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Insolvency professionals divided over ban on resolution outsourcing The insolvency regulator’s move to ban outsourcing of resolution work is primarily targeted at insolvency professional entities (IPEs), some experts said. However, others said this step by the Insolvency and Bankruptcy Board of India (IBBI) would affect individual resolution professionals (RPs) as well. It is aimed at ensuring that only RPs chair the committee of creditors meeting. Otherwise, the worry was that someone from resolution entities and not an RP would conduct these. In its circular, IBBI had said resolution services cannot be outsourced by insolvency professionals. Sources say it had found that heads of IPEs were chairing the committee of creditors meetings. Insolvency professionals who had taken up the project of reviving the company concerned are supposed to do so. umant Batra, managing partner at Kesar Dass B and Associates, says, “The outsourcing part of the circular might be targeted at those i

Shrinking footprints of foreign banks in India Foreign banks are increasingly shrinking their presence in India and are also becoming more conservative than private and public sector counterparts. While many of them have sold some of their businesses in India as part of their global strategy, some are trying to keep their core expertise intact. Others are branching out to newer areas to continue business momentum.For example, HSBC and Barclays Bank in India have got out of the retail business, whereas corporate-focused Standard Chartered Bank is now trying to increase its focus on retail “Building a retail franchise is a huge exercise and takes a long time. You cannot afford to lose it,” said Shashank Joshi, Bank of Tokyo-Mitsubishi UFJ’s India head.According to the Reserve Bank of India (RBI) data, foreign banks’ combined loan book shrunk nearly 10 per cent from Rs 3.78 trillion in fiscal 2015-16 to Rs 3.42 trillion last financial year. The banking industry, which includes for

Budget 2018 needn’t be populist The finance minister will have more opportunities later in the year to woo voters by doling out freebies A view, currently shared by a large number of people, is that the Union government’s Budget for 2018-19 will be populist. The argument is that this will be the last full Budget of the Modi government in its current tenure. Hence, it will make sense for Finance Minister Arun Jaitley to dole out free bies and concessions in his final Budget in an attempt to woo voters Such assumptions are flawed, based as they are on an incomplete and outdated understanding of the factors that influence the making of the Budget. In fact, the dates of general elections in 2019 and the presentation of the final Budget of the Modi government are so far removed from each other that Jaitley should not be under any pressure to present a populist Budget next month. Instead, he could well unveil an array of schemes and proposals that he believes are necessary for the ec

SEBI should not discriminate between rating agencies New CRAs say certain practices in the industry need to be addressed Domestic and newer creditrating agencies (CRAs) have said certain practices in the industry need to be addressed even as the Securities and Exchange Board of India (Sebi) has sought to streamline the processes and create a level playing field.On December 28 last year, after its final board meeting for 2017, Sebi amended the regulations related to CRAs in the country. The regulator has said that apart from a Rs 250 million minimum networth requirement, up from Rs 50 million, the promoters of CRAs need to maintain at least 26 per cent for a minimum of three years from the date of being given registration by Sebi.Rajesh Mokashi, managing director and chief executive officer (CEO), CARE ratings, says that “because there are research asset investments to be made byaCRA, in order to offer a certain quality of service in the market, you need a certain element of capit

Rupee may fall against euro, yen But it will continue to rise against the dollar, providing opportunities for trades The global currency market has been braced for volatility, as the Brexit negotiations drag on. December saw a string of central bank policy reviews but none of the big decisions surprised. However, the new year has brought surprises, in terms of unexpected trends. The consensus opinion was that the pound would be under pressure. The Bank of England held its policy rates but the UK is suffering the twinned curse of higher inflation and recession. However, it’s the US dollar which has taken a hammering in the last 10 days, dropping to six-month lows versus most currencies. The Dollar Index, which measures the dollar versus a basket of six other currencies, is down below 92. The rupee is at a 30-month high versus the dollar, edging to the Rs 63.5-mark On the face of it, this is odd. The Federal Reserve hiked the policy rate in December. Bond yields have risen. The

Tax Breaks for  Health  Cover Premiums on Cards Health insurance premiums could get larger tax breaks, as the finance ministry has asked the apex body of general insurance firms to examine the proposal for the Budget 2018-19 The government is willing to consider the demand, since health insurance costs have moved centre stage in the policy circles. The Narendra Modiled government is pushing for insurance-based healthcare. While the governments at the states and the Centre subsidised a large percentage of premium for people below the poverty line, costs spike for those above it. Under the National Health Policy 2017, the government is planning to bring a national-level health protection scheme, a key component of which will be cheap health insurance products. There are two areas where the government could intervene through the Budget — it could cut the GST rate payable every time someone buys a health insurance product; or it could also provide a larger income tax set off for th

Agri growth likely to be higher than 2.1%: Ministry The country's agriculture sector is expected to grow higher than projected 2.1 per cent growth by the CSO for the current fiscal, following better rabi crop prospects, the agriculture ministry said on Sunday.Last week, Central Statistics Office (CSO) had pegged farm and allied sector growth at 2.1 per cent for 2017-18, much lower than 4.9 per cent achieved in the 201617. The farm sector growth comprises GVA (gross value added) of crops at 60 per cent, livestock 20 per cent and forestry 8.5 per cent and fishing and aquaculture at 5.5 per cent.The agriculture sector can, therefore, be expected to register a much higher GVA for the year 2017-18, when final estimate figures are released, it added. Justifying the reasons for possible higher growth, the ministry said it is of the opinion that the lower coverage of area by August 2017 on account of delayed onset of monsoons has caused a poor reflection compared to the actual positive