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Sunday, March 8, 2020

economic news of india - world economic news - economics news for students - indian economy news

economic news of india - world economic news - economics news for students - indian economy news


The possible names that may help SBI pull off YES Bank rescue

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MUMBAI: State Bank of India (SBI), which needs to come up with equity investment of over Rs 20,000 crore to save Yes Bank from collapse, is in talks with more than half-adozen potential investors, said people with knowledge of the matter. They include Blackstone, Brookfield, Carlyle, TPG, KKR and Goldman Sachs.The state-owned bank is also said to be in talks with Tilden Park, JC Flowers and Cerberus Capital, some of which the previous management had been negotiating with.It could not be ascertained how much each investor is willing to chip in. Some state-owned institutions may also participate, said the people cited above. Housing Development Finance Corp (HDFC) is also said to be interested in investing in the bank; the mortgage lender didn't respond to queries. Last August, its asset management arm bought Yes Bank shares at around Rs 83.55 apiece in a qualified institutional placement (QIP). SBI didn't respond to queries."SBI as the anchor investor and RBI setting the base price at Rs 10 is making Yes Bank an attractive investment proposition," said an official involved in the process. 74543945 Revival Plan: Fresh Equity, 3-4 Marquee Investors Along with SBI"A plan is being firmed up and would be presented to the RBI soon. There are large domestic investors which could be interested besides the foreign ones. If things go to plan, this could be a good investment from SBI's point of view," said the official.There were day-long meetings at SBI headquarters in Mumbai on Saturday, said people directly involved.The plan is to infuse fresh equity into the bank and have three-four marquee investors along with SBI and a few domestic institutions and individuals. SBI is keen to have external investors put in as much as Rs 15,500 crore but the timeline of one week is believed to have deterred some.TPG, Carlyle, Brookfield, Cerberus, Blackstone, Goldman Sachs and KKR declined to comment. Tilden Park and JC Flowers didn't respond to queries.SBI chairman Rajnish Kumar had said Saturday that there was interest from several investors and, at a base price of Rs 2,450 crore, an investment in the bank made sense for the bank."Many potential investors have approached us after seeing the scheme… There are some very good names," said Kumar. "What we have to keep in mind for the co-investors is a couple of things — any investor looking to invest beyond 5% will have to meet RBI's 'fit and proper' criteria. If they are foreign investors, they will have to meet the FPI (foreign portfolio investor) guidelines."The RBI, which superseded the Yes Bank board and imposed a 30-day moratorium on Thursday, announced a draft reconstruction plan that entails an equity investment of up to 49% by SBI on Friday.As per RBI's draft scheme, the state-owned lender is required to hold a minimum 26% in Yes Bank for at least three years. SBI's investment and legal team is currently conducting due diligence on the draft reconstruction scheme and will revert to the RBI today (March 9) with its comments.Analysts estimate that the maximum of Rs 10,000 crore that SBI plans to invest in Yes Bank is less than half of what it needs to stay afloat. The bank will need at least Rs 22,000 crore, half of which will have to come from non-SBI investors, they say."The plan now starts afresh, which means that the investors that were already talking to Yes Bank earlier do not get a head start. They may well join the fray because they have more information on the bank but it is all up to SBI on how they run the process now," said a banker in touch with investors wanting to put money into the bank.All discussions are preliminary in nature, said a private equity executive. Any equity investor will have to grapple with a fundamental question about survival as the retail deposit franchise will be under siege."Once the moratorium opens up, I do expect many to pull out their money because of the sheer inconvenience and frustration," he said. "The government will need to be ready with the necessary liquidity cushion. We all know how much losses exist on the books… In any case, tier 1 capital has been written off."Additional Tier 1 (AT-1) bonds worth about Rs 8,415 crore owned by mutual funds, pension funds and other investors will be reduced to zero under the reconstruction plan.Macquarie analyst Suresh Ganapathy put the amount of capital required by the bank at $3 billion (Rs 22,000 crore) over the next 12 to 18 months, in a report on Friday."As per our analysis, under scenario 1, SBI will infuse Rs 2,450 crore. However, considering the quantum of stressed assets on the Yes Bank books, such a small amount would not be enough to make provisions and so the question arises whether SBI will bring in more capital in the future, if required," Ganapathy said. SBI chairman Kumar has said that the maximum the bank will invest is Rs 10,000 crore. Ganapathy pegged this amount higher, at Rs 11,800 crore."The question arises whether SBI will put in such a large sum and how easy it would be to bring in 'new investors' considering the lack of investor interest in the past," Ganapathy said.The magnitude of the provisions required by the bank has prevented investors from infusing funds in the past. Analysts calculate that about half the capital infused could be used for writing off bad loans.The much-delayed earnings announcement for the December quarter is due on March 14. It's expected that the bank's capital adequacy ratio (CAR) will be negative."The bank had no money to make interest payments, that's how bad the situation was. The CAR is likely to be negative and that is one reason why the moratorium was imposed because otherwise there would have been a run on the bank," said a senior public sector bank executive.Bankers said the special restructuring plan, which allows SBI to sidestep the Securities and Exchange Board of India (Sebi) pricing formula, could help attract more investors since Rs 10 per share is even below the Friday close of Rs 16.60 per share.

