JPMorgan Chase & Co. is poised to include India in its emerging market debt index starting from June, according to Gloria Kim, the firm’s global head of index research. Kim highlighted the positive feedback received from most of the firm’s index clients, indicating readiness to trade in the Indian Government Bond (IGB) market. She acknowledged that while there are operational challenges when entering a new market, they primarily relate to counterparties’ operational readiness and flexibility rather than barriers to entry, noting the reforms made by the Indian government.

One of the reasons foreign investors have been hesitant about India’s entry into global indexes is the complexity of the documentation process required for trading. However, JPMorgan announced last September its decision to include India in its emerging market bond index, where it will carry a maximum weight of 10 percent.

Kim estimates that foreign inflows into India could range between $20 billion and $25 billion, assuming an index-neutral position. Currently, the firm’s emerging-market bond gauge manages assets worth $216 billion. Kim emphasized the stickiness of assets tracking the index, noting their consistent nature over time. Since JPMorgan’s announcement, Indian sovereign bonds have witnessed approximately $8 billion in inflows into the Fully Accessible Route securities, although there were some outflows in April amidst a global debt sell-off. Notably, a Bloomberg gauge of Indian bonds has outperformed major peers this year. The long-awaited index inclusion is leaving a significant impact on various Indian assets, with corporate bonds also outperforming peers and foreign exchange reaching record highs. This influx of funds has contributed to the resilience of the Indian rupee against the backdrop of a strengthening US dollar.

Furthermore, Bloomberg Index Services Ltd. will commence including India in its emerging markets index from January, further solidifying India’s position in global financial markets. Kim acknowledged the substantial market reforms implemented by Indian government authorities to attract investors, including extending the trade-matching window for foreign portfolio investors and streamlining the onboarding process through the introduction of a single application form.

Additionally, the registration process was simplified by accepting digital signatures and scanned copies for account registration. Kim also highlighted the availability of India-dedicated bond exchange-traded funds and UCITS funds, offering intraday liquidity to investors, which have contributed to improving market accessibility and tradability for foreign portfolio investors.

Overall, India’s inclusion in global bond indexes represents a significant milestone for the country’s financial markets. The reforms undertaken by Indian authorities, coupled with increased investor confidence, are expected to enhance India’s attractiveness as an investment destination and further integrate it into the global financial system.

ICICI Bank, a leading private sector bank in India, has unveiled a groundbreaking initiative aimed at enhancing the convenience and accessibility of digital payments for its Non-Resident Indian (NRI) customers. In collaboration with the National Payments Corporation of India (NPCI), ICICI Bank now enables its NRI clientele to make Unified Payments Interface (UPI) transactions using their international mobile numbers, eliminating the need for an Indian mobile number registration.

This innovative service, introduced through ICICI Bank’s mobile banking app, iMobile Pay, represents a significant leap forward in facilitating seamless cross-border transactions for NRI customers. With this feature, NRI account holders can effortlessly conduct a variety of transactions, including utility bill payments, merchant transactions, and e-commerce purchases, using their international mobile numbers linked to their NRE/NRO accounts held with ICICI Bank in India.

The service is currently available to NRI customers residing in ten countries, including the USA, UK, UAE, Canada, Singapore, Australia, Hong Kong, Oman, Qatar, and Saudi Arabia. This expansive reach reflects ICICI Bank’s commitment to catering to the diverse needs of its global clientele and providing them with convenient access to cutting-edge banking services.

The process of activating the UPI facility on an international mobile number using the iMobile Pay app is simple and user-friendly. Customers can follow a few straightforward steps, including logging into the app, verifying their mobile number, and creating a new UPI ID linked to their account. This streamlined process empowers NRI customers to seamlessly integrate UPI payments into their banking routine, without the hassle of switching to an Indian mobile number.

Sidharatha Mishra, Head of Digital Channels and Partnerships at ICICI Bank, expressed enthusiasm for this initiative, highlighting its potential to revolutionize the digital payments landscape globally.

By leveraging NPCI’s UPI infrastructure, ICICI Bank aims to not only meet the evolving needs of its NRI customer base but also contribute to the broader transformation of the digital payments ecosystem.

The introduction of this service underscores ICICI Bank’s commitment to innovation and customer-centricity, as it continues to harness technology to deliver unparalleled banking experiences to customers worldwide.

Bank of England might be cutting interest rates ahead of the US Federal Reserve. Tune into this detailed analysis to understand the key.

As the Bank of England gears up for its upcoming decision, speculation mounts on potential interest rate cuts this summer, contrasting with investors’ expectations of a postponed easing outlook. Governor Andrew Bailey has emphasized the UK’s divergence from escalating consumer price pressures in the US, highlighting “strong evidence” of receding inflation domestically. While economists anticipate the central bank to maintain rates at a 16-year high of 5.25 per cent, attention will be on hints regarding whether policymakers view June or August as opportune moments to initiate reductions in borrowing costs.

