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News In Numbers: July 14

A very visible rap on the knuckles sometimes work better than the invisible hand of the market. There are two numbers that relate to the role of regulators today. Have a look at them and let us know what you think.

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30 days

What is it? The time period within which airlines have to refund cancelled ticket money to customers, irrespective of the mode of purchase.

Why is it important? Brings uniformity in the sector where airlines are known to have levied refund charges in excess of fare excluding taxes. In addition, the maximum cancellation charge is capped at sum of basic fare plus fuel surcharge.

Tell me more: Refund processing fee is also banned as per the new policy aimed at tilting the balance in favour of consumers.

 8.37% – 8.38%

What is it? The likely coupon rate for HDFC’s masala bond, a rupee-denominated bond sold overseas.

Why is it important? The coupon rate is lower than HDFC’s cost of borrowing of 8.93% during last financial year ended March 2016. HDFC is raising Rs 2,000 crore through the masala bond, which eliminated currency risk in overseas borrowing.

Tell me more: HDFC’s masala bond is the first such offering and it’s success will propel other Indian companies to tap overseas market for borrowing.

 Rs 12,000 crore

What is it? The amount of money government plans to spend on skilling 10 million people over the next four years. Out of which, 6 million will be provided fresh skill training and the rest (4 million) will be to certify prior learning.

Why is it important? The initiative addresses the twin problem of not having adequate number of skilled persons, and unemployability of trained individuals. Certification will be uniform and are drafted in consultation with the industry.

Tell me more: State governments have to borne 25% of expenses under this scheme, the rest sponsored by the centre.

 10 lakhs

What is it?  The number of bank employees who plan to go strike on29th July to protest against banking reforms, such as privatisation.

Why is it important? This comes at a time when Indian banking sector is trying to clean up the bad loans in the system. The process also involves capital infusion, not all of which would come from the government, which in effect would reduce the government stake in the state owned banks. Bank staff are protesting against such dilution. However, their buy in is key to execute some of the reforms – especially those related to recovery of bad loans.

Tell me more: The strike was called for by United Forum of Bank Unions (UFBU) which is  an association of nine trade unions – across the banking system including state owned banks and private banks.

500

What is it? The number of listed firms – the top 500 by market capitalisation – that have to disclose their dividend distribution policy, according to stock market regulator.

Why is it important? The transparency would help investors and analysts to take a considered view on the dividends that large firms pay out. There has been complaints from the investors about firms hoarding cash. Infosys for example came under that criticism a few years ago. Now, top 500 firms will have be more open about dividend policy and the potential use of cash. This could nudge the smaller firms to be more transparent too.

Tell me more: Regulators in some countries, such as Chile andBrazil, have made dividend payments mandatory, without making it too difficult for companies to re-invest.

 

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