Money & Banking
Reserve bank revises ECB framework
Kolkata : Considering the critical need for long-term funding of infrastructure sector in the country, the Reserve Bank of India (RBI) has revised the overseas borrowings or external commercial borrowings (ECBs) framework to allow infrastructure firms to borrow for up to five years.
 
"Companies in the infrastructure sector, non-banking financial companies -infrastructure finance companies, NBFCs-asset finance companies, holding companies and core investment companies (CICs) will also be eligible to raise ECBs under Track I of the framework with a minimum average maturity period of five years, subject to 100 percent hedging," the RBI said in a statement on Wednesday.
 
Under the revised framework, exploration, mining and refinery activities would also be treated as infrastructure for ECB purposes.
 
Holding companies and CICs are allowed to use ECB proceeds only for on-lending to infrastructure special purpose vehicles. 
 
The minimum average maturity of foreign currency convertible bonds/foreign currency exchangeable bonds is five years, irrespective of the amount of borrowing. 
 
The RBI said the ECB framework is not applicable in respect of the investments in non-convertible debentures in India by registered foreign portfolio investors.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Trade unions give nationwide strike call on September 2
Chennai : The majority of central trade unions have called for a one-day nationwide strike on September 2 in protest against the central government's decision to amend labour laws, the leader of a union said.
 
"The central trade unions have called for a nationwide strike on September 2 this year against the central government's decision to amend the labour laws," M. Shanmugam, general secretary of the Labour Progressive Federation (LPF), told IANS.
 
He said the decision to go on strike was announced at the national convention.
 
According to Shanmugam, as a run-up to the September 2 strike, unions will hold joint conventions across the country.
 
He said the Bharatiya Mazdoor Sangh (BMS) did not attend the trade unions meeting held in New Delhi on Wednesday.
 
The unions are opposed to the central government's decision to amend the labour and other laws giving a free hand to the employers.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Foreign equity will propel e-commerce retailing
New Delhi : The e-commerce sector in India is poised for multi-fold growth, with the government allowing 100 percent foreign equity in e-retail, trade and industry experts said on Wednesday.
 
"Allowing 100 percent FDI in e-commerce will enable companies and investors to draw long-term plans with certainty as the government has dispelled ambiguities," Ficci e-commerce committee co-chair Pawan Kaul said in a statement here.
 
The government on Tuesday permitted 100 percent conditional foreign equity in the retail e-commerce segment when the products sold are also manufactured in the country, as also for single-brand foreign entities.
 
Terming this a progressive initiative, Federation of Indian Chambers of Commerce and Industry (Ficci) secretary general A. Didar Singh said the conditions under which foreign equity was allowed would help in attracting more investment into the country.
 
"Clarity in the FDI policy and the market potential will attract more overseas investment, create more jobs and provide stimulus to manufacturing," Singh said.
 
Singh, however, wanted the central government to prevail upon states to abolish entry taxes to prevent double taxation, which was affecting the industry's growth.
 
Leading American research and advisory firm Gartner research director Sandy Shen said allowing foreign equity in the e-commerce industry would make it easier for all stakeholders, global and local, to compete online under well-defined rules of the game, especially on pricing.
 
"Foreign equity in e-commerce retailing, however, will not reduce competition in the market where players are in a land-grabbing mode to increase customers and merchants," Shen said.
 
More than getting foreign equity, present and potential e-commerce players will have to make their platforms more appealing with better logistic, payment and purchase experience.
 
"Price pressures will remain for merchants as its primary reason for people to shop online. Even when marketplaces are not allowed to influence pricing, there are still levers they can use," Shen noted.
 
GreenDust founder and chief executive Hitendra Chaturvedi said the move would strengthen the investor confidence in the Indian economy and help create cleaner e-commerce models.
 
Noting that the riders on foreign equity had removed confusion, IndiaMart founder and chief executive Dinesh Agarwal said though business-to-business (B2B) had 100 percent FDI, clarity in the business processes would facilitate similar investments in business-to-customer (B2C) segment.
 
"The nascent SME sector may fall prey to the predatory pricing and the 25 percent limit for a single player is high and may not be in the interest of the sector," Agarwal claimed.
 
Echoing views of other industry players, ShopClues co-founder Sanjay Sethi said foreign equity in e-retailing would benefit consumers, help in making more goods in the country and create more jobs for locals.
 
"Clarity on the definition of e-commerce and marketplace model will allow many national and international players to enter the industry through marketplace route," Sethi pointed out.
 
Observing that foreign investment was a key component to drive the 'Make in India' campaign, CareOnGo co-founder Aditya Kandoi said the government had helped lift the bureaucratic mindset around the business.
 
"The initiative will give push to the spirit of start-up culture. The 25 percent cap on total sales and other rules will help pave a level-playing field and curb predatory pricing," Kandoi added.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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