However, a dovish shift in tone by Bailey and Deputy Governor Dave Ramsden in April caused some economists to reckon that the timing of BOE cuts may be closer to the European Central Bank — which is widely expected to act in June — than to the Federal Reserve, whose chief, Jerome Powell, has avoided offering a timeline for US easing.

Bailey expects UK inflation to fall close to his 2 per cent target in upcoming data for April, though some on the nine-member Monetary Policy Committee are still concerned over underlying price pressures. “The BOE has sounded increasingly dovish at each of its meetings this year. We think there could be a similar theme in May with policymakers having lately signaled little concern about recent upside data surprises.”

The central bank decision will be followed on Friday by gross domestic product data predicted to show the UK economy exited a shallow recession in the first quarter. Economists expect the figures to show output growing 0.4 per cent after two consecutive quarterly drops last year.

Elsewhere, a cliffhanger decision in Sweden, a likely hawkish hold in Australia and rate cuts in Brazil and Peru are among the central bank announcements due.

The US economic data calendar is light. On Friday, the University of Michigan will issue its preliminary survey of consumer sentiment for May. Confidence is expected to be little changed as Americans assess elevated prices, high interest rates and a moderating job market.

A day earlier, the government will issue weekly jobless claims figures. Applications for unemployment benefits remain near historically low levels.

In the week after the Fed held rates unchanged, several central bank officials are scheduled to speak. They include New York Fed President John Williams and the Richmond Fed’s Thomas Barkin on Monday, followed by Neel Kashkari of Minneapolis on Tuesday. Later in the week, investors will also hear from Chicago Fed President Austan Goolsbee and Fed Governor Michelle Bowman.

The Bank of Canada on Thursday will publish its annual financial system review, assessing stability risks to the country’s banking sector. Officials previously flagged concerns about homeowners’ ability to manage debt in a high-rate environment.

On Friday, economists expect Canada’s April labour force survey to show job gains remain well below the pace of population growth, bolstering an argument for policymakers to pivot to rate cuts as early as June.

Asia The Reserve Bank of Australia may amplify its hawkish tone when it meets on Tuesday in the wake of hotter-than-expected inflation gauges for the first quarter, as well as robust jobs stats. The board will consider revised growth, inflation and labour-market projections, with any revisions probably signaling no policy pivot any time soon. Overnight Index Swaps are now pricing more chance of an Aussie rate hike than a cut this year.

On Thursday, Malaysia’s central bank sets its benchmark rate and the Bank of Japan releases a summary of opinions from last month’s meeting, when Governor Kazuo Ueda’s seemingly sanguine stance on the yen helped usher in more losses for the beleaguered currency.

In data, Indonesia first-quarter economic growth is seen staying around 5 per cent year on year, while it may contract a tad versus the prior quarter. The Philippines also releases GDP data. Consumer inflation figures are due in the Philippines, Thailand and Taiwan, while China, the Philippines and Taiwan all get trade data.

Japan’s wage stats on Thursday will probably look a little glum as the outsized pay increases pledged by companies after negotiations with unions won’t fully kick in for a few more months.

Europe, Middle East, Africa On Wednesday, Sweden’s Riksbank could become the second major developed-world central bank – after the Swiss National Bank – to lower rates in what looks likely to be a cliffhanger decision.

After their meeting in March, Governor Erik Thedeen said he and colleagues expect to make their first easing move in May or June. Domestically, there are now very few obstacles to them acting sooner rather than later. Inflation has slowed and looks set to fall below the central bank’s 2 per cent target, the economy remains sluggish, and companies appear to have concluded that they won’t be able to raise prices to the extent they have in the past couple of years.

However, the krona still concerns policymakers, who’ve watched the currency weaken almost 5 per cent against the euro this year. If they decide they can’t risk further deterioration, that could be a reason to delay a first cut, much as Norway did on Friday.

On the other hand, there’s scope to argue that whatever the Swedish central bank does, the currency’s destiny is determined by other factors, including risk aversion and US bond yields. If that view wins the day, the Riksbank could well cut.

Three other monetary decisions are expected around the wider region: On Tuesday, sticky inflation may persuade Madagascar’s central bank to keep its rate at 11 per cent for a third time in a row.

Two days later, Poland’s central bank will likely also leave borrowing costs unchanged, even after April inflation stayed within its target range. Governor Adam Glapinski, who holds his briefing the following day, has repeatedly quashed expectations for rate cuts this year.

