Top Headlines: RBI puts rates on hold, FB lists India plan, and more

From RBI policy review, Facebook planning further expansion to Voda Idea reporting Q1 loss, here are the top news on Friday morning

RBI hits pause button on monetary policy, applies balm on Covid-19 wounds

The Reserve Bank of India (RBI) on Thursday exercised a pause in its monetary policy, deciding to use future rate cuts “judiciously to maximise the beneficial effects”, but gifted corporate India and individuals the respite of loan restructuring to ease the pandemic stress. The six-member monetary policy committee (MPC) unanimously voted to keep the policy repo rate unchanged at 4 per cent and the reverse repo rate at 3.35 per cent, and kept the stance “accommodative”. The central bank is expecting a contraction in economic growth this fiscal year, but said inflation should turn benign soon with bumper crops and a robust turnaround in the rural economy. Read More...

Q1 results: 40% of corporate loans may require restructuring by banks

The quarterly results of listed companies suggest that banks may have to restructure a significant portion of their loan books under the new Reserve Bank of India provisions. The early bird results for the April-June quarter show that companies which either reported operating losses or a poor interest coverage ratio (ICR) accounted for nearly 40 per cent of corporate borrowing. Together, these companies had debts of Rs 10.7 trillion at the end of March this year. Read More...

Facebook plans to expand footprint, steps up product testing in India

Facebook is not only looking at taking global its collaborative model between WhatsApp and JioMart in the e-commerce space, but is also increasing its product testing in India in a significant way. Facebook Managing Director and Vice President (India) Ajit Mohan said for many of the products launched by the global major, India's become among the first group of countries to function as a testing ground. One such example is the much talked about launch of ‘Instagram Reels’, a 15-second video offering, which many say is positioned to take on the possible vacuum created by global leader TikTok. The latter faces a ban in India and serious challenges in the US, where it is looking for a forced sale to Microsoft or closure. Read More...

FinMin unlikely to take Covid-hit FY21 as a base for FY22 Budget

When the Finance Ministry begins work on the 2021-22 Budget, it is unlikely to take ‘one-off’ 2020-21 as the base year for its revenue and expenditure calculations, Business Standard has learnt. Instead, 2019-20 could be the base from which the Budget estimates for next year are calculated. Officials say the revenue collections and expenditure outlay this year cannot serve as the basis for next year’s Budget estimates due to the Covid-19 pandemic, the nationwide lockdown, and the economic distress. Read More...

Voda Idea's loss jumps 4 times to Rs 25,640 cr in Q1; revenue falls 5.4%

Vodafone Idea reported a pre-tax loss of Rs 25,640 crore and complete erosion of its net worth in the first quarter of financial year 2020-21 (Q1FY21) because of provisioning for adjusted gross revenue (AGR) liability. The result indicated the impact of the Covid-19 pandemic and the lockdown, but its overall performance was weighed down by financial stress. The pre-tax loss in Q1FY21 increased fourfold year-on-year (YoY) from Rs 6,673 crore, after the company set aside Rs 19,440 crore as an exceptional item towards the AGR liability. odafone Idea’s AGR liability stands at Rs 58,254 crore after the Supreme Court rejected the firm’s plea for reassessing dues last month. The company has indicated that its ability to continue as a going concern depends on a favourable outcome in the case. Read More...

Microsoft chasing deal to buy all of TikTok's global business: Report

Microsoft Corp is chasing a deal to buy all of TikTok's global business, the Financial Times reported on Thursday, citing five people with knowledge of the talks. However, a source familiar with the discussions told Reuters that Microsoft had not raised the prospect of buying all of TikTok in its negotiations with ByteDance. Microsoft had said it was seeking to buy the assets of TikTok in North America, Australia and New Zealand. It had not disclosed how much it was willing to pay, though sources previously told Reuters that ByteDance executives value all of TikTok at more than $50 billion. Read More...

Sebi moves sessions court against RIL for violation of Companies Act

Reliance Industries (RIL) has disclosed that the markets regulator Securities and Exchange Board of India (Sebi) has moved the Sessions Court against it for alleged violation of the Companies Act and Sebi regulations. The company said the matter pertains to the issue of debentures with convertible warrants two decades ago. “RIL co-operated with Sebi and has produced abundant evidence establishing that RIL has not violated Section 77 of the Companies Act. Sebi has not issued a show cause notice to RIL. There has been no adjudication of this alleged violation under Section 15-I of the Sebi Act, 1992. Notwithstanding this, Sebi has chosen to file the proceedings in the Sessions Court in this matter,” the company said in a stock exchange notification on Wednesday. Read More...

Auto manufacturers let go of contractual workers as slowdown bites

In July last year, as auto companies recorded their worst sale in 20 years, 35-year-old Sumit Lal, who worked as a fitter with one of India’s leading two-wheeler firm, was asked to proceed on “temporary leave” by his employer. One year has passed since then and Sumit’s wait to return to Manesar — the country’s largest auto hub — continues. He now works as a daily wager despite having a degree from ITI, Begusarai. Availability of jobs at India’s auto firms have shrunk significantly over the past two years, as the industry goes through one of its worst slowdown. An analysis of the employee data at top auto firms shows that hiring of contractual workers — more than 60 per cent of the total workforce — fell by 24 per cent in 2019-20, against 2017-18. Read More...

Start-ups to get priority sector tag as RBI revises lending norms

The Reserve Bank of India (RBI) is revising the Priority Sector Lending (PSL) norms to enable higher lending to start-ups and renewable energy firms, as well as to correct regional disparities. It intends to align them with emerging national priorities and bring a sharper focus to inclusive development. The revised guidelines also aim to encourage and support environment-friendly lending policies to achieve Sustainable Development Goals (SDGs), the RBI said in a statement. Detailed guidelines in this regard will be issued shortly. PSL guidelines were last reviewed in April 2015. Read More...