BQuick On Dec. 3: Top 10 Stories In Under 10 Minutes   

Here’s a roundup of the day’s stories in brief.

1. RBI Pulls Up HDFC Bank For Technical Glitches...

The Reserve Bank of India has asked HDFC Bank Ltd. to put a temporary halt to all digital banking launches and sourcing of new credit card customers. This comes after the lender faced a series of technical glitches over the last two years.

• The RBI has also asked the bank’s board to examine the lapses and fix accountability.

• HDFC Bank said that the lifting of the regulatory measures would be considered after satisfactory compliance with critical observations made by the RBI.

Understand why RBI imposed strictures on the bank, and what the lender’s CEO had to say.

...Meanwhile, SBI's YONO Too Faces Glitches

Soon after HDFC Bank's debacle, State Bank of India informed customers that its mobile banking application was facing technical glitches due to a system outage.

• SBI said it was working towards restoring its YONO app to provide for an uninterrupted banking experience, according to its official Twitter handle.

• A lot of SBI customers on Thursday also took to the social networking platform to complain about the error on the YONO app and its UPI server, using #sbidown.

Like HDFC Bank, SBI’s YONO and the bank’s UPI service, too, is not facing technical glitches for the first time.

2. Flipkart’s PhonePe Valued At $5.5 Billion

Walmart Inc.-owned Flipkart will spin off PhonePe into a separate unit and infuse capital, valuing the digital payments business at $5.5 billion.

• PhonePe, following the spin-off, is raising $700 million in primary capital, in a round led by Walmart with the participation of some existing investors, it said in a statement.

• The platform commands a third of the transaction volumes via the Unified Payments Interface.

• "This partial spin-off gives PhonePe access to dedicated long-term capital to pursue our vision of providing financial inclusion to a billion Indians,” Sameer Nigam, founder and chief executive officer at PhonePe, said in the statement.

Meanwhile, Flipkart co-founder Binny Bansal will join PhonePe’s board.

3. Top Portfolio Managers Fail To Beat Benchmarks

India’s top portfolio managers returned gains for the fifth straight month but lagged benchmark indices in October as small and mid caps underperformed.

• The top 60 portfolio managers by assets tracked by BloombergQuint posted an average return of 1.05% in October.

• That compared to 4% and 3.5% gain in S&P BSE Sensex and Nifty 50, respectively, during the month.

• The underperformance in October stemmed from subdued returns by the small- and mid-cap stocks.

Here’s how India’s top 60 portfolio managers performed in October and so far this fiscal.

4. Sensex Ends Flat; Burger King IPO Sees Bumper Demand

Indian equity markets closed the weekly options expiry session at levels nearly similar to Wednesday. Benchmark indices traded in a narrow range throughout the session to end with modest gains.

• The S&P BSE Sensex ended six points higher at 44,624 while the NSE Nifty 50 index ended 18 points higher at 13,136.

• The Sensex traded in a 400 point range while the Nifty was locked in a 90-point range.

• Burger King India's initial public offering remained in high demand on the second day of bidding with the issue being subscribed 9.38 times.

Follow the day’s trading action here.

7. India’s Small Firms Shun Loan Restructuring Despite Covid Pain

Fewer than expected small businesses are making use of the restructuring permitted by the Reserve Bank of India, according to bankers.

• This comes at a time when firms steer clear of debt recasts, which may affect their credit ratings and make future borrowing more expensive.

• The country’s largest lender State Bank of India has seen close to 50,000 of its MSME borrowers seek restructuring of dues, according to CS Setty, managing director at the bank. The number is less than 5% of the 17 lakh MSME borrowers on the bank’s book.

• Other lenders have also seen similar experiences.

Here are the possible reasons why small businesses may be avoiding restructuring loans.

8. Franklin Templeton Will Need Unitholders' Consent To Wind Down Schemes

The Supreme Court today allowed Franklin Templeton Asset Management (India) Pvt. to convene a meeting of its unitholders to seek their consent to wind down six of its mutual fund schemes.

• “Without prejudice to rights and contentions of all parties, the trustees are permitted to call a meeting of unitholders to seek their consent/approval,” the interim order passed by a two-judge bench of the top court said.

• “Steps in this regard be taken within a period of one week from today.”

• The top court, in a hearing today, also directed a stay on redemption payment being made to unitholders for the time being.

Franklin Templeton said the top court’s order will be helpful in ensuring orderly monetisation and distribution of scheme assets.

9. India’s Informal Workers Among Worst Hit In The World

The Covid-19 pandemic has led to job losses and wage cuts across the world, reaffirmed the International Labour Organization’s Global Wage Report for 2020. While data across countries is not strictly comparable, the findings of the report suggest that the drop in wages seen by India’s informal workers may be among the sharpest.

• Across India, informal workers experienced a sharp fall in wages of 22.6%, while formal workers’ wages were cut by 3.6% in lockdown 1.0 and lockdown 2.0 between March 24 and May 3, 2020.

• The paper estimated that workers informally employed in the unorganised sector suffered a wage loss amounting to Rs 63,550 crore, while the total wage loss was estimated at Rs 86,448 crore over this time.

Read more here.

10. Government-Farmers Talks Inconclusive

The fourth round of talks between the central government and agitating farmers remained inconclusive, PTI reported citing unnamed sources. Farmers remained resolute on their demand for a special Parliament session to be called to abolish the three farm laws introduced by the Narendra Modi government.

With tens of thousands of farmers marching upon Delhi, the answer for the government isn't to reverse the laws, but to go one step further, writes Mihir Sharma.

• The government insists that the current grain procurement system with the price guarantees will not end.

• But, given how it rammed through laws hastily and with minimal discussion, farmers don’t believe the pledge.

And they shouldn’t, because the current system can’t last.