Business Today 21 May 2017

The post-Independence Indian pharma industry was really created by a generation of scientist-entrepreneurs who took advantage of the two changes made by the government in the 1970s. The first was the new Patent Act that recognised only process patents of a drug. Till then, India followed a patent law that was modelled on the patent laws of western countries and recognised both the product and process patent of a drug. Since all the original drugs were developed by global giants, they dominated the market as well. Even the bulk drug manufacturing in India was dominated by multinationals. The Indian Patent Act, 1970 changed that. It recognised only process patents, and not product patents. This essentially meant that any company that could create the same drug following a different chemical process…

It’s High Time Banks Move Fast for Dissolving NPAs This refers to your cover story Cleaning the Bad Loans Mess (May 7). The article was a good summation of issues that have been hitting creditworthiness and discussions on possible solutions to NPAs of both private and public sector banks. It is appalling that the NPAs have been allowed to soar so high and that the lenders woke up only after policy interventions of the Centre and the RBI. In this era of digital money, virtual exchange, and gee-whiz technology for banking transactions, the Indian financial system has been damaged severely. When the RBI earlier slashed repo rates under Raghuram Rajan's tenure, the banks did not pass the savings to debtors, and NPAs led to administrative constraints from the RBI, apart…

QUOTE “As many have pointed out, it is not clear that we need so many sector banks. The system could be better off if they are consolidated into fewer but healthier banks” RBI Governor Urjit Patel INDIA TO SOON GET KIA CARS Kia Motors Corp, a unit of Hyundai, will invest $1.1 billion in Andhra Pradesh to build its first manufacturing facility in India. Kia has signed a memorandum of understanding with the state government in this regard. The company plans to start selling a compact sedan and a compact SUV from 2019. CAIRN CASE: SETBACK FOR INDIA An international arbitration panel has rejected India’s demand for a stay on an arbitration proceeding by Cairn Energy plc against a `10,247 crore retrospective tax notice. The tax department had in 2014…

01 03 BRAINSTORMING WHAT: Global Think Tank Summit 2017 WHEN: May 1-3, Yokohama, Japan WHAT TO LOOK FOR: The Asian Development Bank Institute and the Think Tanks and Civil Societies Program of the University of Pennsylvania are organising the Global Think Tank Summit 2017. The meet is expected to attract over 100 think tank officials from over 80 organisations in more than 60 countries. The speaker list includes Haruhiko Kuroda (Governor, Bank of Japan) and Muhammad Yunus (Nobel Peace Prize Laureate; Founder of Grameen Bank). The event will generate papers and policy briefs. 05 LEARNING INNOVATION WHAT: Workshop on ‘Innovation for Market Leadership’ WHEN: May 5, Chennai WHAT TO LOOK FOR: The one-day CII workshop shall provide insights on what innovation is all about and its importance in creating leaders in…

In April last year, Axis Bank came out with a ‘watch list’ of `22,000 crore-plus stressed corporate loans, accounting for 15 per cent advances to companies. The bank, headed by Shikha Sharma, a former ICICI banker, admitted that 60 per cent of these loans would become non-performing assets, or NPAs, in the next two years. To the bank’s surprise, half turned into full-blown NPAs by the end of the first year itself, that is, by March 2017. The bank is now staring at further slippages as a bulk (almost 60 per cent) of the remaining loans in the list have been given to the battered power sector. Exposure to other troubled sectors such as steel, oil & gas and cement could create further problems. Things have turned so bad at…

TELECOM’S VITAL STATISTICS # `82,200 CRORE: EXPOSURE OF BANKS # 10% OF BANKS’ INFRASTRUCTURE PORTFOLIO # 1 % OF BANKS' GROSS LENDING TO ALL SECTORS, INCLUDING RETAIL PROVIDING FOR BAD TIMES HIGHER PROVISIONING FOR STANDARD ASSETS COULD AFFECT THESE SECTORS figures are % of advances to these sectors; for September 2016; Source: RBI The Reserve Bank of India, or RBI, has told banks to do higher provisioning than the regulatory minimum for even standard assets, or good companies, in stressed sectors. The higher provisioning for standard assets, that is, companies that are paying interest and principal regularly, will cover sectors such as infrastructure, power, metals, and telecom. The RBI has, in fact, named telecom as one of the sectors for which banks should consider higher provisioning for standard assets by…