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MUMBAI: Nudged by the government, banks are poised to slash interest rates in the next few days as they move in lockstep with the administration to lift the spirits of borrowers following the dislocation caused by demonetisation and the 50 days sought by Prime Minister Narendra Modi come to an end.

Bankers said the reduction in lending rates could be accompanied by a steeper cut in deposit rates. Large commercial banks currently pay about 7 per cent for one-year deposits and charge 8.9 per cent for loans of the same tenor. A senior bank official said the government has sought to persuade banks to lower rates on the grounds that the cost of deposits had dropped due to demonetisation and the benefits should be passed on to customers to boost consumption.

“Investment sentiments are low and the government is under tremendous pressure from the Opposition to showcase that the demonetization exercise has paid off. Secondly, the common man is hoping that after going through agony for 50 days, he should get the benefits of demonetisation,” said a senior bank official. “Therefore, the government is in dialogue with banks on measures that can be taken to boost investments.”

Modi announced that Rs 500 and Rs 1,000 notes would cease to be legal tender on November 8, in effect cancelling about 86% of the currency in circulation as part of his government’s campaign against black money. He had said the situation would return to normal in 50 days.

Large banks are scheduled to hold meetings of their asset-liability committees, which decide interest rates on loans and deposits, on Friday and Saturday. In the past, banks have lowered lending rates, or the marginal cost of lending rates (MCLR), by increments of 5 and 10 basis points in the process of transmitting monetary policy cuts. A basis point is 0.01percentage point.


CHENNAI: December has been a month of mega discounts for car marketers with top brands like Maruti, Hyundai, Honda and others offering anywhere between Rs 25,000-2 lakh in benefits. Car industry expertssay the discount drive has worked and the industry should end the month with a small 5% growth over last December.

Even used cars are attracting benefits on online portals like Droom. The good news is that the channel and plant inventory, which had piled up due to the demonetisation effect in November, has now come undercontrol, Giving car makers the chance to start new year on a clean slate. Take Hyundai, which is offering between Rs 50,000-2 lakh benefits on models like i10, Xcent, Verna, Santa Fe and Eon. The car maker’s December promotions are 10% higher than what is normal around this time of the year, said Rakesh Srivastava, senior VP-sales & marketing, Hyundai Motor India.

The push was needed to clear the backlog after the demonetisation hit in November. “The sudden announcement of demonetisation in November created market challenges which impacted customer sentiments,” said Srivastava. “To effectively engage with customers we needed to enhance the promotional offers in addition to zero cash offers from finance companies. This counter measure has been effective. A 10% increase in promotions meant we will end up with a 5% growth over last December this month.”


BENGALURU: Apple plans to make iPhones for the Indian market in Bengaluru. Wistron, a Taiwanese OEM maker for Apple, is setting up a facility in Peenya, the city’s industrial hub, to manufacture the iPhones. The facility will start production from next April, according to industry sources.

Top sources in the company confirmed to TOI that Apple is “very serious” about beginning assembly operations – and thereafter full manufacture – in India by the end of next year. “Bangalore is beinglooked at seriously,” said multiple sources within the company. Local manufacture will help Apple price its phones competitively as full imports attract 12.5% additional duty.

Foxconn, Apple’s largest Taiwan-based OEM, earlier committed to setting up a manufacturing plant in Maharashtra. The assumption wasthe plant would make only Apple products. But sources say Foxconn hastied up with other players like Xiaomi and OnePlus for local manufacture and not necessarily to only make Apple products there.

This will be Apple’s second big announcement for Bengaluru. In May, Apple announced a design and development accelerator in the city to grow the iOS developer community and also to guide Indian developers to leverage Apple’s programming language Swift and build apps for Apple TV and Apple Watch. The facility will open early next year.

The Bengaluru manufacturing facility underscores India’s importance for the Cupertino-based company. Apple CEO Tim Cook’s multi-city India tour earlier this year signalled the growing importance of India powered by the demand for Apple products by a burgeoning middle class. Data from Hong Kong-based Counterpoint Technology Market Research showed that Apple sold 2.5 million iPhones in India from October 2015 to September 2016, a rise of more than 50% over the year-ago period.


NEW DELHI: In the second strategic sale approval in over 12 years, the Union Cabinet cleared the sale of India’s first pharma company, Bengal Chemicals and Pharmaceuticals Ltd (BCPL), as well as Hindustan Antibiotics Ltd (HAL) after selling off their surplus land.

The Cabinet headed by PM Modi also approved the closure of Indian Drugs and Pharmaceuticals Ltd (IDPL) and Rajasthan Drugs and Pharmaceuticals Ltd (RDPL). These will be the first privatisation since the sale of Jessop and Co under the NDA government headed by PM Atal Bihari Vajpayee in 2003-04.

BCPL and HAL are among the public sector units that Niti Aayog has identified for sale of government’s majority stake to private companies in order to bring in greater efficiency and professionalism in their functioning. The government is targeting Rs 56,500 crore in disinvestment proceeds this fiscal.