And the National Bank of Serbia on Friday is likely to keep its rate at 6.5 per cent for a 10th month, cautious to avoid premature easing while watching to see how long peers in bigger economies wait before cutting.

In the upcoming week, alongside other central bank events, a Bank for International Settlements conference in Basel will host monetary leaders from Germany to Singapore. The European Central Bank (ECB) agenda includes appearances by Belgian governor Pierre Wunsch and Executive Board members Luis de Guindos and Piero Cipollone. Additionally, a report detailing the central bank’s April 11 decision will be released on Friday. Due to public holidays occurring on various days across economies such as the UK and France, the frequency of data releases will be restricted.

SBI-led lenders seek RBI approval to transfer JAL’s Rs 18,000 crore debt to NARCL for a Rs 10,000 crore acquisition.

State Bank of India (SBI) and other lenders have sought RBI approval to transfer Jaiprakash Associates’ (JAL) Rs 18,000 crore debt to the National Asset Reconstruction Company Limited (NARCL). This would mark NARCL’s biggest debt acquisition from a single company, with an offer of Rs 10,000 crore to lenders pending RBI’s approval. NARCL has made RBI’s approval a prerequisite for acquiring JAL’s loans, as per reports.

JAL is the flagship firm of the Jaypee Group, led by Manoj Gaur, and operates in cement, hospitality, real estate, fertilizers, and construction. In Financial Year 2022-23, NARCL acquired 62% of Jaypee Infratech’s debt amounting to Rs 9,234 crore, resulting in a 39% recovery for lenders through an uncontested Swiss challenge auction.

Lenders are pursuing approval because in 2017, shortly after the enactment of the Insolvency and Bankruptcy Code (IBC), the RBI instructed banks to refer 28 companies, including JAL, for debt resolution under IBC. JAL was part of the second batch of 28 accounts referred by the RBI for resolution under the IBC.

Although banks initiated the debt resolution process for JAL by filing an application with the National Company Law Tribunal (NCLT) around the same time, the company has not yet been admitted due to ongoing litigation.

For some of the 28 companies referred by the RBI, lenders sold debt to private asset reconstruction companies without RBI approval. For JAL’s debt resolution, they are seeking proper channels.

In November last year, Jaiprakash Associates entered into an agreement with ICICI Bank to transfer 18.9 crore shares to the bank, which were pledged as collateral. It was anticipated to result in a recovery of approximately Rs 366 crore for the bank, based on the last closing price of the shares.

However, lenders assert that JAL’s complex structure, comprising multiple large businesses under one entity, necessitates RBI clearance for NARCL’s acquisition to avoid potential regulatory issues.

If lenders proceed with the debt transfer to NARCL, the asset reconstruction company will gain control over JAL’s cement division, prime land housing the Buddh International Race Circuit, several luxury hotel properties, and a construction business.

Separately, SBI and ICICI Bank have filed petitions with the Allahabad NCLT to admit JAL for debt resolution. Meanwhile, Dalmia Cement (Bharat) has made a binding offer to acquire JAL’s clinker, cement, and power units at an enterprise value of Rs 5,666 crore. The funds from this offer are intended to partially settle the lenders’ debt.

Although the cement unit has a capacity of 9.4 million tonnes, the clinker plant boasts 6.7 million tonnes, and the power plant generates 280 MW, the deal remains pending as lenders have not issued a no-objection certificate.

NARCL’s proposed offer includes a 15% cash component and the remainder in securities receipts, comprising a cash portion of Rs 1,500 crore and the remaining Rs 8,500 crore as securities receipts redeemable upon NARCL’s recovery of the dues.

In April, Unified Payment Interface (UPI) transactions experienced a slight decline in both volume and value compared to March 2024, with a decrease of 1 percent in volume and 0.7 percent in value. The total value of UPI transactions in April was Rs 19.64 trillion, down from Rs 19.78 trillion in March. Similarly, the number of transactions stood at 13.3 billion in April, compared to 13.44 billion in March.

Vive Ayer, a partner at Grant Thornton Bharat, explained the decline by stating, “UPI volumes and values continue to grow year-on-year (Y-o-Y), reflecting the ongoing focus on digital adoption across the country and the convenience that UPI offers. The month-on-month reduction is not a comparable factor, given that March typically sees higher volumes during the year, hence April 2024 figures are lower than those of March 2024.”

On a year-on-year basis, UPI transactions showed significant growth, with a 50 percent increase in volume and a 40 percent increase in value. In February 2024, transactions stood at 12.10 billion, with a total value of Rs 18.28 trillion.

