Business
NBFC PCA to bring parity between banks, non-banks: Ind-Ra
The prompt corrective action (PCA) framework for non-banking financial companies (NBFCs) will bring a further parity in terms of the regulations between banks and non-banks, said India Ratings and Research (Ind-Ra).
Accordingly, the ratings agency cited that the trend will be supported on the back of increased size and scale of NBFCs and interconnectedness with banks, along with the scale-based regulation implemented in October 2021 and the alignment of asset quality classifications implemented in November 2021.
Recently, the Reserve Bank of India introduced the PCA framework for NBFCs and it will come into effect from October 1, 2022, based on the financial position of NBFCs on or after March 31, 2022.
“It also establishes a regulatory course of action in an event of a breach of certain parameters, thus acting as an early warning signal.”
“In case of any breach, the NBFCa¿s performance will be measured over four consecutive quarters on risk threshold parameters to declassify the NBFC placed under PCA.”
As per Ind-Ra, NBFCs breaching any of the risk threshold have time to course correct till March 2022 as the guidelines will be based on year-end numbers.
“NBFCs with net non-performing assets of 6 per cent and higher may have to make higher provisions or sell assets to asset reconstruction companies during 2HFY22 to bring in the ratio outside the threshold, in line with the guidance.”
“This may impact profitability and capital buffers.”
As of now, the agency said most of the large NBFCs are comfortably poised to comply with the regulations.
“Many NBFCs have raised capital before and during pandemic, leading to an improvement in their capital buffers, and carried excess expected credit loss provisions to navigate the pandemic impact on asset quality.”
“However, any increase in the asset quality challenges in form of slippage from the restructured book and book benefitted through ‘Emergency Credit Linked Guarantee Schemes’ will led to NBFCs turning cautious in terms of increasing provisions to maintain the risk threshold within the permitted limits on the asset quality side.”
According to Ind-Ra, this PCA framework will bring greater clarity in terms of the regulator’s approach on NBFCs breaching threshold limits on capital buffers or facing heightened credit risk.
Business
Nifty, Sensex see firm recovery after RBI’s support to rupee

Indian equity benchmarks posted a firm recovery, sustaining gains for the second week as investors looked past early inflation worries, especially after the central bank’s special dollar window for oil marketing companies helped the rupee rebound.
Nifty added 2.78 per cent during the week and gained 0.65 per cent on the last trading day to reach 23,146.
At close, Sensex was up 413 points or 0.56 per cent at 74,729. It gained 3.11 per cent during the week.
Market sentiment was dented earlier in the week by consumer inflation hovering near the upper end of the Reserve Bank of India’s tolerance band and a hotter‑than‑expected wholesale price index print that pushed benchmark bond yields to multi‑year highs.
The central bank raised the daily cash reserve ratio maintenance requirement to absorb surplus liquidity, adding to caution. Market confidence, however, improved after the central bank’s special dollar window for oil marketing companies and tighter hedging norms drove a rupee-rebound, analysts said.
“Expectations of a review of LTCG tax and STT, softer crude prices and easing bond yields further revived risk appetite, prompting investors to tilt towards counters with strong Q2FY27 business updates, though the rally remained concentrated in large-caps, with mid-caps posting modest gains and small-caps ending marginally lower,” they added.
“Participants should remain selective, maintain disciplined position sizing and favour a hedged approach amid elevated macroeconomic and earnings-related uncertainty,” the experts said.
Information technology (IT) sector emerged as the standout performer on robust earnings and upbeat management commentary, while healthcare and pharmaceuticals lagged as investors favoured sectors with stronger near-term earnings visibility.
Meanwhile, fast‑moving consumer goods stocks came under pressure amid concerns over margin compression from elevated input costs.
Broad market indices performed largely in line with the benchmark indices as Nifty Midcap100 added 0.58 per cent and Nifty Smallcap100 dipped 0.12 per cent during the week.
In addition, foreign institutional investors (FIIs) turned net buyers of Rs 11.66 billion in Indian equities on Friday after overall selling eased sharply this week as market sentiment improved.
FIIs remained net sellers for the ninth straight week but their weekly selling moderated to Rs 89.91 billion from Rs 302.94 billion the previous week. On the other hand, domestic institutional investors (DIIs) stayed net buyers for a ninth consecutive week at Rs 78.13 billion, though they were net sellers of Rs 36.61 billion on Friday.
The sustainability of the recovery will hinge on earnings growth broadening beyond IT with revenue and margin delivery across financials, consumption and industrials under close scrutiny, analysts said.
Investors are keen on India’s October PMI that will offer insight into domestic demand momentum, while US jobless claims and Japan’s inflation print will shape global rate expectations.
Business
Japanese delegation visits MLFF tolling system near Delhi

