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…

Jet Airways

It is definitely the beginning of the end for Jet Airways Just around midnight on the 16th of April Jet announced temporary suspension of all its flights. That was a euphemism for a shutdown in operations due to paucity of funds with the airline.  When the airline sent an SOS for an infusion of Rs.1000…

Bank NPAs

There is a need to strike a balance between freedom and license The talk of town in the last few days was the Supreme Court order striking down the RBI circular issued on February 12th 2018. The circular had made it mandatory that any borrower above Rs.2,000 crore defaulting on the loan for more than…

Monetary Policy

Monetary Policy goes much beyond rates and liquidity The monetary policy had little by way of surprise when it announced a 25 basis point cut in rates. That was already factored in the market. In fact, the market was hoping for a bigger cut or a shift in stance to “accommodative”. That was not to…

Sensex at 40

Why the Sensex at 40 is also the story of 40 years of India On April 01st, the Sensex completed a full 40 years of existence. Over the last 40 years, nothing has captured the sentiments of the market and the undertone of economic shifts better than the Sensex. Like most indices, the Sensex has…

Loan Benchmarking

It looks like external benchmarking for loans is off the table for now Back in the December monetary policy announced by the RBI there was special mention of the banks shifting to an external benchmark for pricing loans. This was part of the policy statement and was expected to make a big difference to the…