SBI looks to maintain MCLR at existing rates via 2-tier saving interest rate

SBI said balance above Rs 1 crore will continue to earn interest at 4 percent per annum, while interest at 3.5 percent per annum will be offered on balances of Rs 1 crore and below.

The State Bank of India (SBI) is introducing a 2-tier saving bank interest rate structure with effect from July 31, Monday, the largest public sector bank said in a release.

Reacting to the news, Nifty Bank hit a fresh record high while SBI rallied over 3 percent in mid-morning trade.

The bank further clarified that balance above Rs 1 crore will continue to earn interest at 4 percent per annum, while interest at 3.5 percent per annum will be offered on balances of Rs 1 crore and below.

The decline in the rate of inflation and high real interest rates are primary considerations warranting a revision in the rate of interest on saving bank deposits, said the press release.

The bank had cut the MCLR (marginal cost of funds based lending rate) by 90 bps effective from January 1, 2017 on the strength of large flows in savings and current accounts during the demonetisation period in the month of November and December 2016. There have been significant outflows of CASA deposits since then.

The revision in saving bank would enable the bank to maintain the MCLR at the existing rates, benefiting a lot of retail borrowers in SME, agricultural and affordable housing segments, said the release.

No plans to shift financial year to January-December from 2018: Santosh Kumar Gangwar

Discussions to shift the financial year from April-March to January December, however, continue in the Parliament.

The government does not plan to shift the financial year to January-December period from next year, Minister of State for Finance Santosh Kumar Gangwar said.

Discussions to shift the financial year from April-March to January December, however, continue in the Parliament.

For the financial year to start in January, the government will have to present the Union Budget in November, which seems unlikely, the minister told IANS.

According to previous reports, the Centre was planning to change the financial year from 2018 itself, ending the 150-year old tradition. This year, the Centre advanced the union Budget to February 1 from the last week of the month, as was the tradition earlier.

Earlier reported the government has asked think-tank Niti Aayog to evaluate the pros and cons of the shift in financial year to align it with the international system.

The new financial system, if implemented, will bring in a number of positives for the country. It will align the Budget with many global peers as well as create uniformity in analysis of statistical data.

The new system will also align with the monsoon cycle in thr country, benefitting the agriculture sector. It will also ease working for multinationals who generally have to follow two financial years – one in India and one followed in the country they are registered.

Similarly, foreign subsidiaries of Indian companies too will benefit.

The current financial year system — from April to March — was adopted in 1867 to align India’s financial year with that of British. Before that, the financial year was from May 1 to April 30.

Trump intends to sign Russia sanctions bill: White House

The new sanctions come as the White House grapples with several ongoing probes into ties between the Trump campaign and Russia, which the President has blasted as unnecessary.

Washington, Jul 29 (PTI) US President Donald Trump plans to sign legislation slapping punitive sanctions on Russia, Iran and North Korea that the Congress approved this week, the White House has said.

The legislation bars Trump from easing or waiving the penalties on Russia unless Congress agrees.

In its statement, the White House said Trump “negotiated regarding critical elements” of early drafts of the bill and approved of the final draft “based on its responsiveness to his negotiations.”

The Senate passed the bill, 98-2, two days after the House of Representatives pushed the measure through by an overwhelming margin, 419-3. Both were veto-proof numbers.

“President Donald J Trump read early drafts of the bill and negotiated regarding critical elements of it,” White House Press Secretary Sarah Sanders said in a late-night statement.

“He has now reviewed the final version and, based on its responsiveness to his negotiations, approves the bill and intends to sign it,” Sanders said without giving a time frame when it would be signed into law.

The new sanctions come as the White House grapples with several ongoing probes into ties between the Trump campaign and Russia, which the President has blasted as unnecessary.

The legislation could put a strain on Trump’s ability to improve ties with Russia, which he has vocally pursued, but has been restrained by the allegations that his associates had contacts with Russian officials during the election campaign.

Trump has denied any collusion between his associates and Moscow and termed the Russian investigation “a witch hunt”.

Other than Russia, the legislation also seeks to make Iran pay for its “continued support of terrorism”, and includes provisions to curb North Korea’s nuclear programme.

