Future Group announces strategic partnership with Analytics firm Manthan

In an effort to fuel its next level of growth, Future Group aimed at acquiring the abilities to look at customer opportunities at a deep and granular level. 

In a press conference held today at the Ritz Carlton, Bengaluru, Rakesh Biyani, Joint Managing Director at India’s largest retailer Future Group, along with Atul Jalan, CEO Manthan, world’s leading player in analytics for the consumer industry, announced breakthrough results of their 10 month old partnership in analytics-driven business transformation.

In an effort to fuel its next level of growth, Future Group aimed at acquiring the abilities to look at customer opportunities at a deep and granular level. Additionally, the Group desired the flexibility to act on these opportunities near real time, on any channel, on any product, and at any store.

Nationwide diversity and the uniqueness of the Indian consumer posed challenges for Future Group in understanding these opportunities and how they varied across markets and stores. Further, the fast changing consumer behavior and pace of business expansion made consistent execution challenging.

“Customer-centric execution is key to our growth. We needed new technologies to develop new competencies and change our game”, said Joint MD at Future Retail, Rakesh Biyani.

“We knew every customer need was unique and we had opportunities to fine-tune our business planning and execution. With the hyper-localized views of customer demand that Manthan’s analytics provides, we will be able to tailor assortments, inventory, replenishment, marketing promotions, store engagement to meet the unique needs of markets and stores. By making decisions faster and more precise, and our execution more efficient, we believe it has the potential to realize a 7-9% reduction in out of stocks, recover an average 5-7% in lost sales, and achieve 10-12% reduction in churn. All of this would not be possible without the ability to spot and act on analytics-driven opportunities” added Rakesh Biyani.

From the past 4 months Future Group has engaged Manthan’s capabilities for driving decision making in many areas of its business. “We are seeing early signs of promising results from analytics based business initiatives.”

Group CIO at Future Retail, Manoj Agarwal added, “Earlier, such sophisticated analysis would take a long time to deliver, but with Manthan, it is available out of the box in the hands of decision makers. Data which was available only to a few, is now available across the organisation, designed uniquely for each role, and available at their fingertips. This helps us in empowering stores, marketers, merchants with data driven decision making in the areas of assortment planning, event planning, personalized communication and many more. All of this, takes our customer engagement to the next level.”

In a short span, Manthan has deployed its entire portfolio of analytics solutions in key store brands of the retail conglomerate, impacting most aspects of Future Group’s business, including marketing, merchandising, supply chain, stores and digital commerce.

Manthan’s analytics track more than 10 million customer transactions in a month, from over 13000 product brands and 3000 suppliers, giving Future Group precise, real-time, and actionable information in over 370 stores across 166 cities nationwide. Activities of over 25 million loyal customers and their transactions are tracked in Manthan’s data warehouse. Future Group is currently rolling out analytics to all decision makers across its business divisions.

“Making analytics-driven competencies a reality is a tremendous opportunity for Indian retailers today. Future Group has a head start in this direction, and some of the business results we are seeing in this partnership are simply outstanding. Manthan’s 12-year endeavour has been focused on simplifying the sophisticated technologies and statistical sciences needed in understanding customer behavior and realizing its potential in easy-to-use, business friendly analytical applications,” said Atul Jalan, CEO at Manthan.

Jalan further siad, “I call this the ‘consumerization of analytics’, and without giving analytics technologies this edge, it’s difficult to realize its full potential. Over 200 satisfied customers worldwide share similar stories on the impact of our award-winning products in their business. I believe the Indian retail market is maturing into its next age of competitiveness and such technologies will play a transformative role.”

Designed to understand retail business roles and contexts, Manthan products offered the Future Group quick speed to value on its data-driven decision making needs. Manthan was recently mentioned by Gartner for providing the most comprehensive range of analytics solutions in retail. Gartner also featured Manthan’s work with Future Group in a recent research report.

Government IT spending in India to reach $6.8bn in 2015: Gartner

“IT services, which includes consulting, implementation, IT outsourcing and business process outsourcing, will be the largest overall spending category throughout 2019 within the government sector,“ said Dr Anurag Gupta, research vice president at Gartner.

Government IT spending in India will reach $6.8 bn US dollars (USD) in 2015, an increase of 5.7 percent over 2014, according to Gartner, Inc. This forecast includes spending on internal services, software, IT services, data center, devices and telecom services. Government comprises local government and national government.

