1) India, World Bank signs US $100 Million agreement for Karnataka Urban Water Supply Modernization.
- The Loan and Project Agreements for World Bank (IBRD) assistance of US $100 million for the Karnataka Urban Water Supply Modernization project were signed between Government of India/Government of Karnataka and the World Bank.
- The objective of the project is to provide city-wide access to a continuous piped water supply in the eligible cities in the State of Karnataka and to strengthen the service delivery arrangements at the city level.
- KUIDFC is the implementing agency for the project.
The project would have four broad components:
(i) Capital Investment Program
(ii) Institution Building
(iii) Technical Assistance for Sector Development
(iv) Project Management.
- The project will be implemented over a period of six years, initially in the twin cities of Hubballi-Dharwad, with provision for other eligible cities to join the project at a later date.
- Under the project, the Hubballi Dharwad Municipal Corporation has hired a professional water supply operating company for improving the water supply system, as also to manage the refurbished system through a 12-year contract in accordance with strict performance criteria.
- The project will benefit about one million residents of the Hubballi- Dharwad, including estimated 160,000 slum dwellers.
2) City Union Bank net up 13% in fourth quarter.
- City Union Bank (CUB), among the oldest private sector banks in the country, has managed to register growth while maintaining its asset quality amid prevailing concerns over bad loans in the Indian banking sector.
- For the quarter ended 2016, the bank posted a 13 per cent increase in net profit to Rs. 112 crore, from Rs. 99 crore in the year-ago period, on the back of strong growth in operating profit.
- Its operating profit grew 25 per cent to Rs. 224 crore (Rs. 179 crore in Q4 FY15), aided by a rise in net interest income, which went up 22 per cent to Rs. 264 crore (Rs. 205 crore in the year-ago period).
- For the full year, net profit grew 13 per cent to Rs. 445 crore (Rs. 395 crore in FY15). Operating profit was robust at Rs. 833 crore (Rs. 693 crore).
- Net interest income rose 22 per cent to Rs. 981 crore (Rs. 807 crore). Net interest margin (NIM) stood at 3.81 per cent compared with 3.44 per cent.
3) US court tosses out $1.3 billion penalty on Bank of America.
- A US appeals court threw out a nearly $1.3 billion penalty against Bank of America, concluding the bank had not committed fraud amid the housing bust.
- The federal court ruling overturned 2013 jury verdict that Countrywide`s sale of bad loans to mortgage finance firms Fannie Mae and Freddie Mac constituted fraud.
- A federal judge subsequently had sentenced Bank of America, which acquired Countrywide in 2008, to a $1.27 billion penalty.
- The US Justice Department had alleged that Countrywide had, under the so-called "Hustle" program, eliminated key checkpoints on loan quality and compensated employees solely based on loan volumes.
4) Lohia Auto Industries ties up with IndusInd Bank.
- Lohia Auto Industries announced its tie up with private sector lender IndusInd Bank for financing their diesel three wheelers.
- Through this partnership the bank will offer retail finance at an attractive rate of interest to the customers of Lohia Auto for all Lohia 3-wheeler models. This partnership will be able to provide hassle-free loan facility at competitive interest rates to its customers.
- The loan facility will be available across the stat states of Madhya Pradesh, Haryana, Bihar, Jharkhand, Chattisgarh, Gujarat, Rajasthan, Odissa, AP, R&T and Coastal Andhra.
- A huge segment of customers will be benefited by this alliance. This partnership will also help both the Lohia Auto and IndusInd Bank in increasing the number of customers, thus enabling widening of the market for the products.
5) Govt waives over Rs. 9,000 crore loans of HFCL.
- Union Cabinet waived off loans worth more than Rs. 9,079 crore owed by Hindustan Fertilizer Corporation Ltd (HFCL) as part of a financial restructuring package for the PSU.
- The Cabinet approved waiver of government loan of Rs. 1,916.14 crore, 2015 and the outstanding interest amount of Rs. 7,163.35 crore as on same date, according to an official statement.
- The Cabinet also approved transfer of 56 acres of ash dyke land of Barauni unit to Bihar State Power Generation Company Ltd to settle dues of HFCL for faster revival of the unit.