Saudis have just sparked an oil price war

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By Dan Murtaugh and Alfred CangOil markets crashed more than 30 per cent after the disintegration of the Opec+ alliance triggered an all-out price war between Saudi Arabia and Russia that is likely to have sweeping political and economic consequences.Brent futures suffered the second-largest decline on record in the opening seconds of trading in Asia, behind only the plunge during the Gulf War in 1991. As the global oil benchmark plummeted to as low as $31.02 a barrel, Goldman Sachs Group Inc. warned prices could drop to near $20 a barrel. 74543999 The cataclysmic collapse will resonate through the energy industry, from giants like Exxon Mobil Corp. to smaller shale drillers in West Texas. It will hit the budgets of oil-dependent nations from Iraq to Nigeria and could also reshape global politics, eroding the influence of countries like Saudi Arabia. The fight against climate change may suffer a setback as fossil fuels become more competitive versus renewable energy."It's unbelievable, the market was overwhelmed by a wave of selling at the open," said Andy Lipow, president of Houston-based energy consultancy Lipow Oil Associates LLC. "Opec+ has clearly surprised the market by engaging in a price war to gain market share."Hammered by withering demand due to the coronavirus, the oil market is sinking deeper into chaos on the prospect of a supply free-for-all. Saudi Arabia slashed its official prices by the most in at least 20 years over the weekend and signaled to buyers it would ramp up output -- an unambiguous declaration of intent to flood the market with crude. Russia said its companies were free to pump as much as they could.Aramco's unprecedented pricing move came just hours after the talks between Organization of Petroleum Exporting Countries and its allies ended in dramatic failure. The breakup of the alliance effectively ends the cooperation between Saudi Arabia and Russia that has underpinned oil prices since 2016.The state-owned Saudi producer has privately told some market participants it plans to raise output well above 10 million barrels a day next month and could even reach a record 12 million barrels a day, according to people familiar with the conversations, who asked not to be named to protect commercial relations.Oil prices have suffered massive drops each time that Saudi Arabia has launched a price war to drive competitors out of the market. West Texas Intermediate fell 66 per cent from late 1985 to March 1986 when the country pumped at will amid a resurgence of US oil output. Brent crude briefly dipped below $10 a barrel when the kingdom had a showdown with Venezuela in the late 1990s.With oil demand already plummeting due to the economic impact of the coronavirus, traders forecast that prices will go even lower. "The oil market is now faced with two highly uncertain bearish shocks with the clear outcome of a sharp price sell-off," said Jeffrey Currie, head of commodities research at Goldman Sachs in New York.Brent for May settlement tumbled as much as $14.25 a barrel to $31.02 on the London-based ICE Futures Europe Exchange, the biggest intra-day loss since the US-led bombing of Iraq in January 1991. It pared some of those losses to trade 21 per cent lower at $35.71 a barrel as of 9:15 a.m. in Singapore.West Texas Intermediate crude slumped 21 per cent to $32.48 a barrel after sliding as much as 27 per cent to $30 a barrel just after the open. Trading was frozen for the first few minutes because of the scale of the loss.While the price crash was dramatic, for oil specialists the movements in time-spreads, options and volatility are just as remarkable. Brent's three-month price structure widened sharply as oil for prompt delivery collapsed against later shipments. It moved deeper into contango, a sign of bearishness and oversupply, making it profitable for physical traders to buy crude and put it in storage, either in onshore tank farms or at sea on tankers. 74544007 Brent's premium to WTI fell to its lowest level in more than two years, as the coming gusher of crude from Opec countries threatens to impact global supply and demand balances more directly than those within the US The price differential was $2.77 a barrel, narrowing from an average of more than $4 last week.The freefall in oil also ricocheted across financial markets. US equity futures nosedived, along with oil currencies including the Norwegian krone and Mexican peso, while havens such as the Japanese yen and gold jumped. Shares of oil producers got hammered, with Australia's Santos Ltd. and Oil Search Ltd. losing more than 20 per cent in early Sydney trading.The prospect of another price war is spooking traders who will remember the crash that began in 2014, when an explosion in US shale production prompted Opec to open the spigots in an attempt to suppress prices and curtail shale output.That strategy ended in failure, with shale producers proving too resilient and Brent crude tumbling below $30 a barrel in 2016 amid a global glut. It was that crash that prompted Opec to club together with Russia and others to curtail output and help shore up their oil-dependent economies.

