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Credit policy review: RBI keeps repo rate unchanged at 7.75% RBI surprised everybody by keeping the policy rates unchanged despite high inflation. The governor cited weak economy and expected decline in food prices as primary reasons to maintain the status quo. FLIPs View: This is interesting. He sounds hawkish, but is waiting for data. It will come as a big relief to ` banks and the corporate world, as he has done this despite tapering fears, and over 90% of the market expecting it. Is he privy to what fed is going to do? ------------------------------------------------Central bank moots stringent norms on stressed loans RBI has proposed stringent norms to deal with the problem of rising NPAs across banking sector. Guidelines include: Banks to classify accounts into Special Mention Accounts (SMAs) if the payment is overdue for a month (This wont attract additional provisioning). RBI will set up a central repository of information on all loans of more than INR 5 crore value and make this available to all lenders. NBFCs will be allowed to sell their bad loans, these entities, along with private equity firms, are now also allowed to participate in the NPA auction process. FLIPs View: This continues to remain the main focus for the govt., and the biggest problem facing public sector banks today. The signals are clear that banks must take more stringent steps to recover this money. ---------------------------------------------------SEBI to make IPO grading voluntary SEBI is considering to make the IPO grading nonmandatory. This is because IPO grading hasnt helped in the efficient price discovery in the past.
Updates @ FLIP
Helping them grow! FLIP has recently entered into an arrangement with few budding IT companies to help their employees in developing domain competence. These include emerging names like: Nous Infosystems Mindcraft Software Pvt. Ltd. Intertec Systems VSM Software Pvt. Ltd. Business Analysts/Tech Associates etc. in these companies will undergo FLIP courses to serve their clients better. FLIP - setting a BFS knowledge benchmark.
FLIPs View: I am not sure it is such a good idea. Grading like a credit rating helps an investor make a decision. ---------------------------------------------------Double whammy for RBI: Retail inflation surges, IIP contracts Retail inflation rate accelerated to an all-time high of 11.24 per cent in November (from 10.17 per cent the previous month). The Index of Industrial Production declined to a four-month low of 1.8 per cent in October, compared with 2 per cent growth in September. Economy is facing a high inflation-log growth situation, leading to a speculation of rise in policy rates. FLIPs View: True, but the only good thing about the inflation numbers is that it is driven by food prices, and core inflation especially manufacturing led inflation is just 2.6%. The food inflation can reverse quickly, given good monsoons, and that is what the RBI is expecting as well.
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Shelf Prospectus
Recently, SEBI has proposed allowing public sector financial institutions, scheduled banks and NBFCs, among others, to file shelf prospectus for issuance of non-convertible debt securities. This is expected to simplify the process for them to raise money. Lets understand what is shelf prospectus and how is it helpful.
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www.learnwithflip.com