“IT services, which includes consulting, implementation, IT outsourcing and business process outsourcing, will be the largest overall spending category throughout 2019 within the government sector,“ said Dr Anurag Gupta, research vice president at Gartner. “IT services is expected to grow 10.5 percent in 2015to reach $1.7 billion USD – with the business process outsourcing segment growing 21.2 percent.”

Internal services IT spending will increase 8.8 percent in 2015 to reach $1.6 billion USD in 2015. Internal services refer to salaries and benefits paid to the information services staff of an organization. The information services staff includes all company employees that plan, develop, implement and maintain information systems.

Software spending will grow 10.2 percent in 2015 to reach $860 million USD, up from $781 million USD in 2014, led by growth in vertical specific software (software applications that are unique to a vertical industry. These are stand-alone applications that are not modules or extensions of horizontal applications).

“Various governments and providers will target India’s smart cities initiative in next few years, with an emphasis on citizen engagement,” said Dr. Gupta. “We also expect developments in integrating services through AADHAR cards and mobile technologies for various eGovernment initiatives.”

Indian Banking Sector: Emerging challenges and way forward

Banks as the key players in the country’s financial system also carry the responsibility of supporting economic growth, once the economic cycle turns favourable 

The banks are the lifelines of the economy and play a catalytic role in activating and sustaining economic growth, especially, in developing countries and India is no exception.

Our banking system, at the present juncture is, however, facing significant challenges from several quarters. These challenges, if not addressed quickly and adequately, may result in loss of opportunities as and when the economic growth starts picking up momentum. In a sense, it has implications for both- the banks as well as for the economy as a whole. A strong banking system is one of the essential pre-requisites in the quest for growth.

Since the onset of the Financial Crisis in 2008, the global economy has continued to face rough weather and the Indian economy and our banking system have not remained immune. Recovery has been moderate and sometimes uneven. Different jurisdictions continue to be tormented by financial fragilities and macroeconomic imbalances. Geopolitical risks surrounding oil prices and the uneven effects of currency and commodity price movements also pose significant threat to economic stability. Sustenance of highly accommodative monetary policy in the Advanced Economies has also created monetary policy challenges in emerging markets like India.

Challenges for the Banking System

i) Asset Quality
Though on the whole, the banking system has remained resilient, asset quality has seen sustained pressure due to continued economic slowdown. The levels of gross non-performing advances (GNPAs) and net NPAs (NNPAs) for the system have been elevated. As per preliminary data received at RBI for March 15, while the GNPAs have increased to 4.45% for the system as a whole, the NNPAs have also climbed up to 2.36%. When seen in isolation, the NPA ratios do not appear very distressing; however, if we add the portfolio of restructured assets to the GNPA numbers, this rises alarmingly. Stressed Assets Ratio (Gross NPA+ Restructured Standard Advances to Gross Advances) for the system as a whole stood at 10.9% as at the end of March 2015. The level of distress is not uniform across the bank groups and is more pronounced in respect of public sector banks. The Gross NPAs for PSBs as on March 2015 stood at 5.17% while the stressed assets ratio stood at 13.2%, which is nearly 230 bps more than that for the system.

It is pertinent here to also note the observations made in the Global Financial Stability Report released by IMF recently. Referring to the high levels of corporate leverage, the report highlights that 36.9 per cent of India's total debt is at risk, which is among the highest in the emerging economies while India’s banks have only 7.9 per cent loss absorbing buffer, which is among the lowest. While these numbers might need an independent validation, regardless of that, it underscores the relative riskiness of the asset portfolio of the Indian banks.

As you all know, RBI has taken various steps to improve the system’s ability to deal with corporate and financial institution distress. This includes issuance of guidelines on "Early Recognition of Financial Distress, Prompt Steps for Resolution and Fair Recovery for Lenders: Framework for Revitalising Distressed Assets in the Economy, detailed guidelines on formation of Joint Lenders’ Forum (JLF), Corrective Action Plan (CAP), ‘Refinancing of Project Loans’, ‘Sale of NPAs by Banks’ and other regulatory measures, which emphasized the need for early recognition of financial distress and for taking prompt steps for rectification, restructuring or recovery, thereby ensuring that interests of lenders and investors are protected.

Various reports that I get suggest that the implementation of JLF framework needs further improvement on the ground level. We have received representations from bigger lenders about non-cooperation from a few lenders. On the other hand, smaller lenders have voiced their concerns about being arm twisted by bigger lenders. Unless, there is proper co-ordination between the interested parties, all the revival efforts are likely to fall flat.

