Washington: India will retain its position as the world’s top recipient of remittances this year with its diaspora sending a whopping USD 80 billion back home, the World Bank said in a report Saturday.
India is followed by China (USD 67 billion), Mexico and the Philippines (USD 34 billion each) and Egypt (USD 26 billion), according to the global lender.
With this, India has retained its top spot on remittances, according to the latest edition of the World Bank’s Migration and Development Brief.
The Bank estimates that officially-recorded remittances to developing countries will increase by 10.8 per cent to reach USD 528 billion in 2018. This new record level follows a robust growth of 7.8 per cent in 2017.
Global remittances, which include flows to high-income countries, are projected to grow by 10.3 per cent to USD 689 billion, it said.
Over the last three years, India has registered a significant flow of remittances from USD 62.7 billion in 2016 to USD 65.3 billion 2017. In 2017, remittances constituted 2.7 per cent of India’s GDP, it said.
The Bank said remittances to South Asia are projected to increase by 13.5 per cent to USD 132 billion in 2018, a stronger pace than the 5.7 per cent growth seen in 2017.
The upsurge is driven by stronger economic conditions in advanced economies, particularly the US, and the increase in oil prices having a positive impact on outflows from some GCC countries such as the UAE which reported a 13 per cent growth in outflows for the first half of 2018.
Bangladesh and Pakistan both experienced strong upticks of 17.9 per cent and 6.2 per cent in 2018, respectively, the Bank said.
For 2019, it is projected that remittances growth for the region will slow to 4.3 per cent due to a moderation of growth in advanced economies, lower migration to the GCC and the benefits from the oil price spurt dissipating.
The Gulf Cooperation Council (GCC) is a regional inter-governmental political and economic bloc of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE.
As global growth is projected to moderate, future remittances to low- and middle-income countries are expected to grow moderately by four per cent to reach USD 549 billion in 2019. Global remittances are expected to grow 3.7 per cent to USD 715 billion in 2019.
The Brief notes that the global average cost of sending USD 200 remains high at 6.9 per cent in the third quarter of 2018. Reducing remittance flows to three per cent by 2030 is a global target under Sustainable Development Goal (SDG) 10.7.
Increasing the volume of remittances is also a global goal under the proposals for raising financing for the SDGs, it said.
“Even with technological advances, remittances fees remain too high, double the SDG target of 3 per cent. Opening up markets to competition and promoting the use of low-cost technologies will ease the burden on poorer customers,” said Mahmoud Mohieldin, Senior Vice President for the 2030 Development Agenda, United Nations Relations, and Partnerships at the Bank.
The average cost of remitting in South Asia was the lowest at 5.4 per cent, while Sub-Saharan Africa continued to have the highest at 9 per cent.
No solutions are yet in sight for practices that drive up costs, such as de-risking action of banks, which lead to closure of bank accounts of remittance service providers.
Another persistent factor that keeps fees high is the exclusive partnership between national post office systems and any single money transfer operator, as it allows the operator to charge higher fees to poorer customers dependent on post offices, the Bank said.
“The future growth of remittances is vulnerable to lower oil prices, restrictive migration policies, and an overall moderation of economic growth.
“Remittances have a direct impact on alleviating poverty for many households, and the World Bank is well positioned to work with countries to facilitate remittance flows,” said Michal Rutkowski, Senior Director of the Social Protection and Jobs Global Practice at the World Bank.
Take my money, save cash-strapped Jet Airways: Mallya urges banks
New Delhi: Businessman Vijay Mallya on Tuesday urged Indian banks to “take his money” and save cash-strapped Jet Airways.
“I repeat once again that I have placed liquid assets before the Hon’ble Karnataka High Court to pay off the PSU Banks and all other creditors. Why do the Banks not take my money. It will help them to save Jet Airways if nothing else,” the liquor baron tweeted.
“I invested over 4000 crores into Kingfisher Airlines to save the Company and its employees. Not recognised and instead slammed in every possible way. The same PSU Banks let India’s finest airline with the best employees and connectivity fail ruthlessly. Double standards under NDA,” read another tweet.
Mallya also claimed that the media “decimated” him for writing to Prime Minister Narendra Modi while a BJP spokesman “eloquently read out” letters he wrote to former Prime Minister Manmohan Singh and alleged that PSU banks under the UPA government “wrongly supported” Kingfisher Airlines.
Jet Airways has been suffering bruising competition from low-cost airlines, fluctuating crude prices and a weak rupee. The airline has over one billion dollars in debt and has to repay money to banks, lessors of planes and suppliers besides clearing pending salaries to its pilots.
Last week, State Bank of India (SBI) Chairman Rajnish Kumar had said that the resolution plan is almost ready and it will not involve a bailout for any individual.
At the same time, talks with Abu Dhabi-based airline Etihad to secure a rescue deal are still on, he said adding there is also a possibility of bringing in another investor.
