dfa-11-sep

Daily Financial News Analysis – 11th Sep’20 – Free PDF Download

 

State StartUp Rankings 2019

  • State of Gujarat and Union Territory of Andaman and Nicobar Islands have been named the best performers in the State StartUp Rankings 2019.
  • Outstanding performance in simplifying commerce, enhancing productivity and leveraging technology
  • Karnataka and Kerala are the top performing states in the State StartUp Rankings for fostering innovative entrepreneurship to attract business and finance.
  • Andhra Pradesh, Chhattisgarh, Himachal Pradesh, Mizoram, Tamil Nadu, Assam, Delhi, Madhya Pradesh, Sikkim and Uttar Pradesh are the emerging startup ecosystems in the country.
  • Speaking on the occasion, Commerce and Industry Minister Piyush Goyal said that during COVID period, Indian Startups have come up with brilliant ideas and solutions to the many problems that the country and the world face.
  • Mr Goyal said, they also see a number of startups coming up with innovative ideas on delivery of groceries, meeting the essential requirements of the people of the country, and coming up with newer ideas to promote the digital economy and e-commerce in different ways.
  • The Minister said, the startups of India are doing excellent work in the roadways, waterways, shipping and railways and all sectors related to logistics in the country.
  • He called upon everyone to convert the COVID crisis into an opportunity to reimagine India and to reinvigorate the Indian economy.

Interest Waiver

  • The government has set up an expert committee to assess the impact of waiving interest and interest on interest on loans during the moratorium offered to Covid-hit borrowers that ended August 31.
  • The panel will submit its report within a week.
  • SC gave GoI time till September 28

  • The court directed banks not to declare any loan as nonperforming asset (NPA), if it hadn’t been categorised as an NPA as of August 31, until further notice.
  • The three-member committee has been asked to measure the impact on the national economy and financial stability of waiving interest and interest on interest on such loans.
  • It will also suggest measures to mitigate the financial constraints of various sections of society due to any such decision.
  • The court wants the government to address two issues — whether interest can be charged on interest and whether credit rating agencies can downgrade a business that’s been hit by the pandemic during the moratorium period.
  • Under the RBI moratorium plan, there can be no waiver of interest during the period.

Crisil

  • Ratings agency Crisil forecast a deeper contraction of 9% in this financial year.
  • Crisil called for reforms to get the economy on a faster recovery path as well as fiscal support to vulnerable households and small businesses hit hard by the Covid-19 pandemic.
  • Another rating agency, Icra, kept its forecast of 9.5% contraction in 2020-21 unchanged, while maintaining that the economy was “undoubtedly recovering” from the lows of first quarter.
  • Crisil said in a report titled ‘Minus nine now’, released on Thursday, that the downside to its earlier forecast had materialised, prompting the revision.
  • “With the pandemic’s peak not yet in sight and the government not providing adequate direct fiscal support, the downside risks to our earlier forecast have materialised,” it said.

Surge in Suspicious Dealings

  • Banks including State Bank of India, Bank of Baroda, ICICI Bank and HDFC Bank have started red-flagging transactions that defy traditional company patterns after witnessing a substantial spike in suspicious bank, cash and overseas transfers since the start of the Covid-19 pandemic.
  • Especially under the scanner are companies where banks have noticed a sudden spurt in trading or increased dealing in unrelated goods and services or there’s a sudden outflow of money to other countries.
  • “Since April some of the top banks have seen a jump of around 30% and in some cases even 50% where they have come across as suspicious patterns,” said a person with direct knowledge of the matter.
  • Financial Intelligence Unit — the central agency responsible for receiving and analysing information relating to suspicious financial transactions, and providing key details to intelligence and enforcement agencies — has been looking into several transactions and even pulled up some of the large public sector banks for taking the mechanism of red flags.
  • As per regulations, banks, non-banking finance companies and insurance companies are required to report suspicious transactions to FIU every month.

 

 

 

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