YES leaves 40,000 sleepless in Seattle

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Mumbai: At least 40,000 Yes Bank debit and forex card holders travelling overseas are hit due to the ongoing crisis at the bank. The situation is especially grim for customers carrying Yes Bank forex prepaid cards instead of currency notes, with their access to payments for hotel room accommodation, transport and even food - virtually cut off."Forex prepaid cards are just like drafts which are also pre-paid instruments. This is an unprecedented crisis with thousands of Indians overseas without any access to their own money," said a forex-card operator who did not wish to be named. "Imagine being in a situation where you are traveling outside the country and banking on your credit/debit cards, and they no longer work." The central bank on Thursday imposed a moratorium on Yes Bank that capped deposit withdrawals at Rs 50,000 per person, or $675. It relaxed the limit for emergencies like medical needs, payment for higher education, or marriage expenses. That is set at Rs 5 lakh.Several Yes Bank customers having prepaid forex cards tweeted to the bank seeking help as the cards were deactivated, leaving them stranded overseas without access to any money. Harsh Wadhwa, a student having aBookMyForex multi-currency card, complained that he had no access to funds. "I have to pay my rent but I can't withdraw a single cent even when I have already preloaded money in my card," Wadhwa wrote on twitter.Another twitter user Soumitra Chakravarti said he was currently in Canada and his only source of money was his forex Card. "The key word is prepaid, how can you stop my card services? I am stranded because of this and in an SOS situation," he too wrote on Twitter, tagging S Jaishankar, India's external affairs minister.The private lender, facing regulatory curbs, on Saturday announced that its systems were operational and that its users could make withdrawals using its debit cards and ATMs. "You can now make withdrawals using your Yes Bank debit card both at Yes Bank and other bank ATMs. Thanks for your patience," the bank tweeted Saturday evening.The bank also issued a set of FAQs and clarified that all online remittances including payments through RTGS/NEFT are suspended as of now. It also clarified that since all clearing activities were suspended, EMIs will be honored up to the prescribed limit subject to reinstatement of clearing activities. Also, all cheques already issued will not be honored until clearing resumes or Mint Road gives further directives.