Before President Barack Obama left office, he ordered the seizure of two Russian diplomatic compounds and expelled 35 of its diplomats in response to alleged election interference, a claim that Moscow has consistently denied.

Clarify stand to scrap Rs 2,000 notes and introduce Rs 1,000 coins, says Opposition

The Opposition on Wednesday confronted Finance Minister Arun Jaitley about the government’s reported plan to scrap the recently introduced Rs 2,000 currency note and introduce a Rs 1,000 coin in its place.

The Opposition on Wednesday confronted Finance Minister Arun Jaitley about the government’s reported plan to scrap the recently introduced Rs 2,000 currency note and introduce a Rs 1,000 coin in its place, Business Today reported.

Members of the Opposition sought clarification from the finance minister on the issue present in the house to which he did not respond.

“The government has taken a decision to scrap Rs 2,000 note. The RBI has been given order not to print the Rs 2,000 notes. If any policy decision has been taken during the Parliament Session, the tradition is to announce it in the House,” Samajwadi Party (SP) leader Naresh Agrawal said, raising a point of order during Zero Hour.

Supporting his observations, Leader of Opposition Ghulam Nabi Azad also sought clarification from the government on whether they were planning to introduce Rs 1,000 coins.

“Every day we read about a coin of Rs 1,000, Rs 100 and Rs 200. What is the actual status? Are we to go by what media is writing? The House is to be enlightened by the Finance Minister. What is the truth?” Azad asked. “Are we going to have coin of Rs 1,000. To carry coins, we have to purchase a bag? We must know.”

Agrawal stressed that one note ban had already been done and that a second one is now being planned. “Let the Finance Minister clarify,” he said.

The Reserve Bank of India has printed Rs 7.4 trillion worth of Rs 2,000 notes ever since it demonetised the old Rs 1,000 and Rs 500 notes. However, it has now stopped further printing of the new Rs 2,000 note.

Axis Bank buys Freecharge from Snapdeal for Rs 385 crore

The Axis-Freecharge deal size at USD 60 million is significantly lower than the USD 400 million Snapdeal had paid to acquire the payments firm in 2015.

The board of Axis Bank has entered into a share purchase agreement with Jaspers Infotech Private Limited which runs Snapdeal to buy 100 percent stake in its payments subsidiary Freecharge in an all cash deal worth Rs 385 crore, Axis Bank informed the BSE in a statement.

On Wednesday that the two companies had agreed to a sale of Freecharge.

The Axis-Freecharge deal size (about USD 60 million in dollar terms) is significantly lower from the USD 400 million that Snapdeal had paid to acquire the payments firm in 2015.

Freecharge had raised close to USD 116 million before it got acquired by Snapdeal.

The deal will provide some cash flow for Snapdeal which is still in talks with rival Flipkart to conclude an all stock sale.

“This acquisition is expected to help the bank take a significant step towards digital distribution of financial products. The platform provides access to agile customer-facing technology, which will help the bank to serve its existing customers better and approach new digitally native customers in an efficient manner,” the companies said in a joint statement.

The new entity is likely to absorb the 200-250 odd employees of the Freecharge.

The employees were offered retention bonuses in the last couple of months, according to multiple people privy to the development.

Founded in 2010 by Mumbai based entrepreneur Kunal Shah, FreeCharge started as a recharge deal coupons platform before turning into a full-scale mobile wallet.

The acquisition marks the first such acquisition of a digital payments company by a bank in India.

Axis Bank that offers mobile banking, credit cards, debit cards, forex cards, UPI payments claims to have been driving digital acceptance and has established the second largest merchant network with over 4,33,000 POS machines.

“The acquisition of FreeCharge re-affirms Axis Bank’s determination to lead the journey of digitization of financial services. We expect FreeCharge to contribute significantly in our aspiration to serve the digital native and mobile-first young consumers of India,” said Shikha Sharma, managing director and chief executive officer of Axis Bank.

“It is a win-win deal that allows Snapdeal to further focus on our core e-commerce business, while giving Axis some of the most agile and innovative technology capabilities in the financial services space in India,” said Kunal Bahl, co-founder and chief executive officer of Snapdeal.

