News Updates: May 8, 2020

• SBI on Thursday reduced its MCLR by 15 bps. 1-year MCLR has now been reduced to 7.25%.
• The government is considering issuing advisory to public sector companies like NTPC, PGCIL etc. to reduce the fixed charge by half, which they charge to state power distribution companies. In the recently notified tariff regulation for 2019-2024, CERC has kept the return on equity (ROE) as 15.50%.
• Banks in India have again started the discussion on creating a 'Bad Bank'
• Resolution plans for Uttam Galva Metallics and Uttam Galva Steels by CarVal Investors and Nithiya Capital Resources Advisors respectively have received the approval from the bankruptcy court. The resolution plan will get lenders about Rs. 2700 Crore or 37% of their total claims.
• While defending its October circular where it asked liquid funds to cap their holding of unlisted NCDs at 10% of the corpus, SEBI has asked Franklin Templeton (FT) to focus on returning money of investors. FT had blamed SEBI circular and claimed that it was stuck with these securities, since these NCDs could not be traded after SEBI circular.
• A combination of RBI's TLTRO auctions and surplus liquidity has resulted in significant higher primary bond issuance from corporates. During April 2020, companies issued bonds worth Rs. 71,628 Crore compared to Rs. 23,738 Crore in April 2019.
• As dues from discoms continue to rise, NTPC may consider invoking the three way agreement. Under the agreement, it can ask RBI to deduct the defaulted amount from the respective state government's account with the bank.
• Glaxosmithkline has sold its stake in Hindustan Uniliver for $3.4 bn. Prior to sale, GSK held 5.7% stake in HUL.