Our policies are clear & our fundamentals are strong: PM

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On this forum of Global Business Summit, The Economic Times has given me an opportunity to speak in the presence of experts from all over the world. Since this morning, several topics have been discussed here and prominent personalities of the business world have shared their ideas. A common thread in this flow of ideas is 'Collaborate to Create'. This vision is the need of the hour and also the basis of future sustainable growth.The idea of Collaborate to Create is relevant even though it is old… Today, the world is facing a huge challenge in the form of coronavirus. Financial institutions also consider it a big challenge. We all have to face this challenge together… You are also going to brainstorm here on the philosophy of fractured world. Real fractures, over-imagined fractures and factors responsible for it will also be discussed.There was a time when things used to run according to the predictions of a particular class… But with the development of technology and democratisation of discourse, now the opinions of people from every section of the society matter… When you gave us the opportunity to serve for the first time in 2014… a large part of the country's population was longing for basic amenities like toilets, electricity connections, gas connections and houses. There were two options before us – to walk the same path as before or to create our own path and move forward with a new approach… we created a new path, moved ahead with a new approach and gave the foremost priority to the aspirations of the people.The class I was talking to you about has a very important identity – 'Talking the Right Things'. That is, they say the right thing always. There is no harm in saying the right thing. But this class hates those who follow the mantra of 'Doing The Right Things'… You may notice that those who call themselves the messiah of gender justice oppose our decision to enact a law against triple talaq. Those who keep talking about refugee rights to the world, are protesting against the CAA (Citizenship Amendment Act) being enacted for refugees. Those who keep on talking about the Constitution day and night, are opposing the abrogation of temporary provisions such as Article 370 that will ensure the implementation of the Constitution completely in Jammu and Kashmir. Those who talk of justice question the intention of the Supreme Court of the country if one decision of the Supreme Court goes against them.Friends, some of you must have heard the chaupai of Ramcharitmanas that it is very easy to teach others, but it is very difficult to follow those teachings yourselves… Such people believe that inaction is the most convenient action. But for us, nation-building, development of the country, good governance are not a matter of convenience but conviction.CONVICTION TO DO THE RIGHT THING, CONVICTION TO BREAK THE STATUS QUOOne by one, we are taking every sector out of the convenience of inaction. Through DBT (direct benefit transfer), we have saved thousands of crores of rupees from getting into the wrong hands. By enacting the RERA Act, we have taken a huge step to free the real estate sector from the bondage of black money, and made the middle class get its dream homes.This campaign of liberation also took place in the corporate world. We changed the status quo by creating IBC (Insolvency and Bankruptcy Code) and, besides ensuring the return of thousands of crores of rupees, we also showed a path to the companies in trouble. Otherwise, it was just one-way here. One could enter a business but could not leave. We have created ways to help failed businesses come out of it.We also took the banking system out of the old mindset by implementing the Mudra Yojana and have given more than Rs 11 lakh crore without bank guarantee to people, youth, women and firsttime entrepreneurs for promoting selfemployment.Similarly, we have changed the status quo and ensured better synergy and cooperation in our forces by creating CDS, i.e. Chief of Defence Staff. We also made a big change in the system by giving 10% reservation to the poor from the general category and have removed one of the major worries of the poor.Friends, since 2014, the country has moved ahead with the mantra of 'Cooperation in Spirit, Collaboration in Action and Combination of Ideas'. Today, India is creating a model of sustainable growth that will be beneficial for the whole world. The world's largest financial inclusion programme, the world's largest sanitation programme, the world's largest health assurance scheme and many other such schemes are providing experience in helping in the development of the world. 21st century India is learning a lot and is equally ready to take the benefits of the development to the people of the country.The results are clearly visible in different sectors and in different fields. The speed of highway construction in the country was about 12 km per day, six years ago. Today it is around 30 km. Six years ago, the situation was such that only 600 km of railway line was being electrified in a year. Last year, we electrified 5,300 km of railway lines. Six years ago, our airports were handling about 17 crore passengers. Now they are handling over 34 crore passengers.Six years ago, cargo handling at our major ports was around 550 million tonnes. It has now reached close to 700 million tonnes. And I would like to draw your attention towards one more important thing. Six years ago, the turnaround time at major ports was around 100 hours. Now it has come down to 60 hours. Relentless work is underway to reduce it further.Did such a major change take place just like this? No. We tried to eliminate silos in government departments, made systematic efforts and emphasised upon collaboration… You are also looking at the work being done at the airports and railway stations today… No one could have imagined that passengers would be compensated for train delays… But a new culture has been brought in this country wherein passengers are being given refunds when the train is late… There are several airlines that do not give refunds even when they are late, but today passengers are being given refunds when the train is late. We have provided this facility to people travelling by Tejas train. We know how risky this step is. Immediately RTIs will be placed tonight and journalists will also come out to know how much has been refunded, but we are satisfied and confident of our steps. We are taking the country in a direction where the government will be held responsible for train delays… In the last few years, India has become an even stronger part of the global economy system. But due to international conditions, the global economy is weak and in a difficult condition. Nevertheless, we have been taking as many proactive steps and initiatives as possible to ensure its minimal impact on the Indian economy, and this has also benefited us.Our policies are clear, our fundamentals are strong. Recently, India became the fifth largest economy in the world. When we came to power in 2014, we were on the 11th position. Now we have reached fifth place.Our government is working on four different levels to achieve the target of $5 trillion economy. First, collaborate with private sector. Second, fair competition. Third, wealth creation. And fourth, deletion of archaic laws.We have prepared a road map for investing more than Rs 100 lakh crore in the field of infrastructure. We have chosen the path to strengthen PPP with PPP. We want to give powerful progressive push to the country through public-private partnership! It has been seen that those sectors in which private sector is allowed to compete freely, grow rapidly. Therefore, our government is opening more and more sectors of the economy to the private sector.The government is standing firmly with the one who is moving ahead with honesty, fair competition and creating wealth. For that, the law is constantly being simplified and old laws are being abolished. To increase fair competition, we are dealing strictly with both corruption and cronyism. Be it banking, FDI policies or allotment of natural resources, cronyism is being removed everywhere. We have paid attention to simplification, rationalisation and transparency. Now, in this year's budget, we have come up with a new scheme called 'Vivad Se Vishwas' to resolve tax disputes. We are also moving fast towards labour reforms. Just the day before yesterday, the government decriminalised many provisions, making major changes in the Companies Act.Today, India is among the major countries where corporate tax is the lowest. India is also the country with a record 77 rank improvement in just five years in ease of doing business. Amid these efforts of the government, the confidence of foreign investors is also growing in the Indian economy. Just a short while ago, you heard the CEO of Blackstone here. He was saying that India gives the highest return in the world and they are planning to double their investment.Foreign direct investment of around $48 billion poured into the country in 2019. There was a growth of more than 16%. Similarly, India got $19 billion in private equity and venture capital investment last year. Growth in this aspect was more than 53%. Foreign portfolio investors are also increasing investment now. Last year, these investments amounted to about $19 billion. It is clear that investors looking for new options are also moving towards India.By liberating the country from the status quo, we are moving towards creation by collaboration not only at the national level but also internationally. You must remember when the proposal of International Yoga Day came from the United Nations, almost all the nations of the world supported India. And perhaps for the first time in the history of the UN, a resolution got the support of so many countries of the world. And the impact of yoga is such that, probably for the first time a meditation was done at your summit.Today, India has a high participation rate in peacekeeping forces… Moreover, today India plays a major role in setting up international level institutions. Whether it is International Solar Alliance or Coalition for Disaster Resilient Infrastructure, such future-oriented institutions were started at India's initiative and today the whole world has started connecting with it. Friends, just like we have those forces that oppose changes and support the status quo in our country, there are similar forces at the global level that are getting together strongly… In this era of technology, the world is interconnected, interrelated and also interdependent. These are the changes of this century. There are changes at the global level. But still, the world is not able to come on a single platform or frame a global agenda, a global goal – of how to overcome world poverty, how to end terrorism, how to handle climate change issues….In the midst of changing global conditions, India has also made major changes. There was a period when India was neutral, we were neutral, but there was an equal distance from every country. How has the change occurred? Even today India is neutral, not on the basis of distance but on the basis of friendship. We are not only friends with Saudi Arabia but also with Iran. We are not only friends with America but also with Russia. Yet, we are neutral. There was a time when people were neutral by creating equal distance, but we are now neutral by creating equal friendship. In that period, they tried to escape by keeping distance. Today we are being friends and trying to walk together. This is the very essence of India's foreign policy, and the economic policy of India today.Friends, I am ending my speech with the words of Mahatma Gandhi. Gandhiji used to say that "I want the rise of India so that the whole world can benefit from it". This one line also has the Indian idea of globalisation and the mantra of collaboration for the future.I once again wish you all the very best for your discussion on such an important subject. And I thank you for giving me the opportunity to be present amidst you. Thanking you all from the bottom of my heart, I conclude my speech. Thank you!

