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The Automotive Sector Can Transform South Asia Economically
Jan 07,2017

A new World Bank study that examines a range of factors affecting South Asian++s competitiveness in the automotive sector, notes that the region has the potential for greater global competitiveness in many different sectors but must pursue multiple policies to perform as well as other comparable regions, such as East Asia.

With more than 19 million jobs connected directly and indirectly to the automotive sector, India is the South Asian leader in that industry. (Pakistan follows with 2.5 million automotive-related jobs.) India-based auto parts manufacturers have acquired the technical and managerial skills from leading original equipment manufacturers (OEMs) established in India and a growing ability to meet the needs of disparate and discerning customers in competitive export markets. Increased opportunity to co-locate with their global customers for the right reasons will deepen these skills.

India has done very well in the past decade but has a distance to travel before it can fully contend with other major global exporters in the auto sector. It is the worlds sixth largest auto producer by volume, but it owns less than 1 percent of global export markets compared with more than 3 percent for China, 4.5 percent for Korea and 7 percent for Mexico. The average auto firm in India exported only 5 percent of its total sales, compared to 16 percent in China, said Priyam Saraf, Lead Author of the automotive case study.

A few leading global automotive parts manufacturers have already moved their research and development (R&D) centers to India, such as Bosch, which conducts most of its global R&D with 15,000 workers in Bangalore. Others- including BMW, Mercedes, Renaultn++\Nissan, Volvo, GM, Ford and Honda- are gaining the confidence to do the same soon. As they do, there is likely to be further growth and sophistication in the countrys related electronics, machining and tooling sectors, as well.

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The IMF will assess a range of financial systems in 2017: large ones such as China and Japan
Jan 07,2017

In 2017, IMF will assess financial stability of Indian economy jointly with the World Bank. Others Economies whose financial stability the IMF will assess during 2017 jointly with the World Bank include Bulgaria, China, Guyana, Indonesia, Saudi Arabia, Turkey, Zambia. However, Economies whose financial stability the IMF will assess during 2017 include-Bahrain, Japan, Luxembourg, Netherlands, New Zealand, and Spain.

The Financial Sector Assessment Program remains the IMFs principal tool for assessing countries financial stability. It identifies weaknesses in a countrys financial system that could threaten its stability, as well as strengths that make the system resilient. The IMF tailors country stability assessments to analyze issues of particular interest or concern in each country.

In 2017, IMF teams of experts will focus on systemic risks, the health of banks, and contagion and spillover risks. For each economy, the IMF will make policy recommendations about how to:

n++Strengthen the monitoring of risks to the financial system as a whole

n++Improve financial oversight and the macroprudential framework for financial system safety, and

n++Prepare for stressful financial conditions

We have this handy factsheet that explains the why and how of our financial assessments. You can also read more about why we assess the 29 systemically important financial sectors every five years.

Some highlights for countries under review in 2017 include:

China

Since the global financial crisis, Chinas growth has relied increasingly on credit, especially in the corporate sector, including state-owned enterprises, and in recent months also on mortgage lending. Tensions between sustaining growth and the need to contain indebtedness, together with certain financial sector innovations, have led to increased financial sector complexity and the risk of gaps in supervision. The IMF will examine these issues from a systemic point of view.

Indonesia

Financial conglomerates play a dominant role in the financial system and the economy, and account for 70 percent of the assets of financial institutions. The IMF will look closely at the oversight of financial conglomerates, and seek to identify areas for improvement in the newly implemented integrated supervisory framework, and the recently adopted law on crisis management and resolution.

Japan

Since the 2012 assessment, the profitability of financial institutions domestic operations has weakened. This has prompted large banks and insurers to expand overseas in a search for higher yields, and smaller banks to increase their exposure to real estate and small and medium-sized enterprises. Against this background, the IMF will assess vulnerabilities associated with the international expansion of banks and insurers, as well as longer-term prospects for the financial sector in the context of demographic changes and low growth.

Luxembourg

Home to a key international central securities depository, Luxembourg has the worlds second largest investment fund industry, and the profitability of its banking industry is tied to the general health of these funds. To address some of the systemic vulnerabilities, the IMF will use stress tests and spillover analysis to assess the ability of Luxembourgs financial institutions to absorb liquidity and/or solvency shocks.

Saudi Arabia

An extended period of low oil prices is affecting the Saudi economy. Although the bank-dominated financial sector has so far been resilient, this episode is an opportunity to complete the financial reform agenda and make improvements in the functioning of the interbank market that would also help banks diversify their funding sources over the longer term. These are the key issues the IMF will explore with officials.

