Business Today 22-Mar-20

Banking is not for the faint-hearted. Big bucks chase big dreams calling for big decisions. Undoubtedly, it leads to big successes and, often, big failures as well. But the great fall is triggered by the minutest of errors of judgement. Or corruption, as several high-profile bank CEOs, who fell prey to the temptations, have proved in the past three years. Business Today’s annual study of Best Banks is always an opportunity to reflect on the sector that powers the economy’s growth engines. This year’s package led by Executive Editor Anand Adhikari has concluded that Indian banking is coming of age and is finally the Big Boys’ Club. Especially, with the Centre working on the merger of 10 state-run banks into four with assets size of ₹10 lakh crore-plus and mid-sized…

OWNER’S PRIDE FPI holdings in BSE 200 firms were $451 billion in December 2019 compared with $419 billion at the end of September 2019. This translated into a seven-quarter high ownership of 24.3 per cent BULLISH BETS Banks and insurance have seen steady FPI buying since the Dec 2018 quarter OVERALL SHOW After pulling out $3.17 billion in the second quarter of FY20, FPIs bought equities worth $6.07 billion in Dec 2019 NEGATIVE VIEW IT services, auto & components and consumer staples companies have seen the steepest decline in FPI stakes over the past five quarters FPIs' MOST FAVOURED STOCKS Among the BSE 200 index companies, the highest increase in last two quarters was in Zee Entertainment, Bandhan Bank and RBL Bank OUT OF FAVOUR They sold large stakes in…

Capacity utilisation of manufacturing companies has been declining. In quarter ended September 2019, it was at the lowest since the beginning of the RBI’s OBICUS study in 2008/09 866 Number of manufacturing companies in RBI’s 47th round of OBICUS (Order Books, Inventories and Capacity Utilisation Survey) study 4.5% Contraction (y-o-y) in average new orders during September 2019 quarter. This is the first fall since December 2016 13% Average backlog orders recorded a three-month high on a y-o-y basis 49.4% Fall in total inventories as proportion of sales in the September quarter…

↘ The number of active mobile subscribers (those who use services at least once a month) increased by 3.5 million in December 2019 after a decline of 2.1 million in November ↘ Reliance Jio added 3 million subscribers, Bharti 1.4 million, whereas Vodafone Idea lost 1.1 million ↘ However, there has been a decline of 3.2 million in total wireless subscriber base to 1,151 million in December 2019 ↘ The main reason for the fall is the increase in interconnect usage charges by 25-30% Source: Motilal Oswal Financial Services…

After declining for three months, cargo traffic grew 5.6% y-o-y in December 2019, thanks to iron ore movement 60.6 MILLION TONNES Cargo handled by major ports; higher than 57.4 million tonnes in December 2018 0.8% Growth in total cargo traffic during April-December 2019, compared to 3.8% in the corresponding period last year 42.7% Increase in iron ore traffic. Other major commodities whose cargo traffic increased in December 2019 are petroleum, oil and lubricants (11.4%)…

Various measures taken by the RBI and banks have led to early detection of fraud. As a result, amount of fraud has fallen sharply from ₹38,548 crore in FY17 to ₹5,244 crore in the first three quarters of FY20 ↘ A declining trend can also be seen in public sector banks, where frauds worth ₹35,578 crore were reported in FY17. This has fallen to ₹3,781 crore in the first three quarters of FY20 ↘ There is significant time lag between occurrence of a fraud and its detection. For instance, amount involved in frauds that occurred between FY01 and FY18 but were detected later accounted for about 90.6% of the frauds reported in 2018/19 in value terms…