Moneyless in Seattle, card holders send SOS

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Mumbai: At least 40,000 Yes Bank debit and forex card holders travelling overseas are hit due to the ongoing crisis at the bank. The situation is especially grim for customers carrying Yes Bank forex prepaid cards instead of currency notes, with their access to payments for hotel room accommodation, transport and even food - virtually cut off."Forex prepaid cards are just like drafts which are also pre-paid instruments. This is an unprecedented crisis with thousands of Indians overseas without any access to their own money," said a forex-card operator who did not wish to be named. "Imagine being in a situation where you are traveling outside the country and banking on your credit/debit cards, and they no longer work." The central bank on Thursday imposed a moratorium on Yes Bank that capped deposit withdrawals at Rs 50,000 per person, or $675. It relaxed the limit for emergencies like medical needs, payment for higher education, or marriage expenses. That is set at Rs 5 lakh.Several Yes Bank customers having prepaid forex cards tweeted to the bank seeking help as the cards were deactivated, leaving them stranded overseas without access to any money. Harsh Wadhwa, a student having aBookMyForex multi-currency card, complained that he had no access to funds. "I have to pay my rent but I can't withdraw a single cent even when I have already preloaded money in my card," Wadhwa wrote on twitter.Another twitter user Soumitra Chakravarti said he was currently in Canada and his only source of money was his forex Card. "The key word is prepaid, how can you stop my card services? I am stranded because of this and in an SOS situation," he too wrote on Twitter, tagging S Jaishankar, India's external affairs minister.The private lender, facing regulatory curbs, on Saturday announced that its systems were operational and that its users could make withdrawals using its debit cards and ATMs. "You can now make withdrawals using your Yes Bank debit card both at Yes Bank and other bank ATMs. Thanks for your patience," the bank tweeted Saturday evening.The bank also issued a set of FAQs and clarified that all online remittances including payments through RTGS/NEFT are suspended as of now. It also clarified that since all clearing activities were suspended, EMIs will be honored up to the prescribed limit subject to reinstatement of clearing activities. Also, all cheques already issued will not be honored until clearing resumes or Mint Road gives further directives.