Spain

The assessment will look at progress and improvements made since the crisis. It will tackle banks ability to adjust to low profits due to their business models, and their ability to manage the post-crisis recovery. The IMF will also examine the emerging needs of the institutional framework, and apply enhanced methods to capture cross-border financial shocks, and account for the linkages between the economy and the financial system as a whole.

Zambia

Against a backdrop of declining economic growth due to sharply lower copper prices and an unsustainable fiscal deficit, the IMF will focus on how to maintain financial stability, including the adequacy of supervisory resources. It will also examine the adherence to international norms of the legal and regulatory framework for financial sector oversight.

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India Ratings Affirms India Dyeing Mills at GÿIND AG; Outlook Stable
Jan 07,2017

India Ratings and Research (Ind-Ra) has affirmed India Dyeing Mills Pvt. Ltd.s (IDMPL) Long-Term Issuer Rating at GIND A. The Outlook is Stable. Instrument wise rating actions are given below: Instrument TypeDate of issuanceCoupon RateMaturity DateSize of the issue (million)Rating/OutlookRating ActionTerm loans---INR259.8 (increased from INR221)IND A/StableAffirmedFund-based working capital---INR50IND A/StableAffirmedFund-based working capital---INR50IND A1AffirmedNon-fund-based working capital---INR91.9 (increased from INR70)IND A1Affirmed

Key Rating Drivers

Strong Linkages with Eastman Group: The affirmation continues to reflect IDMPLs assured business with Eastman Exports Global Clothing Pvt Ltd (EEGCPL; GIND A; Outlook Stable), which contributes around 80% to the companys revenue. Since IDMPL was set up as a backward integration for EEGCPL, the companys strategy and operations are closely guided by those of EEGCPL, thus reflecting strong operational linkages. Hence, the ratings will continue to move in tandem with EEGCPL.

Comfortable Credit Metrics: Net adjusted leverage improved to 1x in FY16 (FY15: 1.2x) and interest cover to 10x (9.4x), owing to an increase in revenue, coupled with a fairly stable EBITDA margin and a marginal decline in debt. Ind-Ra expects revenue to grow at a moderate pace in the near term, with EBITDA margin sustaining at the current level. Additionally, debt which comprises primarily of term loans is likely to decline with no significant debt-funded capex on the anvil. These factors are likely to aid in a gradual improvement in the credit metrics during FY17-FY19.

Adequate Liquidity: IDMPL has consistently generated positive cash flow from operations, despite an increase in working capital cycle. The companys working capital cycle increased to 29 days in FY16 (FY15: 22 days) on account of stretched payments from EEGCPL. However, free cash flow turned positive to INR44 million (FY15: negative INR178 million) on the back of higher EBITDA and moderate capex. Ind-Ra expects the free cash flow to be positive over the medium term given the absence of major capex and strong cash flow from operations.

Strong Track Record: The ratings continue to be supported by IDMPLs founders over 30-year-long track record in the textile business. Strong pollution control system in IDMPLs dyeing facility, which makes it attractive to exporters, also continues to be a positive factor.

Rating Sensitivities

Positive: Future developments that could lead to a positive rating action include an upgrade in EEGCPLs ratings, coupled with IDMPL maintaining the current credit profile.

Negative: Future developments that could, individually or collectively, lead to a negative rating action include:

-+ - any substantial debt-financed capex or margin reduction leading to the financial leverage exceeding 2x

-+ - a downgrade of EEGCPLs ratings

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India Ratings Affirms India Dyeing Mills at IND A; Outlook Stable
Jan 07,2017

India Ratings and Research (Ind-Ra) has affirmed India Dyeing Millss (IDMPL) Long-Term Issuer Rating at IND A. The Outlook is Stable. Instrument wise rating actions are given below: Instrument TypeDate of issuanceCoupon RateMaturity DateSize of the issue (million)Rating/OutlookRating ActionTerm loans---INR259.8 (increased from INR221)IND A/StableAffirmedFund-based working capital---INR50IND A/StableAffirmedFund-based working capital---INR50IND A1AffirmedNon-fund-based working capital---INR91.9 (increased from INR70)IND A1Affirmed

Key Rating Drivers

Strong Linkages with Eastman Group: The affirmation continues to reflect IDMPLs assured business with Eastman Exports Global Clothing (EEGCPL; IND A; Outlook Stable), which contributes around 80% to the companys revenue. Since IDMPL was set up as a backward integration for EEGCPL, the companys strategy and operations are closely guided by those of EEGCPL, thus reflecting strong operational linkages. Hence, the ratings will continue to move in tandem with EEGCPL.

