News digest: ICICI Bank board meet, LIC's plan for IDBI Bank, and more

Former Sebi chairman C B Bhave, who has worked in the finance ministry earlier, too, was one of the names the board discussed

1. Who'll be the next ICICI Bank chairman? Board shortlists ex-IAS officials

Private sector lender ICICI Bank’s board will meet on Friday to discuss the appointment of a new chairman from a shortlist of four former bureaucrats who have worked with the finance ministry. The term of M K Sharma, the current chairman of ICICI Bank, ends on June 30.

The bank will then send the selected candidate’s name to the Reserve Bank of India (RBI) for clearance.

The appointment of the new chairman comes at a time when ICICI Bank is battling one of its worst management crises. “The board is of the view that the bank needs a seasoned bureaucrat from the Indian Administrative Service (IAS) who is methodological, has a good grasp over economy-related issues, and had served in a senior position in the Ministry of Finance,” said a person privy to the development. Read more...

2. LIC plans Rs 130-bn capital injection in IDBI Bank; Irdai may ease 15% rule

The Insurance Regulatory and Development Authority of India (Irdai) is likely to approve Life Insurance Corporation’s (LIC’s) proposal to pick up a substantial stake in IDBI Bank, paving way for capital infusion of about Rs 130 billion. The board of Irdai, which is meeting on Friday, may grant exemption to LIC from the rule that bars an insurer from holding more than 15 per cent equity stake in any company, according to a government official. The insurance regulator might put some caveats and could ask India’s largest insurer to bring down its stake in IDBI Bank over a period of five-seven years.

Sources said this would not be a challenge because Irdai had allowed such exemptions in the past. LIC has over 10 per cent stake in six public sector banks, including IDBI Bank. Read more...

3. Will rupee breach 70? Indian currency sinks to record low against US dollar

The rupee touched its record low of 69.10 a dollar in morning trades on Thursday amid a sharp spike in crude oil prices, while the markets are convinced that 70 a dollar levels are not too far away for the local currency.

The rupee would have depreciated even more, but for intervention from the Reserve Bank of India (RBI), which managed to strengthen the currency to its close at 68.7950 a dollar, a level last seen on August 28, 2013, which was the rupee’s last record close. The immediate concern for the rupee is the sharp spike in oil prices. In just one week, Brent crude has jumped from $72.5 per barrel to $77.3 per barrel in response to the US sanctions on Iranian oil and other oil producing nations keeping their output flat. Read more...

4. India likely to roll back higher import duties on 29 US products

India may roll back higher tariffs it announced last week on imports from the US if talks on the matter, scheduled to be held in Washington, DC next month, prove fruitful. The government is also hopeful of securing exemption from the Trump Administration regarding steel and aluminium tariffs, which had been imposed earlier by the US against all trade partners.

Last week, India finally imposed higher tariff rates on 29 import items from the US, aimed at raking in $240 million worth of duties through higher tax up to 100 per cent. However, the government hinted otherwise on Thursday, wrapping up the three-day-long discussions with senior US officials led by US Trade Secretary Mark Linscott. Read more...

5. Leaner 28% GST list? Council may consider rate cut for cement, paint

A reduction in the goods and services tax (GST) rate for construction items like paints, cement, marble, tiles, varnishes, and digital cameras is being examined by the fitment committee to bring it from 28 per cent to the 18 per cent category in the next meeting slated on July 21 over video conference.

The cement, paint, and digital camera industry has been intensely lobbying for a rate reduction with the government. If approved, the 28 per cent slab under the GST would be further trimmed from the 50 items currently. Read more...