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Withdrawal from Lakshmi Vilas Bank capped at Rs 25,000 till Dec 16, to be merged with DBS India- A Singapore Bank.

Markets  flat:

 The Union Ministry of Finance has placed Lakshmi Vilas Bank under moratorium till December 16, capping the withdrawal limit at Rs 25,000 for customers. While superseding the bank’s Board, the RBI has announced a draft scheme for amalgamation of Lakshmi Vilas Bank and DBS Bank India.

For LVB, troubles began with its fast-paced growth in loans between FY14 and FY18 (19 per cent CAGR), mainly on account of funding chunky corporate assets. From 2.7 per cent in March 2017, gross NPAs as a percentage of loans, had shot up to 17.3 per cent in the June 2019 quarter. Exposure to high risk sectors had impacted the bank’s performance. The RBI had placed the bank under prompt corrective action (PCA) in September last year. Tier 1 capital ratio had slipped to 4.46 per cent as of June 2019, below the RBI’s regulatory norm, necessitating quick capital infusion. But the bank’s attempts to raise capital over the past year failed severely.

Biden Unveils Economic Plan: US President-elect Joe Biden has unveiled his economic plan to help the country recover from the after-effects of the coronavirus pandemic, laying great emphasis on clean energy, job creation and investment into new technologies. The President-elect announced on Monday after a video meeting with a select group of nine business and labor leaders, including Indian-Americans Satya Nadella (Microsoft) and Sonia Syngal (GAP Inc). Right now, Congress should come together and pass a COVID-19 relief package like the HEROES Act that the House passed six months ago. Once we shut down the virus and deliver economic relief to workers and businesses, then we can start to build back better than before, Biden said.

Asia: Asia-Pacific markets were mixed in early Wednesday trade — investors remained cautious as corona virus cases continued to surge despite vaccine hopes. Meanwhile, the U.S. dollar continued its slide. In Japan, the Nikkei 225 fell 0.82 percent, while the Topix dropped nearly 1 percent. In South Korea, the Kospi edged up 0.15 percent. Australia’s S&P/ASX 200 rose 0.51 percent, reported CNBC International.

US: U.S. stock futures were flat in overnight trading on Tuesday as investors digested the recent record rally in equities. Dow futures fell 16 points. Futures for the S&P 500 and Nasdaq-100 lost 0.04 percent and 0.03 percent, respectively. Tuesday’s session was the first time in three days the Dow and S&P 500 fell, following their record closes on Monday.Small-caps continued to outperform with the Russell 2000 gaining 0.37 percent to close at another record, reported CNBC International. (Image: AP)

Closing Bell On Tuesday: Indian shares ended at record closing highs on Tuesday after a long weekend, following gains in Asian peers, as news of another promising coronavirus vaccine lifted hopes. Investor sentiment was given a boost when US drugmaker Moderna said its experimental COVID-19 vaccine was 94.5 percent effective in preventing infection. The Sensex rose 315 points to end at a new closing high of 43,952.7 while the Nifty was up 94 points to settle at a record close of 12,874. In intraday deals as well, the benchmarks hit new highs. Broader markets were also positive for the day with the Nifty Midcap index hitting its 52-week high, up over 1 percent and the Nifty Smallcap index up 0.3 percent. (Image: Reuters)

Crude Oil: Oil prices were little changed on Tuesday as worries that lockdowns to fight a new surge in coronavirus cases could hit short-term demand counteracted hopes for a vaccine and the possibility of tighter OPEC+ supply policies. Brent futures advanced 8 cents to $43.90 per barrel, while U.S. West Texas Intermediate crude settled 9 cents, or 0.2 percent, higher at $41.43 per barrel, reported CNBC International. (Image: Reuters)

Rupee: The Indian currency rose on Tuesday after an improved demand for riskier assets after positive news on the coronavirus vaccine. The domestic unit opened strong at 74.43 against the US dollar and later touched a high of 74.38 in day trade. The rupee finally closed at 74.46 against the US dollar, registering a gain of 16 paise over its previous close of 74.62, reported PTI. (Image: Reuters)

CRISIL On Non-MSME Companies: Barely 1% of companies, excluding micro small and medium enterprises (MSMEs) may opt for Reserve Bank of India’s (RBI’s) one-time debt restructuring, a preliminary analysis by rating and research agency CRISIL showed. The analysis is based on 3,523 non-MSME companies that it rates. “Improving business sentiment on account of increased economic activity over the past couple of months, and expectation of a sharp recovery next fiscal are persuading borrowers to skip one-time debt restructuring (OTDR),” said Subodh Rai, Senior Director at CRISIL Ratings. The impact on the borrowers’ long-term credit history due to their accounts being classified as restructured advances is another deterrent, Rai said, as this could impact their ability to raise debt in future.

DHFL Bidders Threaten To Walk Out Over Adani’s Proposal: Much drama unfolded at the Dewan Housing Finance Ltd (DHFL) creditors committee meeting tonight as suitors threatened to walk out of the process if Adani Group’s surprise last minute offer to acquire the entire company was considered, three people aware of the development told CNBC-TV18. In three separate e-mails sent to the Administrator and lenders to DHFL ahead of the lenders meeting in the evening, Piramal Group, Oaktree Capital and SC Lowy said they would not participate in the bidding process and withdraw whatever they had offered if Adani Group’s ‘unsolicited’ offer was allowed, one of the people quoted above said. CNBC-TV18 had earlier reported that DHFL’s lenders would meet today to review all offers and may consider inviting revised bids from all after Adani offered to buy all of DHFL’s assets for Rs 31,250 crores.

Indian Students In US Economy Contribution: Indian students contributed $ 7.6 billion to the US economy in the academic year 2019-20, even though there was a 4.4 percent drop in the total number of Indian students, according to a report. China remained the largest source of international students in the US, with the number of Chinese students in the country increased for the 16th consecutive year. There were over 372,000 Chinese students in the U.S. during 2019-20 year, said the report “Opens Doors 2020.” India remained the second-largest source of international students, despite a 4.4 percent decline to 193,124 students, it said. According to the US Department of Commerce, international students contributed $ 44 billion to the US economy in 2019, including $ 7,69 billion from Indian students.

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