Saving Yes Bank: SBI aiming to bring in global investors

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MUMBAI: State Bank of India (SBI), which needs to come up with equity investment of over Rs 20,000 crore to save Yes Bank from collapse, is in talks with more than half-adozen potential investors, said people with knowledge of the matter. They include Blackstone, Brookfield, Carlyle, TPG, KKR and Goldman Sachs.The state-owned bank is also said to be in talks with Tilden Park, JC Flowers and Cerberus Capital, some of which the previous management had been negotiating with.It could not be ascertained how much each investor is willing to chip in. Some state-owned institutions may also participate, said the people cited above. Housing Development Finance Corp (HDFC) is also said to be interested in investing in the bank; the mortgage lender didn't respond to queries. Last August, its asset management arm bought Yes Bank shares at around Rs 83.55 apiece in a qualified institutional placement (QIP). SBI didn't respond to queries."SBI as the anchor investor and RBI setting the base price at Rs 10 is making Yes Bank an attractive investment proposition," said an official involved in the process. 74543945 Revival Plan: Fresh Equity, 3-4 Marquee Investors Along with SBI"A plan is being firmed up and would be presented to the RBI soon. There are large domestic investors which could be interested besides the foreign ones. If things go to plan, this could be a good investment from SBI's point of view," said the official.There were day-long meetings at SBI headquarters in Mumbai on Saturday, said people directly involved.The plan is to infuse fresh equity into the bank and have three-four marquee investors along with SBI and a few domestic institutions and individuals. SBI is keen to have external investors put in as much as Rs 15,500 crore but the timeline of one week is believed to have deterred some.TPG, Carlyle, Brookfield, Cerberus, Blackstone, Goldman Sachs and KKR declined to comment. Tilden Park and JC Flowers didn't respond to queries.SBI chairman Rajnish Kumar had said Saturday that there was interest from several investors and, at a base price of Rs 2,450 crore, an investment in the bank made sense for the bank."Many potential investors have approached us after seeing the scheme… There are some very good names," said Kumar. "What we have to keep in mind for the co-investors is a couple of things — any investor looking to invest beyond 5% will have to meet RBI's 'fit and proper' criteria. If they are foreign investors, they will have to meet the FPI (foreign portfolio investor) guidelines."The RBI, which superseded the Yes Bank board and imposed a 30-day moratorium on Thursday, announced a draft reconstruction plan that entails an equity investment of up to 49% by SBI on Friday.As per RBI's draft scheme, the state-owned lender is required to hold a minimum 26% in Yes Bank for at least three years. SBI's investment and legal team is currently conducting due diligence on the draft reconstruction scheme and will revert to the RBI today (March 9) with its comments.Analysts estimate that the maximum of Rs 10,000 crore that SBI plans to invest in Yes Bank is less than half of what it needs to stay afloat. The bank will need at least Rs 22,000 crore, half of which will have to come from non-SBI investors, they say."The plan now starts afresh, which means that the investors that were already talking to Yes Bank earlier do not get a head start. They may well join the fray because they have more information on the bank but it is all up to SBI on how they run the process now," said a banker in touch with investors wanting to put money into the bank.All discussions are preliminary in nature, said a private equity executive. Any equity investor will have to grapple with a fundamental question about survival as the retail deposit franchise will be under siege."Once the moratorium opens up, I do expect many to pull out their money because of the sheer inconvenience and frustration," he said. "The government will need to be ready with the necessary liquidity cushion. We all know how much losses exist on the books… In any case, tier 1 capital has been written off."Additional Tier 1 (AT-1) bonds worth about Rs 8,415 crore owned by mutual funds, pension funds and other investors will be reduced to zero under the reconstruction plan.Macquarie analyst Suresh Ganapathy put the amount of capital required by the bank at $3 billion (Rs 22,000 crore) over the next 12 to 18 months, in a report on Friday."As per our analysis, under scenario 1, SBI will infuse Rs 2,450 crore. However, considering the quantum of stressed assets on the Yes Bank books, such a small amount would not be enough to make provisions and so the question arises whether SBI will bring in more capital in the future, if required," Ganapathy said. SBI chairman Kumar has said that the maximum the bank will invest is Rs 10,000 crore. Ganapathy pegged this amount higher, at Rs 11,800 crore."The question arises whether SBI will put in such a large sum and how easy it would be to bring in 'new investors' considering the lack of investor interest in the past," Ganapathy said.The magnitude of the provisions required by the bank has prevented investors from infusing funds in the past. Analysts calculate that about half the capital infused could be used for writing off bad loans.The much-delayed earnings announcement for the December quarter is due on March 14. It's expected that the bank's capital adequacy ratio (CAR) will be negative."The bank had no money to make interest payments, that's how bad the situation was. The CAR is likely to be negative and that is one reason why the moratorium was imposed because otherwise there would have been a run on the bank," said a senior public sector bank executive.Bankers said the special restructuring plan, which allows SBI to sidestep the Securities and Exchange Board of India (Sebi) pricing formula, could help attract more investors since Rs 10 per share is even below the Friday close of Rs 16.60 per share.

