Plan and Policy

Plan & Policy

After banks, govt looks at merging insurance PSUs

The government’s plan to list four state-owned insurers and one reinsurer might have to wait as it looks at the possibility of consolidation. Sources in department of investment and public asset management (Dipam) said the government is exploring the possibility of the merger, as at least three general insurance PSUs are not in a position to issue initial public offer (IPO) anytime soon.

Rupee rally could be short-lived: experts

The rupee strengthened for the second consecutive session to hit a fresh 16-month high against the US dollar on the eve of a widely anticipated US Federal Reserve rate hike. Investor sentiments have been boosted after results over the weekend showed that the ruling Bharatiya Janata Party (BJP) scored an overwhelming win in Uttar Pradesh. The victory was widely seen as a strong endorsement of Prime Minister Narendra Modi's agenda. However surprisingly, traders said that the Reserve Bank of India remained out of action, letting the demand and supply dynamics decide the rupee level.

Rupee surges by 78 paise

In sync with a surge in stocks, the rupee on Tuesday appreciated by 78 paise against the US dollar. The domestic currency closed at 16-month high of 65.81, a level last seen on November 6, 2015. The rupee had a stellar performance so far this year, as it is the third-best performing currency in Asia. Only South Korean won and Taiwanese dollar have done better than rupee. Forex dealers said there was heavy dollar unwinding from speculative traders and exporters tracking stock markets.
The scale of BJP’win in Uttar Pradesh sparked a 490-point rally in stock markets.

DeMo has reinforced faith in gold: WGC

Demonetisation has tested people’s faith in fiat currencies and in turn reinforced their faith in gold, finds World Gold Council.
Fiat currencies are those not backed by a physical commodity, like gold. All currencies are now fiat currencies, including the rupee and the dollar.
WGC had conducted a consumer research in Q1 2016 in which 63 per cent of respondents agreed with the statement “I trust gold more than the currencies of countries”. Seventy-three per cent of respondents had agreed that gold makes them feel secure for the long-term.

SBI unyielding on minimum balance fine

There seems to be no respite for crores of savings bank account holders of State Bank of India (SBI), as the lender remains firm on its decision to levy penalties for non-maintenance of minimum balance in savings accounts. The bank’s new pretext is that the fine charged would be used to fund the cost it incurs on no-frills Jan Dhan accounts.
SBI chairman Arundhati Bhattacharya on Wednesday justified the move, saying the bank needs to impose some charges to balance the “burden” of managing a large number of no-frills Jan Dhan accounts.

LIC’s bad loans mount in Apr-Dec 16 Rs 18,221 crore

While bad loans of banks have attracted much attention, not many are aware stressed assets of the Life Insurance Corporation of India (LIC), the public sector insurance behemoth, too are rising consistently.
And it’s not just companies that have defaulted on their loans, but also the state government entities and municipal corporations.

Centre asks SBI to review minimum balance penalty

Amidst public uproar against banks proposing steep increase in cash transaction charges, the government has asked the country’s largest lender SBI to reconsider its decision to levy penalty for non-maintenance of minimum balance in accounts starting April 1.
The move to increase the penalty is expected to impact over 31 crore savings bank account holders.
Finance ministry sources said the government also wants the public sector bank to rethink its proposed charges on cash deposits and withdrawals beyond specified limits.

FinMin nod to ESOPs by PSBs

The Narendra Modi government has agreed in-principle to allow public sector banks to offer stock options to their employees from next financial year – a move that is aimed at retaining experienced hands with better incentives.
According to sources, employee stock option plans (ESOPs) could be given by those banks, which have not only earned substantial profit but also made remarkable improvement in managing non-performing assets (NPAs).

Third party premium for small cars may not rise

Regulator Irdai has proposed up to 50 per cent increase in insurance premium for cars, motor cycles and commercial vehicles from April 1.
However, there is no proposal to raise the third party motor insurance premium for small cars (up to 1,000 cc) from Rs 2,055 now.
The hike proposed in mid-segment cars (1,000 cc - 1,500 cc) as well as bigger cars and SUVs is 50 per cent. The proposal is to increase the premium to Rs 3,355 for cars up to 1,000 cc and Rs 9,246 for bigger ones.

HDFC Bank, ICICI, Axis to charge for cash transactions

Banks, including HDFC Bank, ICICI Bank and Axis Bank, on Wednesday began charging a minimum amount of Rs 150 per transaction for cash deposits and withdrawals beyond four free transactions in a month.
The charges would apply to savings as well as salary accounts effective Wednesday, leading private sector player HDFC Bank said in a circular.
The bank would also cap the third party cash transactions at Rs 25,000 per day, while cash handling charges would be withdrawn effective Wednesday, the circular added.