ISSUE: 728 2025 09 January 2025

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Govt likely to ease conditions on capex loans

to states to meet Rs 1.5 lakh cr target in
FY25: In a bid to meet its ambitious Rs 1.5 lakh
crore capital expenditure (capex) loan target for
FY25, the Centre is likely to sanction additional
funds to states without conditionalities, a senior
government official said. The move is expected to
accelerate disbursements and ensure full utilisation of the budgeted
amount. “Additional allocation to states may be given under the untied
part after assessment in January. There are savings in the tied portion,
which the government is likely to convert to untied loans and give to
states,” the official told Moneycontrol. By converting tied savings into
untied loans, the government aims to simplify the process for states and
boost capital spending in the final quarter of FY25. The capex loans,
disbursed as 50-year interest-free advances to states, aim to bolster
public investments and durable asset creation. Of the total allocation for
FY25, Rs 55,000 crore is currently untied and can be used by states for
projects of their choice, while Rs 95,000 crore is tied to specific reforms
such as industrial growth, land reforms, and infrastructure development
(Moneycontrol)
Gold import numbers slashed by $5 billion for November to
$9.84 billion: In an unprecedented move, gold import estimates for
November 2024 have been sharply lowered by the government by $5
billion to $9.84 billion from $14.86 billion announced last month,
following requests made by the industry for a re-look at the unusually
high numbers. For the April-November 2024 period, estimated gold
imports have gone down by $11.7 billion to $37.38 billion after the
revision from $49.08 billion announced earlier, per figures revealed
through searches on the Directorate General of Commercial Intelligence
and Statistics (DGCIS) website. In sheer volume terms, it would amount
to a discrepancy of 130-140 tonnes in the April-November period.
(Business Line)

CS Setty, Uday Kotak nominated as governing

council members of NIIFTL: The government
has nominated State Bank of India Chairman CS
Setty and Uday Kotak, founder and director, Kotak
Mahindra Bank, as governing council members of
the National Investment and Infrastructure Fund
Trustee Ltd (NIIFTL). Finance Minister Nirmala
Sitharaman is the chairperson of the six member
council and secretaries of department of economic affairs and financial
services are the other members. Veteran investment banker Hemendra
Kothari is also a member. NIIFTL was constituted to act as an advisory
council to NIIF and provide strategic guidance on matters including
investment of the corpus of NIIF, parameters for appointment and
performance of investment managers and advisors.
(Business Standard)
FinMin to review flagship schemes with PSB chiefs ahead of
Budget: M. Nagaraju, Secretary of the Department of Financial Services,
will chair a meeting on January 15 with the Managing Directors and Chief
Executive Officers of public sector banks. The meeting aims to review the
progress of various financial inclusion schemes and discuss future
funding requirements in light of the upcoming Budget, according to
sources. “The meeting will focus on evaluating the implementation of key
government initiatives under the DFS. Additionally, it is expected to
address other financial inclusion issues and discuss the funding needs for
these schemes,” said the sources. A source indicated the government
might consider providing assistance and additional funding for
programmes such as the Pradhan Mantri Jan Dhan Yojana, Stand Up
India, Atal Pension Yojana, Mudra Yojana, and Pradhan Mantri Suraksha
Bima Yojana. The meeting is expected to be attended, among others, by
the chairman of the Indian Banks' Association. "A few bankers have
expressed the need to discuss pending issues related to fixed-deposit
taxation in the upcoming meeting.
(Business Standard)
UCO Bank focussing on South India, Maharashtra and Gujarat
to expand footprint: Public sector lender UCO Bank is focussing on
South India, Maharashtra and Gujarat to expand its footprint nationally.
The Kolkata-headquartered bank currently has a strong presence in East
and North India. On the occasion of its 83rd Foundation Day, the lender
has rolled out 40 branches across regions this week. “These new branches
have been opened in Tamil Nadu, Karnataka, Telangana, Kerala, Gujarat,
Maharashtra, West Bengal and Uttar Pradesh. When we are opening the
new branches, our focus is on South India, and Gujarat and
Maharashtra,” UCO Bank Managing Director and Chief Executive Office
Ashwani Kumar told businessline.
(Business Line)
State banks told to avoid appeals at multiple debt recovery
tribunals: GoI has asked public sector banks to overhaul their approach
to debt recovery tribunals (DRTs) and bring about synergy in the way
cases are filed, officials said. Banks are also exploring the legal feasibility
of withdrawing cases from multiple jurisdictions and refiling them upon
tracing assets. An official told ET that the idea is to streamline the
approach and do away with the multiplicity of appeals across jurisdictions
against a single borrower with consolidated filing of cases.
(Economic Times)