- Waiving off the outstanding amount will facilitate de-registration of HFCL from Board for Industrial and Financial Reconstruction (BIFR) by making its net worth positive. It will clear the way for faster revival of Barauni unit of HFCL.
- This unit will create 400 direct and 1,200 indirect employment opportunities.
6) EU releases $28 million to help Greece handle refugee crisis.
- The European Commission has awarded 25 million euros ($28 million) in emergency funding to the European Asylum Support Office (EASO) to enhance its support to the Greek authorities.
- These additional resources will be used to support the implementation of the EU-Turkey resolve and the EU emergency relocation scheme, Xinhua news agency reported.
- The latest funding was part of the emergency response plan developed together by the European Commission, the Greek authorities and other stakeholders to address the ongoing humanitarian situation.
- The funding will allow for the deployment of additional member state experts and interpreters, and set up mobile offices to assist with processing asylum applications.
- The statement also called on the European Union (EU) member states to quickly make available the necessary staff to help EASO deliver the support and give a boost to the EU relocation scheme.
7) Bad loans bite: BoI loss soars to Rs. 3,587 crore.
- Bank of India reported a net loss of Rs. 3,587 crore for the March 2016 quarter, following the balance sheet clean-up imposed on banks by the RBI.
- It had reported a loss of Rs. 56 crore in Q4 FY15. Bank of India’s total provisions rose 142 per cent to Rs. 5,470 crore in the quarter ended March.
- The bank’s net interest income rose 12 per cent year-on-year to Rs. 3,187 crore while the net interest margin was 2.43 per cent.
- For the full fiscal year, the bank reported a net loss of Rs. 6,089 crore, compared with a profit of Rs. 1,709 crore in FY15.
- The bank’s percentage of net NPAs (non-performing assets) stood at 7.79 per cent.
8) Aditya Birla Fashion buys India rights of Forever 21.
- Aditya Birla Fashion and Retail, part of Aditya Birla Group, has acquired the rights for global fashion chain Forever 21 in the country for an undisclosed sum.
- Forever 21 had a three year old tie up with DLF Brands and wanted to exit the partnership for a much aggressive play in the country.
- Aditya Birla Fashion has signed a memorandum of understanding (MoU) with the US based Forever 21 to acquire its exclusive online and offline rights for Indian market and its existing store network in India from the current franchisee Diana Retail.
- The proposed acquisition is in line with our strategic intent to create the largest integrated branded fashion player in the country.
9) SEBI likely to delist 4,200 firms; warns erring promoters.
- In a mammoth clean-up exercise, markets regulator Sebi is planning to push for delisting of over 4,200 listed companies whose shares are not being traded, and promoters refusing to give exit opportunity to investors would face strict penal actions.
- These include over 1,200 companies whose shares are listed on national bourses BSE and NSE but where trading has been suspended for various non-compliance issues for over seven years. Besides, there are over 3,000 companies listed on various regional stock exchanges that have become defunct.
- Auditors cannot go scot-free if they have been certifying the books for years without pointing finger at the lapses.
- The exercise for over 4,200 listed firms would be completed this year.
10) Cabinet nod for YES Bank proposal to increase foreign investment limit.
- The Cabinet Committee on Economic Affairs (CCEA) approved YES Bank’s proposal to increase foreign investment limit to 74 per cent, from the existing foreign equity of 41.87 per cent.
- The limit can be increased by way of issue of non-equity shares and/or other permissible instruments to eligible non-resident investors.
- This will result in a Foreign Direct Investment of $1 billion in the country.
- The mode of instruments includes Qualified Institutional Placement (QIP) of equity shares and/or issue of ADRs/ GDRs and/or QFIs/ FPIs under the Portfolio Investment Scheme (PIS) by acquisition of permissible securities on stock exchange (except NRIs).
11) Cabinet clears Railway projects worth Rs. 11,000 crore.
- Railway projects worth Rs. 10,736 crore were cleared by the government for improving infrastructure in various states, including Uttar Pradesh and Gujarat that go to polls next year.
- The projects, including three for doubling of existing rail lines and two for laying a third rail line on busy routes, were cleared by the Cabinet Committee on Economic Affairs (CCEA).