Comfortable Credit Metrics: Net adjusted leverage improved to 1x in FY16 (FY15: 1.2x) and interest cover to 10x (9.4x), owing to an increase in revenue, coupled with a fairly stable EBITDA margin and a marginal decline in debt. Ind-Ra expects revenue to grow at a moderate pace in the near term, with EBITDA margin sustaining at the current level. Additionally, debt which comprises primarily of term loans is likely to decline with no significant debt-funded capex on the anvil. These factors are likely to aid in a gradual improvement in the credit metrics during FY17-FY19.

Adequate Liquidity: IDMPL has consistently generated positive cash flow from operations, despite an increase in working capital cycle. The companys working capital cycle increased to 29 days in FY16 (FY15: 22 days) on account of stretched payments from EEGCPL. However, free cash flow turned positive to INR44 million (FY15: negative INR178 million) on the back of higher EBITDA and moderate capex. Ind-Ra expects the free cash flow to be positive over the medium term given the absence of major capex and strong cash flow from operations.

Strong Track Record: The ratings continue to be supported by IDMPLs founders over 30-year-long track record in the textile business. Strong pollution control system in IDMPLs dyeing facility, which makes it attractive to exporters, also continues to be a positive factor.

Rating Sensitivities

Positive: Future developments that could lead to a positive rating action include an upgrade in EEGCPLs ratings, coupled with IDMPL maintaining the current credit profile.

Negative: Future developments that could, individually or collectively, lead to a negative rating action include:

-+ - any substantial debt-financed capex or margin reduction leading to the financial leverage exceeding 2x

-+ - a downgrade of EEGCPLs ratings

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Rabi crops sowing crosses 602 lakh hactare
Jan 06,2017

As per preliminary reports received from the States, the total area sown under Rabi crops as on 6 January 2017 stands at 602.75 lakh hectares as compared to 565.89 lakh hectare this time in 2016. The Rabi crop sowing has increased 6.5% above last year level.

Wheat has been sown/transplanted in 303.16 lakh hectares as on 06 January 2017 compared with sowing of 281.7 lakh hectares same time last season. The area under pulses also moved up 13.4% to 152.63 lakh hectares, while that under oil seeds also increased 8% to 80.63 lakh hectares.

However, the area under rice has declined 27.4% to 12.74 lakh hectares, while that under coarse cereals also fell 6.6% to 53.60 lakh hectares as on 06 January 2017 over a year ago.

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GDP growth pegged at 7.1% for FY2017: First Advance Estimates
Jan 06,2017

As per the first advances estimates of Real GDP or Gross Domestic Product (GDP) released by the Central Statistics Office (CSO), the GDP growth at constant (2011-12) prices is estimated at 7.1% for FY2017, showing moderation from 7.6% in FY2016..

Real GVA, i.e, GVA at basic constant prices (2011-12) is anticipated to increase 7.0% in FY2017 against 7.2% growth in FY2016.

The sectors which registered growth rate of over 7.0% are, public administration, defence and other services, financial, real estate and professional services and manufacturing. The growth in the agriculture, forestry and fishing, mining and quarrying, electricity, gas, water supply and other utility services, construction and Trade, hotels, transport, communication and services related to broadcasting is estimated to be 4.1%, (-) 1.8%, 6.5%, 2.9% and 6.0% respectively.

The per capita income in real terms (at 2011-12 prices) during FY2017 is likely to attain a level of Rs 81805 as compared to Rs 77,435 for the year FY2016. The growth rate in per capita income is estimated at 5.6% during FY2017, as against 6.2% in the previous year.

The per capita net national income during FY2017 is estimated to be Rs 103,007 showing a rise of 10.4% as compared to Rs 93,293 during FY2016 with the growth rate of 7.4%.

Private Final Consumption Expenditure (PFCE) at current prices is estimated at Rs 89.72 lakh crore in FY2017 as against Rs 80.78 lakh crore in FY2016. At constant (2011-12) prices, the PFCE is estimated at Rs 67.13 lakh crore in FY2017 as against Rs 63.01 lakh crore in FY2016. In terms of GDP, the rates of PFCE at current and constant (2011-12) prices during FY2017 are estimated at 59.1% and 55.2%, respectively, as against the corresponding rates of 59.5% and 55.5%, respectively in FY2016.

