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Tribunal asks TRAI to re-examine Jio free offers, declines stay

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Reliance Jio

New Delhi, March 16: The telecom tribunal on Thursday asked the sector regulator to re-examine issues pertaining to Reliance Jio’s free promotional offers. However, no stay was given on the offers.

The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) also directed the Telecom Regulatory Authority of India (TRAI) to re-examine the issues and inform it within two weeks.

Telecom majors Bharti Airtel and Idea Cellular had lodged a complaint with the telecom tribunal against TRAI for letting new entrant in the sector, Reliance Jio to continue with its promotional offers beyond 90 days. Reliance Jio, had launched free voice and data plan in September 2016 and had extended it till March 31, 2017.

However, the tribunal did not order a stay, as was sought by the incumbent telecom operators. Last week, the tribunal had reserved its order on an appeal by the two operators.

Wefornews Bureau

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FRDI Bill and bail-in: Your deposits were never safe(r)

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By Nikhil Arora

One obviously reads how social media and technology have the power to breed beliefs only qualifiable as post-truth. Rare have been occasions when I have witnessed this phenomenon first hand.

The recent public outcry on deposits being “at risk” during a bank’s liquidation — due to the proposed Financial Resolution and Deposit Insurance (FRDI) Bill — is astounding!

What started as an op-ed in a newspaper blandly-titled “Banking on legislation” — published a full three months after the FRDI Bill was tabled — vigorously picked up steam courtesy a dramatically-worded WhatsApp cover note which termed the bail-in clause as a “banking Armageddon amendment”.

The sensationalist delivery has obviously worked, as one month later we have the Finance Minister of the country being forced to intervene and calm everyone’s nerves. The political timing, on the other hand, should obviously give makers of “House of Cards” another reason to blush.

Coming back to the actual Bill, the only logical way to assess this issue is to see if depositors are going to be worse off with this document in the picture. Does the Bill dramatically change the status quo? And finally, does it change it for the better or for worse?

Deposits in the Indian banking system, much like the rest of the world, are treated as the most “senior” form of liability for a bank, and are hence supposed to take losses only after holdings of all the shareholders (i.e. holders of equity or regulatory capital); followed by all the creditors (i.e. who have extended wholesale funding to the bank) are wiped off during bad loan write-downs.

Therefore, savers have at the least two layers of protection before their assets are hit. Moreover, deposits amounting to a not-so-royal amount of Rs 1 lakh are mandatorily “protected” through “Deposit Insurance”, even if the rest can theoretically suffer losses.

The marginal quanta of insured deposits, though inadequate and worrying, is a different debate altogether. In practical terms, the Reserve Bank of India (RBI), being the prudent institution that it is, would intervene much before any bank’s capital (which is the top layer of protection for depositors) becomes dramatically low.

Now to the WhatsApp storm of November 17: Let’s see what is so different about the FRDI Bill? Not much. All the Bill does is to formalise the process which already existed. Insured deposits will still be mandatorily protected. The cap of Rs 1 lakh has been suggested to be replaced by a flexible mechanism, where the insured sum is fixed by a newly-envisaged Resolution Corporation. In any case, a revision was long due as a protection of Rs 1 lakh did not make much sense in 1993 when it was introduced, leave alone now. And yes, this process now has a name, i.e. “bail-in”, which, its taboo-like reputation aside, is a standard term used in international precedents.

One can obviously debate and push for better protection of depositors through a wider insurance net — but it is factually incorrect to allege that people’s savings will come under an increased threat courtesy the introduction of the FRDI Bill.

The Bill is, in fact, a positive move, considering for the first time it sets in motion a separate mechanism for depositors’ resolution when a contingency arises. What was part of the commercial model of banks is now being institutionalised and formally regulated.

All regulations aside, deposit holders have faced and will always face a certain level of risk, but that is how the banking system works. The key is to ensure a robust system of ownership, accountability and redressal.

Rest of the narrative is plain hyperbole.

IANS

(Nikhil Arora is the CEO & Founder of Transfin. Views expressed are personal. He can be contacted at [email protected])

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IMF indicates salutory effects of demonetisation after some disruptions

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International Monetary fund indicated that demonetisation may bring positivity to Indian Economy after some disruptions.

“We see salutary benefits from the demonetisation that took place a year ago. And there are potential benefits going forward,” William Murray of the IMF told reporters at the fortnightly IMF news conference.

However Murray said the demonetisation did cause some temporary disruptions in economic activity, primarily, private consumption and small businesses due to cash shortages.

“In the medium term, demonetisation could have possible effects, including through greater formalisation of and the information on economic activities and a more efficient payment system with a greater use of the banking system and digital payments,” Murray said.

The IMF is slated to come out with an update of its projections of India’s growth rate along with the rest of the world in January.

WeForNews

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Key Indian equity indices open on a cheery note

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Mumbai, Dec 15: Extending previous session’s gains, key Indian equity indices on Friday opened on a higher note with healthy buying in banking, consumer durables and capital goods stocks.

Around 9.17 a.m., the wider Nifty50 of the National Stock Exchange (NSE) traded higher by 93.90 points or 0.92 per cent at 10,346 points.

The barometer 30-scrip Sensitive Index (Sensex) of the BSE, which opened at 33,456.02 points, traded at 33,540.24 points — up 293.54 points or 0.88 per cent — from its previous close.

The Sensex touched a high of 33,605.11 points and a low of 33,456.02 points during the intra-day trade so far.

However, the BSE market breadth was bearish — 1,572 declines and 1,049 advances.

On Thursday, short covering, along with positive hopes of the ruling BJP’s win in the crucial two-phased Gujarat assembly elections, erased the day’s entire losses and lifted the indices to close in the green.

The NSE Nifty50 edged higher by 59.15 points or 0.58 per cent to close at 10,252.10 points, while the BSE Sensex closed at 33,246.70 points — up 193.66 points or 0.59 per cent.

IANS

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