RBI had given a road map for ending the regulatory forbearance on asset classification of restructured accounts long back and accordingly, the forbearance has come to an end on March 31, 2015. There has been a lot of clamor from all quarters for extending this forbearance. Our stand on this issue has been absolutely clear. I wish to highlight that ‘Restructuring’ per se is not necessarily a forbidden word. It is a legitimate financial activity practiced the world over to help the borrowers tide over short term problems and to preserve economic value in the system. I don’t know why restructuring a loan which is under short term stress should not be done. What we are saying is that, the banks must acknowledge the problem, admit that the account is facing stress as of now, but is expected to recover in future. Hence, make a small provision and reverse it when the account becomes satisfactory and starts paying. Staying in denial mode does not help anyone especially in an interconnected world where regulation making has become global and so has the public scrutiny. Any forbearance extended by the regulator will be discounted by the investor/ analyst community while assessing the bank’s financials.

ii) Capital Adequacy of Banks

Concerns have been raised about the ability of our banks to raise additional capital to support their business and I would admit that these concerns are not entirely misplaced, especially for the public sector banks. Higher level of capital adequacy is needed due to higher provisioning requirements resulting from deterioration in asset quality, kicking in of the Basel III Capital norms, capital required to cover additional risk areas under the risk based supervision framework as also to sustain and meet the impending growth in credit demand, going forward.

Though at present, the banking system is adequately capitalized, challenges are on the horizon for some of the banks. For the system as a whole, the CRAR has been steadily declining and as at the end of March 2015, it stood at 12.70% as against 13.01% as at the end of March 2014. Our concerns are larger in respect of the PSBs where the CRAR has declined further to 11.24% from 11.40% over the last year.

The poor valuations of bank stocks, especially the PSBs, are not helping matters either, as raising equity has become difficult. When even the best performing PSBs have been hesitant to tap the markets for augmenting their capital levels, it would be difficult for the weaker PSBs to raise resources from the market. There is a constraint on the owners insofar as meeting the capital needs of the PSBs and hence, the underperforming banks are faced with the challenge of looking at newer ways of meeting their capital needs. A singular emphasis on profitability ratios (based on RoA and RoE) perhaps fails to capture other aspects of performance of banks and could perhaps encourage a short term profitability-oriented view by bank management. However, without getting into the merits of this approach, from a regulatory stand point, we feel that some of these poorly managed banks could slide below the minimum regulatory threshold of capital if they don’t get their acts together soon enough. Of course, the pressure may lessen somewhat if, going forward, the asset quality improves on account of higher growth, resulting in higher retained earnings for banks. The need of the hour for all banks, and more specifically, in respect of the PSBs, is that capital must be conserved and utilized as efficiently as possible.

iii) LCR Framework

As you are aware, the Liquidity Coverage Ratio (LCR) regime has kicked in for the banks from January 1, 2015 with a minimum requirement of 60% to be gradually increased to 100% by January 1, 2019 in a phased manner. The LCR is a ratio of High Quality Liquid Assets (HQLA) to the Total Net Cash Outflows prescribed to address the short term liquidity risk of banks and the banks would be required to maintain a stock of HQLAs on an ongoing basis equal to the Total Net Cash Outflows.
Banks have been asking for reduction in SLR citing the implementation of the LCR framework. To a certain extent their request has merit. SLR essentially serves the same purpose as the LCR. However, SLR does not assume certain outflow rates for liabilities while outflow and inflow rates under the LCR framework are based on certain assumptions of stress. Presently, apart from maintaining LCR at 60%, the banks have to maintain SLR of 21.5% of the NDTL. Going forward, as the LCR requirements gradually increase, it may be desirable to reduce the SLR progressively. Presently, there is a special dispensation wherein RBI has permitted banks to reckon up to 7% of the SLR towards LCR (2% of MSF and 5% under FALLCR). Our regulatory department is seized of the issue and would take appropriate measures to address this issue going forward.

iv) Unhedged Forex Exposures

The wild gyrations in the forex market have the potential to inflict significant stress in the books of Indian companies who have heavily borrowed abroad. This stress, besides impacting repayment of forex liabilities, eventually hampers their debt repayment capability to the domestic lenders as well. It is precisely with this consideration that RBI has been advocating a curb on the increasing tendency of the corporates to dollarize their debts without adequate risk mitigation.