Government Final Consumption Expenditure (GFCE) at current prices is estimated at Rs 18.61 lakh crore in FY2017 as against Rs 14.39 lakh crore in FY2016. At constant (2011-12) prices, the GFCE is estimated at Rs 13.95 lakh crore in FY2017as against Rs 11.27 lakh crore in FY2016. In terms of GDP, the rates of GFCE at current and constant (2011-12) prices during FY2017 are estimated at 12.3% and 11.5%, respectively, as against the corresponding rates of 10.6% and 9.9%, respectively in FY2016.

Gross Fixed Capital Formation (GFCF) at current prices is estimated at Rs 40.39 lakh crore in FY2017 as against Rs 39.72 lakh crore in FY2016. At constant (2011-12) prices, the GFCF is estimated at Rs 35.35 lakh crore in FY2017 as against Rs 35.41 lakh crore in FY2016. In terms of GDP, the rates of GFCF at current and constant (2011-12) prices during FY2017 are estimated at 26.6% and 29.1%, respectively, as against the corresponding rates of 29.3% and 31.2%, respectively in FY2016. The GFCF is expected to register growth rate of 1.7% at current prices and (-) 0.2% at constant prices.

The next release of second advance estimates of national income for the year FY2017 and quarterly GDP estimate for the quarter April-December, 2016 (Q3 of FY2017) will be on 28 February 2016.

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Dr. Jitendra Singh release 2017 Calendar of North Eastern Council
Jan 06,2017

The Union Minister of State (Independent Charge) for Development of North Eastern Region (DoNER), MoS PMO, Personnel, Public Grievances, Pensions, Atomic Energy and Space, Dr Jitendra Singh released the 2017 Calendar of the North Eastern Council here today. The North-East Council Calendar for 2017 carries the theme of n++seasonal fruitsn++ in different parts of the year.

Dr. Jitendra Singh announced the formation of exclusive n++North-Eastern Tourism Development Counciln++ (NETDC) on a public-private partnership (PPP) mode under the auspices of Union Ministry of DoNER. He said that this is for the first time that the Government has decided to set up a separate tourism development agency, devoted to a particular region of the country. The Minister said that the setting up of an exclusive North-Eastern Tourism Council is also a reflection of the high priority that the Union Government accords to the development of the peripheral States of Northeast.

Dr Jitendra Singh said that North-Eastern Tourism Council is yet another addition to several new initiatives undertaken with regard to North East. For instance, setting up of n++Venture Fundn++ as initial capital assistance for any young entrepreneur or start-up who wishes to launch an establishment or venture in the North-Eastern region and setting up of n++Dr A.P.J. Abdul Kalam Centre for Policy Research & Analysisn++ at the Indian Institute of Management (IIM), Shillong, he added.

The Minister said that the n++North-East Road Sector Development Schemen++ (NERSDS) is also region-based road development programme in India which has proved to be a great blessing for maintenance, construction and upgradation of such roads, which remain neglected either because of being low in the priority or being interconnecting roads between two States as a result of which they remain un-owned and had thus gained the dubious distinction of being described as n++orphan roadsn++.

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Money Supply: Currency in circulation declines
Jan 06,2017

The money supply (M3) registered growth of 7.1% as on 09 December 2016. The growth was lower than 8.5% in the month of November 2016. Meanwhile, on annual basis the M3 growth was lower than in December 2015, amid fall in currency with public and deceleration in other deposits with RBI, while demand deposits with banks and time deposits with banks accelerated. In a historic move, the government, on advice of RBI, announced that existing notes of Rs 500 and Rs 1000 denomination ceased to be legal tender from 09 November 2016. A new series of Rs 500 and Rs 2000 notes were introduced by RBI from 10 November 2016. Accordingly, old notes that have been demonetised can be deposited in bank accounts (without limit till 31 December 2016) or can be exchanged for legal tender.

This move reduced the currency in circulation drastically and increased the deposits with banks.

Meanwhile, the M3 decreased by Rs 559.5 billion or 0.5% fortnightly, led by fall in currency with the public, while time deposits with banks, demand deposits with banks and other deposits with RBI increased.

