Volume XXXII Number 3 October 17, 2016

Weeklies

BI – Business India

BusW – Business World

BusT – Business Today

CMar – Capital Market

EPW – Economic and Political Weekly

SE – Southern Economist

Eco – Economist

For(Asia) – Fortune AsiaCI – Corporate India

Newspapers

BS – Business Standard

ET – Economic Times

FE – Financial Express

FT – Financial Times

H – Hindu

HBL – Hindu Business Line

HT – Hindustan Times

IE – Indian Express

TI – Times of India

Mint – Mint

Classifications

Economy Banking Agriculture & Rural Development Industry Small Scale Industry

International Economics Labour & Personnel Management Management Miscellaneous Books

CONTENTS

A. ECONOMY 1

B. BANKING 2

C. AGRICULTURE & RURAL DEVELOPMENT 15

D. INDUSTRY 15

E. SMALL SCALE INDUSTRY 16

F. INTERNATIONAL ECONOMICS 16

G. MISCELLANEOUS 17

– 1 –

BANKERS' BRIEF Vol. XXXII No. 3October 17, 2016

ECONOMY"China's slump makes India more attractive for foreign inflows" – Edited excerpts from an interview

with Richard Iley Chief Economist-EM, BNP Paribas. – (ET Oct 8, 2016 p 5)

"Economy may grow five-fold in 15 years, says Panagariya" – The size of the Indian economy couldincrease five-fold to $10 trillion in the next 15 years, replicating a feat achieved by the Chinese economy,according to NITI Aayog vice chairman Arvind Panagariya. India started off to rapid growth a little later thanChina, but now it has the potential to accomplish in the next 15 years what China did in the last 15 years.India's GDP (now) stands at about $2 trillion and it has good prospects of rising to $10 trillion in the next 15years. A report. – (FE Oct 8, 2016 p 2)

"GST lends weight to 8% growth projection: S&P" – Calling GST as the most important structural reformtill date by the Modi government, S&P Global Ratings said the passage of the indirect tax law gives itadditional conviction of India clocking 8 percent growth in the next few years. 'India's GST passage gives usadditional conviction around our 8%-ish GDP growth forecast over the next few years,' it said in a reporttitled 'Asia-Pacific steadies while China goes silent'. A report. – (HBL Oct 12, 2016 p 4)

"GST poised to boost India's medium-term growth: IMF" – Asserting that India has shown that progresson reforms could 'ignite' business investment, the IMF said the adoption of goods and services tax is poisedto boost the country's medium-term growth. India's strong reform push in 2016 is welcome and shouldcontinue apace. As shown by India, progress on reforms could ignite business investment (including alreadystrong FDI inflows), further boosting domestic demand. A report. – (HBL Oct 8, 2016 p 4)

"RBI governor has become less powerful now" – Edited excerpts from an interview with Former financeminister Yashwant Sinha. He says the current FM has more power than any FM in the past has wielded. Herecalls his late-night sitting in the North Block to clear heaps of files even as he held, what he terms, 'thepurest of the pure finance ministry departments'. – (ET Oct 9, 2016 p 6)

"So far, so good" – The IMF has upped India's growth forecast, but global headwinds pose a risk. An editorial.– (HBL Oct 7, 2016 p 8)

"Sustaining 8% growth is a challenge, says Gita Gopinath: My role is in trying to connect Kerala withglobal knowledge experts: Harvard professor" – Excerpts from an interview with Gita Gopinath,Professor of Economics at Harvard University. To sustain growth at 8 per cent or more in the next couple ofdecades, the political and economic institutions have to keep moving in a positive direction. – (HBL Oct 7,2016 p 4)

"We are trying to make India a more tax-compliant country, says Jaitley" – Edited excerpts from aninterview with Arun Jaitley, Finance Minister. – (Mint Oct 11, 2016 p 18)

Birla, Sidharth – "Bright and dark spots in the economy" – The last 30 days gave us some feel-goodmoments. But jobs and investments continue to suffer. An article. – (HBL Oct 7, 2016 p 8)

Chidambaram, P – "Bad ideas will drive out the good" – An article. – (FE Oct 9, 2016 p 2)

Raghavan, T C A Sharad – "How's the economy really doing?" – There are multiple ways to arrive at ananswer, but each metric points in a different direction. An article. – (H Oct 12, 2016 p 11)

Sharma, Shantanu Nandan – "Super ministry" – How the Modi government's finance ministry has emergedwith more responsibilities on its plate and perhaps become more formidable than any other in post-reformsIndia. An article. – (ET Oct 9, 2016 pp 4-6)

– 2 –

DIGITAL PAYMENTS– CASHLESS ECONOMY

"Cashing in by outing cash" – Visa study ignores the tax-savings of a cash economy. An editorial. – (FE Oct7, 2016 p 8)

"Cashless economy: India has miles to go" – Bank for International Settlements data shows India lags farbehind both emerging and developed markets in the shift towards a cashless economy. A graphical report.– (Mint Oct 11, 2016 p 7)

"State-run banks are leading the charge from cash to cashless" – There's much discussion around Indiagoing cashless. Some argue that Indians are still more comfortable with cash than digital payments, an insightthat prompted e-commerce firm Flipkart to offer a cash-on-delivery option to its customers, which led to ajump in orders. At the same time, fintech start-ups are betting that Indians will give up their love for cashtransactions sooner than later. Data from RBI on transactions done on ATMs (representative of cashtransactions) and on points of sale, or PoS (representative of cashless transactions), shows that while bothare growing, PoS is gaining share. In volume terms, PoS has gained a share of 10 percentage points in the lastfive years. In value terms, the share of PoS has increased by only 5 percentage points, indicating that usersare comfortable using their cards for lower value transactions too. And public sector banks, primarily StateBank of India, have been driving this growth. A report. – (Mint Oct 12, 2016 p 1)

FOREIGN EXCHANGE RATE– FCNR-B DEPOSITS

Bhattacharyya, Bishwajit – "RBI pays a stiff price: hot money worth $34 billion will be flowing out ofIndia" – A huge amount of dollars will be flowing out of the country in the coming weeks as non-residentIndians redeem the deposits they made three years ago under an ill-conceived special scheme to shore up theexternal value of the rupee. The new governor of the Reserve Bank of India should resist pressures todevalue the Indian currency. An article. – (EPW 51(39) Sep 24, 2016 pp 12-13)

FOREIGN EXCHANGE RESERVES"Forex reserves touch record high of $372 bn" – India's foreign exchange reserves scaled a new high of

$371.99 billion, up $1.223 billion for the week to September 30, according to Reserve Bank of India (RBI)data. The central bank said the increase was primarily on account of a $1.468-billion surge in the foreigncurrency assets. – (BS Oct 9, 2016 p 3)

GSTPethe, Abhay – "GST: Now for some small tricky steps" – The states should give up their stance for a

higher rate arising out of revenue neutral rate calculations. An article. – (Mint Oct 7, 2016 p 18)

REMITTANCES"Remittances to India to drop 5%: World Bank" – India, the world's largest remittance recipient in 2015,

may receive a remittance $65.5 billion this year, a drop of 5 per cent, the World Bank has said in a new reportciting weak economic growth in remittances-source countries and cyclic low oil prices. A report. – (BS Oct8, 2016 p 4)

