#1. Reserve Bank monitoring Credit Suisse development, impact unlikely in India The Reserve Bank of India is monitoring developments related to Credit Suisse although the Swiss lender’s limited size and scope in the country means any major impact is unlikely. The risk of contagion is negligible, local bond traders said. Credit Suisse India will have enough capital, bankers said. It doesn’t have a significant presence in India, and new exposure is totally ruled out as banks are in wait-and-watch mode. Although Credit Suisse in India has funded 60 per cent of assets from borrowings, it’s a small part of the Indian banking sector with 0.1 per cent share of total assets, brokerage Jefferies said. Credit Suisse’s Indian assets are estimated at about Rs 20,000 crore. Why it’s important: Coming day after the collapse of two US banks, the financial sector is wary of the situation at Credit Suisse. Domestic banks and money market traders have tightened their belts and cautioned against any fresh counterparty exposure against the lender. #2. Krithivasan to lead Tata Consultancy after Gopinathan resigns unexpectedly Tata Consultancy Services named K. Krithivasan, 59, as chief executive after Rajesh Gopinathan resigned unexpectedly. The decision surprised senior management of India’s largest software company. TCS’s retirement age is 60 but executives who are on the board can continue until 65. The choice of Krithivasan is also a departure from the past. The past two CEOs were in their 40s when they were appointed. Gopinathan’s resignation will be effective from September 15, making his six-year tenure the shortest in the company’s history. Why it’s important: Differences between Tata Sons chief N Chandrasekaran and Gopinathan could have led to his departure. Gopinathan’s sudden exit is surprising because nothing was said of the matter when TCS held its two-day annual strategic meet in Doha last month. #3. Maintain margins of safety amid global turmoil, Chief Economic Advisor says Governments, businesses, and individuals should keep margins of safety amid rising global uncertainty, chief economic advisor V Anantha Nageswaran has said. Given the current situation, the global growth estimates issued by the International Monetary Fund in January appeared outdated, Nageswaran said. The fund had projected the global economy to grow at 2.9 per cent in 2023 and 3.1 per cent in 2024. Why it’s important: Countries like India will have to watch out for the impact of recent developments on investor confidence and lending growth in banks. Further rate tightening by the US central bank could have an unexpected domino effect. The European central bank raised rates by half a percentage point despite the turmoil. #4. Union government may postpone IDBI Bank’s $4 billion privatisation plan The government may defer the $4 billion IDBI Bank privatisation plan over concerns that the unprecedented market volatility may deter prospective buyers. The government may get a much lower value from the proposed 60.72 per cent stake sale than what it expected earlier. The IDBI Bank divestment is the government’s first privatisation plan in India’s banking space. It has been expecting a valuation of at least $4 billion. If the exchequer decides to go ahead, the government will need to accept a sharply lower valuation of around $3 billion. Why it’s important: World markets have been roiled by one banking crisis after the other in the past weeks. Investors may not be too keen to spend high amounts due to current negative sentiments. Postponing the divestment would be a setback for the government asset sale target though. #5. About $200 million from Silicon Valley Bank shifted to Gift City in India About $200 million of the $1 billion funds held by Indian start-ups in Silicon Valley Bank have been transferred to Gift City, a global financial centre in Gujarat, after the US lender collapsed, according to electronics and IT minister Rajeev Chandrasekhar. Indian start-ups are estimated to have over $1 billion of deposits in the collapsed US lender. Local start-ups with accounts at SVB had trouble moving funds out of the bank because international wire transfers were suspended. Why it’s important: The crisis triggered by SVB’s collapse has likely become a more manageable short-term liquidity issue instead of a solvency crisis faced by startups with money stuck in the US lender. #6. Adani Group tells stock exchanges that Vinod Adani part of promoter group The Adani Group has said in a stock exchange filing that Vinod Adani, the older brother of group chairman Gautam Adani, continues to be a part of the promoter group. Vinod Adani’s shareholding in various group companies, including his controlling stakes in its cement assets, has been disclosed to regulators periodically, it said. The stock exchanges had sought a response from the group following recent news items in this regard. Why it’s important: The clarification comes after Hindenburg Research alleged Dubai-based Vinod Adani was responsible for creating and managing offshore shell entities for stock parking, market manipulation and laundering money. The Adani Group had said at the time that Vinod Adani had no operational role in the running of group companies and could not be classified as a related party. #7. Online pharmacies seek to explain stance after getting notices over violation of norms Over a dozen online pharmacies are seeking an audience with the health ministry to explain their stance over show-cause notices last month over the sale of drugs in alleged violation of norms. This comes at a time when the government has proposed in a draft regulation to regulate, restrict, or prohibit any sale, stocking or distribution of any drug by online mode by issuing a notification. Why it’s important: The government has said online pharmacies are operating without requisite licenses. The move to regulate e-pharmacies is expected as traditional medicine retailers have also advocated more oversight of their online counterparts. #8. Jayant Sinha set to table private bill on digital competition on Friday Lok Sabha member Jayant Sinha, who heads the standing committee on finance, will table a private member’s bill on Friday that deals with anti-competitive practices by big tech companies. The idea behind introducing the bill was to present an example of what such a law would look like, he said. When asked why as a member of the ruling party he was tabling a private bill when the government could do so, Sinha said his bill would inform the Centre’s decisions. Why it’s important: Dominant technology companies identified as digital gatekeepers may have to file annual compliance reports to a regulator under a proposed digital competition law. The private bill is a surprising development and may indicate differences within the government. #9. Foxconn to establish factory in India to assemble Apple AirPods Foxconn Technology Group is working out modalities to set up a plant in India to assemble Apple AirPods. Discussions are on whether to set up the unit in Telangana or Karnataka. The investment is likely at around $200 million. The Taiwanese company had during the visit of Foxconn global chief Young Lui to India signed agreements to invest in these states for electronics manufacturing. Why it’s important: Apple and its contractors are on track to increase their manufacturing footprint in India in an effort to reduce dependence on China. The central and state governments are giving them many incentives to do so. #10. Global airline and hotel firms offer discounts to Indians as outbound Chinese travel shrinks Airline and hotel companies are tempting Indians to travel and stay abroad with discounts and buy-one-get-one-free deals at a time outbound travel from China has ebbed. Most of the world has focused on Indians since outbound travel from China, once the largest source of tourism revenue globally, remains disrupted despite the lifting of most pandemic restrictions. China sent out about 12 million outbound air passengers every month in 2019. Why it’s important: Overseas vacations by a section of the Indian middle class have increased in recent years. Discounts by the travel industry may encourage more people to go abroad as fears of the pandemic recede.
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