Week 2

Surgical strike on black money

Currency notes of Rs 500 and Rs 1,000 denomination that are currently in circulation will no longer be legal money and cannot be used as medium of exchange from Tuesday midnight, as Prime Minister Narendra Modi in a surprise move clamped down on black money as well as counterfeit notes in circulation. Instead, the Reserve Bank of India (RBI) will issue new Rs 500 and Rs 2,000 currency notes. Existing currency notes of Rs 1, 2, 5, 10 and 100 denomination as well as coins continue to be legal and could be used for buying and selling. This  move would immediately press a pause button on transactions that were planned in black money. On the other hand, ordinary transactions such as buying of vegetables from the local market might be hit for a month. To enable people dispose of their existing Rs 500 and Rs 1,000 notes, Modi announced these could be deposited in banks and post offices between November 10 and December 30 by showing ID proofs. There will be no limit on such deposits. However, if old notes are exchanged for new notes, there will be a cap of Rs 4,000 till November 24. There will also be a cap of Rs 10,000 a day and Rs 20,000 a week on withdrawals from banks and Rs 2,000 a day from ATMs. This limit will be increased in the coming days.

Tata seeks investors’ backing for Mistry exit from group firms

The Tata camp is learnt to be readying ground for the removal of Cyrus Mistry as chairman from the boards of various listed companies belonging to the group. It is trying to garner support from key institutional investors to ensure a smooth sailing, if the issue comes up for shareholder voting. According to sources, Tata group executives have already met key foreign and domestic institutional investors, who own significant stake in the companies, explaining the current state of affairs and the need for their support in the near future. Although Mistry has been ousted as chairman of Tata Sons, he continues to remain chairman of various listed companies of the Tata Group. If Tata Group wants to remove Mistry as chairman of group companies, a simple majority of board members is required. If this does not happen, TataSons, as a shareholder, will need to ask for an extraordinary general meeting (EGM), and seek Mistry’s removal as a director. If Mistry is removed as a director, he would cease to be the chairman of the board.

Donald John Trump win the 2016 U.S. presidential election

Donald John Trump was elected the 45th president of the United States on Tuesday in a stunning culmination of an explosive, populist and polarizing campaign that took relentless aim at the institutions and long-held ideals of American democracy. The surprise outcome, defying late polls that showed Hillary Clinton with a modest but persistent edge, threatened convulsions throughout the country and the world, where skeptics had watched with alarm as Mr. Trump’s unvarnished overtures to disillusioned voters took hold. The triumph for Mr. Trump, 70, a real estate developer-turned-reality television star with no government experience, was a powerful rejection of the establishment forces that had assembled against him, from the world of business to government, and the consensus they had forged on everything from trade to immigration. The results amounted to a repudiation, not only of Mrs. Clinton, but of President Obama, whose legacy is suddenly imperiled. And it was a decisive demonstration of power by a largely overlooked coalition of mostly blue-collar white and working-class voters who felt that the promise of the United States had slipped their grasp amid decades of globalization and multiculturalism.

India readies to do business with Trump

India’s foreign policy minders in South Block, as also those who manage the ruling Bharatiya Janata Party’s (BJP) diaspora outreach, believe Donald Trump’s triumph offers opportunities for New Delhi to reach out to the new administration on points of congruence between Prime Minister Narendra Modi and Trump, particularly on the issue of terrorism that could help India further isolate Pakistan. Prime Minister Modi was one of the first world leaders to congratulate Trump. Modi said he looked forward to working together to enhance ties. During his election campaign, the US President-elect had good things to say about the Indian economy and Indian PM’s leadership.The election time bonhomie between Trump and Hindu groups among the Indian diaspora in the US aside, points of concerns in India about the policies of the putative Trump Administration are quite a few. South Block, as well as Indian industry, has apprehensions on several counts. Trump’s positions on climate change, outsourcing and immigration being the foremost. During his campaign, the US President-elect had also questioned multilateral trade agreements, particularly the Trans-Pacific Partnership (TPP) between the US and 11 other Pacific Rim countries.

RBI overhauls debt restructuring schemes

In a step to address corporate stress, Reserve Bank of India (RBI) on Thursday made sweeping changes to existing loan recast schemes like S4A, 5/25 and SDR. It has given lenders additional time up to 180 days for hammering out a restructuring package under the scheme for sustainable structuring of stressed asset (S4A). Previously, the time limit was 90 days. There was a need to provide reasonable time to the overseeing committee to review the processes involved in the resolution plan, RBI said in a late night notification. This is step also intended to harmonise rules across various recast schemes, as time given in other schemes such as joint lenders’ forum (JLF) is 180 days. One of the significant changes made to the strategic debt restructuring (SDR) scheme is that the new promoter should have acquired at least 26 per cent of the paid-up equity capital of the borrower company. The regulations state the new promoter of the company will also be in ‘control’ of the borrower company, according to the definition of ‘control’ provided in the Companies Act, 2013. It also adds the new promoter should be the single-largest shareholder of the borrower company, which will allow the promoter to make sweeping changes vis-à-vis board and operations, say experts. RBI has also made changes to schemes that allow banks to extend repayment schedule of loans to 25 years, with the option to refinance at the end of five years.Now, it has allowed lenders to extend the 5/25 scheme to new project loans. The scheme can also be extended to existing project loans with an aggregate exposure of Rs 250 crore to banks, compared to the earlier mandate of Rs 500 crore.

 

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