RBI Takes a Swipe at HSBC with ₹1.73 Crore Penalty

Tuesday, May 9th 2023

Good Morning ☕

Welcome to our daily business newsletter, where we bring you a concise summary of the most important news stories from the business world. Our aim is to provide you with a quick and easy way to stay up-to-date with the latest developments, so you can make informed decisions and stay ahead of the curve.

The business world is always abuzz with news about major companies and institutions, from fines and penalties to investments and initiatives.

1. RBI imposes ₹1.73 crore fine on HSBC for incorrect credit information

The Reserve Bank of India has imposed a monetary penalty of INR 1.73 crore on HSBC for providing incorrect credit information related to expired credit cards with nil dues to all four credit information companies, in contravention of Credit Information Companies Rules, 2006. The penalty was imposed after considering the bank's reply and oral submissions made during the personal hearing and is based on deficiencies in regulatory compliance, not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

2. SpiceJet faces insolvency proceedings as NCLT issues notice on Aircastle petition

The National Company Law Tribunal has issued a notice to SpiceJet on a petition by an aircraft lessor, Aircastle (Ireland) Ltd., seeking initiation of insolvency resolution proceedings against the budget carrier. The next hearing is scheduled for May 17. SpiceJet stated that the court has recognized the fact that parties are under settlement discussions and that there was no adverse ruling against SpiceJet. Two more petitions for insolvency resolution proceedings against SpiceJet are also pending before the NCLT.

3. Miscreants allegedly pelt stones at Vande Bharat Express in Kerala’s Kannur, second such incident in the state

Unidentified miscreants allegedly pelted stones at Kerala's Vande Bharat Express train, which was inaugurated by Prime Minister Narendra Modi a few days ago. The incident occurred in Kannur's Valapattanam area, causing scratches on the train. This is the second such incident against the same train, as a similar incident occurred last week in Malappuram district. The train runs between Thiruvananthapuram and Kasargod, covering 11 districts, and is part of the Indian government's "Make in India" initiative. The government is planning to expand the manufacturing facility of the Vande Bharat Express train to several locations.

4. Indian Supreme Court issues notice to govt on 'zero tolerance rules' for unruly airline passengers

The Indian Supreme Court issued a notice to the government and others over a plea seeking a mandatory Statement of Purpose and zero-tolerance rules for dealing with unruly passengers and onboard sufferers. The plea was filed by a 72-year-old woman who was urinated upon by an inebriated passenger on an Air India flight in November 2022. The Supreme Court has posted the hearing on the case till July 2023 and has sought the assistance of the solicitor general in the matter. Since the incident in November, several incidents have been reported of unruly or drunk passengers urinating on fellow passengers in mid-air.

5. General Atlantic plans to invest up to $1 billion annually in India's digital infrastructure and financial inclusion initiatives

General Atlantic plans to invest up to $1 billion annually in Indian businesses over the next few years, focusing on India's digital infrastructure, affordable supply and data, and affordable infrastructure for financial inclusion. The growth-equity investor has already invested $4.6 billion in India over the past two decades, with a focus on domestic consumption investment opportunities in healthcare, consumer-focused enterprise software, and financial services. Among the companies it has backed in India are PhonePe, ASG Eye Hospitals, and KIMS Hospitals. The government's production-linked incentives have led to investment in lower-cost medical equipment and consumables that are being built in India.

6. Birla Estates buys 28.6-acre land in Bengaluru for housing project; eyes ₹3,000 crore revenue

Birla Estates, a subsidiary of the Aditya Birla Group, has acquired a 28.6-acre land in Bengaluru's Sarjapura Road with a potential revenue of INR 3,000 crore ($403 million). The development will mainly comprise residential housing along with retail options to cater to IT professionals in the region. Birla Estates intends to set new standards for iconic living in Bengaluru through this project.

7. India and UK discuss partnership to boost cooperation in critical strategic technologies

India and the UK are reportedly in talks to establish a broad partnership focusing on cooperation in strategic technologies such as semiconductors, critical minerals, and telecommunications. The two countries are considering linking Indian firms with cutting-edge research facilities in the UK and building pathways for greater mobility for research talent to move between the countries. The partnership is expected to be similar to the Initiative on Critical and Emerging Technologies (iCET) between India and the US, which aims to build cooperation on key technologies and defence industrial ecosystems.

8. Food Corp of India to miss wheat procurement target due to private traders and farmers holding back produce

Food Corp India (FCI) will not be able to achieve its wheat procurement target of 34.5 million tonnes during the 2023-24 April-March Rabi marketing season due to private traders stocking up and farmers holding back their produce. FCI's chairman and managing director, Ashok Meena, said that FCI is likely to procure about 26 million tonnes of wheat this season due to private traders and millers offering more remunerative prices to farmers. Farmers in some states such as Uttar Pradesh and Bihar prefer to sell their wheat to traders, millers, and stockists due to higher market prices. This has resulted in significantly lower procurement by FCI in these states than in Punjab and Haryana. FCI is procuring wheat at the minimum support price of ₹2,125 per quintal.