New registration of insolvency professionals

on downhill trek: Registrations of new insolvency
professionals have been steadily decreasing since
2017-18, causing challenges for authorities in
resolving stressed firms. Just 77 professionals
registered in the first half of this fiscal. Inadequate
compensation and fears of investigation are key
reasons. The number of active professionals may seem adequate now but
could pose issues if bad loans rise.
(Economic Times)
Mid-tier businesses turn to private credit funds amid slowed
bank lending: Mid-tier manufacturing or process-based companies
including Himadri Speciality Chemical, Ramco Group, and Gharda
Chemicals are increasingly turning to private credit funds for financing
due to slowed bank credit and tepid growth in mutual funds. These funds
offer quick access to capital for expansion and acquisitions despite
stringent terms.
(Economic Times)
Government tells MFIs to reduce rates: The department of
financial services has told senior executives of microfinance institutions
(MFI) to lower lending rates to a reasonable level so that the loans
become viable for bottom-of-the-pyramid borrowers. This was discussed
at a pre-budget meeting Wednesday between senior finance ministry
officials and the country's major MFIs and officials from the two self-
regulators for the sector. "We have informed the government officials that
a majority of MFIs keep lending rates between 21% and 24% to which
they said this may not be viable for the grassroot borrowers," a person
who attended the meeting said, on the condition of anonymity. "They
want us to reduce the rates," he said.
(Economic Times)

Aadhaar-based payments using face scan yet

to fall into place: Aadhaar-based payments
through facial recognition, piloted through the
Covid peak by the National Payments Corporation of
India (NPCI), have failed to take off even a year after
its implementation. State Bank of India, Union Bank
of India, and Bank of India, large public-sector
banks with millions of customers, have not
implemented the project as they want Aadhaar's administrator to make a
desktop or laptop version of the service. "The reason payments through
face authentication has failed to take off is because only 23 banks are
currently offering this service," said a banking industry official. "
(Economic Times)
LIC's Bima Sakhi Yojana records over 50,000 registrations
within one month of launch: Bima Sakhi Yojana of LIC has seen over
50,000 registrations within a month of its launch by Prime Minister
Narendra Modi as an initiative towards Viksit Bharat through women
empowerment. After completion of one month since the inauguration, the
total registration for Bima Sakhi is 52,511 of which 27,695 Bima Sakhis
have been issued appointment letters to sell policies and 14,583 Bima
Sakhis have started selling policies, LIC said in a statement on
Wednesday. Speaking about the development LIC Managing Director and
Chief Executive Officer Siddhartha Mohanty said, "It is our objective to
cover each panchayat of the country with at least one Bima Sakhi within
one year."
(Economic Times)
New RBI chief faces rupee policy dilemma amid surging dollar:
India’s new central bank head faces a tough decision on managing the
rupee’s exchange rate — focus on squeezing volatility like his predecessor
did, or respond to calls for more flexibility as the dollar continues to
surge. Former Reserve Bank of India Governor Shaktikanta Das’s term
was marked by efforts to staunch currency swings, as he sought to impart
predictability to foreign investors as well as local importers and exporters.
A change in leadership has stoked speculation about the RBI’s exchange-
rate policy. While effective in dampening fluctuations, critics say Das’s
tight grip on the rupee effectively fixed the currency to a crawling peg
against the dollar. That has hurt India’s export competitiveness during a
period of slowing growth, they say.
(Business Line)

RBI KEY RATES FOREX EQUITY

(RBI REF. ) /COMM. MARKET
Repo Rate: 6.50% INR / 1 USD : 85.8443 Sensex: 78148.49 (-50.62)
SDF: 6.25% INR / 1 GBP : 107.2052 NIFTY: 23688.95(-18.95)
MSF /Bank Rate: 6.75% INR / 1 EUR : 88.8946 Bnk NIFTY: 49835.05 (-367.10)
CRR: 4.00% INR /100 JPY: 54.3100
SLR: 18.00%
BUSINESS/FINANCIAL CONCEPTS
OPEN NETWORK FOR DIGITAL COMMERCE
(ONDC)
 The Open Network for Digital Commerce (ONDC) acts as a middleman in the
world of online shopping, connecting buyers and sellers. It functions similarly
to the Unified Payment Interface (UPI), a popular mobile payment system
that allows people to make mobile payments regardless of the specific
payment app they use.
 Govt. has taken this initiative to reduce the dominance of e-commerce giants
like Flipkart and Amazon.
 ONDC is based on open-sourced methodology, using open specifications and
open network protocols independent of any specific platform.
 The foundations of ONDC are to be open protocols for all aspects in the entire
chain of activities in exchange of goods and services, similar to hypertext
transfer protocol for information exchange over internet, simple mail transfer
protocol for exchange of emails and unified payments interface for payments.
 Buyers get access to more sellers which ultimately leads to more finest
choices. Sellers can cut the advertising and commission cost associated with
intermediaries. Buyers can enjoy lower rates of goods & services due to the
elimination of intermediaries.

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