BANKINGGENERAL

"Jaitley warns against risks of negative rates" – India has warned about the risks of low and negativeinterest rates and 'significant loan impairments' in the banking system to global financial stability and calledfor 'de-leveraging' balance sheets to spur growth. A report. – (H Oct 10, 2016 p 15)

– 3 –

"Misbehaving bankers: Accounts payable" – At Indian banks, staff found dodgy ways to meet targets setby higher-ups. An article. – (Eco 420(9007) Sep 17, 2016 p 66)

CANARA BANK"Canara Bank to set up finance agency to fund higher education infrastructure: Joint venture with

HRD Ministry to have capital of Rs.2,000 crore" – The Ministry of Human Resources Development(MHRD) has appointed Canara Bank for establishing the Higher Education Financing Agency (HEFA). Areport. – (HBL Oct 7, 2016 p 17)

CITY UNION BANKMerwin, Radhika – "City Union Bank: Banking on the South" – Steady growth in loans and cautious

approach to corporate lending are positives. An article. – (HBL Oct 10, 2016 p 4)

CORPORATION BANK– MSMEs

"Corporation Bank eyeing Rs.4,500-cr MSME loans: Special campaign launched to achieve targetin the next few months, says official" – Corporation Bank is looking to disburse Rs.4,500 crore of loans toMSMEs (micro, small and medium enterprises) during the next few months, according to C K Gopal, GeneralManager of the bank. A report. – (HBL Oct 8, 2016 p 9)

ICICI BANK"ICICI Bank unveils next-gen features on mobile app Pockets" – ICICI Bank has introduced digital

banking on its mobile app 'Pockets'. Claiming to be the first to introduce contact-less mobile payment solutionin the country, the bank's Managing Director and Chief Executive, Chanda Kochhar, said that the solutionwould allow anyone, even those who are not customers of ICICI Bank, to download, fund the wallet fromany bank account, and use it. – (HBL Oct 7, 2016 p 10)

– BLOCKCHAIN TECHNOLOGY

"ICICI Bank uses blockchain technology for remittances" – ICICI Bank, India's largest private sectorbank by consolidated assets, has executed a few transactions in international trade finance and remittanceusing blockchain technology in partnership with Emirates NBD. – (HBL Oct 13, 2016 p 5)

IDBI BANK"Bid to get stalled selloff moving again: Govt to retain majority to push IDBI stake sale: Bank has

shareholder nod to raise Rs.8,000 cr; Centre says lender free to choose funding route" – Thegovernment, looking to get state-run IDBI Bank's stalled disinvestment plan moving again, has instructed thelender's management to bring its stake down to 52%. Retaining a majority, the government hopes, will allowthe asset-sale programme smoother passage and help achieve the ambition of transforming IDBI Bank onthe lines of Axis Bank. A report. – (ET Oct 7, 2016 p 1)

INDIAN BANK"Indian Bank roll-out environment friendly tech products" – As yet another step towards 100% Digital

Banking, Indian Bank has launched five unique, customer-centric, environment friendly, easy-to-use Techproducts for its customers to avail the Banking services without coming to the branches. – (HBL Oct 7, 2016 p 2)

INDUSIND BANK"IndusInd Bank Q2 profit up 26% on income growth: Overall industry sentiment positive, gradual

rise in credit pick-up seen: Sobti" – Robust growth in net interest income and non-interest income helpedIndusInd Bank report a net profit of Rs.704 crore, up 26 per cent year-on-year, in the July-Septemberquarter. It profit in the year ago period was Rs.560 crore. A report. – (HBL Oct 13, 2016 p 5)

– 4 –

"IndusInd Bank: Unaudited financial results for the quarter/half year ended September 30, 2016" –An advertisement feature – (Mint Oct 13, 2016 p 13)

Merwin, Radhika – "Another steady performance" – An article. – (HBL Oct 13, 2016 p 5)

JAMMU & KASHMIR BANK"J&K Bank reduces MCLR to 8.85%" – The Jammu and Kashmir Bank has lowered its marginal cost of

funds-based lending rate (MCLR) across all maturities. – (BS Oct 13, 2016 p 4)

"No profit growth, no dividends for 18 months: J&K Bank" – Current unrest in the Valley has furthercomplicated the financial situation, according to J&K Bank Chairman Parvez Ahmad. He warned that therewould not be any bottomline growth in the next 18 months, resulting in 'no dividend, no tax provisions and nocontribution to the CSR'. The (banking) industry is passing through very tough times due to the economicslowdown as well as the prevailing political environment, and the bank expects 'slippages' in the comingmonths. – (BS Oct 11, 2016 p 4)

KARNATAKA BANK"Karnataka Bank's special loan offer" – Karnataka Bank has reduced interest rates on home loans and car

loans by 20 basis points as part of a special campaign. According to a press release by the bank, the loansextended from October 1 to March 31 will have the benefit of lower interest rate, longer loan period, lowerEMIs, and quick sanction. During the campaign, housing loans up to Rs.3 crore will attract 9.5 per centinterest, and loans up to Rs.5 crore, 9.7 per cent. Car loans will come at 10.25 per cent. – (HBL Oct 7, 2016 p 10)

KOTAK MAHINDRA BANK– LOAN PRICING

"KMB only lender with base rate lower than 1-year MCLR" – With the 10-bps base rate cut from KotakMahindra Bank (KMB), it becomes the only bank at present to have a base rate that is lower than its one-year marginal cost of funds-based lending rate (MCLR). While its one-year MCLR is currently 9.5%, thebase rate is 9.4%. A report. – (FE Oct 8, 2016 p 10)

PUNJAB NATIONAL BANK"PNB makes home, auto loans attractive for govt employees" – To cash in on the 7th Pay Commission

payout to government employees, Punjab National Bank (PNB) is offering them home and auto loans atattractive rates of 9.3-9.8 per cent beginning this month. Besides, the bank said it will offer loans to thesesegments without any processing or upfront fee and no documentation charges will be levied on them.– (FE Oct 12, 2016 p 5)

"Punjab National Bank: Rising from the lows" – Efforts to improve loan recoveries yield results; stock outperformance backed by fundamentals: Analysts – (BS Oct 11, 2016 p 10)

SOUTH INDIAN BANK"South Indian Bank Q2 net grows 18%" – South Indian Bank reported an 18.4% year-on-year rise in its net

profit for the September quarter to Rs.110.52 crore, even as provisions almost doubled primarily because of3.2% increase in interest earned over the period, while interest paid on deposits and borrowed funds declined.A report. – (FE Oct 8, 2016 p 10)

"South Indian Bank: Unaudited financial results for the quarter and half year ended 30th September2016" – An advertisement feature – (HBL Oct 8, 2016 p 9)

STATE BANK OF INDIA"Don't worry, rate cut will be transmitted: SBI's Arundhati Bhattacharya" – Edited excerpts from an

interview with Arundhati Bhattacharya, Chairman, State Bank of India. – (ET Oct 11, 2016 p 9)