A Japanese delegation visited the Multi-Lane Free Flow (MLFF) tolling system in Mundka-Bakkarwala on Friday on the sidelines of the 12th India–Japan Joint Working Group Meeting on Roads and Road Transportation.
The MLFF system provided insights into India’s technology-driven initiatives for seamless and efficient highway travel.
At the MLFFs, the National Highways Authority of India (NHAI) uses a combination of RFID-based FASTag electronic toll collection, automatic number plate recognition (ANPR) and AI analytics to allow vehicles to pass through charging points without stopping, slowing down or remaining in a designated lane.
MLFFs have already been installed at Choryasi in Gujarat, Mundka in Delhi, Gharaunda in Haryana and Daulatpura and Manoharpura in Rajasthan.
While 12 further locations have been awarded for conversion, tenders have also been launched covering an additional 104 toll plazas around the country.
The MLFF at Choryasi on the Surat–Bharuch section of NH-48 was the first to become operational.
The one at Mundka on Delhi’s Urban Extension Road-II was the second.
The expansion plan represents a significant shift from India’s traditional barrier-based toll plazas.
Rather than moving immediately to satellite-based toll collection, the Indian government has opted to build on the country’s established FASTag system and combine it with ANPR and AI.
Expert committees had recommended further consideration of GPS-based barrier-free tolling because of security, privacy and operational control issues, the Ministry of Road Transport and Highways has indicated.
FASTag and ANPR/AI was thus selected as the technology for the current MLFF programme.
The session of the India–Japan Joint Working Group on Roads and Road Transportation Sector was successfully held at Bharat Mandapam in New Delhi.
Discussions focused on advanced construction technologies, bridge and tunnel engineering, sustainable infrastructure and digital innovations, fostering the exchange of technical expertise and best practices.
“The meeting reaffirmed both nations’ commitment to safe, sustainable and technology-driven road infrastructure, aligned with the vision of Viksit Bharat @ 2047,” the Ministry said in a statement.
Business
India-US trade deal 98-99 percent done: US official

Washington, Oct 16: A long-awaited trade agreement between India and the United States is almost complete, with only one or two per cent of negotiations remaining, a senior US official said, signalling that the two countries are approaching a breakthrough after months of high-level discussions.
The official said the biggest issues had already been resolved and that negotiations were continuing at the highest political levels, including between President Donald Trump and Prime Minister Narendra Modi.
“The biggest items have been settled. I mean …., it’s pretty much done. We have that one, one or two per cent left,” the official told reporters during a State Department briefing on Friday.
The remarks came ahead of Secretary of State Marco Rubio’s scheduled visit to India, where he will hold discussions with Indian government officials and leading business executives in Mumbai and Jamnagar.
The official said the two governments remained in constant contact over the proposed agreement.
“We are actively engaged every single week,” the official said, adding that high-level discussions on the trade deal were taking place regularly.
The official cited recent diplomatic engagements involving US Trade Representative Jamieson Greer, India’s Commerce Minister Piyush Goyal and conversations between Trump and PM Modi as evidence of the momentum behind the negotiations.
However, the official also identified a significant complication that had delayed the agreement.
An earlier understanding had been linked to the International Emergency Economic Powers Act, or IEEPA, but the legal framework had to be reconsidered after the law was struck down, according to the official.
The development forced negotiators to revisit elements of the proposed agreement and contributed to several additional months of discussions.
Despite those complications, the official expressed optimism that the remaining differences could be resolved soon.
Rubio is scheduled to travel first to Uzbekistan for meetings with Central Asian leaders before proceeding to India.
In Mumbai, he will meet Indian government counterparts and senior executives from some of the country’s largest companies.
The official said the decision to visit Mumbai rather than New Delhi reflected the administration’s growing emphasis on commercial diplomacy and Indian investment in the United States.
Rubio will also travel to Jamnagar.
The official said Washington was seeking closer engagement with India across information technology, pharmaceuticals, defence cooperation and other sectors.
Further visits by senior American Cabinet officials are also anticipated next year as both governments seek to expand bilateral engagement.
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