vans by 2030, 10 years earlier than planned.
However, it will allow the sale of hybrid cars and vans that can drive a significant distance with no carbon coming out of the tailpipe until 2035.
The UK car industry already manufactures a significant proportion of electric vehicles in Europe, including one of the most popular models in the world.
Responding to the announcements, Mohamed Adow, Director of Nairobi-based energy and climate think tank, Power Shift Africa Director, told IANS in a statement, “Nowhere suffers more disproportionately from the climate crisis than Africa, so it’s good to see Boris Johnson stepping up and providing personal leadership on this issue.
“As hosts of the crucial UN climate summit next year in Glasgow it has a key role in securing a new era of global action to cut emissions and support those already suffering from climate breakdown. The eyes of the world will be on Britain.”
The UK Prime Minister’s speech coincides with a new report from Power Shift Africa which shows that the UK burns more CO2 per person than 18 Commonwealth countries combined.
“The UK government announcement on ban of petrol or diesel cars would positively impact the health issues caused by air pollution from such vehicles. It is going to be life saviour for current and future generations,” said Quality and Accreditation Institute CEO Bhupendra Kumar Rana.
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Daniil Medvedev defeated Alexander Zverev in straight sets during an ATP Finals match at London’s O2 Arena on Tuesday.
Russia’s Medvedev won 6-3, 6-4 against his German opponent to join Novak Djokovic on top of the Group Tokyo 1970.
Zverev hit four double faults in his first two service games, and never found rhythm with his second serve going. Medvedev won 79 per cent of his second-serve return points (15/19) on way to his one-hour, 29-minute victory.
Medvedev is high on confidence having beaten Zverev in the Rolex Paris Masters Final a few days back.
“Confidence is the key, for sure. Winning an [ATP] Masters [1000] always helps the confidence,” Medvedev said.
“I knew that I can play good. It was a little bit shaky from both of us in the beginning from one [point] of view, but from the other [point] of view, I think there were some unbelievable points. To be honest, the intensity of the match was one of the most [intense] I had in my career.”
Medvedev is the first Russian to compete at the ATP Finals in consecutive seasons since Nikolay Davydenko made five straight appearances from 2005 to 2009.
The Reserve Bank of India (RBI) has appointed Infosys co-founder Senapathy (Kris) Gopalakrishnan as Chairperson of the RBI Innovation Hub (RBIH).
The RBI in its Monetary Policy Statement on Development and Regulatory Policies dated August 6, 2020, had announced that it will set up the RBIH to promote innovation across the financial sector by leveraging on technology and creating an environment which would facilitate and foster innovation.
In a statement, RBI said that innovation hub would be guided and managed by a Governing Council (GC) led by a Chairperson.
“The Reserve Bank has appointed Senapathy (Kris) Gopalakrishnan, co-founder and former co-Chairman of Infosys, as the first Chairperson of the RBIH.”
Gopalakrishnan is currently the Chief Mentor of Start-up Village, an incubation hub for start-ups.
The other members of the Governing Council include Ashok Jhunjhunwala, Institute Professor, IIT, Madras; H Krishnamurthy, Principal Research Scientist, IISc, Bengaluru; Gopal Srinivasan, CMD, TVS Capital Funds; and AP Hota, former CEO, National Payments Corporation of India.
The CEO of the innovation hub has not been appointed yet.
The RBIH shall create an eco-system that would focus on promoting access to financial services and products. This would also promote financial inclusion, as per the announcement.
The hub will collaborate with financial sector institutions, technology industry and academic institutions and coordinate efforts for exchange of ideas and development of prototypes related to financial innovations.
It would develop internal infrastructure to promote fintech research and facilitate engagement with innovators and start-ups.
India’s Department for Promotion of Industry and Internal Trade, DPIIT, has notified the opening up in more sectors for foreign direct investment. These sectors are single-brand retail trading, contract manufacturing and coal mining.
The DPIIT also stated that 26 per cent foreign direct investment will be allowed in digital media. Such investment in print media is already capped at 26 per cent and in TV news at 49 per cent. All these decisions are aimed at increasing economic growth, which has been affected by the COVID-19 pandemic.
Foreign entities can now invest up to 100 per cent in the coal industry for mining and sale of coal under the automatic route. They will also be entitled to carry out processing infrastructure operations such as coal washery, crushing, coal handling, and separation of magnetic and non-magnetic coal.
Full 100 per cent foreign direct investment is henceforth permitted for contract manufacturing, a DPIIT notification said.
Foreign entities intending to engage in single brand retail trading in India may do so through e-commerce prior to opening of their own stores, provided the company opens brick and mortar stores within two years from date of starting such online retail.
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