Our supervision of banks’ books has highlighted the need for the banks to have more robust policies for risk mitigation on account of unhedged foreign currency exposure of their corporate borrowers. Inadequacies of data further complicate the impact assessment of such exposures across the banking system. The banks have been advised to factor in this risk into their policies/ pricing decision and also devise means for sharing of information on such exposures amongst themselves. Regulatory guidelines have also since been issued outlining the capital and provisioning requirements for exposure to entities with significant unhedged forex exposures.

v) Human Resource Issues

I do not need to emphasize the HR issues in banks. This is a decade of retirement for the PSBs and I am sure those working there are already feeling the pinch of the loss of experienced hands in their day to day operations. While the recruitments would be happening at the junior levels, there would be a virtual vacuum at the middle and senior level for some time to come. The absence of middle management could lead to adverse impact on banks’ decision making process as this segment of officers played a critical role in translating the top management’s strategy into workable action plans. Some of the major banks are also suffering on account of prolonged leadership vacuums at the top. All banks, including those in the private sector, are witnessing high attrition rates, giving rise to resource gaps. The problem is set to get accentuated further once the banks that have been newly licensed/ likely to be licensed, start hiring. Therefore, bridging resource gaps and managing employee turnover are major challenges that banks need to be prepared to address.

The banks need to continuously enhance the skill levels of their employees so as to remain viable and competitive and to take advantage of new opportunities. The banking personnel, across the cadres need to be suitably trained to acquire necessary skill sets to perform their jobs more efficiently. The biggest challenge is to build capacity at a rate which matches the loss of existing talent and skills to retirement, poaching and resignations. The training initiatives must ensure that the available talent pool in the banks is able to always keep pace with the fast changing ways in which banking is conducted. Of course, in these challenges also lie an inherent opportunity for banks to redraw their organizational profile and to create HR systems and processes best suited to the needs of the future.

vi) Revision to the Priority Sector Lending Guidelines

The revised priority sector lending guidelines have been released last week. Lending to a few new sub-sectors like renewable energy, social infrastructure and to the medium enterprises would now be treated as priority sector lending. Concept of a tradable Priority Sector Lending Certificate (PSLC) has also been introduced, which would enable the ‘deficit’ banks to buy these certificates from ‘surplus’ banks to meet their targets.

There is also readjustment in some sub-targets, whereby the banks are now required to progressively achieve 8% of lending to Small and Marginal Farmers and 7.5% to the micro enterprises among the MSEs in a phased manner. This has been brought about with an underlying objective of making available finance to the most needy and the most alienated of the borrowers. This may probably pose a bit of a challenge initially but I believe with proper planning, these targets could be achieved sooner rather than later.

vii) PMJDY and beyond

I must compliment the banking sector for wholeheartedly working for the success of the PMJDY scheme. The numbers speak for themselves. More than 14.5 crore accounts opened. That leads to the question- what next? Flow of individual savings, albeit howsoever small combined with flows from direct benefit transfer would be crucial to give an initial push to keep these accounts active while extending productive/need-based credit would be the second crucial step. The onus is upon all of us to ensure that the window of opportunity that has been presented by the opening of such a large number of accounts, is not put to waste by allowing the accounts to turn inactive.

The credit absorption capacity of the farmers can be enhanced through consolidation of fragmented landholdings by ushering in land reforms or through pooling of land holdings in a SHG format. Similarly, customers may also be trained to undertake non-farm activities. Efforts to enhance the credit absorption capacity must also be supplemented through financial literacy and vocational training initiatives. Improved financial literacy would aid the inculcation of a savings culture and investment habit amongst the customers, which can be leveraged by the banks by offering suitable small savings, investment and pension products.

A major challenge for the banks would be to manage their banking correspondent model effectively. The problems relating to their viability, governance, cash management, linkage and oversight from a base branch need to be quickly addressed. The entire financial inclusion ecosystem must progressively develop, if the momentum gathered under the PMJDY exercise has to be sustained for all-round benefit of all stakeholders.

viii) Globalization of Regulation- making process

Banking regulations are getting increasingly globalized, subject of course to certain national discretions. As members of the standard setting bodies like BCBS and FSB, we are committed to implement these regulations in our jurisdictions. There is a process for peer review of regulatory guidelines issued by various jurisdictions to ascertain compliance with the global standards, failure to adhere to which would render the jurisdiction non-compliant to the standards. While we do participate in the regulation making process and suggest modifications to protect the rightful interests of the domestic economy, very often, we have to abide by the larger framework. I will give just one example viz. the large exposures regime, for which a consultation paper on new SBL/GBL norms has already been released by RBI.

