The benchmark stock indices have capitalized on yesterday’s gains to clock further gains in the morning.Join us as we follow the top business news through the day.10:20 AMRajan, Acharya caution against proposal to allow corporate houses to set up banksThe RBI working group’s proposal to allow corporate houses to set up banks is a “bombshell” and at this juncture, it is more important to stick to the tried and tested limits on involvement of business houses in the banking sector, says an article jointly written by former RBI Governor Raghuram Rajan and ex-Deputy Governor Viral Acharya.The authors suggest that the proposal is “best left on the shelf”.“The history of… connected lending is invariably disastrous —how can the bank make good loans when it is owned by the borrower? Even an independent committed regulator, with all the information in the world, finds it difficult to be in every nook and corner of the financial system to stop poor lending,” the article said.Last week, an Internal Working Group (IWG) set up by the Reserve Bank of India (RBI) made various recommendations, including that a large corporate may be permitted to promote banks only after necessary amendments to the Banking Regulation Act.
10:00 AMNifty breaks 13,000 level on vaccine optimism, banks top gainersThe bull run in stocks continues unabated.Reuters reports: “Indian shares scaled a record high on Tuesday in broad-based gains, as progress on U.S. President-elect Joe Biden’s transition to the White House and optimism around another COVID-19 vaccine helped boost investor sentiment globally.The NSE Nifty 50 index surpassed the psychologically important 13,000 level for the first time ever and was up 0.74% at 13,021.05 by 0400 GMT. The S&P BSE Sensex was 0.72% higher at 44,391.79.All 12 Nifty sub-indexes were trading higher, with banks leading the pack. HDFC Bank and ICICI Bank were the top two boosts to the Nifty 50.The Serum Institute of India, the world’s top vaccine manufacturer, will first focus on supplying AstraZeneca’s COVID-19 vaccine to India, Serum’s chief said on Monday, potentially increasing the chances of the shot becoming available quickly in the world’s second worst-hit country.Other Asian markets were also trading higher on Tuesday after Biden was given the go-ahead to begin his White House transition.”9:30 AMGeneral Motors will recall 7 million vehicles for air bag issue worldwideGeneral Motors Co will recall 7 million vehicles worldwide with potentially dangerous Takata air bag inflators after a U.S. safety agency said Monday it had rejected the Detroit automaker’s petition to avoid the callback.The recall is expected to cost the Detroit automaker $1.2 billion.The National Highway Traffic Safety Administration (NHTSA) said GM must recall 5.9 million 2007-2014 model year trucks and SUVs because the inflators “are at risk of the same type of explosion after long-term exposure to high heat and humidity as other recalled Takata inflators.”GM has estimated in securities filings it would cost $1.2 billion if it were required to replace air bag inflators it had sought to avoid fixing. The company confirmed the estimated cost Monday. GM said it will recall 7 million vehicles worldwide, including 544,000 in Canada.