- The CCEA has approved projects worth Rs. 10,736 crore for doubling and tripling (of railway lines). There are a total of five new projects, three doubling projects for 763 kms and two third line projects for 514 kms.
- The benefit of these projects obviously will go to several states but two important states will benefit immensely, one is Gujarat and the other is Uttar Pradesh.
- Providing details of the projects, in Gujarat the CCEA has given approval for doubling of Surendranagar-Rajkot project at an estimated cost of Rs. 1,002.39 crore with expected completion cost of Rs. 1,137.17 crore with 5 per cent escalation per annum.
- The length of the railway line will be 116.17 kms. The completion period will be four years.
12) Biocon gets Karnataka govt nod for Rs. 1,060 crore plant.
- Biotech major Biocon will invest Rs. 1,060 crore to set up a manufacturing plant near Bengaluru.
- The State government cleared the company’s proposal to set up a plant to manufacture injectables, monoclonal antibodies and oral solid dosage (OSD) forms as part of its biosimilars, generics formulation and novel molecules businesses. Monoclonal antibodies are specific antibodies that are made in a lab to mimic the body’s immune system.
Job creation:
- The plant is expected to create 750 jobs.
- Pharmacokinetics is the study of the movement of drugs in the human body.
- The Karnataka State High Level Committee Meeting also cleared PepsiCo’s plan to set up a beverage and snack manufacturing unit at an investment of Rs. 590 crore at Nanjangud (Mysuru district).
- That project is likely to create 900 jobs.
13) Godrej to invest over Rs. 200 crore in capacity expansion.
- India’s green technology pioneer Godrej Appliances, part of Godrej & Boyce Manufacturing Company Ltd, will invest Rs. 200 crore on expanding production capacities, and is set to use solar energy in a big way for 50 per cent of its requirements over the next couple of years.
- The company, with manufacturing facilities at Shirwal, 50 km from Pune, and at Mohali (near Chandigarh), will invest Rs. 100 crore at each of these two plants to set up additional sheds for expanding capacities of production of air-conditioners, washing machines, refrigerators and microwave ovens, among others.
14) Tech Mahindra to acquire UK-based Target Group.
- Tech Mahindra Ltd will acquire UK-based Target Group in a bid to strengthen its BFSI portfolio. The transaction is expected to close in the second quarter of FY17, subject to the receipt of regulatory approvals. The deal size was not disclosed.
- The acquisition catapults Tech Mahindra to one of the top 3 processors in UK financial services for certain complex lending and investment product categories. It also strengthens Tech Mahindra’s European presence and adds several new clients
- The acquisition strengthens Tech Mahindra’s BFSI practice by access to IP and a platform which helps automate end-to-end processes in the lending, investments and insurance market.
- The acquisition will enhance Tech Mahindra’s capabilities and allow Tech Mahindra to capture a larger share of the GBP 45-60 billion annual spend by UK BFSI companies on software and services. Tech Mahindra intends to leverage its global footprint and enhance the platform to service other markets.
15) FDI inflows up 16.5% at $2.5 billion.
- Foreign direct investment (FDI) inflows into India increased by 16.5 per cent to $2.46 billion this year.
- FDI inflows were at $2.11 billion in the same month last year, according to the Department of Industrial Policy and Promotion (DIPP) data.
- For the entire 2015-16 fiscal ended March 31, the inflows grew 29 per cent to $40 billion from $30.93 billion in 2014-15.
- FDI inflows for 2015-16 were the highest since 2000-01. Services segment attracted the highest investments of $6.88 billion followed by computer hardware and software ($5.90 billion), trading business ($3.84 billion) and automobile industry ($2.52 billion).
- Singapore toppled Mauritius as the top FDI source for FDI in India last fiscal.
- The government has taken several steps to promote investments through a liberal FDI policy.
- It is expected to soon take a decision on permitting 100 per cent FDI in the food processing sector through the FIPB approval route.
16) Rs. 12,139 crore provision sees SBI Q4 net dive 66%.