Meanwhile, Immediate Payment Service (IMPS) transactions also experienced a decline in April compared to March, with a 7 percent decrease in value and a 5 percent decrease in volume. The total value of IMPS transactions in April was Rs 5.92 trillion, down from Rs 6.35 trillion in March. The number of transactions decreased from 581 million in March to 550 million in April. However, on a year-on-year basis, IMPS transactions saw an increase of 11 percent in volume and 14 percent in value.

Similarly, FASTag transactions declined in both volume and value in April, with a 3 percent decrease in volume and a 6 percent decrease in value compared to March. The total transaction value for FASTag in April was Rs 5,592 crore, down from Rs 5,939 crore in March. The volume of transactions decreased to 328 million in April, compared to 339 million in March. However, compared to April 2023, FASTag transactions witnessed growth of 8 percent in volume and 9 percent in value.

In April, the Aadhaar Enabled Payment System (AePS) also experienced a decline in both volume and value compared to March. AePS transactions amounted to Rs 25,172 crore in April, down from Rs 27,996 crore in March. The number of transactions decreased to 94 million in April, compared to 108 million in March. However, on a year-on-year basis, AePS transactions saw a decrease of 7 percent in volume and 15 percent in value compared to April 2023.

Overall, while some digital payment channels experienced a decline in April compared to the previous month, the year-on-year growth indicates a continued trend towards digital adoption and the increasing convenience offered by digital payment platforms like UPI, IMPS, FASTag, and AePS.

Bank credit growth to agriculture and services sector at more than 20 per cent year-on-year, in March 2024, surpassed loans to industry which grew by 8.5 per cent yoy in the month under observation. On a yoy basis, non-food bank credit registered a growth of 16.3 per cent in March 2024, as compared with 15.4 per cent a year ago, Reserve Bank of India said on Wednesday.

Credit growth to agriculture and allied activities was robust at 20.1 per cent yoy in March 2024 as compared to 15.4 per cent growth a year ago, according to RBI data on sectoral deployment of bank credit for the month of March 2024, collected from 41 select scheduled commercial banks, accounting for about 95 per cent of the total non-food credit deployed by all scheduled commercial banks. Credit growth to services sector improved to 20.2 per cent (y-o-y) in March 2024 (from 19.6 per cent a year ago), with higher growth in credit to ‘transport operators’ and ‘commercial real estate’.

Credit growth to ‘non-banking financial companies (NBFCs)’ and ‘trade’, however, decelerated in March 2024 as compared with March 2023. The share of the services sector in bank credit increased marginally to 28.3 per cent. Within services, the highest credit growth was recorded by the aviation sector, which grew 56 per cent to Rs 43,246 crore. Credit to industry grew by 8.5 per cent as compared with 5.6 per cent in March 2023. The pace of credit growth at 7 per cent to large industries more than doubled in FY24 from the 3.1% per cent a year before.

As 22 March, 2024, the share of industry in bank credit contracted 23.1 per cent from 24.8 per cent in March 2023. Among major industries, growth in credit yoy to sectors such as chemicals and chemical products, food processing and infrastructure’ accelerated in March 2024 as compared with the corresponding month of the previous year, while that to ‘basic metal and metal products’ moderated. An ICRA report also points out that incremental non-food bank credit expansion has been robust so far at Rs. 20.9 trillion in FY2024 (till 8 March, 2024, exceeding the year-ago level of Rs 16.8 trillion, aided by the retail and services segments.

The rating agency estimates incremental credit at Rs 22.0-22.5 trillion in FY2024 (excluding the impact of the HDFC-HDFC bank merger), implying a yoy growth of 16.1 per cent -16.5 per cent as compared to 15.4 per cent plus in FY2023). This would be the highest-ever credit expansion in any year, far outpacing the Rs 18.2 trillion seen in FY2023. On the sectoral front, within industry, infrastructure saw loans grow by 6.5 per cent to Rs 12.8 lakh crore.

A CRISIL Ratings study of 11 large and listed residential developers, accounting for one third of the residential property sales in the country, indicates that large developers have already strengthened their credit profiles by deleveraging balance sheets via robust sales and collections over the past two fiscals and focusing more on asset light-models (joint ventures and joint development).

Higher collections and sharper focus on asset-light models have enabled deleveraging of balance sheets, which, in turn, supports the credit profiles of developers. “The momentum in demand and robust collections will help developers fund new launches and withstand any downcycles without stressing their credit profiles. Developer’s ability to maintain leverage amid more launches will bear watching,” says Pallavi Singh, Associate Director, CRISIL Ratings.

For FY 2025 , ICRA projects the incremental credit growth at Rs 19.0-20.5 trillion (including the impact of the HDFC-HDFC bank merger), implying a yoy growth in outstanding credit of 11.7 per cent -12.5 per cent, lower than the growth expected in FY2024 amid muted export demand in certain sectors, impact of higher interest rates as well as the increase in risk weights.