Mumbai: Granting banks more leeway in classifying loans as bad debts, the Reserve Bank of India (RBI) has said that lenders can now wait for 90 more days before classifying a loan as a non-performing asset(NPA). In a circular to all lenders, the RBI said that it has decided to provide 30 days, in addition to the 60 days of relief provided in November post-demonetisation.

The relaxation will apply to those borrowers running working capital account crop loans with any bank where the sanctioned limit is Rs 1 crore or less. It will also apply to term loans for business purposes, secured or otherwise, where the original sanctioned amount is Rs 1 crore or less. The dispensation will apply to banks, non-banking finance companies, micro finance companies and housing finance institutions. Banks have hastened to clarify that this would mean credit card holders cannot delay payment as such a move would trigger all the charges.

The central bank has said that the special dispensation will apply to dues payable between November 1, 2016 and December 31, 2016. The special dispensation will help both banks as well as borrowers. Banks will gain as they will be saved from showing higher NPAs in their books and making provisions towards them. Borrowers, if they are classified as NPA, face recovery proceedings and risk having credit lines shut off.

The additional time given will defer the classification of an existing standard asset as substandard but will not allow banks to delaying the migration of an account which is already an NPA into a category requiring higher provision. Dues payable after January 1, 2017 will not be granted the special dispensation. Following the government’s decision to demonetise high-value currency, there has been a massive cash crunch that hurt sales across businesses. The unorganised sector was expected to be the worst hit.


BHOPAl: At a time when, international beverage giant Coca-Cola is facing a stiff resistance from activists and locals in different states of the country over exploitation of water resources, Madhya Pradesh government has cozied up to it and allotted 110 acre of land along Narmada river for a food processing and bottling plant.

Coca-Cola will invest Rs 750 crore to set up a food processing unit including a bottling plant at the newly developed Mohasa-Babai industrial estate in Hoshangabad district, some 8 kms away from river Narmada. Babai industrial estate is about 98 kms away from Bhopal.

While the land allocation has been made discretely, chief minister Shivraj Singh Chouhan is likely to perform bhoomi pujan for the unit on January 11 next month. The government is also setting up a 5 MGD(million gallon per day) water treatment plant (WTP) for uninterrupted water supply to the company. industry minister Rajendra Shukla said, “This would perhaps be the biggest unit of Coca-Cola in India. The unit will help in employment for a large number of people. It is a big investment.” When fully operational, the soft drink unit at Babai would require about 1million litre of water daily.

“The Audhogik Vikas Nigam has constructed an intake well at Narmada in Babai and the water would be drawn from it to the WTP at the industrial estate. Coca-Cola will get water supply from the WTP the capacity of which can be further augmented any time,” a senior official told TOI.

The 1,700 acre industrial estate is still being developed and Coke’s unit will be the first to come up in the estate. “External infrastructure – road, power and water- has already been made available to the plot where the plant will be set up. When completed, this would be the best site for water-based industries in India,” sources said.

Bids for the development of the remaining part of the industrial area will be opened on January 27 next year, sources said. “There is nothing to worry about pollution in the area as the Coco-Cola unit would be a zero discharge project,” sources claimed. Coke is already operating its small bottling plant in Pilukhedi, about 50 kms away from Bhopal in Rajgarh district.

Coke had run in to rough weather following protests in Plachimada plant in Palakkad district of Kerala and in Madurai. After a PIL, the Madurai bench of the Madras high court in November this year granted an interim injunction, restraining Coca-Cola and Pepsi from taking water from Tamirabarani river.

After strong protests from local villagers in Plachimada, who alleged severe water crisis as the company was drawing water for its use from bore-wells and contamination of wells in the region, the village council had to revoke the licence to the company leading to a protracted legal battle. The multinational company has also been facing community protests following water crisis in other parts of India including Rajasthan and Tamil Nadu.


BENGALURU: Indian consumers are still not confident that mobile payments are secure enough to make it their first choice for making a financial transaction. A study by Deloitte said 29% of consumers feel that security is a concern and recent cyber fraud involving a digital wallet will not make consumers bring out their phones more frequently, despite demonetization.

The Deloitte survey found that smartphone users’ most important financial transaction was checking their bank balance, with around 54% of those surveyed doing so. More than 50% of consumers use smartphones to pay utility bills (54%) and other service bills (53%), followed by transferring money (38%). A large segment of consumers said lack of benefits and credit card rewards give them less incentive to make mobile payments. It indicates that once the cashback offers on mobile wallets come down, consumers might not use this payment mode frequently.

According to the research, e-commerce websites are the primary choice for customers to purchase smartphones in India, with 54% consumers buying online, while 39% of smartphone owners still bought their phones in-store. It added that that for most smartphone owners in India, the reliance on WiFi has reduced considerably because of higher penetration of mobile data and also indicating the higher mobility among urban professionals. The report said that 4G adoption is expected to grow strongly over the next year to become the predominant data network with about 45% of the respondents planning to subscribe 4G or LTE in the next 12 months.

Instant messaging (74%), social network (64%) and email (63%) saw the highest growth in usage frequency among smartphone users. Over 2,000 Indian consumers participated in Deloitte’s Global Mobile Consumer Survey. The sample is that of a high earning urban professional aged between 18 and 54. The majority of respondents installed 20 apps or less in addition to all the pre-installed apps.

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