The truth is women make better investors. Here's the reason why

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By Jyoti VaswaniIn today's world, the role of a women has undergone a sea change compared with yesteryears and is making its greatest impact in society. Earlier a women's contribution to society was limited and controlled by men. However today, women are standing tall and playing a major role in various arenas like politics, defence, sports, IT, finance, business and law. Given this changed world, financial equality and independence is imperative for women and more so for the ones who are seeking to have a life of prosperity, build wealth and meet their short-term and retirement goals.Thus, being cognizant of the importance of investing and possessing the right investing skills is key, be it for a homemaker, or a professional or an entrepreneur.However in reality, the narrative here is very different when it comes to women investing, as the stereotype belief still runs that men do the investing and women usually do the saving bit. Besides women are perceived not just unwilling to invest, but are also less aggressive than their male counterparts.When it comes to investment or personal finance planning spectrum, most women still rely on their husbands/father to go about their investments or financial plans.Several studies have shown that women's portfolio outperform their male counterparts because of the inherent qualities that women possess by nature, that differentiates them from male investors in their approach of investing. Women are usually more risk conscious, willing to acknowledge and research what they don't know and 'slow and steady wins the race' broadly sums up their investment approach.They would generally prefer to participate in safer and less volatile investments with consistent track records.Besides women have more long-term investment perspective than men and hence trade less frequently. Today, it's important that we change this old school of thought and try and understand the importance of investing more profoundly from a woman's standpoint.Why should a woman look at investing?First and foremost, it's important for women to be able to achieve a sense of financial equality and independence. Women need to acknowledge that managing one's own and the family's finances is not rocket science. It can be mastered with a little bit of patience, effort and an open mind. Women should not shy away from holding and operating bank accounts, trading accounts, demat accounts and holding assets in their own name. If a woman is earning less or thinks 'she doesn't possess the aptitude for investing, she can start with a small systematic investment plan. In fact investing is one of the best ways for women to ensure that they have the potential to accumulate the same amount of wealth as men.Investing is unarguably one of the best tools for a woman to accomplish her financial goals which may vary from sending your kids to school/college, a holiday, save up an emergency fund, saving for a large expenditure such as buying a house or for a wedding, saving for retirement or just grow your overall wealth .As we know, to draw an everyday parallel, most of the women would go to great lengths to plan a balanced diet for their family and ensure the physical wellbeing of their families. Having a well-balanced savings and investment portfolio, is also equally crucial in ensuring one's own and the family's financial wellbeing.Savings and investment are indeed two parts of the same coin. As a thumb rule, a typical household should try and save about 25-30 per cent of income. But it does not end there, savings stashed away under mattresses will earn nothing, and their value will erode over, as inflation reduces purchasing power.Similarly, savings invested in physical assets like gold will appreciate over time, but will provide no returns in the interim. Consequently, it is important to ensure that one's savings are invested in a well balanced portfolio.This brings us to what can be succinctly put as the three Ps of Investing.Investing for Protection: Life insurance policies are important to protect a family's income in the event of death of the women irrespective of whether she is a home maker or a professional. It is also important for women to invest in protection products to meet unforeseen contingencies. This would primarily entail purchase of health insurance to cover potential illness and hospitalization costs. It may also be prudent to have coverage against terminal illness, in case one's ability to work is permanently impairedInvesting for a Purpose: The second tenet of investing stands for investing with a purpose or goals based investing. The goals may range from one's retirement to children's education or planning for large ticket purchases. A woman needs to understand the power of compounding, the earlier she invests, the more wealth she can accumulate to achieve her goals.Investing in the right product: Finally, it is important to choose the right product depending on one's risk appetite, goals and time horizon. A long term goal is best met with investment in equities while a short term goal may be met through investment in debt funds. One can also allocate a small portion of their portfolio to physical assets such as gold which may be held through gold bonds which also pay nominal interest. More importantly, it's important for a woman to remain committed to her investment strategy and not panic to drops in investment values which are usually in a constant state of flux.(Jyoti Vaswani is Chief Investment Officer of Future Generali India Life Insurance. Views are her own)