Components

M3 recorded growth of 4.3% till 09 December in 2016-17 compared with the 7.2% rise in the same period a year ago. Meanwhile, on annual basis the M3 growth was lower than in December 2015, amid fall in currency with public and deceleration in other deposits with RBI, while demand deposits with banks and time deposits with banks accelerated.

The growth rate in time deposits with banks accelerated to 14.2% from 10.8% a year ago, demand deposits with banks, another major component of broad money, increased at 29.4% from 13% a year ago while currency with public fall 48% from 12.4% rise a year ago.

Meanwhile, the M3 decreased by Rs 559.5 billion or 0.5% fortnightly, led by fall in currency with the public, while time deposits with banks, demand deposits with banks and other deposits with RBI increased.

Demand deposit with banks increased 21% till 09 December 2016 compared with a rise of 3.8% in the corresponding period a year ago. The annual growth rate stood at 29.4% as on 09 December 2016 compared with a rise of 13% a year ago. On other hand, time deposits increased at 12.3% till 09 December in 2016-17 compared with 7.4% growth a year ago. The annual growth rate stood at 14.2% as on 09 December compared with a 10.8% increase a year ago.

One of the major components of M3, that is currency with the public, fell 48% annually as on 09 December 2016 compared with 12.4% increase a year ago. It recorded 51.1% fall till 09 December in 2016-17 compared with a 8.4% increase in the same period a year ago. Meanwhile, fortnightly the currency with the public fall 14.4% or by Rs 1309.6 billion.

Sources

The net bank credit to government declined by Rs 944.6 billion in the fortnight ended 09 December 2016 but increased 22% till 09 December in 2016-17. This is higher than the rise of 12.4% growth a year ago. The annual growth rate accelerated to 16.9% as on 09 December 2016 compared with 7.2% a year ago. The growth in net foreign exchange assets of the banking sector stood at 2.7% till 09 December 2016 in 2016-17 lower from 9.4% growth a year ago. Meanwhile, the annual growth rate also decelerated 5.7% as on 09 December 2016 compared with a rise of 19.9% a year ago.

Reserve money

The reserve money growth declined annually in December 2016 compared with an annual rise in December 2015. The annual growth rate declined 29.6% as on 23 December 2016 compared with the 14.3% growth a year ago. The fall in currency in circulation led to fall in reserve money growth, while Bankers Deposits with RBI and other deposits with RBI decelerated. The fall in currency in circulation was 40% as on 23 December 2016 compared with a rise of 13% rise a year ago. The bankers deposit with the RBI decelerated at 6.5% compared with a rise of 17.9% rise a year ago and the other deposits with RBI also decelerated annually to 6.4%.

The net foreign exchange assets of the banking sector decelerated to 5.4% as on 23 December 2016 compared with a rise of 15.4% a year ago. Meanwhile, the growth rate was 2.5% till 23 December in 2016-17 compared with 9% rise in the same period a year ago. Net non-monetary liabilities of the RBI decreased 0.8% till 23 December 2016 in FY17 compared with a rise of 14.7% in the same period a year ago. The annual growth rate accelerated by 5.2% as on 23 December compared with rise of 4.5% a year ago.

Outlook

The growth of money supply in the economy slipped to 7% from 12% in the near term, and may slip further if 25-30% of unaccounted currency does not flow back into the banking system post demonetisation move. The demonetization led to massive influx of currency into the banking system with system liquidity turning into huge surplus as currency in circulation fell and deposit base grew by same amount. In a short period, the banking system will have to carry out a massive exercise of accepting old, demonetized notes and issuing new legal tender. This will be later followed by a massive outflow of currency back into the system.

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India and Kazakhstan sign Protocol to amend the Double Taxation Avoidance Convention (DTAC)
Jan 06,2017

India and Kazakhstan signed here today in the national capital a Protocol to amend the existing Double Taxation Avoidance Convention (DTAC) between the two countries which was earlier signed on 9th December, 1996 for the avoidance of double taxation and for the prevention of fiscal evasion with respect to taxes on income.

Salient features of the Protocol are as under:

(i) The Protocol provides internationally accepted standards for effective exchange of information on tax matters. Further, the information received from Kazakhstan for tax purposes can be shared with other law enforcement agencies with authorisation of the competent authority of Kazakhstan and vice versa.

(ii) The Protocol inserts a Limitation of Benefits Article, to provide a main purpose test to prevent misuse of the DTAC and to allow application of domestic law and measures against tax avoidance or evasion.

