Business, Economy & Banking Current Affairs

Investment in P-notes hits 9-year low at Rs 80,341 crore

Investments through participatory notes (P-notes) into Indian capital markets- equity, debt, and derivatives have plunged to over nine-year low of Rs 80,341 crore till July 2018-end. This is the lowest level since April 2009 when the cumulative value of such investments stood at Rs 72,314 crore.

Background

The decline comes amid stringent norms put in place by market watchdog Securitas Exchange Board of India (SEBI) to check misuse of these instruments.  In July 2017, Sebi had notified stricter norms stipulating fee of US $1,000 on each instrument to check any misuse for channelising black money. It had also prohibited FPIs from issuing such notes where underlying asset is derivative, except those which are used for hedging purposes. Earlier in April 2017, SEBI also had barred resident Indians, NRIs and entities owned by them from making investment through P-notes.

Participatory Notes (P-notes)

P-notes are offshore/overseas derivative instruments (ODIs) issued by registered foreign portfolio investors (FPIs) to overseas investors who wish to be part of the Indian stock market without registering themselves directly. They, however, need to go through due diligence process. P-Notes are not used within the country but are mainly used outside India for making investments in shares listed in the Indian stock market. SEBI had permitted FIIS to participate and register in the Indian stock market in 1992.  Earlier, investing through P-Notes is very simple and is very popular amongst FPIs, FIIs.

Month: Categories: Business & Economy Current Affairs 2018

Tags:

Banks Board Bureau hires Egon Zehnder, Hay Consultants to develop strategies

Banks Board Bureau (BBB) has appointed two firms Egon Zehnder International Pvt. Ltd and Hay Consultants Pvt. Ltd to assist in developing strategies for top bank management.

Key Facts

Egon Zehnder was appointed as knowledge partner to design, implement and institutionalise a flagship leadership development strategy for state-run banks in India. Hay Consultants was appointed to assess leadership competencies and potential capabilities of people appearing for post of whole time directors in state-run banks. Their expertise will help to bring in experienced professionals as whole-time directors is part of  focus to ensure more effective monitoring of decisions taken by state owned bank management.

Comment

The appointment two consultants to assist BBB is indication of growing stress on leadership skills in public sector banks (PSBs). Their appointment comes at a time when state-run banks have been struggling to appoint quality people in top management. It also comes at a time efforts are being made by government and Reserve Bank of India (RBI) to revive PSBs suffering from huge levels of non-performing assets (NPAs) and losses.

Banks Board Bureau (BBB)

BBB is autonomous body of Central Government tasked to improve governance of Public Sector Banks (PSBs), recommend selection of chiefs of government owned banks and financial institutions and help banks in developing strategies and capital raising plans.

It was announced by Union Government in August 2015 as part of seven point Indradhanush Mission to revamp PSBs and started functioning in April 2016. It had replaced Appointments Board of Government. It is housed in Reserve Bank of India’s (RBI) central office in Mumbai, Maharashtra.

It comprises eminent professionals and officials for public sector banks (PSBs). Current BBB Chairman is Bhanu Pratap Sharma. The first BBB was set up in February 2016 under chairmanship of former CAG Vinod Rai for two-year term that ended in March 2018

Functions of BBB

  • Give recommendations for appointment of full-time Directors as well as non-Executive Chairman of PSBs.
  • Give advice to PSBs in developing differentiated strategies for raising funds through innovative financial methods and instruments and to deal with issues of stressed assets.
  • Guide banks on mergers and consolidations and governance issues to address bad loans problem among other issues.

Month: Categories: Banking Current Affairs 2018

Tags:

Advertisement

1...89101112...203040...1,109