– 5 –

"SBI may sell up to 5% in SBI Life" – The private placement of shares will help the company set anindicative price for the eventual initial public offering. A report. – (Mint Oct 7, 2016 p 3)

"We're working on NPA solutions, says Bhattacharya" – Edited excerpts from an interview with ArundhatiBhattacharya, Chairman, State Bank of India. – (Mint Oct 11, 2016 p 18)

Bandyopadhyay, Tamal – "The importance of being Arundhati Bhattacharya" – An article. – (Mint Oct10, 2016 p 8)

UCO BANK"UCO Bank to sell 72 mn shares to LIC" – Uco Bank had concluded an agreement to sell 71.7 million

shares to Life Insurance Corp. of India Ltd (LIC), the country's biggest insurer, on a preferential basis to addaround Rs.270 crore to its equity capital. A report. – (Mint Oct 7, 2016 pp 1, 6)

ARAB COUNTRIES– BANKING TECHNOLOGY

"Arab world banking and finance: Technology focus" – A special report. – (FT Oct 7, 2016 Supl. pp 1-11)

CHINA"Chinese banks may need $1.7 trillion in capital by 2020: S&P: Bad loans to surge as the credit

profile of China's top 200 companies is set to worsen" – Rising debt levels will worsen the creditprofiles of China's top 200 companies this year, requiring the country's banks to raise as much as $1.7 trillionin capital to cover a likely surge in bad loans, S&P Global said in reports. – (HBL Oct 12, 2016 p 10)

EUROPE"Bankers signal alarm over eurozone lenders: UBS chief follows IMF criticism with warning of 'huge

overcapacity'" – Some of the world's top bankers have added their voices to warnings about the fragility ofEurozone lenders, days after the International Monetary Fund said the European sector posed a threat tofinancial stability and highlighted concerns about Deutsche Bank. A report. – (FT Oct 10, 2016 p 2)

"European banks still out in the cold" – European banks have been the lightning rod for any bad newsaround the world. A report. – (FT Oct 4, 2016 p 24)

"IMF urges 'deep reform' at European banks" – Report calls for closure of branches and a reduction oflenders' funding costs. European banks should carry out 'deep rooted reforms' to reduce risks to financialstability rather than focus on problems caused by negative and low interest rates, according to the InternationalMonetary Fund. A report. – (FT Oct 6, 2016 p 2)

GERMANY– DEUTSCHE BANK

"Deutsche Bank clears hurdle for 1,000 German job cuts" – Deutsche Bank AG reached an agreementwith labor representatives to eliminate 1,000 jobs, as part of Chief Executive Officer John Cryan's efforts tocut 4,000 positions in the lender home market. The cuts will be spread across human resources, assetmanagement, global markets, corporate finance and research, Germany's biggest lender said in a statement.– (Mint Oct 7, 2016 p 7)

ACCOUNTING STANDARDS"Basel to give banks time to ease in" – Banks should be given 3-5 years until new accounting rules for loan

losses have an impact on regulatory capital, according to the Basel Committee on Banking Supervision.Accounting standards that require banks to set aside money for bad-loan losses will be in force in 2018 inmost of the world. A report. – (ET Oct 13, 2016 p 17)

– 6 –

ALTERNATIVE LENDING MARKETVariyar, Mugdha and Shankar, Shashwati and Others – "Bending lending" – India's alternative lending

market is rapidly expanding, with a rush of startups facilitating loans to small businesses and individuals astraditional lenders turn more vigilant. An article. – (ET Oct 7, 2016 p 16)

BANK CAPITAL"Tier I capital ratio of Indian banks among the lowest" – Much has been written about the need for

infusing capital in Indian banks, particularly in some state-run lenders. How does India compare with othercountries as far as bank capital adequacy is concerned? The chart, taken from the International MonetaryFund's (IMF's) latest Global Financial Stability Report, shows the Tier 1 capital ratio for major emergingmarket economies. India is the third from bottom. Only Russian and Chilean banks have a worse ratio. Andbanks in the advanced economies too all have higher Tier 1 ratios than Indian lenders. This chart underscoresthe dire need for the government to recapitalize many of its banks. A report. – (Mint Oct 11, 2016 p 4)

BANK CONSOLIDATION– PUBLIC SECTOR BANKS

"2 large PSBs could merge after debt clean-up: Rai" – Two large State-run banks may be merged in thecoming fiscal year, once a clean-up a bad assets has run its course, according to Vinod Rai, Chairman of theBanks Board Bureau. State-run banks accounted for 88 per cent of a pile of stressed loans, which exceeded$138 billion in June, the legacy of a lending binge under the UPA government that has hobbled Prime MinisterNarendra Modi growth agenda. A report. – (HBL Oct 12, 2016 pp 1, 10)

"PSU banks' merger faces many hurdles" – Banks Board chief's comments on merging PSU banks echogovt plan to pare number of banks but NPAs, union issues roadblocks. A report. – (Mint Oct 12, 2016 p 6)

– SBI / SBT

"Kerala HC refuses to stay acquisition of SBT by SBI" – The Kerala High Court has declined to grant astay to the acquisition process of State Bank of Travancore by State Bank of India, according to SBI sources.The save SBT forum and 11 other petitioners had filed a writ petition in the Kerala High Court seeking a stayon the proposed amalgamation of State Bank of Travancore with its parent State Bank of India. A report.– (FE Oct 7, 2016 p 3)

BANK LENDING"Credit growth to industry below zero, first in decade" – Bank credit to the industrial sector, which

continued at an elevated rate of over 20 per cent on an average until four years ago and was in double digitsuntil the month of July 2014, has slipped into the negative in August 2016 - the first time it has done so in atleast a decade. For the month of August 2016, the loan outstanding of scheduled commercial banks to theindustrial sector contracted by 0.2 per cent. A report. – (IE Oct 12, 2016 p 1)

"Festival offers galore on banks' loan products" – Banks are wooing retail customers with some freebiesor the other to entice them into taking loans during the festival season. State Bank of India (SBI) has waivedprocessing fees for online home loan applications and loans for approved housing projects, according toVaijinath MG, CGM, real estate and housing department of the bank. A report. – (FE Oct 8, 2016 p 10)

– ENTREPRENEURSHIP

"Credit guarantee scheme for start-ups on the anvil: We are trying to fast-track disbursement offunds through the 'fund of funds' created for start-ups with a plan to disburse Rs.10,000 cr in fouryears: DIPP secretary Ramesh Abhishek" – The industry department will soon take a proposal to thecabinet to create a credit guarantee scheme of Rs.2,000 crore to encourage banks to lend to start-ups in Indiawithout collateral, according to Ramesh Abhishek, Secretary, Department of Industrial Policy and Promotion(DIPP). A report. – (Mint Oct 8, 2016 p 19)

– 7 –

BANKING REFORMS"Global bank reform vital" – Even in India, bank recapitalisation can't be put off. An editorial. – (FE Oct 7,

2016 p 8)

BANKING REFORMS - INDRADHANUSHMeher, Bharat Kumar and Puntambekar, G I – "lndradhanush: A new hope for Indian banking system"