(iii) The Protocol inserts specific provisions to facilitate relieving of economic double taxation in transfer pricing cases. This is a taxpayer friendly measure and is in line with Indias commitment under Base Erosion and Profit Shifting (BEPS) Action Plan to meet the minimum standard of providing Mutual Agreement Procedure (MAP) access in transfer pricing cases.

(iv) The Protocol inserts service PE provisions with a threshold and also provides that the profits to be attributed to PE will be determined on the basis of apportionment of total profits of the enterprise.

(v) The Protocol replaces existing Article on Assistance in Collection of Taxes with a new Article to align it with international standards.

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ADB Sells Dual-Tranche $3 Billion 3-Year and $1 Billion 10-Year Global Benchmark Bonds
Jan 06,2017

The Asian Development Bank (ADB) returned to the US dollar bond market with the pricing of a dual-tranche $3 billion 3-year and $1 billion 10-year global benchmark bond issues, proceeds of which will be part of ADBs ordinary capital resources.

n++The first week of January has traditionally been an extremely busy issuance period with clear first-mover advantages and New Year cash flows we were keen to capitalize on. As the supply picture unfolded, there was a clear window to navigate the building pipeline with a maturity differentiating 3/10-year dual-tranche transaction. This format allows us to respond to demand in the front and back-end of the curve and I am pleased to see the solid investor response for ADBs credit and support of its mission in the region,n++ said ADB Treasurer Pierre Van Peteghem.

The 3-year bond, with a coupon rate of 1.750% per annum payable semi-annually and a maturity date of 10 January 2020, was priced at 99.942% to yield 28.05 basis points over the 1.375% US Treasury notes due December 2019. The 10-year bond, with a coupon rate of 2.625% per annum payable semi-annually and a maturity date of 12 January 2027, was priced at 99.451% to yield 23.75 basis points over the 2.000% US Treasury notes due November 2026.

The transactions were lead-managed by Citi, Goldman Sachs, J.P. Morgan, and Nomura. A syndicate group was also formed consisting of Bank of America Merrill Lynch, BMO Capital Markets, BNP Paribas, Credit Agricole CIB, Daiwa Securities, DBS Bank, Mizuho International, RBC Capital Markets, SMBC Nikko, and TD Securities.

Both issues achieved wide primary market distribution with 40% of the 3-year bonds placed in Asia, 29% in Europe, Middle East, and Africa, and 31% in the Americas. By investor type, 72% of the bonds went to central banks and official institutions, 8% to banks, and 20% to fund managers and other types of investors. For the 10-year bonds, 27% were placed in Asia, 20% in Europe, Middle East and Africa, and 53% in the Americas. By investor type, 47% of the bonds went to central banks and official institutions, 11% to banks, 42% to fund managers and other types of investors.

ADB plans to raise around $25-30 billion from the capital markets in 2017.

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Attractive compensation package to recruit best professionals for PSBs on anvil: Vinod Rai
Jan 06,2017

The Banks Board Bureau is working on a fairly attractive compensation package including elements of bonus, employee stock ownership plans (ESOPs), non-monetary perks and others at all management levels as part of corrective steps to ensure that best of professionals are recruited for public sector banks (PSBs), its chairman, Mr Vinod Rai said at an ASSOCHAM event.

n++In some ways the compensation package of these public sector institutions needs to be improved, maybe we are not able to do much with fixed part of compensation package but variable part we certainly are looking into it and we are hopeful that by next financial year we will be able to introduce a far more attractive package,n++ informed Mr Rai.

n++An attempt will be made to introduce accountability in the system, to ensure that you appoint a whole time director or a CEO (chief executive officer) at an age where he has got a minimum of six years more to go in the institution so that he can be held accountable for the decision,n++ added Mr Rai.

He also said that the Banks Board Bureau is in the process of filling up vacancies. n++We are looking for the right people, and we are trying to ensure that we choose the best and not the second-best.n++

Mr Rai further said, n++We are in the business of trying to collate people who are from different walks of life and who will be willing to join boards of PSBs and be able to provide that kind of expertise which these banks have not had in the past and the effort is to ensure that it is these boards which run the banks.n++

He said that all these activities are being carried out to establish a system and structure sans unhealthy practices that led to huge stress in the banking sector.

Mr Rai said that though the Corporate Debt Restructuring Cell was created with very noble intentions in early 2000s but later it found itself sagging with humongous amount of stressed assets in which there was no way it could manage those resources.

He said that there have been innumerable cases where project reports were inflated, balance sheets manipulated and submitted, funds siphoned off and others.

