Flipkart acquires Myntra

India’s largest online retailer, Flipkart.com, acquired fashion e-retailer Myntra.com. While the exact size of the deal could not be ascertained, some reports estimate it to be of Rs 1,800-2,000 crore

The deal is expected to consolidate Rs 62,000-crore e-commerce market of India. The acquisition by Flipkart reflects the company’s intention to tap into the online sales of apparel and fashion accessories where it has had limited. Apparel and fashion domain is the largest shopping categories in the online retail space.

As per experts, by 2019, the electronics and fashion domain will account for 30% of the sales in the online e-commerce space.

RBI permits banks to provide loans to exporters for up to 10 years

Banks have been allowed by the RBI to give loans with tenures of up to 10 years to exporters to help them ensure capital flows to fulfil long-term contracts. As per current rules, banks are allowed to provide loans for up to 1 year only.

RBI has permitted banks to allow exporters having a minimum of 3 years’ satisfactory track record to get long-term export advance up to a maximum tenor of 10 years to be utilized for execution of long-term supply contracts for export of goods.

This facility is available with certain caveats, including:-

  1. An interest rate limit of 200 basis points above the London interbank offered rate (Libor), a global benchmark.
  2. Exporters getting loans of $ 100 million or above are required to report the transaction immediately to the RBI.
  3. There should be irrevocable supply orders in place.
  4. The contract with the overseas party or buyer should be examined and must clearly specify the nature, amount and delivery timelines of products over the years and the penalty in case of non-performance or contract cancellation.
  5. Export advances which are classified as non-performing assets as per RBI norms can’t be used to liquidate rupee loans.
  6. Exporters should have the capacity, systems and processes in place to ensure that orders over the duration of the tenure can be executed.