Short-term loans to get cheaper

Come Friday, the benchmark rates are expected to be lower by 80-90 basis points (bps) for short-term credit as banks begin to price new loans on the basis of marginal cost of funds.

It will drive financially sound companies’ hunt for the best lending rate (for short-term credit) under the new regime, leading to some competition among banks.

This could also hit the issuance of commercial papers (CPs) as companies begin to avail of credit limits than to use the money market for short-term need, bank executives said.

The Reserve Bank of India (RBI) has prescribed the new system to improve transmission of monetary policy. TheRBI has cut key policy rate (repo rate) by 125 bps, since January 2015 to 6.75 per cent now.

Responding to the central bank’s actions, banks also reduced their benchmark lending rates (base rate) but not in same proportion. They have cut by 55-75 bps. They brought-down deposit rates by 85-100 bps in past 12 months, according to RBI data.Read More.

Going after Vijay Mallya? What about Rs 30,000 cr taxpayers lost in Air India

"What is the difference between Vijay Mallya who lost Rs 10,000 crore and Air India which lost Rs 30,000 crore? Bank money is lost (in case of KFA) and public taxpayer's money is lost (in AI's case)," asks Mohandas Pai, former Chief Financial Officer and HR Head of Infosys.

The only difference - Air India has a forgiving promoter - government of India who stood by the company despite the atrocious decisions taken by its management and those responsible for its growth and wellbeing. Read More.

Railways funds set to turn negative in FY17

Indian Railways is staring at an overall negative fund balance of Rs 6,095 crore next financial year despite the rail ministry’s claim that it would manage to successfully handle the impact of the Seventh Central Pay Commission recommendations on its financial health.Read More.