While on the other hand there are an equal number of instances where irresponsible or lazy lending took place, due diligence was given the go by and where supervision was callous.

n++In the Banks Bureau we are engaged in the task of trying to ensure that going forward, these things do not repeat themselves, a project report needs to be scrutinised very effectively, maybe we were lacking in experience in the banks which scrutinised or appraised these project reports, these have to be done by one or may be two independent agencies not having anything in common with each other,n++ he said.

Sharing his perspective on the most recent demonetisation move of the Union Government, he said that there is no harm in trying to cleanse the system and there are various ways to do it and demonetisation was one very effective way.

n++Any attempt to cleanse the economy is a very noble attempt and we should lend our energies in ensuring that process of cleansing takes place,n++ said Mr Rai.

n++It is far too early for us to say it is a success or not a success,n++ he added.

He also said that over the period of time banks may go in for mergers, consolidation and lots of thinking was going into the entire process.

n++The entire process is being thought of, it is not going to materialise in two or three months, it is a long drawn process, there is a lot of work which has to be done and once the roadmap is ready and hopefully in the next two to three years it will be rolled out,n++ said Mr Rai.

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Japan to assist in making Chennai, Ahmedabad and Varanasi Smart Cities
Jan 06,2017

Japan has decided to be associated with the development of Chennai, Ahmedabad and Varanasi as smart cities. This was today conveyed by Japans Ambassador to India Mr.Kenji Hiramatsu during his meeting with Minister of Urban Development Shri M.Venkaiah Naidu.

Mr.Hiramatsu further said that Japan is quite interested in urban development initiatives of the Government of India and decided to be a partner.

Responding to Shri Naidu observation about the need for speedy action, Japans Envoy said n++We would like to match the action oriented approach of the Government under Prime Minister Shri Modin++. Both of them discussed growing cooperation between the two countries further to the last meeting between the Prime Ministers of the two countries.

High Commissioner of United Kingdom Mr.Dominic Asquith also met Shri Venkaiah Naidu and discussed converting into action the MoU signed between the two countries during the recent visit of British Prime Minister to India Ms.Teresa May, on cooperation in urban development sector. He said institutionalizing Government to Government cooperation for smart city development has huge potential.

So far, leading countries have come forward to be associated with development of 15 smart cities. These include: United States Trade Development Agency (USTDA) -Visakhapatnam, Ajmer and Allahabad, UK-Pune, Amaravati(Andhra Pradesh) and Indore, France-Chandigarh, Puducherry and Nagpur and Germany -Bhubaneswar, Coimbattore and Kochi.

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SIDBI and LIC jointly signs agreements with 7 Venture Funds under SIDBI - LIC MOU
Jan 05,2017

In a bid to boost the venture capital ecosystem for MSMEs in the country Small Industries Development Bank of India (SIDBI) has tied up with Life Insurance Corporation of India (LIC) for augmenting the capital support to enterprises in the country. Under Fund of Funds operations, SIDBI operates various Funds viz. India Aspiration Fund with corpus of Rs.2000 crore, ASPIRE Fund with corpus of Rs.60 crore and Fund of Funds for Startups (FFS) with corpus of Rs.10,000 crore.

During April 2016, Small Industries Development Bank of India (SIDBI) and Life Insurance Corporation of India (LIC) had signed Memorandum of Understanding to supplement funds under India Aspiration Fund The MoU with LIC was launched in the presence of then Minister of State for Finance, Shri Jayant Sinha in Mumbai. Under the MoU, LIC has earmarked an amount of Rs.200 Crore for investment. Under the MOU, as part of first phase, LIC and SIDBI have signed Contribution Agreements on January 03, 2017 in New Delhi with 7 Venture Capital Funds (VCFs), with an aggregate commitment of Rs.99.50 Crore from LIC. This is over and above commitment of Rs.162.75 crore already given to these funds by SIDBI.

In order to bring in more professional outlook, SIDBI constituted a Venture Capital Investment Committee (VCIC) comprising experts.

There has been major upsurge in the activity during the current year as seen through growth in sanctions under Fund of fund operations. Commitments made by SIDBI in FY2015 and 2016 were- Rs.314.40 (11 funds) and 606.75 crores (19 funds) respectively. Compared to this, during the current year, SIDBI has so far accorded formal sanction already to 20 Alternative Investment Funds with aggregate commitments of Rs 714 crore. In addition there are further cases cleared by VCIC which are under detailed appraisal and due diligence. It may be pertinent to note that after constitution of VCIC in July 2015, out of 40 cases recommended by VCIC, 32 funds have already been given final sanction by SIDBI for an aggregate commitment of Rs. 1006.75 crores out of which 19 funds had announced first closing and have commenced investments.