ix) Technology and its impact

Let me briefly touch upon an issue which is relatively much more pertinent for the PSBs, i.e. use of technology in banking. All PSBs are now on CBS platform and have developed capabilities to offer anywhere banking. Few have also started offering basic banking transactions on mobile for their customers. But this is just scrapping the surface as the technology can be leveraged for a far greater effect. PSBs must be able to leverage technology for building data warehouses and then be able to do data mining and analytics. The goal should be to use data for effective decision making at various levels, including product customization, developing business models and delivery channels, etc.
PSBs must be able to pitch suitable products for their customers through internet and mobile banking channels. Traditional businesses are slowly moving on-line and e-commerce is the preferred choice of the gen-next customer. The challenge before the PSBs is to upscale their capabilities, train their employees on the new technologies to benefit from the possibilities that adoption of technology can open up.

A good thing going for the banks is the current recruitment of youngsters in the work force. This new-generation staff is tech-savvy and can quickly connect with technology. The enterprising among them must be accorded freedom to experiment and suggest ways in which the bank could reengineer its processes for its own benefit and that of its customers. This would require a change in mind-set of the senior / Top Management and this must happen if the PSBs have to compete efficiently and effectively with the private sector counterparts in future.

x) Treating Customers Fairly

Protection of bank customers has been one of the thrust areas for RBI in recent times. As you may be aware, RBI has issued a Charter of Customer Rights based on the global best practices. The Charter comprises of following five rights:

• Right to Fair Treatment
• Right to Transparency, Fair and Honest Dealing
• Right to Suitability
• Right to Privacy
• Right to Grievances Redress and Compensation

A model customer rights policy jointly prepared by IBA and BCSBI incorporating these rights has been circulated to all banks by IBA. The banks have been advised to prepare a Board Approved Policy based on the model policy before July 31, 2015. RBI may review the policies framed by the banks and their implementation as part of our supervisory assessment over the next 12-18 months.

xi) KYC/AML Compliance

Let me now turn to another very important issue which is equally challenging for the private sector banks as well and that is, compliance with the KYC/ AML norms. A majority of the enforcement action by the banking sector regulator in the recent past has been on account of these violations.
The instances of fake e-mails soliciting unsuspecting customers to make payments to certain bank accounts as a precursor to receiving prize or lottery winnings from abroad, have become quite rampant. It is surprising that even well-educated individuals are falling prey to such incredulous offers. While spreading financial literacy remains a huge challenge, the banks cannot be absolved of their responsibilities in the sequence of events. Most of this money is being transferred through banking channels and obviously, there is a deficiency in KYC compliance. Money muling is another common occurrence which highlights deficiencies in risk categorization of customers and monitoring of transactions.

I am emphasizing on this issue because banks need to be sensitive to the possibility of regulatory strictures / penalties for non-compliance. Consistent monitoring of transactions is necessary to prevent money muling. A few banks in the past have already been fined for deficiencies in adherence to KYC/AML norms and with our commitment to comply with the FATF norms; I can only forewarn you that the frequency and severity of such penalties would rise in future.

xii) Balance Sheet Management

Over the past few years we have witnessed an increasing propensity to defer or delay provisions in an apparent attempt to post higher net profits. Probably, this short term vision is also in part attributable to short term tenure which the CEOs/ CMDs get. It must be appreciated that CEOs/ CMDs would come and go but the institutions are perpetual entities. The only thing which can perpetuate their existence is a stronger and healthier balance sheet. It must be realized that the first step towards resolving a problem is to acknowledge its existence. The problems which are swept under the carpet for a quarter or two would need to be encountered thereafter, with the issue getting further complicated in the interim.

Making higher provisions would not only add strength to the balance sheet, but also lead to better control over tax out-go and the dividend pay-out, besides adding credibility to the bank’s financial statements. While a lower net profit would make headlines for a day or two, believe me the savvy long-term investors / analysts do not read too much into the short term blips. If they understand that the Management is sincere about repairing the balance sheet, they would drive up the valuation of your stocks, which would help you in the long-term. With most banks in dire need of capital, the retained earnings need to increase progressively.