“We believe Jet Airways is a good aviation property and it is in every body’s interest that it continues to fly,” Kumar had said on March 20.
The chairman of the airline, Naresh Goyal, stepped down on Monday (March 25), following which lenders agreed to pump in Rs 1500 crore to bail out the financially troubled airline.
Meanwhile, a Delhi court had, last week, ordered attachment of Mallya’s properties in Bengaluru under section 83 of the Code of Criminal Procedure in connection with a FERA (Foreign Exchange Regulation Act) violation case, and fixed the next date of hearing as July 10.
Goyal has option to raise stake; expect buyer for Jet by May 31: SBI chief
New Delhi: Embattled Jet Airways promoter Naresh Goyal, who was forced to cut his stake in the cash-strapped airline, will be eligible to bid for takeover of one of the oldest private carrier when the lenders auction it next month, SBI Chairman Rajnish Kumar said.
State Bank of India, which is the leader of the group of lenders, will next month invite Expression of Interest from buyers willing to takeover the airline and will finalise the investor by May end, he said.
Consortium of lenders led by the SBI Monday agreed to put in Rs 1,500 crore immediate funding by acquiring 51 percent stake in the company through issue of Rs 11.4 crore fresh shares.
As a result, the stake of promoter Naresh Goyal will come down to 25 percent from 51 percent, while Abu Dhabi’s Etihad Airways, which had a 24 percent stake in the carrier, came down to 12 percent.
Bidding process to be initiated by lenders for sale to new investor(s) is expected to be completed in June quarter as per the resolution plan.
“June is too late. My expectation is May 31…Market is open for everyone whosoever wants to come in. There will be expression of interest which will be given by April 9 and binding bids by April 30.
“It could be financial investor, it could be airline…Including Naresh Goyal himself or Etihad. No body is barred from bidding or taking over the airline as per the rule,” Kumar said.
Asked about board nominee from lenders’ side, Kumar without revealing names said, it would be top quality professional who would see through the process of sale for which strict timelines are there.
Jet Airways has a debt of over Rs 8,200 crore and needs to make repayments of up to Rs 1,700 crore by the end of March. It has already defaulted on an ECB payment earlier this week but is servicing its domestic debt.
Jet Airways Founder and Chairman Naresh Goyal and his wife Anita Goyal will step down from the board of the ailing airline following reduction in their stake to 25 percent as per the resolution plan formulated by SBI-led domestic lenders.
After weeks of speculations and uncertainties over the future course of Jet Airways, which has grounded over 80 planes due to financial woes, approved constitution of an Interim Management Committee to manage and monitor the daily operations and cash flow of the company.
DLF launches QIP to raise over Rs 3,000 crore
New Delhi: Realty major DLF launched its QIP offer to raise over Rs 3,000 crore by selling 17.3 crore equity shares to qualified institutional investors.
With an aim to become a debt-free company, DLF had last year announced plans to issue up to 17.3 crore shares through qualified institutional placement (QIP) to raise funds and pre-pay loans.
According to a regulatory filing, DLF has launched its QIP and the floor price has been fixed at Rs 193.01 per equity share.
The company said that at its discretion it may offer a discount of up to 5 percent on the floor price in the QIP.
DLF’s shares closed at Rs 189.40 on the BSE, down 3.49 percent.
This is the third major fund raising from DLF. In 2007, DLF raised close to Rs 9,200 crore through initial public offer (IPO). In 2013, the company had raised nearly Rs 1,900 crore through institutional placement programme.
The DLF’s QIP comes close in the heels of successful launch of India’s first Real Estate Investment Trust (REIT), launched by Blackstone and Embassy to raise Rs 4,750 crore.
DLF’s group CFO Ashok Tyagi had recently said that the QIP proceeds and further infusion of Rs 2,500 crore from promoters against the issue of warrants would help the company in significantly reducing the debt that stood at around Rs 7,200 crore as on December 31, 2018.
DLF promoters K P Singh and family have already infused Rs 9,000 crore in the company and would pump in Rs 2,250 crore more.
The company made a preferential allotment of compulsorily convertible debentures (CCDs) and warrants to the promoters against the infusion of funds.
As infusion of the fund by promoters will lead to an increase in their shareholdings beyond permissible limit of 75 percent, the company plans to launch QIP and maintain minimum public shareholding of 25 percent in a listed entity.
In August 2017, the promoters had sold entire 40 percent stake in rental arm DLF Cyber City Developers Ltd (DCCDL) for Rs 11,900 crore and committed to infusing bulk of this amount in the company to cut net debt.
This deal included the sale of 33.34 percent stake in DCCDL to Singapore’s sovereign wealth fund GIC for Rs 8,900 crore and buyback of remaining shares worth Rs 3,000 crore by DCCDL.
The deal concluded in December 2017. As a result, DLF stake in DCCDL increased to 66.66 percent stake from 60 percent, while GIC has a balance of 33.34 percent stake in the joint venture firm.