– Many measures and reforms had been implemented to improve the conditions of Public Sector Banks, butstill the problems continue and the PSBs are still under the threat of being collapsed in future, if an immediateaction is not taken. Hence the Government of India and RBI have decided to launch a consolidated plancalled Indradhanush, which would not only be able to revive the sick units of PSBs but also provide themadequate capital for the purpose of their growth and stability in future era. A prominent step under thisscheme, has been seen recently when Rs.25,000 crores and Rs.22,915 crores were capitalized into PSBs inthe year 2015-16 and 2016-17 respectively. The possibility of Indradhanush scheme to become one perfectsolution for all problems faced by PSBs is to be assessed. An article. – (SE 55(11) Oct 1, 2016 pp 15-22)

BANKING REGULATOR– RESERVE BANK OF INDIA

Padmanabhan, Anil – "RBI gets a new style sheet" – An article. – (Mint Oct 10, 2016 p 21)

BANKRUPTCY CODE"Government issues more draft norms under bankruptcy code" – The government came out with another

set of draft rules, including for liquidation of insolvent corporate persons, under the Insolvency and BankruptcyCode. As part of implementing the Code, the government has already constituted the Insolvency and BankruptcyBoard of India (IBBI) while the draft norms will be finalised after taking into consideration views of thestakeholders. A report. – (FE Oct 12, 2016 p 2)

Burman, Anirudh and Sengupta, Rajeswari – "Clear the air before enforcing Bankruptcy Code" –Poor regulation of the insolvency professional industry will lead to poor bankruptcy outcomes. An article.– (BS Oct 10, 2016 p 10)

BANKS BOARD BUREAU"Banks board bureau chief talks tough: Banks dithering on cleaning bad loans, says Rai:

Managements evading hard decisions, bank consolidation depends on resolving NPAs: Rai" –Banks Board Bureau chief Vinod Rai said little progress has been made on resolving bad loans as managementsare reluctant to take hard decisions on recasting debt despite concerns that the rising burden of non-performingassets (NPAs) is holding back the economy. We are not making much progress and I don't think we haveanybody else to blame but the banks themselves. A report. – (ET Oct 13, 2016 p 1)

BRANCHES"RBI suggests wider definition of banking outlet: Aimed at helping banks meet norm of opening

25% of branches in un-banked rural areas" – The Reserve Bank of India proposes to give a breather tobanks, especially small finance banks, by bringing all places of their business, including extension counters,satellite offices, ultra-small branches, fixed point business correspondent outlets, and manned ATMs, withinthe definition of a banking outlet to help them fulfil the criteria of opening 25 per cent branches in un-bankedrural centres. – (HBL Oct 7, 2016 p 10)

CREDIT CARDS"Number of credit cards seen at a record 30 million by March" – The number of credit cards on issue is

set to exceed the record 28 million cards it hit in March 2008, bankers said. The banking system adds about5-6 million cards every year, according to the lenders. A report. – (Mint Oct 11, 2016 p 6)

– 8 –

DEPOSITS (NRI)"NRI deposits plunge 55% on oil slump, Fed rate-hike prospects: Remittances from West Asia hit;

slowing advanced economies also to blame: RBI" – The dip in crude oil prices and the possibility of theUS Federal Reserve hiking rates in December have led to the fund flow into non-resident Indian (NRI)deposit accounts dropping sharply in 2016-17. A report. – (HBL Oct 12, 2016 p 1)

E-KYC"How to open a bank account via an app" – Banks are turning to electronic know-your-customer (eKYC)

processes to make it easier for their customers to open bank accounts. Banks such as Axis Bank Ltd, KotakMahindra Bank Ltd, The Federal Bank Ltd and DBS Bank Ltd have enabled eKYC for opening bankaccount online or from mobile phones. To open an account using eKYC, you need to have an Aadhaarnumber. Mint takes a look at some of these newly launched apps, to see what they offer. A report.– (Mint Oct 13, 2016 p 14)

EDUCATION LOANSRoongta, Harsh – "Education loans need to be regulated" – Public sector banks are major players in this

market. There are also specialised companies like Credila and Avanse. An article. – (BS Oct 13, 2016 p 10)

FINANCIAL RESULTS"Banks likely to see treasury gains in September quarter" – The July-September quarter might have

brought some respite for banks, as compared to the financial year's first quarter (April-June). 'Most (especiallypublic sector banks) will report higher treasury gains, aiding profitability,' according to a Religare report. Areport. – (BS Oct 7, 2016 p 13)

"Banks' earnings in Q2 may decline 15% amid bad loans provisioning" – The banking sector is likely towitness a 15% year-on-year decline in earnings during the July-September quarter, as it continues to reelunder the effects of provisioning for bad loans, according to Kotak Institutional Equities. A report. – (FE Oct7, 2016 p 10)

"Private banks may see Q2 profit growth: study: Says profit of public sector banks could drop byalmost 13%" – Private sector banks are likely to see about 5 per cent uptick in earnings while profit ofState-owned lenders may drop 12.7 per cent for the second quarter of this fiscal, according to a report.– (HBL Oct 8, 2016 p 9)

"Treasury income to come to the aid of banks in weak quarter" – Earnings likely to decline by 15% y-o-y due to provisions for bad loans; retail-oriented banks expected to report stable/better performance. Areport. – (FE Oct 10, 2016 p 10)

FOREIGN BANKS– ING

"ING cuts 5,000 jobs in branch cull" – Dutch bank ING announced a significant scaling back of its branchnetwork in Belgium and the Netherlands, with the loss of more than 5,000 jobs, giving a stark warning of thechallenges facing the industry. A report. – (FT Oct 4, 2016 p 13)

FOREIGN BANKS IN INDIA– STANDARD CHARTERED BANK

"Standard Chartered to grow commercial banking biz by 10%" – Standard Chartered Bank, the largestforeign lender in India in terms of branches, says it is now aiming to grow its corporate client base by 10 percent. This is after a fall in its corporate book last year and flat growth in the year before. Sanjeev Paul,regional head, commercial banking, says: India remains a key market for us. We are making sure there is farmore stringent due-diligence when we book new clients. A report. – (BS Oct 11, 2016 p 4)

– 9 –

INDUSTRIAL RELATIONS– TRADE UNIONS

"Not everyday does one come across such camaraderie" – Bank unions raise over Rs.50 lakh for P VMohanan, who was dismissed from service and denied retirement benefits. Mohanan was removed fromservice in June 2015, which created an uproar in the banking sector in Kerala, leading to a 33-day strike bybank officers. A report. – (HBL Oct 8, 2016 p 9)

INFRASTRUCTURE FINANCE– PROJECT MONITORING

"RBI, banks mull firm for project monitoring" – The Reserve Bank of India (RBI) and banks are discussinga proposal to float a company for independent project appraisal and monitoring of big-ticket infrastructureand industrial projects. This is part of RBI's efforts to improve risk management, contain delays and reducerisks for projects becoming bad loans. A report. – (BS Oct 12, 2016 pp 1, 15)

INTEREST RATESPal, Anuvab – "Funny business: It's a stick-up (by the bank!)" – An article. – (ET Oct 13, 2016 p 14)

