News highlights : 8 September 2016

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01. SBI gets Rs 2k-cr capital via additional Tier-1 bonds :

State Bank of India (SBI), India’s largest lender, has raised Rs 2,100 crore through additional Tier-1 (AT1) bonds to boost its capital base as well as business growth. It placed the entire AI-1 bond issue with YES Bank. The Basel-III-compliant debt instrument would have a coupon (interest rate) of nine per cent payable annually, SBI informed the BSE. The bond instrument carries a call option after five years. Last week, IDBI Bank had raised Rs 1,500 crore through AT-1 bonds at a steep rate of 11.09 per cent. On August 24, SBI had informed stock exchanges that its panel of directors had approved a proposal to raise capital of up to Rs 11,100 crore through AT-1 bonds from domestic and international investors. The bank would issue Tier-I bonds in one or more tranches to domestic and international markets. It might opt for public offering or use the private placement route for raising capital.

02. Government sets up panel on working of EXIM Bank, ECGC:

Government has set up a ten-member committee to examine issues related to effective functioning of Export Import Bank and Export Credit Guarantee Corporation (ECGC). The committee, headed by the Finance Secretary, would recommend ways to strengthen functioning of these two organisations. It will examine need for capital infusion, addressing regulatory constraints with respect to the EXIM Bank and ECGC. The committee would submit its recommendations within six weeks from the date of holding its first meeting, the Commerce and Industry Ministry said in a series of tweets.“The idea is to look at ways in which EXIM Bank and ECGC can be further strengthened to support and handhold our exporters,” it said. The terms of reference of the committee also include examining issues related to enhancing the role of ECGC by addressing regulatory constraints and suggest separate norms and policy guidelines for Export Import (EXIM) Bank and ECGC. ECGC is an export promotion organisation, seeking to improve the competitiveness of Indian exporters by providing them with credit insurance covers.

03. 'No closures, only branch relocations after SBI merger' :

The State Bank of India (SBI) may relocate some branches after the merger of its associate banks into its fold, but none of them will be shut down, chairperson Arundhati Bhattacharya has said in a bid to put rumours to rest and assuage the staff. "I don't believe we will be closing down any branches. This is one area that is getting a lot of adverse publicity. We will be working with the synergies," Bhattacharya told IANS, referring to the plans to merge five associates and Bharatiya Mahila Bank."Obviously, if the same building has branches of three associate banks, it doesn't make sense to keep them open. If that branch is moved away 60 km, it will have a better reach. We will be relocating a few of them," the Chairperson told IANS over the phone

04. TCS is leader in Banking Application Outsourcing: Report

India’s IT major Tata Consultancy Services (TCS) was recognised as a leader among 28 companies for the sixth consecutive year for its industry leading domain solutions, strong delivery and execution capabilities, according to a research-based report. TCS was positioned as a leader across all four lines of the banking business which include credit cards, retail banking, lending and commercial banking, Everest Group said. It analysed the capabilities of 28 leading Application Outsourcing providers, specific to the global banking sector. These providers were mapped to the group’s Performance, Experience, Ability Knowledge (PEAK) matrix, which is a composite index of a range of distinct metrics related to each provider’s capability and market success. “The disruption in the banking industry, which is driven by global macroeconomic uncertainties, digitalisation and growth in FinTech, is forcing service providers to focus beyond traditional IT services and create breakthrough value for their customers,” said Jimit Arora, Partner, Everest Group.

05. India among priority nations in UK’s post-Brexit trade agenda :

India was today included among priority countries by the UK for striking post-Brexit trade deals by Prime Minister Theresa May, who also stressed on developing an “ambitious and bold” model of non-membership association with the EU. May told the House of Commons during Prime Minister’s Questions (PMQs) that India was among the countries that had expressed an interest in trade deals with the UK. “As we leave the EU, we will forge our own trade deals. The leaders from India, Mexico, South Korea and Singapore said they would welcome talks to remove trade barriers. President Xi also made clear that China would welcome discussions about trade with the UK,” she said. May, who recently returned to the UK from the G20 Summit in China, had met Prime Minister Narendra Modi on the sidelines. In reference to her government’s plans on leaving the European Union (EU) in the wake of the June 23 referendum in favour of Brexit, the Prime Minister refused to provide a “running commentary” on her plans.

