BQuick On March 6: Top 10 Stories In Under 10 Minutes  

This is a roundup of the day’s top stories in brief.

1. Yes Bank's Rescue Plan Featuring SBI

State Bank of India will acquire a 49 percent stake in Yes Bank Ltd. at a price not less than Rs 2,450 crore approximately, a draft reconstruction scheme has proposed. Reserve Bank of India, under whose recommendation the government has imposed a one-month moratorium on Yes Bank, has placed this scheme in the public for comments.The important features of the proposed scheme are:

• Yes Bank’s authorised capital shall stand altered to Rs 5,000 crore from the current Rs 800 crore.
• The number of equity shares will be increased to 2,400 crore from the current 255 crore (face value Rs 2 each) aggregating to Rs 4,800 crore.
• SBI shall agree to invest in the equity of the reconstructed bank such that post infusion it holds 49 percent.
• The capital infusion will be at not less than Rs 10 per share (Face value Rs 2, premium Rs 8)
• SBI shall not reduce its holding below 26 percent for three years from date of capital infusion.

Get a detailed look at what the scheme has proposed regarding a new board, employees and AT-1 bonds.

Here’s more related coverage around the Yes Bank crisis:

• Yes Bank Shares Fall 85% Intraday To Lowest On Record
• Here’s How Much Mutual Funds Are Exposed To Yes Bank Debt
• Mutual Funds With Equity Exposure To Yes Bank
• Max Financial Falls The Most Since July 2016 On Yes Bank Crisis

2. Yes Bank Fallout: ATMs Shut, Cards Inactive, Payment Services Affected

The RBI directed Yes Bank to shut down its ATMs and said that cash be disbursed to customers only through branches. The National Payments Corporation of India took the banks’ ATMs offline and Yes Bank customers were not able to withdraw cash from other banks' ATMs.

• Several companies using Yes Banks’ application programme interface for connecting with the UPI platform were also impacted.
• Around 21 of the 38 live third-party application providers are using bank APIs provided by Yes Bank for UPI payments. These include Swiggy, Hungrybox, MakeMyTrip, PVR, Myntra, Flipkart and Airtel.
• Besides, Yes Bank's point of sale terminals, debit cards and credit cards have all been disconnected.
• A senior official told BloombergQuint that Yes Bank is reworking its systems to meet the Rs 50,000 withdrawal limit and hence everything has been kept offline till then.
• PhonePe, which had earlier faced disruption, said it restored its payments mechanism for transactions made using debit and credit cards and through its wallet on its mobile app.

Follow the fallout from the Yes Bank crisis here.

Finance Minister Nirmala Sitharaman said that the government will not let any financial institution collapse as she announced the RBI's restructuring plan for embattled Yes Bank.

• “As I have repeatedly said, I will not allow for any institution to fall off a cliff,” Sitharaman said in a press conference.
• “We can assure all depositors that their money is safe. This will be resolved very speedily and a restructuring of the bank will happen.”
• Finance Minister also said that she has asked the RBI to submit a report on the reasons that led to the failure of Yes Bank.

Here are the other highlights from the press conference.

3. Sensex Hits Six-Month Low, Rupee Weakens To Lowest Since 2018

Indian equity markets ended off the lowest point of the day but with significant losses, and closed the week with their third straight weekly decline.

• The S&P BSE Sensex Index fell 2.32 percent to end at 37,576, its lowest level since Sept. 19.
• For the week, the benchmark index was down 1.88 percent.
• The NSE Nifty 50 index too ended off the day's low but with losses of 2.57 percent.
• The index was down 1.92 percent this week.

Follow the day’s trading action here.

India’s rupee weakened to its lowest since 2018 after the central bank seized control of beleaguered Yes Bank, intensifying the risk-off mood fueled by the spread of coronavirus cases in India.

• The rupee fell 0.63 percent to Rs 73.78 against the dollar.
• Friday’s selloff capped a third straight week of losses for the rupee.
• “In such panic-driven markets, the RBI may have to step in quite aggressively, else USD/INR risks moving toward the all-time high,” said Anindya Banerjee, currency strategist at Kotak Securities.

While the rupee was initially insulated, a rising number of virus cases in India has led to fears about the impact on economic activity.

4. U.S. Markets Slump, Crude Tanks

U.S. stocks tumbled for a second day, while Treasury yields plunged to fresh records amid mounting concerns that the coronavirus outbreak will derail economic growth.

• The S&P 500 pushed it two-day rout to more than 6 percent as cases of the virus multiplied across the U.S., shaking confidence in the world’s largest economy.

• European and Asian benchmarks also suffered deep declines.

• The woes seeped into corporate bonds as the credit market’s fear gauge jumped the most since 2011.