- State Bank of India reported a 24 per cent drop in net profit for fiscal year 2015-16 - its sharpest annual fall in five years. India’s largest bank posted a net profit of Rs. 9,950.65 crore for the year against the Rs. 13,101 crore it recorded in the previous fiscal year.
- Net profit for the fourth quarter ended March declined 66.23 per cent to Rs. 1,264 crore. NPA provisioning for the quarter stood at Rs. 12,139.17 crore (Rs. 4,985.8 crore).
- The lower profit was a reflection of higher provisioning and cleansing of the balance sheet.
- The SBI scrip shrugged off the disappointing results and rose 6.42 per cent to close at Rs. 195.55 on the BSE. The bank’s board recommended a dividend of Rs. 2.60, or 260 per cent, for 2015-16.
17) FPIs pull out Rs. 5,986 crore from debt market in May.
- Foreign investors pulled out close to Rs. 6,000 crore from the Indian debt market in May after pumping in huge money in the preceding month.
- However, foreign portfolio investors (FPIs) are bullish on the stock market as they put in Rs. 1,495 crore during the same period.
- Market experts attributed the outflow to weakening of the rupee. Besides, possible action by the US Federal Reserve has also hit investor sentiment.
- The recent changes in Mauritius tax treaty might have prompted FPIs to pull out of debt, step back and consider their tax implications.
- Capital poured in by FPIs is often referred to as ‘hot money’ because of its unpredictability although they continue to remain the most important drivers of Indian stock markets.
- This year, FPIs have invested Rs. 14,406 crore in equities, while withdrawing Rs. 6,925 crore from the debt market, resulting in a net inflow of Rs. 7,481 crore.
18) J&K govt spent Rs. 322 crore on assistance to migrants.
- Jammu and Kashmir government has spent over Rs. 300 crore for providing cash assistance to Kashmiri migrants during the last two financial years.
- The government has incurred Rs. 321.948 crore on account of providing cash assistance to Kashmiri migrants. An amount of Rs. 18.76 crore was also used for providing food grains to the migrants registered under relief category in Jammu.
- Under the package, those Kashmiri migrants who propose or intend to return to their original place of stay, there is a component of financial assistance of Rs. 7.50 lakh for construction of the house.
- In addition, 6000 government jobs and 9000 additional jobs through establishing income generating units are also being provided to Kashmiri migrant Pandits under the PM`s package.
19) Central Bank posts Rs. 898 crore loss.
- Central Bank of India reported a loss of Rs. 898 crore for the quarter ended March, 2016, as compared to a profit of Rs. 174 crore during the same period of the previous year due to increase provisioning for non-performing assets.
- Its gross non-performing assets (NPAs) almost doubled to Rs. 22,720.88 crore as on March end which was 11.95 per cent of gross advances as of March 2016, from 6.09 per cent year ago.
- The bank has made a provisioning of Rs. 2,286 crore for the fourth quarter. For the full year, it reported a consolidated loss of Rs. 1,396.37 crore as compared to a profit of Rs. 666.06 crore in the previous fiscal.
20) GDP can rise by $1 trillion over 100% internet access.
- Four of five Indians could afford internet if data costs fell by 66%, according to a Facebook-commissioned report on internet access. But Indian telecom operators already run data services at a 11% loss, making cost-cutting difficult.
- The statistics mean that a data plan, currently priced at Rs. 100 should not cost more than Rs. 34, if India has to make the internet affordable for 80% of its population.
- But the adverse economics imply that this cannot happen without intervention from the government - who’s Rs. 20,000 crore ($2.9 billion) plan to connect each of India’s 250,000 panchayats (a village administrative unit) with broadband by 2018.
- The internet reached 29% of Indians 354 million users in 2015, IndiaSpend reported. It could rise to 39%, or 462 million users.
- But if it were to reach 100%, India’s GDP could be increased by an extra $1 trillion by 2020, according to the Facebook-commissioned report published. To put this in perspective, India’s GDP crossed the $2 trillion mark for the first time in 2014.
21) Yes Bank ties up with online payment solutions startup Click&pay.
- Private sector lender Yes Bank has partnered with Click&pay, T-Hub`s portfolio company and a mobile-based payment solutions enterprise, to facilitate cashless, secure and flexible transactions for customers.