As per the statement, the deal was broadly spearheaded by Jason Kothari on behalf of Jaspers who was parachuted into the company post his stint at Housing in January.

Kothari will help with integration and then resume his position at Snapdeal.

The deal is expected to close in the next two months.

Freecharge competes with Softbank-backed Paytm and claims to be having 50 million registered wallet users and over 2,00,000 merchants.

It claims that nearly 75% of its users are under 30 years, with 85% of active users accessing their financial services from a mobile device.

Digital payments and online consumption of financial services are growing on the back of “digital India” initiatives.

Rising usage of smartphones and increasing penetration of low cost Internet are further expected to drive digital adoption.

New age customers are ‘digital-native, mobile-first’ who prefer one-click payments products and anywhere banking.

While J Sagar Associates assisted Freechage on this deal, Axis Bank was advised by Cyril Amarchand Mangaldas.

Evolution of India Stack (Jan Dhan, Aadhaar and mobile penetration) together with paperless presence less ways of authentication has created a tipping point towards greater digitization of financial services.

Swiggy rubbishes accusations of cheating, hits back with a rebuttal

Food delivery startup Swiggy has rubbished all allegations regarding financial misappropriation and faking of numbers in the company, leveled by 4 former employees, in a point-wise rebuttal to the anonymous blogpost that surfaced on Wednesday on Tumblr.

To drive home its commitment to its restaurant partners, company CEO Sriharsha Majety informed that the company is now helping its restaurant partners to setup kitchens in various locations to address the “geographic cuisine gap.”

The first such kitchen will house 3 restaurant brands, and will come up in Marathahalli, Majety said.

“Solving for assortment in hyperlocal commerce is a very tough problem and Swiggy will be driving innovation here for benefit of both restaurants as well as customers,” he added.

The startup defended its move to bump up its own food offering Bowl Company over its restaurant partners saying that the “intention is to boost the number of times a consumer can use Swiggy over the long term.”

“If we introduce brands that don’t boost repeats but just order numbers, we don’t believe there’s a case for that brand to exist and come back to the drawing board. We don’t embark on any of these initiatives with a cannibalization approach,” Majety added.

Swiggy’s biggest rival Deepinder Goyal, founder of Zomato, has come out in support of Swiggy.

“We compete with Swiggy rigorously, and we have never had a competitor we have respected so much and every organization has problems it needs to address, and a committed team always overcomes them,” Goyal said in a tweet.

But the former employees have accused the startup of much graver misappropriations.

The employees said in the blogpost that Swiggy management has been tampering with sales volume figures to manipulate the media, stakeholders, restaurant owners, and investors.

The post leveled the charges based on internal documents. Swiggy in its response has raised a question about the credibility of those documents.

“The excel sheet screenshot is a complete fabrication as is a lot more in the post,” Swiggy said in its response.

Sriharsha Majety, CEO of Swiggy also pointed out mismatch in the figures shown in the excel sheet screenshot and the investor deck uploaded by the former employees.

“The November 2016 orders as per the investor deck is at 63,804 per day, but the excel sheet cited by the employees says 78,010 per day. If the 78,010 orders per day in excel sheet was right, why would the investor deck report lower numbers?”

As far as the comparison of December 2016 and January 2017 order numbers is concerned, Swiggy defended its stand with “actual numbers” that peg order volume per day in December 2016 at 72,112, and January 2017 volumes at 78,417.

The employees, on the other hand, have alleged that the order volume in January 2017 was 78,767, lower than 82,799 in the previous month.

They have accused the management of hiding this dip in the investor presentation for their last fund raising activity in March.

“The actual numbers have been verified by external, neutral auditors (a part of the big four) as a part of our standard due diligence that is done before every fund raise,” Majety clarified.

The employees had also questioned Swiggy’s claim of reaching 4 million orders per month.

They alleged that the company had revoked access to the order volume tracking dashboards for everyone, just a few days before Swiggy was chosen as the Startup of the year by a leading publication.

The order per month stood at around 3 million before the outage, while it jumped to 4 million when the access was restored, employees claim.

Majety in his defense said that the company had reached the 3 million mark a few months ago. The rebuttal supported the argument with the daily order average in the last week of July.

