Regulations
Govt revises format of OBC caste certificate
Difficulties were being faced as the OBC caste certificate had space for mentioning the name of the   caste or community but no space for indicating the specific resolution by which the said caste or   community has been included in the central list
 
The union government has revised the format of caste certificate for other backward class (OBC) to make it easier for them to get the benefit of reservation.
 
Representations were being received from OBC candidates citing difficulty in getting the benefit of reservation, Minister of State for Personnel, Public Grievances and Pensions Jitendra Singh told Lok Sabha in a written reply.
 
Difficulties were being faced as the caste certificate had space for mentioning the name of the caste or community but no space for indicating the specific resolution by which the said caste or community has been included in the central list of OBC, he said.
 
“The issue was examined in consultation with the National Commission for Backward Classes and the format of the OBC certificate has since been revised,” the Minister said.

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Asset quality improvement in banking is one-two quarters away

According to Edelweiss Securities, private banks are likely to fare well due to better risk management practices, strong liabilities traction and robust capital positions compared with PSU banks

Over the past few months, foreign fund flows have been strong and equity markets have been riding on the expectation of green shoots for pick up in industrial activity bolstered by a pro-business government. However, Edelweiss Securities Ltd feels that asset quality improvement for banking and financial services sector is still one to two quarters away.

 

"Private banks are likely to fare well due to better risk management practices, strong liabilities traction (set to capture growth) and robust capital positions. We continue to prefer large-cap private banks—Axis Bank, ICICI Bank. Also, we await clarity on capital raising by public sector (units) (PSU) banks, which is likely to be addressed in budget," said the report.

Edelweiss said, the first quarter of FY15 is expected to be a seasonally weak quarter for credit growth (industry up 14% year-on-year (YoY) and flat quarter-on-quarter (QoQ)), while contribution of cyclical factors to growth is some time away. Stable money market cost of funds is likely to be flat, but Q4 FY13 priority sector lending (PSL) build up can depress yields. While net interest income (NII) will track the credit growth number, other income is likely to be weak, though treasury income from equity book could buoy it a little. Credit cost is not likely to dip meaningfully, which together with introduction of provisions for un-hedged forex exposure of borrowers, will pressurise profit after tax (PAT), it added.

 

According to the report, banks have been selling restructured accounts to asset reconstruction companies (ARCs) before they turn into non-performing assets (NPAs), though it’s still early to label it a trend. Power finance non-banking finance companies (NBFCs) are likely to report stable asset quality, but auto NBFCs’ recovery could be delayed, Edelweiss said.

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Sensex, Nifty still under pressure – Wednesday closing report
Nifty may continue be choppy around 7,500-7,550
 
We had mentioned on Tuesday that further downside for the market is in store. The Indian market plunged sharply during Wednesday morning, rallied immediately and traded close to its yesterday’s low before another plunge towards the close. Today the market awaited the Economic Survey for 2013-14.
 
The S&P BSE Sensex opened at 25,615 while the NSE's CNX Nifty opened at 7,638. Sensex moved in the range of 25,365 and 25,684 and closed at 25,445 (down 137 points or 0.54%). Nifty moved between 7,552 and 7,650 and closed at 7,585 (down 38 points or 0.50%). The NSE recorded a volume of 118.59 crore shares. India VIX fell 5.17% to close at 18.1875.
 
The Economic Survey 2013-14 predicted a recovery in India's economic growth in 2014-15. It has forecast 5.4% to 5.9% growth in GDP in 2014-15, compared with 4.7% expansion in 2013-14. The survey also states that there are risks to the economy arising from a poor monsoon, the external environment and the poor investment climate. Among other things the survey calls for a tax regime that is simple, predictable and stable consisting of a single-rate goods and services tax (GST), fewer exemptions in direct taxes, and a transformation of tax administration. The survey also discusses the need for revamping some of the social sector schemes.
 
According to a Barclays report, India’s retail inflation is likely to hit a low of 7%  in the current financial year. ONGC (1.77%), the top gainer in the Sensex 30 pack, said that its wholly owned subsidiary ONGC Videsh has priced $1.5 billion and Euro 525 million unsecured bonds in the international capital markets. These bonds are guaranteed by ONGC. The offering was oversubscribed approximately 4.5 times in US dollar and 3.6 times in Euro currencies. ONGC Videsh intends to use the proceeds of the bond issue to refinance the bridge loans availed for the recently concluded acquisition of 16% stake in Rovuma Area 1, offshore Mozambique.
 
Coal India (2.97%) was among the top two losers in the Sensex 30 stock. The Economic Survey said that there is a need to restructure Coal India quickly to raise output to feed fuel-starved power plants. Coal India has failed to meet its output targets for years. Oil marketing companies (OMCs) could achieve only 1.37% blending of ethanol with petrol against the target of 5%, the government informed the Lok Sabha on Monday, saying it has taken cognisance of the hurdles in achieving the goals. With the crude oil prices falling, it will benefit the OMCs as it will decrease its under-recoveries on domestic sale of diesel. Indian Oil Corporation (2.90%), HPCL (2.86%) and BPCL (2.13%) were among the top six gainers in the ‘A’ group on the BSE.
 
Bharat Electronics (8.39%) was the top loser in the ‘A’ group on the BSE. In its shareholding pattern filed today with the BSE, reported a fall in the FII holding from 3.69% in March 2014 to 2.20% in June 2014 while DII holding rose from 16.92% to 17.72%. 
 
US indices closed Tuesday lower. All the Asian indices which were trading today closed in the negative. Hang Seng (1.55%) was the top loser.
 
Consumer-price inflation in China slowed last month, data today showed, while factory gate prices fell at the lowest pace in more than two years. China's consumer price index rose 2.3% in June from a year earlier, after gaining 2.5% in May. The country's measure of producer prices, which hasn't shown a year-on-year increase since January 2012, fell 1.1%. It dropped 1.4% in May.
 
European indices were showing mixed performance while US Futures were trading marginally higher.
 

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