Time ripe for a serious rework of gender maths in workforce

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By Koel GhoshAs a mother to a precocious teenage daughter, one of the issues that I care deeply about is promoting diversity and inclusion in the workplace and supporting initiatives that help increase female representation in the executive ranks and boards of companies and institutions.The financial services industry today is testament to the change, which is now reflecting the growth of representation of women in executive committees and boards.S&P Global published a research recently that illustrated how US GDP growth could accelerate with increased female labour force participation and add a whopping $5.87 trillion to global market capitalisation in 10 years. A one per cent growth in GDP makes S&P 500 return 3.4% on an average annually. An additional 0.2 point of GDP growth (thanks to female participation) would boost the S&P500 another 0.7% — and could increase US market capitalisation by $2.87 trillion in a decade.Similarly, US growth influences larger gains in other countries such as Germany, China and Korea and the world.Many women are all too familiar with the 'glass ceiling' that keeps them looking up to similarly (or less-) qualified men in positions above them. Add to this wage gap that, while narrowing, stubbornly persists. Compared with men, women's earnings are just 83% of the equivalent male full-time workers. Therefore, women must work that extra 44 days each year to earn as much as their male counterpart does. More than 25% of mothers quit entirely for children or family care. Significant time taken off for child or family care is 39 per cent by mothers and 24 per cent by fathers.While this may reflect their ability to be flexible and spend more time with families, it comes at the cost of unbridgeable wage disparity and limited opportunities for advancement. This raises the question of whether policies designed to help women work can have unintended consequences.Nonetheless, there must be change, and all indications certainly suggest that society recognises this time in history as ripe for a serious overhaul in relation to gender accessibility to the workforce. Throughout my career in the financial services industry, I have been fortunate to have mentors, managers and colleagues who have helped me find opportunities to advance my career, and take on leadership responsibilities. At a personal level and beyond the important economic benefits of diversity and inclusion, I am inspired by female colleagues and financial industry peers who have shared their remarkable stories of overcoming career obstacles, and balancing demanding careers with personal lives.In the corporate and financial world in India and globally, an increasing number of women are assuming senior decision-making roles at companies and other institutions paving the way for future female leaders.We still have a long way to go, but India is seeing a rise in female workforce participation and inclusion, and catching up with more developed countries. In India, the success of highly respected leaders such as Crisil CEO Ashu Suyash, Finance Minister Nirmala Sitharaman, JP Morgan India CEO Kalpana Morparia, to name only a few, show us the rich possibilities for women in financial services, government and other institutions.Change is inevitable and women are demonstrating to be the agents of positive change. Encouragement, inspiration and mentoring will go a long way to grow and build a new generation of leaders and contributors who will open up new possibilities.Indeed, an occasion such as International Women's Day serves as a reminder of how far we have come, the progress we have made, and the doors that we still need to open. I look forward to the day when women in leadership roles become the norm for my daughter's generation. (Koel Ghosh is Head of South Asia at S&P Dow Jones Indices. Views are her own)

Tech Mahindra launches women-led ideathon to drive tech innovation

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NEW DELHI: Makers Lab, the research and development arm center of Tech Mahindra, a provider of digital transformation, consulting and business reengineering services and solutions on Sunday announced the launch of a women-led Ideathon to drive technology innovation. Launched on International Women's Day, the Ideathon is aimed at solving real world challenges through technology, especially in the defense space, according to a release. The Ideathon will run for four weeks and will end on 7th April.The wider Tech Mahindra family including woman associates, women spouses of other associates and children are invited to participate in this Ideation.The Ideathon, supported by Josh, the cultural group of Tech Mahindra will comprise two rounds. The top 20 ideas will be rewarded and will get a chance to interact with instructors as well as Army officers of College of Military Engineering (CME), Pune.The College of Military Engineering is a premier technical and tactical training institute of the Indian Army (Corps of Engineers) with a focus on promoting innovative technologies like Artificial Intelligence and Robotics for the Indian Army.Nikhil Malhotra, global head of Makers Lab, Tech Mahindra, said, "The mission of Tech Mahindra's R&D arm, Makers Lab, is to promote technology innovation and provide a common platform where academia and industry can come together to create disruptive solutions to solve real world problems. This women-led Ideathon is a first among a series of Ideathons and hackathons which are planned across the year in Tech Mahindra, to encourage women professionals especially to innovate and leverage technology towards betterment of society and world at large."Kanchan Bhonde, product strategy head, Makers Lab and Head - Winnovate (Women who Innovate) program, Tech Mahindra, said, "There are some very challenging problem statements we have developed for the Ideathon, which will generate curiosity amongst the teams. We are excited to hear from women and children who will get a chance to showcase their creativity and technical expertise."Winnovate is a Tech Mahindra program with a vision to enable women to break the glass ceiling and bring excellence in technology as well as management. The program is aimed at inspiring more women with real life examples, monthly webinars and mentorship programs.As part of the TechMNxt charter, Tech Mahindra's Makers Lab is focused on developing future-ready solution by leveraging next gen technologies such as Artificial Intelligence (AI), Machine Learning, Robotics, Internet of Things (IoT), Augmented Reality/ Virtual Reality, 5G – Network of the future. There is a range of business problems that Makers Lab aims to solve in the future to enhance citizen services and customer experiences.

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