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Regulating NBFCs

Government has to walk the thin line between regulation and growth Back in 1997 there were around 40,000 NBFCs operating in India. Then in 1998 the RBI came up with stringent capital adequacy and asset classification norms for NBFCs to reduce the systemic risk after the CRB fiasco. By 2002 there were just about 10…

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Regulating NBFCs

Government has to walk the thin line between regulation and growth Back in 1997 there were around 40,000 NBFCs operating in India. Then in 1998 the RBI came up with stringent capital adequacy and asset classification norms for NBFCs to reduce the systemic risk after the CRB fiasco. By 2002 there were just about 10…

Pharma Stocks

Why pharma companies must take the lawsuit seriously The pharma stocks had a bad week with the pharma index down by over 4% in the first day of the week itself. It all started with a Reuters news item stating that 44 states in the US had decided to file a lawsuit against 20 generic…

Soft Bankruptcy

India must handle soft bankruptcy cases a lot more deftly CRISIL recently published a report about the Rs.70,000 crore collected through NCLT in the fiscal year 2018-19. The collections in the current fiscal are likely to be closer to Rs.1 trillion. According to CRISIL, this represents 43% realization that is at par with global best…

IL&FS Bad Loans

It is time banks wrote off their loans to IL&FS and Jet Recently, the RBI had instructed all banks having exposures to IL&FS group to make provisions for their exposure to the IL&FS group. Indian banks have lent close to Rs.97,000 crore ($14 billion) to the IL&FS group and it is not clear how much…

Valuing AMCs

What you must know before adding AMC stocks to your portfolio When HDFC AMC announced stellar numbers in the March 2019 quarter, the markets were abuzz with buying ideas. How good an idea is it to buy AMC stocks in the equity market? Of course, there are only two listed AMC stocks of Reliance and…

Dollar Swaps

Are the dollar swaps putting pressure on the Indian Rupee? During the last week, the rupee rapidly weakened against the dollar and went as low as 70.56/$. While oil prices were one of the reasons for the rupee slide, there was another more immediate reason for this rupee fall. It was the dollar swap auctions…

RBI Dilemma

Should RBI cut rates further; MPC minutes show a clear divide The minutes of the Monetary Policy Committee (MPC) published during the week give a clear idea about the discussions within the MPC before the rate cut decision was taken. The MPC minutes document detailed discussions among the 6 members of the MPC and the…

HDFC FMPs

Should investors roll over FMPs or just redeem it at a discount? Fixed maturity plans (FMPs) came under a cloud in the last few weeks after leading AMCs admitted to their inability to honor their FMP commitments. The reason was a huge exposure to the Essel Group, which is owned by Subhash Chandra of the…