Business News at 09:30 am on 24th November 2023

Let’s begin. Finance Industry Development Council, a representative of non-banking financial companies, has asked the Reserve Bank of India to re-evaluate the sharp increase in risk weights on banks’ loans to the sector. It has also sought restoration of risk weights on NBFCs where majority of the lender’s loan book consists of MSME loans, vehicle loans and other categories of loans that have been excluded from the purview of the RBI circular. FIDC in a letter sent to RBI on Thursday said, quote, “While we understand the purpose of the bank to regulate credit flow to the consumer sector, this measure inadvertently, also has the potential to sharply reduce flow of credit to MSMEs, self-employed and other sectors,” unquote.

Meanwhile, Communications and IT minister Ashwini Vaishnaw on Thursday asked all social media platforms to present their plan of action within the next 10 days to curb the growing menace of deepfakes and other misuse of AI generated technologies. The minister who earlier in the day held a meeting with all the platforms which included the likes of Google, Facebook, Instagram, YouTube, Snapchat, Telegram, industry body Nasscom and several AI academicians, said that their inputs would be incorporated by the government in framing new regulations that may impose penalties on both creator and platform hosting deepfakes. The platforms have been asked to present their plans on four pillars – detection of deepfakes, misinformation; how to prevent spread of misinformation; how to strengthen reporting mechanisms; and increasing awareness.

Over to banking. Public sector lenders State Bank of India and Bank of Baroda has received encouraging response from customers for the Central Bank Digital Currency or digital rupee. Country’s largest lender has recorded over 900,000 transactions from 400,000 lakh users since December 1 last year. The number of CBDC users for Bank of Baroda has reached 250,000. Balaji Rajagopalan, Chief Technology Officer, SBI on the sidelines of banking conference FIBAC 2023 organised by FICCI said that the pilot of CBDC has been successful. They have 900,000 plus transactions from December 1 last year and have onboarded over 40,000 merchants. Bank of Baroda is targeting to increase the number of CBDC users to 1 million by the end of current financial year.

In some more banking news, RBI deputy governor Rajeshwar Rao recently said the regulatory framework must be redefined in such a manner that it supports innovation. Rao said this at an event organised by the Federation of Indian Chambers of Commerce and Industry and the Indian Banking Association. He said, quote, “The innovations and collaborations need to be well thought out, risks properly analysed and mitigation plans must be put in place before offering them to customers,” unquote. In his speech, Rao shed light on some of the changes that the banking industry may undergo in the coming decade. The banks will transition to an ecosystem approach from a sectoral one, wherein they will provide a wide range of services in addition to core banking.

Moving on. India’s oil producing companies – Oil and Natural Gas Corporation, Oil India Ltd, and various joint ventures – produced 15.9 million tonne of crude oil in April-October in the current financial year, down 3% on year, data from the Petroleum Planning and Analysis Cell showed. This was even as crude oil imports rose 0.6% to 134.4 million tonnes in the first seven months of the fiscal year. In October alone, imported stood at 18.5 million tonnes, up 2.2% on year. The country’s oil producing companies had set a target of producing 17.6 million tonnes of crude oil for the first seven months of 2023-24. Crude oil prices have remained subdued in the current financial year.

Next up, industry. UltraTech Cement, India’s largest cement producer, has evinced interest in acquiring Kesoram Industries’ cement assets and commenced negotiations to acquire promoters’ stake in the firm. Kesoram Industries – which has presence in cement, tyres and tubes, heavy chemicals and spun pipes – sells cement under the brand Birla Shakti. According to the company’s website, it has two cement manufacturing plants – at Sedam, Karnataka and Basantnagar, Telangana. It has a total production capacity of 10.75 million metric tonne. It also offers consulting, research, trading and engineering, among other services. Sources said that the discussions were on, but declined to state whether this would culminate in a deal.

Lastly, let’s look at the stocks you need to watch out today. These include L&T Finance, UltraTech Cement, JSW Steel, Lupin, and BHEL among others. For those unaware, &T Finance has signed a $125 million loan pact with the Asian Development Bank to support financing in rural and peri-urban areas in India, particularly for women borrowers. UltraTech Cement, India’s largest cement producer, has also evinced interest in acquiring Kesoram Industries’ cement assets and commenced negotiations to acquire promoters’ stake in the firm.