• Ten-year Treasury yields plunged to as low as 0.69 percent, while the dollar fell for the sixth time in seven days.

• Oil tanked as OPEC has been unable to agree on deep output cuts to combat the impact of Covid-19.

Get your daily fix of global markets here.

Global equities witnessed one of their sharpest declines in history on fears of economic disruptions caused by the novel coronavirus outbreak.

• Howard Marks says it's okay to do some buying now because things are cheaper.

• Ray Dalio says that he'd seek to neutralise himself rather than bet on something he does not know.

• Chris Wood says that the coronavirus shock will be deflationary.

Read more to see how these veteran investors are changing strategies to tackle the virus impact.

6. Why The Auto Sales Slowdown Continued In February

Retail auto sales remained subdued in February even as dealers offered discounts to exhaust existing inventory ahead of the transition to stricter emission standards.

• Vehicle registrations—a measure of sales at dealerships—fell 2.3 percent sequentially to 16.80 lakh units last month, according to data from 1,225 regional transport offices in 32 states and union territories, collated by BloombergQuint from the website of the Ministry of Road Transport and Highways.
• It, however, rose 1.2 percent over last year.
• Factory-gate sales for larger car and tractor makers were higher than retail sales in February, according to data released by companies.
• With sales at dealerships not picking up, the data indicates that companies are pushing Bharat Stage-IV inventory ahead of the April 1 rollout of BS-VI emission norms.

Both retail and factory-gate shipments failed to make a meaningful recovery from a prolonged slowdown.

7. Is This Aditya Puri’s Successor At HDFC Bank?

Harit Talwar, the head of Goldman Sachs Group Inc.’s consumer-banking business, is in the running for one of India’s top banking jobs.

• HDFC Bank Ltd., India’s largest private-sector lender, has held talks with Talwar for the top role, according to people with knowledge of the matter.
• The bank has been looking for a new leader to replace Aditya Puri, one of the longest-serving banking chiefs in India, whose term ends in October.
• The Mumbai-based lender has a market capitalization of about $86 billion, giving it a bigger standing than major U.S. banks like Goldman and Morgan Stanley.

Talwar joined Goldman in 2015 and was the face of its push into consumer banking.

8. This Brokerage Says Reliance Jio Will Be In Profit Next Year

The telecommunications upstart backed by Asia’s richest man will book its first profit at “normal” depreciation in the year starting April, analysts at Sanford C. Bernstein & Co. predict.

• Reliance Jio Infocomm Ltd. has elbowed its way into the No. 1 spot among India’s wireless carriers by offering free voice calling and cheap data services, undercutting incumbents Bharti Airtel Ltd. and Vodafone Idea Ltd.
• Jio, as the company is called, has already reported quarterly profit, but the figures do not reflect normal depreciation levels, according to the Bernstein report.
• “Indeed, by FY23, we expect telco will overtake energy to become the largest Ebitda (earnings before interest, tax, depreciation and amortization) contributor,” wrote analysts including Neil Beveridge and Chris Lane in the report.

Here are the key insights from the brokerage report.

9. Supreme Court Asks Activist Harsh Mander To Respond To Hate Speech Allegations

The Supreme Court asked activist Harsh Mander on Friday to file his response to the allegation of the Delhi Police that he had also delivered hate speeches during the anti-Citizenship Amendment Act protests in Delhi.

• The top court, however, made it clear that it had not issued a contempt notice to Mander and said it would hear the plea on April 15.
• The Delhi Police, in its plea filed on Wednesday, sought initiation of contempt proceedings against Mander for his alleged derogatory remarks, making insinuations against the apex court and its judges.
• Appearing for Mander, senior advocate Dushyant Dave said he had perused the statement attributed to the activist and found nothing contemptuous and objectionable in those.
• Appearing for the Delhi Police, Solicitor General Tushar Mehta opposed the submission and said he had come across one more statement that was objectionable and brought disrepute to the judiciary.

Mander has also sought registration of FIRs against certain BJP leaders for allegedly delivering hate speeches.

10. Economists Sound A Warning To India

A group of economists have cautioned India’s government against clubbing data collection for its controversial citizens’ register with the census exercise, saying it could have implications for the nation’s statistical system.

• The census is a basic household and population list based on anonymous data, whereas there are fears the National Population Register could be used to question a person’s citizenship, according to an open letter to the government by 190 economists including Jayati Ghosh, a professor at New Delhi’s Jawaharlal Nehru University, and Maitreesh Ghatak of the London School of Economics.
• Conducting the population register along with the census violates the rules of the Census Act 1948 that bars anyone from accessing “any book, register or record made by a census-officer in the discharge of his duty,” they said, adding the law also prohibits using census data as evidence in any civil proceeding.

The economists urged the government to ensure the census exercise is safe and uncontaminated by any other factors.