dfa-7-oct

Daily Financial News Analysis – 7th Oct’20 – Free PDF Download

 

Real Estate Sector

  • The government is unlikely to extend the proposed interest on interest waiver to the real estate sector.
  • Reason: the sector has already benefited from funding support under the Special Window for Affordable and Mid Income Housing or SWAMIH.
  • The Centre will provide details of the SWAMIH scheme through which more than ₹10,000 crore has been sanctioned to resume construction of houses that had halted.
  • The waiver relates to the 6 month loan moratorium that ended August 31 and was aimed at providing relief to borrowers hit by the Covid-19 pandemic.
  • The Centre will make additional submissions before the Supreme Court on the proposed compound interest relief based on the report of the panel headed by former CAG Rajiv Mehrishi as well as directives stemming from the KV Kamath committee recommendations on loan restructuring.

CCI on Jio-FB deal

  • Facebook assured the Competition Commission of India (CCI) that its investment in Jio Platforms will only involve exchange of “limited data” related to facilitating ecommerce transactions.
  • CCI warned both sides that anti-competitive conduct resulting from data sharing in the future could be taken up by the regulator.
  • CCI had approved the acquisition of a 9.99% stake in Reliance Industries Ltd-owned Jio Platforms by Facebook entity Jaadhu for ₹43,574 crore in June.
  • The Facebook unit told CCI that neither company will acquire each other’s data, according to the order, dated June 24.
  • As per their commercial arrangement, Facebook-owned WhatsApp and JioMart, owned by Reliance Retail Ventures and operated by Jio Platforms, will send and receive “limited data”.

Mauritius FDI

  • Financial Action Task Force (FATF) — an inter-governmental policy making body setting anti-money laundering standards.
  • RBI has spelt out that finance companies cannot be set up with foreign direct investment (FDI) from Mauritius and other jurisdictions that do not meet the benchmarks laid down by the FATF.
  • With this the central bank has taken a sterner stand on Mauritius than that taken by the central government and the Indian capital market regulator.
  • There are no restrictions on FDI and external commercial borrowings (ECB) from Mauritius in Indian manufacturing and other non-financial services companies, while foreign portfolio investors (FPIs) from Mauritius are free to register with Securities & Exchange Board of India (Sebi) to trade on Indian stock exchanges.
  • However, as regulated entities in the financial intermediation space, the rules, according to RBI, are tighter for finance companies which, like banks, are permitted to leverage several times their equity with public funds sourced largely from banks and domestic investors.
  • Industry sources said that the regulatory stance probably owes its origin to cases where RBI had suspected round-tripping of funds by promoters of Indian companies.

AI

  • India is hosting a global summit on artificial intelligence (AI).
  • Prime Minister has addressed the gathering and expressed commitment at the highest level of government to wholesome development and regulation of AI.
  • AI will fast become not just a major component of economic competitiveness but also a force multiplier in strategic capacity.
  • Control and regulation of AI are global concerns of mounting importance, on which the G20 have adopted guidelines and principles.
  • The 1st thing India needs to do is to put in place a robust data protection framework.
  • Data is oxygen for AI and how data is used to train AI has implications for the data subjects whose data is utilised for the purpose and for the kind of algorithm that is produced.
  • Transparency and explainability is also must
  • Robustness, safety and security must be ensured, for which traceability of the data sets used for creating or training the algorithms involved is essential.
  • Regulation of AI and of algorithms must emerge as a robust and active field of study and practice in India.
  • The Prime Minister said that AI should not be weaponised in the hands of non-State actors.
  • How to translate this fine sentiment into action is the question.
  • The Global Partnership on Artificial Intelligence excludes China, whose labs and companies operate at the cutting edge of AI.
  • That makes global coordination to keep AI safe rather tough.

 

 

 

Download Free PDF