- As a part of this alliance, Click&pay will issue Yes Bank sponsored mobile wallets and employ Yes Bank`s immediate payments service (IMPS) payments platform which will help Click&pay to process instant proximity transactions with merchants and person to person.
- Yes Bank signed a Memorandum of Understanding (MoU) with T-Hub, a unique public/ private partnership between the government of Telangana, three of India`s premier academic institutes (IIIT-H, ISB & NALSAR) and key private sector leaders.
22) Hyderabad Angels invests Rs. 15 crore in 12 start-ups in 2015-16.
- Hyderabad Angels, which had either invested in or committed around Rs. 15 crore to a dozen start-ups last fiscal, plans to grow its portfolio by adding 12 more companies in the current financial year.
- Of the 12 companies in which Rs. 15 crore was invested in 2015-16, two were follow-on rounds and the remaining new additions. Some of them were yet to go public with the fund raising news.
- The Hyderabad Angel’s current portfolio covers a range of industry verticals. The GIBSS, NowFloats, Betaout, Explara, Indian Money, Thrillophilia, Spareshub and Evibe form part of the portfolio.
23) Kellton Tech plans Rs. 120 crore QIP.
- Kellton Tech is planning to hire 2,000 more employees and raise Rs. 120 crore as it aims to reach a turnover of Rs. 2,000 crore by 2019. It presently has about 1,200 employees, of which half came on board last year.
- IT services firm would go for a qualified institutional placement to rise about Rs. 120 crore.
- The company is in the process of acquiring a couple of firms in the SMAC (Social, Mobility, Analytics and Cloud) and Internet of Thing areas.
24) UAE’s Thumbay group to invest Rs. 100 crore for multi-specialty hospitals.
- The United Arab Emirates (UAE) based Thumbay group is planning to invest Rs. 100 crore in setting up multi-specialty hospitals in India.
- The group will be opening super specialty hospitals in Mangalore, Bengaluru, Mysore and Mumbai shortly.
- The 250-bed Thumbay New Life Hospital has been set up with in investment of over Rs. 30 crore by taking over already existing New Life Hospital. Another hospital will be opened in Jubilee Hills - Hitech city zone soon.
- The group, which is one of the largest private healthcare providers in the Middle East region, plans to train its health university students in India in its hospital.
25) JICA to provide Rs. 1,548 crore for TN urban healthcare.
- The Japan International Cooperation Agency (JICA) has signed an agreement with the Government of India to provide a loan of Rs. 1,548 crore to improve the quality of urban healthcare services in Tamil Nadu.
- The Japanese Official Development Assistance (ODA) loan will be provided at 0.3 per cent interest rate for a period of 40 years (including 10 years of grace period). The assistance will be utilized for increasing the capacity of key hospitals, upgrading facilities and equipment and human resources with the focus on non-communicable diseases.
- It will be implemented in 17 cities in Tamil Nadu with focus on upgrading tertiary hospitals, strengthening referral and secondary care hospitals, improving hospital management and primary healthcare.
- The project will provide access to advanced healthcare services in urban areas and promote healthy lifestyle. Training to improve the skills of health personnel will also be covered under this project.
- JICA has given Rs. 19,870 crore through ODA loans since 1981 for comprehensive development in Tamil Nadu.
26) BSE plans to sell up to 30% stake within 2016-17.
- BSE, Asia’s oldest stock exchange, plans to sell up to 30 per cent stake in its much-awaited initial public offer (IPO), which is expected to hit the market this financial year.
- The exchange plans to file draft papers with the capital markets regulator SEBI.
- BSE (formerly known as Bombay Stock Exchange) has already appointed Edelweiss Financial Services as the lead merchant banker and AZB & Partners and Nishith Desai Associates as legal advisors to the issue.
- The total size of the issue will not exceed 30 per cent, according to a notice of AGM.
- The IPO could be a combination of an offer for sale and fresh issue for up to a maximum of 30 per cent of the post-issue issued equity share capital of the company, subject to regulatory requirements.
- BSE has also proposed to create an advisory committee that would consist of selling shareholders for transparency in the listing process.