LEADERSHIP DEVELOPMENT– PUBLIC SECTOR BANKS

Majumdar, Shyamal – "Driverless cars?: Despite leadership vacuum, state-run banks are slow inlateral recruitments" – An article. – (BS Oct 7, 2016 p 10)

LOAN RESTRUCTURING– PUNJAB

"RBI nod to restructure Punjab food loans" – The Reserve Bank of India (RBI) has approved a proposalto restructure around Rs.30,000 crore of food credit given to Punjab state agencies, said two bankers withdirect knowledge of the development. The Rs.30,000-crore amount is the mismatch between food stocksavailable in Punjab warehouses and loans granted over the past decade. According to the proposal, a StateBank of India-led (SBI-led) consortium of 68 banks will convert the cash credit limit worth Rs.30,000 croreinto a 20-year term loan at a lower interest rate of 8.25%. A report. – (Mint Oct 10, 2016 p 1)

MOBILE BANKING"RBI moots manned ATMs as branches" – A study by the Reserve Bank of India (RBI) has found that

although the country's mobile banking penetration is among the highest in Asia, Indians are omni channelusers in banking and still hugely dependent on ATMs and branches. This has prompted the central bank topropose that a remote ATM, with a bank employee for support, be treated as the equivalent of a branch tocomplement the self-service feature of mobile banking. A report. – (TI Oct 12, 2016 p 17)

MOBILE WALLETS– KYC NORMS

"RBI official asks wallet players to follow strict KYC norms" – A senior Reserve Bank of India officialcriticized prepaid payment instrument (PPI) providers for laxity in meeting KYC norms, saying it is leading toopacity in funds movement. PPIs are creating wallets automatically without proper consent from customers,according to Nanda Dave, chief general manager overseeing the payments and settlement systems at theRBI. The customer is being identified by his or her mobile number, period. And such wallets have been usedfor routing money which has been fraudulently taken from bank accounts. A report. – (Mint Oct 7, 2016 p 20)

– 10 –

MONETARY POLICY"Changing track for growth" – A graphical report. – (FE Oct 8, 2016 p 9)

"Has RBI eased the intensity of its fight against inflation?" – Edited excerpts from a panel discussionwith Nomura Financial Advisory & Securities (India) executive director and India economist Sonal Varma),ICICI Securities Primary Dealership chief economist A Prasanna, and JP Morgan Asia economist SajjidChinoy discuss various aspects of a lower neutral rate. – (Mint Oct 10, 2016 p 14)

"No reason for RBI to hold back 25-bp cut over developments in US" – Edited excerpts from aninterview with Gita Gopinath, Professor of Economics, Harvard University. The elevation of Urjit Patel asReserve Bank of India (RBI) governor was thought to represent policy continuity at RBI. But, in the veryfirst monetary policy committee, all six members voted to cut interest rates. Further, the real interest ratetarget was also lowered to 1.25 per cent, from the 1.5 to two per cent range set by previous RBI GovernorRaghuram Rajan. To understand the change in RBI's thinking on inflation and interest rates. – (BS Oct 7,2016 p 4)

Bhalla, Surjit S – "No proof required: A data dependent MPC" – In making the decision to cut the reporate by 25 bps, the Monetary Policy Committee was neither dovish, nor hawkish, just pragmatic. An article.– (FE Oct 8, 2016 p 8)

Ninan, Oommen A – "Rate cut by central bank unlikely to boost investment" – An article. – (H Oct 10,2016 p 16)

Sheel, Alok – "Reserve Bank of India's new neutral rate" – The central bank is lowering the policy ratedespite its relatively pessimistic assessment of inflationary pressures. An article. – (Mint Oct 13, 2016 p 17)

Vasudevan, A – "Monetary policy challenges for RBI" – The effectiveness of the transmission channels ofmonetary policy is not known in India. An article. – (Mint Oct 12, 2016 p 18)

– INFLATION TARGETING

Rajaraman, Indira – "The monetary policy committee and the inflation target" – The ultimate textbookbenefit of a formal inflation target, credibly delivered, is the taming of inflationary expectations, down toequivalence with the target. Responsibility is now uniquely assigned to RBI to administer correctives even ifother actors in the economic system are going rogue. An article. – (Mint Oct 7, 2016 p 19)

Rajwade, A V – "The cons of inflation targeting" – An economy pays a heavy price in terms of output loss,higher unemployment. An article. – (BS Oct 13, 2016 p 8)

MONETARY POLICY COMMITTEERangan, M C Govardhana and Shukla, Saloni – "Monetary Policy Committee: Consensus and the

issue of credibility" – It should have been party time when Governor Urjit Patel cut rates. But the celebrationswere tempered. While many believe that there is a shift in approach to soft shedding the RBI's tough talk, toconclude so may be premature. An article. – (ET Oct 12, 2016 p 14)

MONETARY POLICY TRANSMISSION– LOAN PRICING

"Canara, Kotak cut lending rates by up to 0.1%" – Canara Bank, Indian Bank and private sector KotakMahindra Bank cut lending rates by up to 0.1 per cent, following the 0.25 per cent repo rate cut by the RBI.Canara Bank has effected downward revision in the base rate by 0.05 per cent to 9.60 per cent from 9.65 percent, it said in a regulatory filing. The new rate would be effective from October 11, according to the CanaraBank. Another state-owned lender Indian Bank has reduced marginal cost of funds based lending rate(MCLR) by up to 0.1 per cent. Kotak Mahindra Bank has reduced base rate by 0.1 per cent to 9.40 per centfrom 9.50 per cent, it said in a statement. A report. – (IE Oct 7, 2016 p 14)

– 11 –

"Rate cut transmission: Banks may need to review MCLR implementation: RBI: Stressed balancesheets, sluggish credit growth impeding transfer of rate cuts" – The Reserve Bank of India (RBI) hassaid banks will need to review the implementation of the Marginal Cost of Funds based Lending Rate (MCLR)to facilitate effective transmission of rate cuts. Structural and cyclical factors impeding transmission to banklending rates, particularly stressed balance sheets of banks and sluggish credit growth, may require a reviewof the MCLR implementation by banks, in the context of significant softening of long-term yields, the RBIhas said in its Monetary Policy Report-October 2016, released ahead of the 4th bi-monthly policy statement.Since January 2014, the RBI had slashed Repo rate by 175 basis points but banks have passed on just around80 bps. A report. – (IE Oct 6, 2016 p 13)

NON-PERFORMING ASSETS"Bank's asset quality woes to worsen" – Rating firm Crisil has said asset quality woes of Indian banks are

far from over with more loans slipping into non-performing category in the fiscal ending March 2017. Areport. – (IE Oct 9, 2016 p 15)

"Banks vulnerable to profit decline amid rising bad loans, warns IMF: Calls for upgrading India'scorporate insolvency framework" – Indian banks are vulnerable to further decline in profits as they faceslow credit growth and elevated non-performing assets, IMF has said, calling for 'additional and more timelyaction' to deal with the problem of bad loans. Gross NPAs of public sector banks have surged to 9.32 per centin 2015-16 from 5.43 per cent of advances in 2014-15. A report. – (HBL Oct 7, 2016 p 10)

