IDBI BANK POSTS `144 CR PROFIT

ComMin not accepting MEIS applications

The commerce ministry has blocked the online system for exporters to apply for getting tax incentives under the MEIS scheme from July 23 as the department of revenue (DoR) decided to limit the benefits under the scheme at Rs 9,000 crore for April-Dec. 2020. According to an office memorandum of the DGFT, the DoR in May had conveyed that it may not be feasible to exceed MEIS allocation beyond Rs 9,000 cr.

Mumbai, July 28: LICowned IDBI Bank on Tuesday reported a standalone profit after tax of Rs 144 crore for the quarter ended June, helped by lower provisioning and higher interest income. The bank, which is under the RBI’s prompt corrective action (PCA) framework since May 2017, had reported a net loss of Rs 3,801 crore in the year-ago quarter. This is the second successive quarter the bank has reported net profit, after being in red for 13 quarters.

Total provisions dropped to Rs 1,182 crore from Rs 4,752 crore in the yearago period.

Equity mutual funds may see their first monthly net outflows in more than four years as investors continue to cash out to tide over the pandemic-related credit crunch, while others hold off adding more in a rising stock market.

Net withdrawals from stock plans may top Rs 1,000 crore in July, said Nilesh Shah, MD of Kotak Mahindra Asset Management Co and chairman of the Association of Mutual Funds in India (Amfi). That would be the first net outflow since March 2016. Amfi data for July is due early next month.

"Some are redeeming to book profits after the rebound and others are selling to meet the cash crunch in their businesses in the absence of bank finance," Shah said. "Gross flows to equity funds are holding up but there's no let-up in redemptions. There will be net outflow for July as things stand today."

The contraction in fund flows are a cautionary tale for India's $1.9 trillion stock market that's looked past some dire economic projections and climbing virus numbers to jump more than 40 pr cent from its March low. Local money managers softened the blow by buying at the depths of the swoon even as foreigners pulled a record $8.4 billion. If the likely outflows in July marks the start of a trend, funds won't have the same firepower the next time risk appetites dries up.

"Since markets have continued to rise this month, I think redemptions will go up," said Sunil Subramaniam, MD at Sundaram Asset Management Co.

— Bloomberg