| News Announcement |
Impact Analysis |
| Yes Bank put under administration by the Reserve Bank of India |
- The RBI superseded the Yes Bank board and appointed former SBI CFO, Prashant Kumar, as the administrator
- This virtually puts a stop to all activities of Yes Bank including taking fresh deposits and giving fresh loans
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| Yes Bank moratorium could become a major hassle for customers |
- The total withdrawal limit has been restricted to Rs.50,000 per account till April 03, 2020
- In addition, all cheques issued by the bank and ECS mandates will not be honoured by the bank any longer
|
| RBI announces terms of restructuring for Yes Bank |
- Under the scheme, SBI will take a 49% stake in Yes Bank and infuse capital to the tune of Rs.2500 crore
- SBI will eventually have the authority to also raise additional capital through further equity dilution
|
| Mutual funds have a major challenge with Yes Bank perpetual bonds (AT1) |
- Indian MFs have a total exposure of Rs.2700 crore to the perpetual (high yield)AT1 bonds of Yes Bank
- This has been reduced to zero by RBI, which means investors will virtually get nothing out of these bonds
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| Institutions may look to challenge AT1 write off order by RBI |
- The contention of institutions is that such bonds are senior to equity and cannot be written off till equity is written down
- However, this argument may not hold as most investors have invested in these bonds knowing the risks fully well
|
| Brent Crude cracks sharply during the week to $45/bbl |
- This is the lowest level for crude since the middle of 2017 and was largely caused by differences over supply cuts
- OPEC had called for a cut of 1.5 million bpd but Russia had chosen to stay away from such a steep cut
|
| US Fed set the ball rolling during the week with 50 bps rate cut |
- This was quicker and larger than most rate cut estimates and led to the bond yields falling below 1% in the US
- However, most analysts and economists are sceptical if this could really result in a pick-up in growth.
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| SBI Cards issue gets oversubscribed nearly 25 times |
- This was appreciable considering that the IPO came in the midst of an extremely volatile and difficult market
- While retail portion got oversubscribed 2.5 times, HNI and Institutional portion oversubscription was much larger
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| ED raids Rana Kapoor’s residence in the aftermath of Yes Bank moratorium |
- This raid was with respect to suspected money laundering in tandem with Dewan Housing to the tune of Rs.13,000 crore
- The money is said to have been laundered via creation of fake loan accounts in the books of the bank
|
| Global markets crack sharply as the Coronavirus becomes a global worry |
- With more than 3200 deaths and a rapid spread across almost 80 countries, the pandemic fears are back
- Global markets crashed on fears that the virus could lead to a loss of 30 to 40 basis points in global GDP growth
|
| Coronavirus toll crosses 3200 during the previous week |
- Most of the virus related infections and deaths are now happening outside of China
- Italy, Iran and South Korea are the most affected even as India and the US are reporting rising number of cases
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| Mutual funds and brokers ask clients to delink Yes Bank accounts |
- Mutual funds have asked investors to change their bank mandate for SIPs if they are currently linked to Yes Bank
- Brokers are also proactively holding back payouts to Yes Bank accounts to prevent money being locked in
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| Hardeep Puri admits that the Air India sale may be delayed |
- The DIPAM wants to give the bidders more time to complete their due diligence of the airline
- There are also worries that the Coronavirus scare may depress the valuation of airline companies globally
|
| HDFC Bank may be evaluating Harit Talwar for the role of bank CEO |
- Harit Talwar is from Goldman Sachs, one of the world’s largest and most reputed investment banks
- Aditya Puri will have to demit office this year after he reaches the age of 70, as per RBI regulations
|
| Indian women fund managers have done better than male fund managers |
- This was brought out by a study made by Morningstar, a leading mutual fund research fund globally
- However, the report also pointed out that women only managed Rs.3.59 trillion of the Rs.28 trillion overall AUM
|
| Bank mergers would be effective from April 01, 2020; Nirmala Sitharaman |
- Despite protests from the bank unions, the effective date for merging 10 banks into 4 has been announced
- Out of the four principal absorbing banks, three have already announced their swap ratio for the merger
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| Government cuts EPF interest rates to 8.5% for 2019-20 |
- This marks the lowest interest rate on Employee Provident Fund in the last seven years
- Lowering of rates on government schemes has become essential to ensure better transmission by banks
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| L&T to hive of assets worth Rs.30,000 crore to an INVIT |
- This is intended to make the company asset light and also improve the return on investment (ROI) of L&T
- The company’s overall debt, including group company debt, stood at a whopping Rs.124,000 crore
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| ED files fresh money laundering cases against Naresh Goyal |
- The promoter of Jet Airways is alleged to have siphoned money out of Jet Airways to his accounts abroad
- This case puts a ban on Naresh Goyal and his spouse from travelling abroad in the near future
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| SBI approves resolution plan for Reliance Communications (RCOM) |
- Creditors will get Rs.33,000 crore out of the Rs.38,000 crore of total debt that is currently outstanding
- In the past, RCOM had tried to sell some of its assets, including to Jio, but with little success
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| Jack Welch, the iconic former big boss of GE, passes away at 84 |
- Neutron Jack was largely credited with reviving GE in 1981 and making it a world beating company by 2000
- However, Jack was also responsible for its massive expansion into financial services, which eventually led to its fall
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