"Growing bad loans risk delaying bank clean-up" – Stressed loans in India's banking sector crossed $138billion in June, central bank data reviewed by Reuters shows, an increase of nearly 15 percent in just sixmonths that suggests a state clean-up effort will take longer and cost more than expected. Fixing the mountainof bad debt weighing down India's banks is vital for Prime Minister Narendra Modi's government to reviveweak credit and investment growth and put a faltering recovery in Asia's third largest economy on a firmerfooting. A report. – (FE Oct 11, 2016 p 10)

"NPA mess could worsen" – RBI study shows India Inc debt-at-risk has risen. An editorial. – (FE Oct 13,2016 p 6)

"Three-pronged strategy in works: Govt plans big push to rid banks of rotten assets: Matter likelyto be discussed at top levels of govt later this month" – The government wants to put together a planto purge the banking system of bad loans, seen as the single biggest hurdle in the way of an investment revivalthat's badly needed to push growth. On the table are said to be three possible strategies -asset swaps, a bank-by-bank cleanup and a bad bank. The matter is likely to be discussed later this month, according to a seniorgovernment official. A report. – (ET Oct 11, 2016 p 1)

Adhikari, Anand – "Decoding NPAs" – Mid and small companies, and the agriculture sector, are majorcontributors to banks' bad assets. An article. – (BusT 25(21) Oct 10, 2016 pp 22-23)

– BAD BANK

"'Bad bank' not the answer to NPA mess, says Assocham chief: Suggests strengthening bank boards,bringing in more professionals" – The government should focus on further empowering bank boardsrather than look at setting up a 'bad bank' to help tide over the current bad loans mess, according to SunilKanoria, President, Assocham, an apex industry body. A report. – (HBL Oct 8, 2016 p 9)

Mohan, T T Ram – "Why a bank is tricky" – The proposal bristles with problems. A compromise could be toset up a bad bank to deal with non-performing assets at some of the weaker public sector banks rather thanat all PSBs. A big motivation for floating the idea would be to dress up the PSBs by getting rid of their badloans. Then private capital can be attracted to them. An article. – (H Oct 10, 2016 p 11)

Narang, Deepak – "Devising a bad bank: If ARCs can have a model to buy and reconstruct an asset,then why can PSBs conjure up such a scheme" – If public sector banks were to sell toxic assets to badbank at a price determined by the bank then apprehensions about price discovery and attendant consequenceswill be non-existent. An article. – (FE Oct 11, 2016 p 9)

– 12 –

Vikraman, Shaji – "18 years ago, how the idea of a 'bad bank' ended up in cold freeze" – An article.– (IE Oct 12, 2016 p 7)

– CORPORATE FINANCE

"Double challenge" – Contraction of bank loans to industry is related to demand for funds and bank NPAs.Both aspects must be addressed. An editorial. – (IE Oct 13, 2016 p 10)

– PUBLIC SECTOR BANKS

"The big question: How India should deleverage" – Steps taken by policymakers so far have not improvedthe situation as they were expected to. An article. – (Mint Oct 7, 2016 p 18)

NPCI"We plan to launch UPI 2.0 by March 2017" – Edited excerpts from an interview with A P Hota, Managing

Director and Chief Executive, NPCI. – (Mint Oct 12, 2016 p 10)

PAYMENTS BANKS"RBI eases operating norms for payments banks: Can have a pact with other banks to accept amounts

over Rs.1 lakh in a customer's account" – Reserve Bank of India, in its operating guidelines for paymentsbanks (PBs), said it will have no objection to these banks making arrangements with any other scheduledcommercial bank/small finance bank, whereby amounts in excess of the prescribed limit of Rs.1 lakh isswept into an account opened for the customer with the latter. This arrangement should be activated with theprior written consent of the customer, according to the central bank. – (HBL Oct 7, 2016 p 10)

– SMALL FINANCE BANKS

"RBI issues guidelines for small and payments banks" – The Reserve Bank of India issued separateoperating guidelines for payments banks and small finance banks in view of their differentiated nature ofbusiness and focus on financial inclusion. The RBI has granted in-principle approvals to 11 payments banks(August 2015) and 10 small finance bank (September 2015). Given the financial inclusion focus of thesebanks, the minimum capital requirement of 15 per cent will be suitably calibrated. New operating norms: Thecentral bank has prescribed for both categories of banks the following: * Minimum capital: 15 per cent; *Common equity Tier: 1-6 per cent; * Additional Tier: 1-1.5 per cent; * Minimum Tier-1 & Tier-2 capital: 7.5per cent each; * Capital Conservation Buffer: 7.5 per cent. A report. – (HBL Oct 7, 2016 p 1)

"Striking the right chord" – The RBI, in its guidelines, has done well to provide small finance and paymentbanks operational flexibility. An editorial. – (HBL Oct 12, 2016 p 8)

PAYMENTS SYSTEM– UNIFIED PAYMENTS INTERFACE

"UPI 2.0 will disrupt payments in India: The upgraded version will focus on integrating UnifiedPayments Interface with Aadhaar and the Bharat Bill Payment System" – A month after introducingmobile-based payments architecture Unified Payments Interface (UPI), the National Payments Corporationof India (NPCI) is working on an upgraded version of UPI, to be released next year, that will contain featuressuch as pre-authorized transactions and biometric authentication. The new version of UPI, to be called UPI2.0, will include new features such as electronic mandates that will allow users to pre-authorize transactionsthrough digital signatures, as NPCI gears up to get tens of millions of new users on board UPI over thecoming months. A report. – (Mint Oct 12, 2016 p 10)

PEER-TO-PEER LENDING"P2P lenders offer life cover with loans" – MicroGraam, i-lend, LenDenClub and several other peer-to-peer

lending platforms are tying up, or considering to do so, with insurance companies to offer cover for borrowersagainst unforeseen events such as accidents or death that can affect loan repayments. These platforms arepartnering with insurers like HDFC Life Insurance and ICICI Prudential Life Insurance. While most of them

– 13 –

plan to unveil the offers after the Reserve Bank of India issues guidelines on such covers - companies saidthey expect the central bank to come up with the regulations later this month - some have already startedoffering such products. A report. – (ET Oct 12, 2016 p 8)

PRIVATE SECTOR BANKS"Microfinance boom catches attention of private banks" – The rapid growth in the microfinance space

seems to have caught the attention of private sector banks, which have lately been getting aggressive intapping the opportunity at the bottom of the pyramid, either through acquisition of microfinance firms or bybuying minority stakes in them. A report. – (Mint Oct 12, 2016 p 3)

PROVISIONING– NON-PERFORMING ASSETS

"FinMin backs banks on easing provisioning: Hopes RBI will help in boosting credit flow to supportgrowth" – The finance ministry has supported a recent plea by the state-owned banks to the Reserve Bankof India (RBI) to 'tweak' the rules that determine how much money needs to be set aside to make provisionfor bad loans. If RBI decides to be on the same page as the finance ministry on the issue, it will be a relief forIndia Inc which have found banks reluctant in offering fresh loans till the bad loans issue is fully resolved. Areport. – (BS Oct 10, 2016 pp 1, 4)

