News digest: PNB fraud, Cabinet reshuffle, Karnataka polls, and more

The CBI has not named any other board-level executive of public sector banks in the case so far, but sources said the roles of other PNB CEOs and a few officials of the RBI were being investigated

1. PNB fraud: CBI names 2 EDs, ex-CEO Usha Ananthasubramanian in charge sheet

The Union government cracked the whip on three top former and incumbent Punjab National Bank (PNB) executives after the Central Bureau of Investigation (CBI) named them in its charge sheet in the Rs 65-billion fraud related to group of companies belonging to Nirav Modi.

While the government directed Allahabad Bank to “divest all the powers” of its managing director and chief executive officer Usha Ananthasubramanian, who was previously heading PNB, two executive directors at PNB — Sanjiv Sharan and K V Brahmaji Rao — have been removed from the board, Department of Financial Services (DFS) Secretary Rajiv Kumar said. Read more...

2. Cabinet rejig: Piyush Goyal to run finance; Irani removed from I&B ministry

Railways Minister Piyush Goyal has emerged the chief troubleshooter for the Bharatiya Janata Party in the past couple of years. On Monday, Prime Minister Narendra Modi turned to Goyal to take over the reins of the finance ministry while Arun Jaitley recovers from an operation.

The communique from the President’s House said Goyal had been “temporarily assigned” the portfolios of finance and corporate affairs during “the period of indisposition” of Jaitley. He would continue to hold the railways and coal ministry portfolios. Read more...

3. HAL offers 40 more Sukhois at one-third of Rafale's cost

With the Sukhoi-30MKI fighter — the backbone of the air force fleet — nearing the end of its production run, its manufacturer, Hindustan Aeronautics Ltd (HAL), is taking up a case to build 40 more. If the defence ministry accepts HAL’s proposal, the inventory of the Russian fighter would be enhanced from the planned 272 to 312.

With HAL offering to price the additional Su-30s at just Rs 4.25 billion, the fighter will be barely one-third the cost of the Rafale. According to a Business Standard analysis, the Indian Air Force (IAF) is paying Rs 11.25 billion per Rafale, excluding the price of weapons and logistics.

HAL Chairman T Suvarna Raju said: “We will offer a very competitive price. Since 2010, we have been delivering the Su-30 at Rs 4.25 billion. Read more...

4. Crude business: Karnataka polls wipe out Rs 4 billion of OMC revenues

With the electoral battle for Karnataka over, oil-marketing companies (OMCs) on Monday started recovering their revenue loss by hiking prices of petrol by 17 paise and diesel by 21 paise. The freeze on retail prices since April 23, however, meant that the OMCs had to let go up to Rs 350 million per day, according to a Business Standard analysis based on the average consumption of both fuels.

The losses increased gradually — a rough estimate shows the markets suffered a revenue loss of more than Rs 200 million per day in May, which for 19 days cost them about Rs 3.8 billion. On an annualised basis, a Rs 1 reduction in margin results in a Rs 130 billion annual shortfall in OMC revenues. Sources said the companies would recover the loss in the coming weeks through successive upward revisions. Read more...

5. WPI at 4-month high in April; inflation rises to 3.18 % from 2.47% in March

Pressure on inflation, retail as well as wholesale, is mounting. While the widely-tracked consumer price index (CPI)-based inflation rate rose to a three-month high of 4.58 per cent, its wholesale price index (WPI) counterpart increased to a four-month high of 3.18 per cent in April.

This might justify the hawkish stance of the monetary policy committee (MPC). The CPI inflation rate had stood at 4.28 per cent, and the WPI rate at 2.47 per cent in March. The widely-tracked core CPI inflation (non-food, non-oil) rate rose to a 44-month high of 5.9 per cent against 5.4 per cent in this period. On the other hand, core WPI inflation remained flat at 3.6 per cent. Read more...