RBI Guv concerned over disconnect between financial markets and real economy

Agencies
January 12, 2021

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New Delhi, Jan 12: Raising concerns over a disconnect between the financial markets and the real economy, RBI Governor Shaktikanta Das on Monday said that stretched valuations of financial assets pose risks to financial stability.

In his foreword to the Financial Stability report of the Reserve Bank of India (RBI) for January, he noted that banks and financial intermediaries need to be cognisant of these risks and spillovers in an interconnected financial system.

"The disconnect between certain segments of financial markets and the real economy has been accentuating in recent times, both globally and in India. Stretched valuations of financial assets pose risks to financial stability," he wrote.

The Governor's statement comes at a time when the Indian equity markets are scaling new highs amid the pandemic, while the economy going through a recession.

Das said that that in spite of rising public commitments for mitigating the impact of the pandemic, fiscal authorities are also witnessing revenue shortfalls. The resultant expansion in the market borrowing programme of the government has imposed additional pressures on banks, he added.

So far, the borrowing programme has been managed smoothly so far, with the lowest borrowing costs in 16 years and elongation of maturity, Das said, adding that the corporate sector has also raised substantial funds from financial markets amidst easy financing conditions, which have been mainly used for deleveraging and building up precautionary buffers.

"As growth impulses take root, the private sector capex cycle should revive as existing capacities get utilised and new capacities are added. This will require the financial system to intermediate expanded growth requirements of Indian business," Das wrote in the foreword.

Noting that India's banking system faced the pandemic with relatively sound capital and liquidity buffers built assiduously in the aftermath of the global financial crisis, he said: "Notwithstanding these efforts, the pandemic threatens to result in balance sheet impairments and capital shortfalls, especially as regulatory reliefs are rolled back."

In addition, banks will be called to meet the funding requirements of the economy as it traces a revival from the pandemic. Consequently, maintaining the health of the banking sector remains a policy priority and preservation of the stability of the financial system is an overarching goal, Das said.

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Agencies
February 15,2021

New Delhi, Feb 15: The Supreme Court on Monday issued notice to the Centre and WhatsApp over the privacy policy update of the messaging platform. 

The top court said that the matter will be heard after 4 weeks.

The Supreme Court was hearing an application seeking directions to WhatsApp that it shall not apply lower privacy standards for Indian users and shall apply the same privacy policy and terms of use for Indian users as for users in Europe. 

The top court said that people have grave apprehensions that they will lose their privacy, and it is our duty to protect them.

The apex court said people value their privacy more than the value of the company which might be in trillions.

WhatsApp told the top court that Europe has a special law on privacy and it will also follow if India has a similar statute. 

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Agencies
February 15,2021

The Delhi Police today appeared to link activists Disha Ravi, Nikita Jacob and Shantanu Mallick, who are being investigated in the toolkit case, with a foreigner under Indian agencies' radar for his connections with the ISI claiming that his name figured in the document they prepared in support of farmers' protest.

Under fire from the Opposition parties for "targeting" the youth activists, police also claimed that Nikita and Shantanu, who have given the investigators the slip so far, had a Zoom meeting on January 11 with pro-Khalistani outfit Poetic Justice Foundation when modalities for creating the toolkit for farmers' protest was finalised.

Joint Commissioner of Police (Cyber Cell) Prem Nath told reporters that Disha, who was arrested from Bengaluru, lawyer Nikita and an engineer Mallick "collaborated" to create the toolkit, which was an online guide on how to support the ongoing protest. The collaborative document was owned by Shantanu's email id.

Manishi Chandra, Deputy Commissioner of Police (Cyber Cell), said the toolkit was a "carefully crafted" document, meant for circulation among a few people to guide them on which hashtag to be used on a particular day and who is to be followed.

"The document has a list to be followed, which included media houses, established fact-checkers and NGOs among others. There was one Peter Frederick also in the list. This person was under the Indian agencies' radar since 2006 for his links with Bhajan Singh Bhinder alias Iqbal Choudhary, a leading propagandist of K-2 desk (Kashmir desk of ISI)," Chandra said.

He said it is a matter of investigation whether the three people were in contact with Frederick. "Disha will tell us about this. We want to check why Frederick was put as a resource person and whether they have any direct connection with Bhinder," he said.

Prem Nath said search warrants were issued against Nikita on February 9 and two days later, searches were conducted at her residence in Mumbai. Two laptops and an iPhone were seized from her and a written undertaking was taken from her that she will join investigations the next day.

However, on February 12, he said, she fled from her house. Shantanu also could not be located at his residence in Maharashtra's Beed.

"We then acted against Disha, who had deleted a WhatsApp group meant to distribute the toolkit. She was arrested in the presence of her mother and the local Station House Officer. Due procedure was followed," Prem Nath said.

A senior Delhi Police official said Disha shared the document with Greta Thunberg through Telegram. There were hyperlinks in the toolkit and it was a private document to be distributed among select people. 

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Agencies
February 23,2021

Organisations in India projecting 7.7% salary increase in 2021: Survey |  Business Standard News

New Delhi, Feb 23: Companies in India are likely to offer a 7.7 per cent salary increase in 2021, one of the highest among the BRIC nations, and higher than the average actual increase of 6.1 per cent in 2020, says a survey.

Global professional services firm Aon Plc on Tuesday released insights from its latest Salary Increase Survey in India, as per which 88 per cent of the surveyed companies reported that they intend to increase salaries in 2021, as compared to 75 per cent companies in 2020, reflecting positive business sentiment.

The study, that analysed data across 1,200 companies from more than 20 industries noted that while salary increments indicate strong recovery, the Code of Wages could be a gamechanger.

"We expect the increment dynamics for 2021 to play out over a longer period of time given the uncertainty and potential impact of forthcoming changes," Nitin Sethi, partner and Chief Executive Officer of Aon's performance and rewards business in India, said.

The proposed definition of wages under the new Labor Codes could lead to additional compensation budgeting in the form of higher provisioning for Benefit plans like gratuity, leave encashment and provident fund, Sethi noted.

"We expect organisations to review their compensation budgets in the second half of the year once the exact financial impact of the Labor Codes is known. It is also possible that some of the salary increments may not translate into higher cash-in-hand for employees if organisations choose to pay higher provident fund contributions on the new definition of Wages," he said.

As per the survey, sectors with the highest projected increases include, e-commerce and venture capital, hi-tech/information technology, ITeS, life sciences. On the contrary, sectors with the lowest projected increases include hospitality/restaurants, real estate/infrastructure, engineering services.

It further noted that attrition has been one of the lowest in the last few years at 12.8 per cent, which talks about the maturity of India Inc and also lesser opportunity for people to move as they preferred to wait and watch.

Despite a tough 2020 with stringent lockdowns, India continues to project the highest salary increases among the BRIC nations, the survey noted.

"The highest-paying sectors in 2021 continue to be the ones from last year – information technology, information technology-enabled services, life sciences, e-commerce and fast-moving consumer goods," said Roopank Chaudhary, a partner in Aon's human capital business in India.

Chaudhary further noted that "It's notable that the sectors that were adversely impacted by Covid-19, such as retail, hospitality and real estate, are projecting healthy increases in the range of 5-6 per cent. Such numbers reflect their intent to stay relevant and to control attrition, which had increased for these industries last year." 

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