PUBLIC SECTOR BANKS"Four PSBs may struggle to pay bond coupons" – Four public sector banks that had reported heavy losses

due to a surge in bad loans may struggle to make coupon payments on their additional tier 1 (AT1) bonds,according to Crisil. The credit rating agency has projected that almost half of the 13 public sector banks thathad reported losses in 2015-16 are likely to do so again this fiscal year. A report. – (H Oct 13, 2016 p 15)

"PSBs continue to park funds in safe government bonds: Will help banks boost treasury income ascore lending remains muted" – From March this year, the RBI has been gradually bringing down the SLRrequirement (statutory liquidity) - government securities held by banks - in a phased manner. From 21.5 percent of net demand and time liabilities in the beginning of this year, the SLR requirement is down to 20.75 percent now. But public sector banks that continue to witness a weak credit off-take still hold at least 2-3 percent more than the mandated requirement. A report. – (HBL Oct 13, 2016 p 5)

"Weak loan demand weighs: Banks now say no to long-term funds: PSU banks avoid high-cost fixeddeposits of over 5-year tenure in a falling interest rate regime" – Stung by high cost of funds whendemand for loans is at the weakest in nearly a decade, state-run banks, which used to rely on long-term fixeddeposits, are increasingly not accepting any fixed deposit beyond five years. This also reflects a dip indemand for long-term loans for infrastructure projects like power plants or ports, which require funding foranywhere between seven and twelve years, say bankers. A report. – (ET Oct 11, 2016 p 1)

– BANK LENDING

"Govt wants PSBs' midsize corp borrowers shift to bond mkt" – Shift to alternative sources will servedual purpose of helping develop bond market and creating space for banks to lend to small and mediumenterprises. A report. – (ET Oct 12, 2016 p 11)

– SOCIAL SECURITY SCHEMES

"Glamour quotient: PSU banks to rope in celebrities to promote Jan Suraksha schemes" – Publicsector banks will now focus on promoting the NDA government's social security schemes launched underthe Jan Suraksha umbrella. To begin with banks are looking to rope in celebrities to promote the schemes. Areport. – (HT Oct 11, 2016 p 19)

– 14 –

RECOVERY OF LOANS– DEFAULTERS

"Banks trying innovative ways to recover loans" – After RBI's 29 September notification on publishingphotographs of wilful defaulters, banks may not be able to name and shame defaulting borrowers asindiscriminately as before. But that doesn't stop them from employing innovative ways to compel borrowersto repay loans. Emotional pleas are the latest in a series of measures. A report. – (Mint Oct 12, 2016 pp 1, 9)

SALE OF NPAs– ASSET RECONSTERUCTION COMPANIES

"Banks getting rid of bad loans for 'Cleaner' Sept quarter show: While ICICI & Axis sold Rs.3,700cr stressed assets, SBI has entered market to get rid of Rs.1,800 cr such loans" – Two private-sector banks, ICICI Bank and Axis Bank, sold Rs.3,700 crore of their bad loans to asset reconstructioncompanies (ARCs) a week ago -a sign that lenders are becoming active in getting rid of their stressedportfolio. Removing such a significant stock of bad loans from their books would reflect favourably when thetwo report their September-quarter results. The country's largest bank, State Bank of India too, is in themarket to Rs.1,800 crore of corporate loan that has turned sour. A report. – (ET Oct 7, 2016 p 17)

SCHEME FOR SUSTAINABLE STRUCTURING STRESSED ASSETS"Relief in sight for debt-laden banks?" – Banks struggling under a mountain of loans gone bad, could soon

get a breather as RBI is looking at a proposal to classify a part of the sticky debt as standard loan rather thanas non-performing asset. The central bank is exploring options of tweaking norms in the S4A or the Schemefor Sustainable Structuring of Stressed Assets, a debt restructuring plan formulated by RBI in June, sourcesin the know said. A report. – (HT Oct 8, 2016 Supl. p 1)

– CORPORATE DEBT

"33% of all corporate loans unsustainable under S4A: An analysis of corporate loans in last five yearsreveals 1 in every 3 rupees is stressed" – About one out of every three rupees lent to industry over thepast five years would have been classified as unsustainable under the central bank's sustainable structuringof stressed assets, or S4A norms, according to a Mint analysis. Under S4A, banks are allowed to split astressed firm's debt into the two parts - sustainable and unsustainable. Sustainable debt (which has to be atleast 50% of total funded exposure) is defined as that portion of debt that can be serviced by the company'simmediate cash flows. In other words, if a company had only this portion of debt, its interest coverage ratio(ICR) would be one, or its earnings from core operations would equal interest payments. Anything above thislevel of debt is unsustainable. A report. – (Mint Oct 13, 2016 p 7)

SMALL FINANCE BANKS"Small finance banks exempted from inter-bank borrowing ceiling: Exemption till existing loans

mature or up to three years, whichever is earlier" – Small finance banks (SFBs) will be allowedexemption from the existing regulatory ceiling on inter-bank borrowings till the existing loans mature or up toa period of three years, whichever is earlier, according to the operating guidelines issued by the ReserveBank of India. Small finance banks may engage all permitted entities, including the companies owned by theirbusiness partners and own group companies, on an arm length basis as business correspondents. – (HBL Oct7, 2016 p 10)

– PAYMENTS BANKS

"Small banks welcome KYC, digital channel steps" – Small finance banks and payment banks which arein the process of setting up operations have given their thumbs up to the Reserve Bank's operating guidelinesgiving flexibility to know your customer (KYC) norms and the use of digital channel, especially moving awayfrom wet signatures. A report. – (IE Oct 8, 2016 p 12)

– 15 –

RBI CIRCULARS"Import Data Processing and Monitoring System (IDPMS)" – (RBI Circular RBI/2016-2017/78 A.P.

(DIR Series) Circular No. 05 dated 06.10.2016)

"Operating Guidelines for Payments Banks" – (RBI Circular RBI/2016-2017/80 DBR.NBD.No.25/16.13.218/2016-17 dated 06.10.2016)

"Operating Guidelines for Small Finance Banks" – (RBI Circular RBI/2016-2017/81 DBR.NBD.No.26/16.13.218/2016-17 dated 06.10.2016)

"Priority Sector Lending - Revised Reporting System" – (RBI Circular RBI/2016-2017/79FIDD.CO.Plan.CO.BC.No.17/04.09.001/2016-17 dated 06.10.2016)

"Revised Kisan Credit Card (KCC) Scheme" – (RBI Circular RBI/2016-2017/84 FIDD.FSD.BC.No.18/05.05.010/2016-17 dated 13.10.2016)

"Revision of interest rates for Small Savings Schemes" – (RBI Circular RBI/2016-2017/82DGBA.GAD.881/15.02.005/2016-17 dated 13.10.2016)

"Section 24 and Section 56 of the Banking Regulation Act, 1949 - Maintenance of Statutory LiquidityRatio (SLR)" – (RBI Circular RBI/2016-2017/83 DBR.No.Ret.BC.15/12.02.001/2016-17 dated 13.10.2016)

AGRICULTURE & RURAL DEVELOPMENT

RURAL CHANGEGulati, Ashok – "Rural change challenge: Inclusive agricultural growth is key to removing poverty by

