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  World Bank forecasts 7.3 per cent growth for India in FY2018-2019 It said that growth in South Asia is projected to strengthen to 6.9 per cent in 2018 and to 7.1 per cent in 2019, mainly as factors holding back growth in India fade The World Bank has forecast a growth rate of 7.3 per cent for India this year and 7.5 per cent for the next two years, making it the fastest growing country among  major emerging economies.  A top World Bank official said India's economy is robust, resilient and has potential to deliver sustained growth.  Growth in India is projected to advance 7.3 per cent in Fiscal Year (FY) 2018/19 (April 1, 2018-March 31, 2019) and 7.5 per cent in FY 2019/20, reflecting robust  private consumption and strengthening investment, the bank said in its June 2018 edition of the Global Economic Prospect report. The report, released yesterday, is the global lender's flagship publication on the state of the world economy.  It said that growth in South Asia i

  RBI relaxes NPA classification norms for MSMEs under GST For non-GST registered MSMEs, NPA norms would revert to 90 days from January 1, 2019 In a major relief to MSMEs, the Reserve Bank on Wednesday eased NPA classification norms for such units facing input credit linkages and associated issues under the  Goods and Services Tax.  "In continuation of support and relief to MSMEs, NPA recognition for GST and non-GST MSMEs is now at 180 days for dues up to December 31, 2018," Financial Services  Secretary Rajiv Kumar said.  Now 180-day NPA norms are applicable for all micro, small and medium enterprises dues between September 1, 2017 and December 31, 2018 if the account was standard on  August 31, 2017, he said, adding this dispensation covers both registered as well as unregistered MSMEs.   With regard to GST registered MSMEs, 180-day NPA norms will be brought back to 90 days only in a phased manner, starting January 1, 2019.  For non-GST registered MSMEs, NPA nor

RBI monetary policy review: States may need to get their loans rated If the state development loans (SDL) are rated, the margin requirement would be set at 1 per cent lower than other SDLs for the same maturity buckets In its June monetary policy, the Reserve Bank of India (RBI) reduced the margin requirement for government securities (Gsecs) and state development loans (SDL)  mortgaged by banks to access liquidity from the central bank.  The central bank said the margin requirement for government bonds would be in the range of 0.5 per cent to 4 per cent, depending on residual maturity. For SDLs, the  margin requirement would be 2.5 per cent to 6 per cent. The rule was to have a margin requirement of 4 per cent for Gsecs and 6 per cent for SDLs. Furthermore, if the SDL is rated, the margin requirement would be set at 1  per cent lower than other SDLs for the same maturity buckets. The segmentation would help differentiate the market risk across securities, the RBI said.  Th

Even one homebuyer can now drag errant builder to NCLT: Govt ordinance The Ordinance says the voting percentage be reduced to a minimum 66% from 75% earlier Even one homebuyer can drag an errant builder into the National Company Law Tribunal (NCLT), says the government after an Ordinance promulgated on Wednesday empowered  homebuyers to do so. The Ordinance to amend the Insolvency and Bankruptcy Code (IBC), approved by President Ram Nath Kovind two weeks after it was approved by the Cabinet, puts homebuyers  on a par with financial creditors. Homebuyers now will be part of the committee of creditors (CoC) in bankruptcy proceedings.  Corporate Affairs Secretary Injeti Srinivas said, “Even if one homebuyer moves the NCLT, the company can go in for insolvency. That is the intention of bringing them  into the creditors fold." However, it would be up to CoC to give homebuyers the status of secured or unsecured creditors, he said. Most provisions of the Ordinance will be prosp

Regulator Asks MFs to Disclose Total Expense Charge on a Daily Basis Markets regulator Sebi on Tuesday asked mutual fund houses to prominently disclose on a daily basis total expenses charged to customers for all schemes under a separate head on their websites as well as industry body Amfi website.  The fund houses need to disclose about name of the scheme, base as well as total TER, additional expense and Goods and Services Tax (GST) for regular and direct mutual funds plan in a prescribed format. The new directive will come into force with immediate effect, the Securities and Exchange Board of India (Sebi) said in a circular.  “AMCs (Asset Management Companies) shall prominently disclose on a daily basis, the TER (scheme-wise, date-wise) of all schemes under a separate head - ‘Total Expense Ratio (TER) of mutual fund schemes’ on their website and on the website of Amfi,” the regulator added.    It said that any change in the base TER (excluding additional expenses) and GST o

Rules Eased on Mandatory Scrutiny of Related Party Diamond Trade The customs department has relaxed a rule that required compulsory scrutinising of imports and exports of diamonds between related parties, a regulation that was followed strictly after the Nirav Modi scam.  In the past one week, customs commissioners have issued facilitation notices allowing diamond traders to forego the process even when they are dealing with related parties. The notices cited difficulty in valuing diamonds as the reason for this decision. During their probes into frauds in the gems and jewellery sector — there had been several such cases in recent years — investigators discovered that international trade with related parties were at times overvalued. This was mainly done by a few exporters to spruce up the balance sheets and borrow additional money from banks. According to regulations, the customs department gets a fair value of imports and exports through scrutiny conducted by a special valuatio

  Services Activity Contracts for First Time in 3 Months in May Services activity contracted for the first time in three months in May even as business optimism touched the highest in over three years. The Nikkei-IHS Markit Services Purchasing Managers’ Index declined to 49.6 in May from 51.4 in April.  India’s services activity contracted for the first time in three months in May due to stagnation in new orders even as business optimism touched the highest in over three years, a private survey showed. The Nikkei-IHS Markit Services Purchasing Managers’ Index declined to 49.6 in May from 51.4 in April. A reading below 50 on this surveybased index shows contraction. “The performance of the service sector was disappointing in May, as output dipped into contraction for the first time in three months,” said Aashna Dodhia, economist at IHS Markit and author of the report.  Manufacturing PMI released by the agency last week had shown a decline in factory activity with the index dropping