Maharashtra government warns of a second Covid-19 wave
Maharashtra CM Uddhav Thackeray warned that the second wave of COVID-19 could hit the state "like a tsunami" if people fail to follow safety guidelines.
The state government, as a precautionary measure, has canceled the reopening of schools. The CM has appealed to citizens to follow all the mandatory COVID-19 safety protocols, to avoid a lockdown.
Maharashtra Deputy Chief Minister Ajit Pawar, revealed that they are reviewing the situation for the next 8-10 days.
Based on the actions of various state governments, we have a strong reason to believe that the country is staring at the beginning of a major round of Covid cases.
The Delhi government has opted for strict surveillance at markets in Delhi. Rajasthan, Madhya Pradesh, and Gujarat have imposed night curfews across the major cities while Haryana is also forced to close schools after a few students tested positive.
RBI proposes to ease restrictions on promoter holding:
The RBI's IWG (Internal working group) report has recommended increasing promoter stake in the banks from 15% to 26% of the paid-up equity share capital of the bank.
Current licensing norms require promoters to bring down their stake to 40% within three years of starting operations. Thereafter, promoters are required to reduce their shareholding to 20% and 15% within 10 years and 12 years, respectively.
Relaxing the cap would bring much-needed clarity about RBI's policy on promoter holding. Off late, RBI's stance has been unclear as RBI decides these on a case-to-case basis currently. For instance, RBI has allowed the promoters of Kotak Mahindra Bank to retain a stake at 26% while promoters at other banks are following the stringent norm of maintaining their holdings at 15%.
Promoter’s shareholding in banks is tightly structured at present. Limited promoter participation is discouraging for long term institutional investors. It does not just reduce the pool of capital but the expertise as well that these investors bring along with them.
Greater promoter ownership would be a great confidence booster for newer entrants. Hence, we believe that allowing the promoters to increase their stake from 15% to 26% (If implemented), will be hugely positive.
India is likely to report a current account surplus for FY21
India is likely to report a current account surplus at the end of the current financial year ending in March 2021. India's current account surplus rose to a record $19.8 billion in April-June as its trade deficit narrowed sharply, as per the chief economic adviser K Subramanian.
If the current account surplus is due to the rising exports it can be considered a positive sign. However, here, the surplus is largely due to the fallen imports amid the pandemic. India depends heavily on imported raw materials for daily economic activity. So, the current account surplus - due to lower imports- is a signal of a slowdown in the Indian economy.