However, the company did not share actual timeline when it had crossed the 3 million or the 4 million mark.

The anonymous blogpost also claimed that the Swiggy management unethically, taxing the small restaurant owners, “who could be paying more than their share.” According to the post, Swiggy increased its commission share from 5%, to 10%, and now nearly at 25%. “The management wants us to take this to an average of 30% by 2022.”

Majety defended Swiggy’s right to command high commission, based on the value they create for the restaurants. “The reason we started low is because we wanted to first convince the restaurant partners about the amount of value we bring to the table before requesting for higher numbers,” he said.

Delivering of higher value led to higher commissions, he added. He also clarified that the 30% commission target is actually a 3-fold proposition. “The commission we get from the restaurants, delivery fee charged from the consumers, and discretionary advertising revenues.”

Swiggy reviews all commercial agreements every six months when the commissions are also revised. “If there’s a commission number that both parties mutually agree on, only then we sign an agreement. There is absolutely no violation of contractual obligations,” Majety added.

Majety also countered claims of toxic work environment saying that Swiggy concerns a great deal with “employee feedback.” “We conduct pulse surveys, managerial effectiveness surveys and open houses to encourage feedback and act on it, across all functions of the organization.”

The startup went on to clarify that Swiggy periodically takes up training and development programs for its delivery executives, while performance is rewarded through rewards and recognition.

“Every Swiggy Delivery Executive undergoes background verification before they are on-boarded. All delivery executives are provided with medical insurance for the family and a personal accident insurance, which is borne by the company,” he added.

India will need $4.5 trillion by 2040 for infrastructure: Report

According to its report ‘Global Infrastructure Outlook’, India has an infrastructure investment need of USD 4.5 trillion by 2040, making it the second largest infrastructure market in Asia after China.

India will need investments to the tune of around USD 4.5 trillion till 2040 to develop infrastructure to improve economic growth and community wellbeing, said Global Infrastructure Hub today.

According to its report ‘Global Infrastructure Outlook’, India has an infrastructure investment need of USD 4.5 trillion by 2040, making it the second largest infrastructure market in Asia after China.

“Rising income levels and economic prosperity is likely to drive significant demand for infrastructure investment in India over the next 25 years,” the report said.

Taking sustainable development goals (SDGs) into account, the country is predicted to need an additional USD 888 billion by 2030 to provide universal household access to electricity and water.

“In absolute terms, the total investment needed to meet the SDGs is greatest in India – a total of USD 1.3 trillion of investment is needed by 2030, more than China, which is USD 257 billion,” the report said.

The firm, which conducted an intensive study of 50 countries and seven industry sectors, found out that by 2040, the global population will grow by almost two billion people – a 25 pet cent increase.

Rural to urban migration continues with the urban population growing by 46 per cent, triggering massive demand for infrastructure support, it said.

RBI halts printing of Rs 2000 notes; focus more on Rs 200, Rs 500: Report

The goverment plans to slowly phase out higher denomination notes from circulation.

The Reserve Bank of India (RBI) has increased printing of smaller denomination notes including the new Rs 200 notes after it stopped printing Rs 2000 notes around five months back, reports Livemint.

The central bank is unlikely to print Rs 2000 notes any further as the Centre is progressively preparing to phase out printing higher denomination notes. Rs 2000 notes had replaced the Rs 1000 after demonetisation last year.

The report also said that RBI’s proposal to print 100 crore Rs 2000 note was turned down by the government.

Around Rs 7.4 trillion worth of Rs 2000 notes have been printed so far, which adequately compensates the Rs 6.3 trillion Rs 1000 notes that were taken out of circulation, said the Livemint report. Rs 1000 notes were withdrawn in November 2016 after demonetisation.

The majority of new notes printed are of low denomination now. Nearly 14 billion Rs 500 notes have been printed already, the report said.

The total currency in circulation as on July 14 stands around Rs 15.22 trillion as per the RBI data, which is about 86 percent of the Rs 17.7 trillion that was in circulation on November 4.

The printing of new Rs 200 notes has been started in RBI’s Mysuru printing press and the note may come into circulation by next month.