2030" – An article. – (IE Oct 10, 2016 p 9)

RURAL DEVELOPMENT"NREGS is in its Yauvan (Youth). Now people want to utilise it" – Edited excerpts from an interview with

Narendra Singh Tomar, Rural Development Minister. We are all working towards achieving the goal ofdoubling farmer income by 2022. – (ET Oct 10, 2016 p 7)

INDUSTRY"IIP contracts for the 2nd straight month" – Industrial production contracted for a second straight month in

August, raising doubt over manufacturing recovery and justifying the policy rate cut by the Monetary PolicyCommittee (MPC) last week. However, a good monsoon and early onset of the festive season have raisedhope of revival in demand for consumer durables, on the back of rising farm income. The Index of IndustrialProduction (IIP) fell by 0.7 per cent in August, compared to a decline of 2.5 per cent in July, according to datafrom the Central Statistics Office. A report. – (BS Oct 11, 2016 p 1)

MANUFACTURING SECTOR– DEBT AT RISK

"Manufacturing sector: 283 firms with risky debt of Rs.2,10,400 cr: RBI: 43 steel firms with alarmingdebt at risk of Rs.1,18,200 cr; risky debt of manufacturing companies stood at Rs.58,800 cr in2011-12" – The Reserve Bank of India (RBI) has categorised loans of 283 manufacturing companies worthRs.210,400 crore as vulnerable and 'debt at risk', indicating a worsening of the risk profile in the sector. Ofthis, there are 43 vulnerable steel companies with debt at risk of Rs.118,200 crore, which the RBI said was'alarming' according to an study by the Indian central bank. A report. – (IE Oct 12, 2016 p 11)

– 16 –

SMALL SCALE INDUSTRY

ENTREPRENEURSHIP"A new manifesto for Indian entrepreneurship: A conversation with Arun Maira, Sundeep Waslekar

and Nachiket Mor on what it might take to build a world that works for everyone - and howentrepreneurship can play its part in that transformation" – Edited excerpts of discussion with ArunMaira, former member, Planning Commission of India and former chairman, Boston Consulting Group; SundeepWaslekar, president, Strategic Foresight Group; and Nachiket Mor, India country director, Bill & MelindaGates Foundation. – (Mint Oct 12, 2016 p 14)

MSMEs"Growth of MSMEs in IT/ITeS constrained by lack of funds" – Micro, small and medium enterprises

operating in the information technology (IT)/IT enabled services (ITeS) space tend to find growth constrained,mainly due to lack of capital. An analysis of 4,000 CRISIL-rated MSMEs shows that those focused on IT/ITeS grew by 12 per cent per annum between FY13 and FY15, compared with nearly 20 per cent for theirpeers in the service sector. A report. – (BS Oct 11, 2016 p 14)

INTERNATIONAL ECONOMICS"Global growth benefited 'too few', inequality high: Lagarde" – Global growth has benefited 'too few'

people for 'too long' and inequality remains high in many countries as trade has increasingly become a'political football', IMF chief Christine Lagarde has said calling on world leaders to focus on an inclusivedevelopment strategy. A report. – (FE Oct 10, 2016 p 4)

"IMF warns record debt of $152 tn poses threat to global economy" – The world is $152tn in the red, arecord-breaking level of debt, according to the International Monetary Fund. The figure, more than two timesthe size of the global economy, is the most accurate measure of the world debt burden ever calculated.'Global debt is at record highs and rising,' according to Vitor Gaspar, director of fiscal affairs at the fund. Areport. – (FT Oct 6, 2016 p 1)

"US election and Brexit pose main threat to global growth, warns IMF" – Political risk in advancedeconomies has emerged as the biggest threat to the global economy, the International Monetary Fund warnedas it lowered its growth forecasts for the US and other rich economies. Low growth and a slow recoveryfrom the 2008 crisis were fuelling 'political tensions (which) have now made advanced economies a majorlocus of policy uncertainty', the IMF's chief economist, Maurice Obstfeld, said as he unveiled the fund latestWorld Economic Outlook. A report. – (FT Oct 5, 2016 p 1)

CHINA"Economy is improving, debt risks under control: China's Li: Beijing will take measures to ensure

healthy property market, says Premier Li Keqiang" – China's economy performed better than expectedin the third quarter and the country's debt risks are under control, according to Premier Li Keqiang. A report.– (HBL Oct 12, 2016 p 5)

CAPITAL FLOWS"Capital flows continue to favour EMs" – September quarter portfolio flows show that emerging markets

(EMs) remain a preferred destination. An estimated $25 billion inflows was seen in September alone, up fromthat seen in July and August. In fact, inflows for the quarter at $64 billion were the highest since 2014,according to the Institute for International Finance (IIF), which tracks capital flows across 10 EMs. However,within EMs, debt markets were the bigger beneficiaries compared to equity. Regionally, EM Asia and LatinAmerica had the most inflows during September, followed by EM Europe and Africa/Middle East. A report.– (Mint Oct 7, 2016 p 4)

– 17 –

FUND MANAGEMENT"Global fund management" – A weekly report. – (FT Oct 10, 2016 Supl. pp 1-18)

INEQUALITY"Global inequality: Shooting an elephant" – Charting globalisation's discontents. An article. – (Eco 420(9007)

Sep 17, 2016 pp 64-65)

NOBEL PRIZE"Why the 2016 economics Nobel for contract theory really matters" – The decision to award the Nobel

Prize in economics this year to Oliver Hart and Bengt Holmstrom for their work in contract theory is furtherproof that some of the best work in economics is being done to understand the rules of the game - and thecontracts that determine our actions in the real world. A report. – (Mint Oct 11, 2016 p 1)

OECD COUNTRIES"Growth momentum stable in major economies: OECD" – Economic momentum is holding stable in

major industrialized economies while growth has settled at a lower rate in Britain after its vote in June to quitthe European Union, the OECD's monthly leading indicators showed. Organisation for Economic Cooperationand Development said its leading indicator for its 34 member countries was unchanged in August at 99.7,where it has stood since March. A report. – (FE Oct 11, 2016 p 2)

WORLD BANK"The World Bank: Lucky Jim" – The extension of Jim Yong Kim term as president of the World Bank is a

short-sighted stitch-up. An article. – (Eco 420(9007) Sep 17, 2016 p 14)

Ahluwalia, Montek Singh and Summers, Lawrence H & Others – "For a better, not bigger, WorldBank" – The world has changed, but the mandates and operations of the multilateral development bankshave not kept pace. An article. – (FE Oct 10, 2016 p 7)

MISCELLANEOUS"Five Indian-Americans among America's richest: Forbes" – Five Indian-Americans are among the

richest in the US, according to a Forbes list of 400 people that was topped by Microsoft's co-founder BillGates for the 23rd year in a row. Symphony Technology founder Romesh Wadhwani, co-founder of outsourcingfirm Syntel Bharat Neerja Desai, airline veteran Rakesh Gangwal, entrepreneur John Kapoor and SiliconValley angel investor Kavitark Ram Shriram have featured on Forbes' The Richest People In America 2016list. – (BS Oct 10, 2016 p 18)

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