Share markets in India are presently trading on a negative note, tracking mixed cues from global equities, amid heightened worries of COVID-19 virus outbreak.
Sectoral indices are trading mixed with stocks in the metal sector and automobile sector witnessing selling pressure, while healthcare stocks are witnessing buying interest.
The BSE Sensex is trading down by 224 points while the NSE Nifty is trading down by 57 points.
The BSE MidCap index is trading down by 1.2% and the BSE SmallCap index is trading down by 1%.
The rupee is trading at 73.55 against the US$.
Speaking of the current stock market scenario, investors took the flight to safety last week as stock markets saw a sharp fall post the Coronavirus impact.
In news from the IT sector, shares of Infosys rose over 1% in early trade today after the company received a contract to set up hybrid cloud data centres.
The company announced a strategic long-term partnership with K+S AG, world's largest salt manufacturer and Europe's biggest supplier of Potash, to support it's 'Shaping 2030 Strategy' - by preparing an agile and flexible IT infrastructure foundation to enable their digital roadmap.
Infosys will set up two state-of-the-art, centralised and dedicated datacentres in Kassel, Germany and 16 regional datacentres in Europe, USA, Canada, and South America along with a public cloud ecosystem.
Infosys share price is presently trading up by 0.4%.
Moving on to news from the banking sector, a bill to provide more powers to the RBI for regulating cooperative banks was introduced by Finance Minister Nirmala Sitharaman in the Lok Sabha on Tuesday.
Introducing the bill, Sitharaman said it is the "need of the hour" to avoid a PMC Bank-like crisis in the future.
As per an article in The Economic Times, the Banking Regulation (Amendment) Bill, 2020 comes in the backdrop of PMC Bank scam which seeks to strengthen cooperative banks by increasing professionalism, enabling access to capital, improving governance and ensuring sound banking through the RBI.
Here's an excerpt from the article:
- The Bill was introduced in the Lok Sabha amid the din, with Sitharaman saying that if the opposition wants to deny the small depositors their rights then "it is a shame". It could not be cleared because of the ongoing ruckus in the House over the issue of violence in Delhi.
The proposed law seeks to enforce banking regulation guidelines of the RBI in cooperative banks, while administrative issues will still be guided by the Registrar of Cooperative.
In her Budget speech, Sitharaman had said that to strengthen cooperative banks, amendments would be brought in the Banking Regulation Act for increasing professionalism, enabling access to capital and improving governance and oversight for sound banking through the RBI.
The Punjab and Maharashtra (PMC) cooperative bank was found to have given over Rs 67 billion loan to a single realty company HDIL through alleged fraudulent means and also hid the stress from the RBI by creating separate books of accounts.
As per reports, there are 1,540 cooperative banks with depositor base of 86 million having total savings of about Rs 5 lakh crore.
Note that the PMC bank fiasco has put small savers in the limelight yet again. These banks have poor lending practices. Depositors have had to pay the price time and again.
In the short run, this has an adverse effect on microfinance lending as well. Micro finance institutions (MFIs) are skeptical about lending to even genuine borrowers in an uncertain environment.
But this is actually a blessing in disguise for MFIs with strong business practices.
After all, last mile connectivity in lending is still a huge opportunity.
Huge Opportunity in Last Mile Lending in India
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