As a part of balance sheet management exercise, the Board/Top Management would have to proactively take a call on the likely components of their balance sheets and what shape they would like the balance sheet to take in future. The objective of optimal utilization of capital would have to be necessarily kept in mind while evolving balance sheet management strategies.

xiii) Risk Management

Risk is inevitable in the banking business and hence, a sound risk management framework is the touchstone of an efficient bank. The risk management effectively aims at balancing the Risk-Return Trade-off which is “maximizing return for a given risk” and “minimizing risk for a given return”. The responsibility of setting a risk appetite for the bank as a whole is that of the Board and the Top Management. In practice, however, we seldom see the articulation of an objective risk appetite statement by the PSBs. If you haven’t set out a risk limit for each type of risk that the bank runs and an aggregate risk appetite for the bank as a whole, how do you measure and monitor risk? We must understand that risk management is integral to the success of the bank and hence, the Top Management should strive to put in place an efficient risk management framework keeping in view the changing market dynamics and the regulatory prescriptions.

These are challenging times for the banking sector but as the clichéd proverb goes “Every cloud has a silver lining”. The future leaders in the banking industry would be those who identify this silver lining early and initiate necessary steps to leverage the opportunity. The impending competition from new banks and the large number of new accounts opened under the PMJDY Scheme are two instances that readily come to mind of the challenges that could be turned into opportunities. Besides this, banks as the key players in the country’s financial system also carry the responsibility of supporting economic growth, once the economic cycle turns favourable. Banks have to prepare themselves for meeting this responsibility by nurturing a healthier balance sheet. 

RBI announces rate of interest on FRBs 2016

Floating Rate Bonds, 2016 applicable for the year (May 7, 2015 to May 6, 2016) shall be 7.90 per cent per annum.

The Reserve Bank of India on Wednesday conveyed that the rate of interest on the Floating Rate Bonds, 2016 (FRB, 2016) applicable for the year (May 7, 2015 to May 6, 2016) shall be 7.90 per cent per annum.

It may be recalled that the rate of interest on the FRB, 2016 was set at a mark-up (as decided in the auction held on May 6, 2004) over and above the variable base rate. The variable base rate for payment of interest shall be the average rate (rounded off up to two decimal places) of the implicit yields at cut-off prices emerging in the three auctions of Government of India 364 day Treasury Bills immediately preceding the relative annual coupon reset date. 

The variable base rate based on the average rate of the implicit yields at cut-off prices of the said last three auctions of Government of India 364 day Treasury Bills worked out to 7.86 per cent. The mark-up decided in the auction held on May 6, 2004 was (+) 0.04 (plus 0.04). The coupon rate has been fixed accordingly. 

IT stocks bounce back on weakening Rupee

IT stocks have bounced back smartly on the back of renewed buying interest at lower levels as Re continues to weaken versus the US dollar. 

IT stocks have bounced back smartly on the back of renewed buying interest at lower levels as Re continues to weaken versus the US dollar.

The Indian Rupee today touched a low of 63.875 per US dollar in early deals. The Indian currency has depreciated by nearly 3 percent in the last one month.

The CNX IT index has soared nearly 2 percent to 11,140.

Index heavyweights - TCS and Infosys have rallied over 2 percent each to Rs. 2,519 and Rs. 1,963, respectively.

Mindtree and HCL Technologies also have surged over 2 percent each to Rs. 1,293 and Rs. 910, respectively.

Hexaware and Oracle Financial Services Software (OFSS) have gained around 1.5 percent each at Rs. 263 and Rs. 3,399, respectively.

MphasiS, Wipro, Naukri and eClerx are the other prominent gainers.

On the flip side, Persistent Systems, Polaris and Rolta are some of the major losers in the IT space.

Thanks to the strong gains in IT shares, the NSE Nifty too has managed to recoup most of its losses and is now down mere 12 points at 8,085.

FIPB can recommend FDI proposals up to Rs 3000 crore

The Minister of Finance who is in-charge of FIPB would consider the recommendations of FIPB on proposals with total foreign equity inflow up to Rs.3000 crore.

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, has approved the proposal of Department of Industrial Policy & Promotion to review of the investment limit for cases requiring prior approval of the Foreign Investment Promotion Board (FIPB) / Cabinet Committee on Economic Affairs (CCEA), as provided in the Consolidated FDI Policy Circular effective from April 17, 2014. Amended provisions in this regard are as under: 

(a) The Minister of Finance who is in-charge of FIPB would consider the recommendations of FIPB on proposals with total foreign equity inflow up to Rs.3000 crore. 