9. Russian investors turn to Indian capital markets via the FPI route amid sanctions

Russian investors are now investing in Indian capital markets through the Foreign Portfolio Investment (FPI) route, amidst sanctions imposed on Russia in response to its involvement in the war against Ukraine. Three Moscow-based entities have registered with the Securities and Exchange Board of India (SEBI) as FPIs, marking the first time that Russian investors have opted for the FPI route to invest in India. The FPI licence issued to them is valid for three years, until early 2026. Experts suggest that the sanctions imposed on Russia, particularly the weaponization of the dollar, have led to these new economic and financial developments.

10. Moody's expects Oyo to have positive EBITDA in FY24 and a stable outlook

Moody's has affirmed the B3 corporate family rating (CFR) of Oyo and its backed senior secured term loan and predicted that the hospitality and travel tech startup is likely to have a positive Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) for the remaining financial year (FY24). Moody's also expects the overall outlook for Oyo to remain stable. The forecast is based on a further recovery in demand for the hospitality business, more cost reductions, and a higher number of storefronts on Oyo's platform. However, Moody's cautioned that Oyo's rating could be downgraded if it does not reduce its cash burn or if external factors such as government policies or new entrants impact the company's operations.

11. Electricity prices on exchanges decline

Electricity prices on Indian exchanges have fallen in the first week of May due to the easing of temperatures and recent rainfall. The average price in the day-ahead market in April was above ₹5/kWh, while so far in May, it has been around ₹3/kWh. Peak power demand has also come down to 180.377 GW on 7 May, from near-record levels reached in April. However, with rising temperatures expected in the coming weeks, power demand is expected to rise again.

12. Invesco slashes Swiggy's valuation to $5.5 billion from $8.2 billion: Report

Invesco, a US-based fund manager, has cut the valuation of food and grocery delivery platform Swiggy for the second time in less than a year. Invesco has reduced Swiggy’s valuation to $5.5 billion from $8.2 billion, a drop of 32%. In January 2021, Invesco had led the $700 million funding round in Swiggy and valued the company at $10.7 billion. Swiggy’s total valuation has been reduced by 48.6% from January last year, putting it behind its listed peer, Zomato, which had a market capitalization of around $6.9 billion on May 8.

13. India and Canada progressing towards early-stage trade agreement to diversify supply chains away from China

India and Canada are making progress towards signing an early-stage trade agreement focused on a few industries, according to Canadian Trade Minister Mary Ng. The move is part of Canada's strategy to diversify its Pacific trade and supply chains away from China. The trade deal is expected to include rules around investment, tariff reductions, and facilitating trade. Canadian pension funds are increasingly investing in Indian infrastructure, and Canadians overall have about C$65 billion ($48.7 billion) in portfolio investments in India.

14. RBI imposes monetary penalty on two cooperative banks for non-compliance with rules

The Reserve Bank of India has imposed monetary penalties on two cooperative banks - The Trichur Urban Co-operative Bank and Bhilai Nagarik Sahakari Bank Maryadit - for non-compliance with banking rules. The Trichur Urban Co-operative Bank was fined ₹2.00 lakh for non-compliance with RBI's directions on managing advances while Bhilai Nagarik Sahakari Bank Maryadit was fined ₹1.25 lakh for contravention of the Banking Regulation Act, 1949, and the Depositor Education and Awareness Fund Scheme, 2014. The penalties were imposed based on deficiencies in regulatory compliance and are not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers, the RBI said.

What else is happening around the world?

• Ukraine war: Russia launches 'biggest' kamikaze drone attack

• Allen Texas mall shooting: Aishwarya Thatikonda, an Indian engineer, was among the victims

• US Treasury Secretary Janet Yellen has warned a failure to raise the US's debt ceiling could have dire consequences.

• Halifax has apologized for rejecting a customer's mortgage application because the homeowner is hosting two Ukrainian refugees.

• EU lawyers say plan to scan private messages for child abuse may be unlawful

• China's foreign minister calls to 'stabilise relations' with US to "Avoid a downward spiral"

• First ChatGPT arrest in China over fake train crash news

• Taiwan In Talks For $500 Million Weapons Package From US

• Billionaire Peter Thiel Reveals He Has Signed Up To Be Cryogenically Preserved When He Dies

• Mystery Chinese Spacecraft Returns To Earth After 276 Days: Report

• 27 Dead In Gold Mine Fire Tragedy In Peru

• Former UNDP chief and Turkish minister Dervis dies at 74