Join us as we follow the top business news through the day.
Credit sachets can aid capital stressed PSBs: RBI deputy governor
Public sector banks should learn from FMCG players and “democratise credit”, a move that can help them solve the “biggest fiscal challenge” of recapitalisation, former RBI deputy governor Viral Acharya said on Wednesday.
“There are some PSBs whose business model is so broken in my assessment that there won’t be any immediate suitors who are interested in buying their equity in a significant manner or at decent prices. What is the option? I’d say they should focus on sachetisation or democratisation of credit,” Mr. Acharya said, speaking at a summit organized by ETBFSI.com.
Indian shares rise as Reliance hits record high
A good start to the day for stocks, thanks to the index heavyweight RIL.
Reuters reports: "Indian shares rose on Thursday, driven by gains in shares of Reliance Industries after reports of potential stake sales in the company's retail arm, with strength in broader Asian markets also boosting investor sentiment.
The blue-chip NSE Nifty 50 index rose 0.67% to 11,353.75, while the benchmark S&P BSE Sensex was up 0.75% to 38,473.39 by 0354 GMT.
Mukesh Ambani-led Reliance Industries Ltd rose as much as 2.1% to hit a record high, a day after it secured $1 billion in investment in its retail business from private equity firm Silver Lake. Middle East sovereign firms are also in talks to buy stakes in the retail arm, according to reports.
The Nifty bank index rose 0.91%. India's top court is set to continue hearing a case on waiving interest rates on loans under a moratorium later today.
Broader Asian markets rose following an overnight rally in technology-related stocks on Wall Street after a global selloff."
RBI sets sectoral norms for resolution of COVID-19 related stressed assets
The Reserve Bank on Monday specified five financial ratios and sector-specific thresholds for resolution of COVID-19 related stressed assets in 26 sectors, including auto components, aviation, and tourism.
The circular issued by the RBI for resolution of stressed assets is based on the recommendations of the K.V. Kamath committee, which submitted its report on September 4. “The recommendations of the Committee have been broadly accepted by the Reserve Bank,” RBI said in a release.
The key financial ratios suggested by the committee are total outside liabilities/adjusted tangible networth; total debt/EBITDA; current ratio, which is current assets divided by current liabilities; debt service coverage ratio; and average debt service coverage ratio.