(b) Recommendations of FIPB on proposals with total foreign equity inflow of more than Rs.3000 crore would be placed for consideration of CCEA. 

(c) The CCEA would also consider the proposals which may be referred to it by the FIPB / the Minister of Finance (in-charge of FIPB). 

(d) The FIPB Secretariat in the Department of Economic Affairs (DEA) will process the recommendations of FIPB to obtain the approval of Minister of Finance and the CCEA. 

This decision is expected to expedite the approval process and result in increased foreign investment inflows. 

Background:

Liberalisation of the FDI policy has been done in a calibrated manner. Most of the sectors are presently under the automatic route, under which, only intimation is required to be given to the Reserve Bank of India (RBI) and approval of the FIPB/CCEA is not required. No limit for foreign investment has been prescribed for the automatic route. However, approval route cases are decided by the FIPB, only if the investment is less than Rs. 2000 crore. 

Sensex, Nifty back in green

The broader market, too, started in red zone, the CNX Midcap index is marginally down at 12,519 and the Smallcap index is down 0.08 percent at 5,400. All sectoral indices are in negative zone, the CNX Bank Nifty, Auto, Energy, Finance, Metal, Pharma and PSU Bank indices have declined 0.3 percent each. 

fter a massive fall yesterday, the market today started the day on negative note, but soon drifted lower as selling pressure continue on the back of weakness in global markets.

The BSE Sensex and the NSE Nifty opened at 26,721 and 8,077. Soon, the key benchmark indices touched a low of 26,570 and 8,066, respectively.

The BSE headline index is now up 128 points at 26,846 and the Nifty-50 index is also up 16 points at 8,113.

The broader market, too, started in red zone, the CNX Midcap index is marginally down at 12,541 and the Smallcap index is down 0.3 percent at 5,390.

All sectoral indices are in negative zone, the CNX Bank Nifty, Auto, Energy, Finance, Metal, Pharma and PSU Bank indices have declined 0.3 percent each.

Among Nifty-50 shares - Asian Paints is the top loser - down over 2 percent at Rs. 744. Ultratech Cement has slipped nearly 2 percent at Rs. 2,560.

Cipla, Hindalco, IndusInd Bank, Kotak Bank, Axis Bank, Lupin, Maruti Suzuki and Mahindra & Mahindra are the other significant losers.

On the other hand, Hindustan Unilever, Cairn India, Bharti Airtel and ONGC are the other major gainers - up around a percent each. 

Rupee drops nearly 30 paise against dollar

The rupee has fallen over 3% in the past three months

Rupee continued its downward journey against the dollar and opened nearly 30 paise down as against dollar, at Rs 63.83 to a dollar.

The rupee has fallen over 3% in the past three months.

At 9:39AM, the local unit is trading at 63.83 against the US dollar. It hit a high of 64.14 and a low of 63.83.

Foreign institutional investors (FIIs) have invested more than $30 billion into the equities of Taiwan, South Korea, Japan, Brazil and Canada since April 1, according to a media report. 

Nifty trades below 8,100

The broader market, too, started in red zone, the CNX Midcap index is marginally down at 12,541 and the Smallcap index is down 0.3 percent at 5,390. 

After a massive fall yesterday, the market today started the day on negative note, but soon drifted lower as selling pressure continue on the back of weakness in global markets.

The BSE Sensex and the NSE Nifty opened at 26,721 and 8,077. Soon, the key benchmark indices touched a low of 26,570 and 8,066, respectively.

The BSE headline index is now down almost 100 points at 26,624 and the Nifty-50 index is also down 43 points at 8,053.

The broader market, too, started in red zone, the CNX Midcap index is marginally down at 12,541 and the Smallcap index is down 0.3 percent at 5,390.

All sectoral indices are in negative zone, the CNX Bank Nifty, Auto, Energy, Finance, Metal, Pharma and PSU Bank indices have declined 0.3 percent each.

Among Nifty-50 shares - Asian Paints is the top loser - down over 2 percent at Rs. 744. Ultratech Cement has slipped nearly 2 percent at Rs. 2,560.

Cipla, Hindalco, IndusInd Bank, Kotak Bank, Axis Bank, Lupin, Maruti Suzuki and Mahindra & Mahindra are the other significant losers.

On the other hand, Hindustan Unilever, Cairn India, Bharti Airtel and ONGC are the other major gainers - up around a percent each.