Driverless cars won’t be allowed in India: Nitin Gadkari

The road transport minister further said that instead the government will focus on training drivers as adequate driving skills can provide employment to about 50 lakh people.

Union minister Nitin Gadkari said driverless cars will not be allowed in India as it will lead to joblessness.

The road transport minister further said that instead the government will focus on training drivers as adequate driving skills can provide employment to about 50 lakh people.

“We will not allow driver-less cars in India. India suffers a huge shortage of 22 lakh drivers…Cab aggregators take advantage of these. We are not going to promote any technology or policy that will render people jobless,” Gadkari said.

He said the government is planning to introduce a cab aggregator platform where commuters could choose any mode of transportation like electric four-wheeler taxis or two- wheelers.

The government will only be a facilitator in this but the platform will bring in more competition and help commuters to have affordable public transportation, he said.

Also, he said that the government will promote electric vehicles but would not allow its imports and rather would urge all major automobile companies to manufacture this as per ‘Make in India’ drive.

Besides, the government is also planning to introduce and make GPS and satellite tracking mandatory in all public and private vehicles.

Besides, plans were afoot to transform public transportation in the country and replace 1.8 lakh buses across the states with luxury buses, the minister said.

“Talks are on with World Bank and Asian Development Bank (ADB) to help India to replicate the London Transport Authority Model where all the public transportation buses would be replaced by luxury buses and a common man can travel in them by paying about 40 per cent less price as compared to current fares,” said Gadkari.

He said double decker and other luxury buses would be introduced where there would be facilities on par with flights.

The project would be complemented by building state-of- the-art bus ports on the line of Indian airports and a special National Highway Authority of India (NHAI) wing with an equity of Rs 500 crore would be set up to undertake this.

The government plans to construct 25 bus ports pan-India at present, he said.

Also, there has been changes in the e-rickshaw and carts designs to facilitate transportation of goods.

HDFC Bank trims workforce by 11,000 in 9 months

The staff count remained flat from the March quarter at around 84,000 employees. This is the third straight quarter when it has not seen a surge in hiring.

HDFC Bank, country’s highest valued bank and second largest private lender by asset size, has reduced its staff by over 11,000 in nine months as it freezes fresh hiring to increase efficiency amid digital growth and slower branch expansion.

The staff count remained flat from the March quarter at around 84,000 employees. This is the third straight quarter when it has not seen a surge in hiring.

“We would have roughly 84,000 employees. And on a net basis, it (the hiring) would be flat growth,” said Paresh Sukthankar, Deputy Managing Director of HDFC Bank.

As on September 30, 2016, HDFC Bank’s staff strength was 95,002.

The bank’s headcount had fallen by 6,096, or 7 percent, to 84,325 in the quarter ended March 2017 from 90,421 in December 2016. This reduction was the highest in a quarter and at least 33 percent more than the 4,581 people the bank lost in the quarter ended December 2016. Sukthankar said in a post first quarter results interaction on Monday, ”

This quarter, we have more or less flat growth in the employee base that we had in March. That does not mean we don’t continue to have various initiatives to help us improve productivity and change processes to make things more efficient. We are also seeing business growth, wherever there are efficiency gains thrown up, we will be able to redeploy people there, especially in the semi-urban or rural areas.”

However, this has not affected the bank’s profitability as it reported a 20 percent rise in net profit for the first quarter FY18 from April to June this year with a 20 percent rise in net interest income and 21 percent growth in net revenues.

Although the employee cost also marginally inched up 4 percent for the bank, its cost-to-income ratio for the quarter declined to 42.7 percent as against 46.2 percent for the corresponding quarter ended June 30, 2016.

Sukthankar also added the credit growth for the system was not as expected and hence, the bank plans to grow in its core business areas and increase market share.

With the rise in digital transactions giving certain cost efficiencies to the bank linked to the digital channel, the bank has not replaced the staff which has moved out due to attrition.

Moreover, the bank’s branch network growth also slowed with a net increase of 12 branches to 4727 as on June end from 4715 in March end thus year.

On the other hand, number of ATMs declined to 12,220 from 12660 three months ago.

Sukthankar said the ATM usage has reduced with growing digital banking usage reflecting the slowdown in ATM expansion.