06. 'Swadesh Darshan' projects worth Rs 450 crore get govt nod :

The government has approved projects worth about Rs 450 crore under 'Swadesh Darshan' scheme for five states, including poll-bound Uttar Pradesh. The scheme was launched with an objective to develop 13 theme-based tourist circuits in the country and the approval for five was given in a meeting of the central sanctioning and monitoring committee (CSMC). "The CSMC for the Swadesh Darshan Scheme has approved projects to the tune of Rs 450 crore for development of various circuits in Madhya Pradesh, Uttarakhand, Uttar Pradesh, Sikkim and Tamil Nadu," an official said. 'Ramayana circuit' in Uttar Pradesh with a project cost of Rs 70 crore was approved, while 'heritage circuits' in Madhya Pradesh and Uttarakhand with costs of Rs 100 crore and Rs 83 crore, respectively, were also sanctioned. Coastal circuit' in Tamil Nadu with a cost of about Rs 100 crore and envisages development of Chennai-Mamamallapuram- Rameshwaram-Manpadu-Kanyakumari. The 'heritage circuit' in Madhya Pradesh, which covers Gwalior-Orchha-Khajuraho-Chanderi-Bhimbetka-Mandu with a total project cost of about Rs 100 crore, envisages infrastructural development of the sites, the official said.

07. Indian Railways to introduce flexi-fare system for Rajdhani, Shatabdi and Duronto:

In line with the aviation sector, Indian Railways is introducing a flexi fare system for premium trains like Rajdhani, Shatabdi and Duronto. The changes in fares will come into force from September 9, but will not apply to tickets that have already been issued in advance for journeys to commence on or after that date. Now, the base fare for Rajdhani, Duronto and Shatabdi trains will be on a flexi system. “The base fares will increase by 10% with every 10% of berths sold subject to a prescribed ceiling limit. There will be no change in the existing fare for 1AC and EC class of travel,” said the Ministry of Railways release. Other supplementary charges like catering charges, reservation charges, service tax, superfast charge will be levied separately, based on applicability. These will not see any change. Railways has said that the information with regards to flexi fares will be displayed to the passenger at the time of booking, so that in case the fare of the lower class exceeds that of the higher class, the customer can exercise the option to travel by the higher class.

08. India may get 5G with the rest of the world :

India stands a chance to get 5G technology with the rest of the world as the country enters an era of Internet of Things (IoT), Telecom Secretary J S Deepak said. “…We got 2G 25 years after the rest of the world, at least after the developed world. We got 3G more than a decade after it became ubiquitous in US, Europe. 4G may be, five years after its global launch. In 5G, we have the chance of being there with the rest of the world,” Deepak said. He added that the probable simultaneous launch of 5G in India along with the rest of the world could be from bridging the gap that had prevailed and the country might as well take a step forward and acquire a leadership position in certain areas as it enters into an era of Internet of Things with connected devices and machines.

09. Indian Railways plans foray into radio to boost non-fare revenue :

The Railway Ministry plans to foray into radio broadcast to provide free onboard and customised entertainment across all trains in order to boost its advertising revenue. The Non-Fare Revenue (NFR) Directorate of Railway Ministry pegs the revenue from advertisements through onboard radio at over Rs 100 crore per year. Last year’s total advertising earnings were Rs 263 crore. According to a senior official, the capital expenditure in setting up speakers and amplifiers for the purpose is expected to be around Rs 40 crore while the operating expenditure per year is estimated at nearly 3 crore. Neither of the two expenditures will be borne by Railways. The project will be tendered to the highest bidder on revenue sharing model. Once implemented, all trains will have a customised playlist of music, which could vary statewise. The onboard Public Announcement (PA) system will also be used to disseminate passenger convenience related information, like delay in arrival, reason for delay, among others. These will be interspersed with advertisements. Currently, the ministry is considering internet-based radio for a wider reach across its entire network but is open to alternative technology or medium, sources said.

10. 'Indian e-tailing industry may touch USD 28 billion by FY2020' :

India's e-commerce sector is expected to touch USD 28 billion by FY2019-20 on account of an increase in number of buyers and stable annual spends per consumer, according to a report. "A gradual increase in shopper base, coupled with steady increase in online spends can help the Indian e-tailers reach gross merchandise value of USD 28 billion by FY 2020. We assume buyer penetration to improve to 18 per cent by FY 2020 from 12 per cent in FY 2016, with annual average online spend to increase by 10-15 per cent year-on-year over the forecast period," a Kotak Institutional Equities report said. It observed that the e-commerce will continue to find more takers, particularly as organised retail penetration remains limited in tier II and III cities. It noted that the growth in the e-commerce industry, which it estimates to be a compounded annual growth rate of 45 per cent over FY2017-20, will be in line with the gradual improvements in household incomes and infrastructure development.