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Surge in retail inflation in November brings RBI’s fears to reality A higher than expected retail inflation in November has upset RBI’s statistics, and the prospect of a rate hike is looking much closer now The Consumer Price Index (CPI)-based inflation surged to 4.88% in November, the fastest month-on-month increase in 16 months, driven by soaring vegetable prices and a rise in fuel inflation.Vegetable prices jumped 22.48% year-on-year, the steepest since the double-digit inflation episode in early 2013. Considering prices of vegetables had fallen 10% in November last year, there is a statistical base effect here. Food inflation doubled to 4.41% in November from 2.26% in October and the pickup in price rise was reflected in almost all categories except pulses, prices of which continued to fall. Vegetables may well be the main culprit but the quickening of inflation is not restricted to the food segment alone The recent surge in global crude oil prices was reflected in the ri

Sebi sets up department to address issues firms face in bankruptcy court Sebi has created a separate debt department to look at debt instruments such as REITs, InvITs, securitised assets and corporate bonds, says chairman Ajay Tyagi The Securities and Exchange Board of India (Sebi) has formed a new department that will review company filings for debt raising and address issues that listed companies face in bankruptcy court. This follows greater government and regulatory focus on tackling stressed assets, said two people aware of the matter, including the Sebi chairman. “Talking about work bifurcation, we have created a separate debt department which is looking at debt instruments such as Real Estate Investment Trusts (REITs), Infrastructure Investment Trusts (InvITs), securitised assets and corporate bonds,” Sebi chairman Ajay Tyagi said at an event organized by the Association of Investment Bankers of India in Mumbai on Tuesday. “The department was made in the last week of N

SMEs' claims may get higher priority in liquidation cases The government is looking at a proposal to give higher priority to the claims of small operational creditors in cases of liquidation under the bankruptcy code, an official said. This comes after representations that small and medium enterprises (SMEs), which are suppliers of goods or services to a defaulting company, face huge losses during bankruptcy proceedings, pushing them towards bankruptcy in some cases and also leading to job losses for those employed with them. "In a few cases which are presently under liquidation, it has been pointed out that SMEs face the brunt, putting them under severe stress," said the government official cited earlier. "We are examining the issue," the person said. Under the recovery of balance dues, in terms of waterfall mechanism as set out in Section 53 of the Bankruptcy Act, the order of priority for operational creditors comes under unsecured creditors. Expert

Govt asks panel to review amendment to Insolvency and Bankruptcy Code The review committee will help the government take another look at some of the contentious issues in the IBC ordinance highlighted by the industry The government has decided to ask a panel it formed in November to review provisions of the Insolvency and Bankruptcy Code (IBC) to also review a later amendment prohibiting defaulting promoters and related entities from bidding for their assets, two people aware of the matter said. The committee, which is chaired by the secretary, ministry of corporate affairs, and includes members involved in the drafting of the IBC, met on Friday.Coincidentally, on the same day, the Punjab and Haryana high court issued a notice to the centre over the amendment. Suman Jolly, managing director of Punjab-based Recorders and Medicare Systems Pvt. Ltd, had challenged the IBC ordinance on the ground that it would have retroactive effect, and that it does not distinguish between ordina

Sebi rejigs primary market advisory panel Capital markets regulator Sebi has reconstituted its Primary Market Advisory Committee (PMAC), which advises it on issues related to the regulation and development of IPOs and other such segments. The 24 member panel is chaired by TV Mohandas Pai, chairman of the Manipal Global Education Services.PMAC also advises Sebi on matters required to be taken up for changes in legal frame work to introduce simplification and transparency in the primary market. The Business Standard, New Delhi, 12th December 2017

Govt may let foreign airlines bid for AI  India is likely to change rules to allow foreign airlines to bid for Air India Ltd as long as they have a local joint venture with an Indian partner as the government seeks to increase the number of suitors for the debt-laden national carrier. “Foreign airlines will be allowed to bid as per the current policy that’s applicable on all domestic airlines. That much we can confirm,” an official with knowledge of the matter said on condition of anonymity Existing rules allow foreign airlines to own as much as 49% in an Indian airline, with the exception of Air India. With the change in rules, the government expects to make the sale of Air India, which has drawn interest from companies including the Tata group and InterGlobe Aviation Ltd, more competitive. The Mint, New Delhi, 11th December 2017

Lenders want extension of insolvency deadline If debt resolution is not finalised by December 13 for the 28 companies, insolvency proceedings will kickoff The Indian Chamber of Commerce (ICC) has written to RBI Governor Urjit Patel, requesting an extension of the deadline to March 31, 2018. Since the IBC is a new code and there are more than 300 accounts under the IBC in the NCLT without a resolution so far, banks should get more time for debt resolution outside the IBC to avoid risks of liquidation and plant closure with consequent unemployment, according to the chamber. “The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017, has also been recently issued on November 23, 2017, which is likely to delay the resolution of exposures above Rs 5,000 crore already under the IBC till April 2018 and it would be prudent to refer further cases to NCLT only after there is clarity on resolution of the existing cases,” the ICC letter added. Based on the recommendations of the I