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MCX Launches Castor Seed Futures
Jan 05,2017

Multi Commodity Exchange of India (MCX), launched a futures contract in Castor Seed, after receiving approval for the same from the Securities and Exchange Board of India. With this launch, MCX has added another contract to its agri-commodities products suite, in the oil and oilseeds complex.

The exchange has currently launched February, March, April and May 2017 contracts in Castor Seed, with 10 MT as the trading unit and Deesa (Gujarat) as the basis centre. Besides, in order to cater to the demand of a wide and diverse participants group, MCX has decided to levy a flat transaction charge of 50 paise per one lakh rupees of transaction, the lowest in any commodity levied by the Exchange.

The response to this new contract has been quite satisfactory with traded volumes and Open Interest clocking 6050 tons and 1300 tons respectively, till the time of going to the Press.

India is the leader in global Castor Seed production and the country dominates international Castor Oil trade, meeting more than 80% of global demand of castor oil. Indias export of Castor oil and derivatives are estimated to be over Rs.3,000 crores per annum, with indispensable usage in several industries like cosmetics, surface coatings, toiletries, pharmaceuticals, perfumes, soaps, lubricating formulations and medicines. By also meeting the hedging requirements of castor oil exporters and those connected to its exports, MCX Castor Seed Futures would fill in a critical gap in Indias agri exports, playing its part in the Governments Make in India initiative.

Mr. Mrugank Paranjape, MD and CEO, MCX said, n++The decision to launch Castor Seed futures contracts was made to cater to the need of the stakeholders of Castor Seed, particularly those from the physical market of this crop, for a reliable instrument for price discovery and risk management. With India dominating the global castor oil trade and rising volumes of production of Castor Seeds commensurate with an increasing trend in exports of its extract, there was a need felt for an effective instrument for hedging and appropriate price discovery, which the MCX Castor Seeds futures would address. Given the proven soundness of our Risk Management System and robustness of MCXs technology backbone, we are confident that all stakeholders of Castor Seed would find hedging their price risks on the MCX platform a superior economic proposition.n++

Mr. Atul Chaturvedi, President, Solvent Extractors Association said, n++We are very glad that SEBI has permitted Commodity Exchanges to launch contract in Castor Seed futures, which we have been looking forward to, especially after futures contract in this commodity became unavailable since last year. Businesses like ours are significantly exposed to castor oil price movements and our bottomlines are often adversely affected by the uncertainty and volatility of its prices.n++

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FM: Though world economy is quite fragile yet India appears to be much better placed on back of improvement in its macro-economic fundamentals
Jan 05,2017

The Union Finance Minister Shri Arun Jaitley said though the world economy is quite fragile yet India appears to be much better placed today on the back of improvement in its macro-economic fundamentals. The Finance Minister said that the Governments measures to eliminate the shadow economy and tax evasion are expected to have a positive impact both on GDP and on fiscal consolidation in the long run. The Finance Minister Shri Jaitley was making his Opening Remarks while chairing the Sixteenth Meeting of the Financial Stability and Development Council (FSDC).

The Council reviewed the major issues and challenges facing the economy and noted that India appears to be much better placed today on the back of improvement in its macro-economic fundamentals. The Council also noted that the Governments measures to eliminate the parallel economy and black money are expected to have a positive impact both on GDP and on fiscal consolidation in the long run.

The Regulators offered their suggestions/proposals for the upcoming Budget 2017-18, which were deliberated upon by the Council. The Council also reviewed the present status of NPAs in Banks and the measures taken by Government & RBI for dealing with the stressed assets and discussed on further action in this regard.

FSDC discussed about the various initiatives taken by the Government and Regulators for promoting financial inclusion/financial literacy efforts and discussed further measures for promoting the same.

A Brief Report on the activities undertaken by the FSDC Sub-Committee chaired by Governor, RBI was placed before the FSDC. The Council also undertook a comprehensive review of the action taken by members on the decisions taken in earlier meetings of the Council.

The Council also discussed issues pertaining to Fintech, digital innovations and cyber security. The Council took note of the initiatives taken in this regard by the Government and the Regulators and discussed on further steps to be taken.

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