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Star India is set to produce a new web series spotlighting the <keyword id="19899810" type="General" weightage="100" keywordseo="Reserve-Bank-of-India" source="keywords">Reserve Bank of India</keyword> (<keyword id="19899808" type="General" weightage="20" keywordseo="rbi" source="keywords">RBI</keyword>) and its critical role in shaping India’s economy over the past 90 years. The RBI, established in 1935, celebrated its 90th anniversary this April, and the upcoming series will aim to deepen public understanding of the central bank’s operations and achievements. Several prominent media companies — Star India Private Limited, Viacom 18, Zee Entertainment Network Limited, and Discovery Communications India — competed for the project. Following a request for proposal (RFP) by the RBI in July, Star India secured the contract, valued at Rs 6.5 crore, after progressing through final evaluations alongside Viacom 18. The RBI's vision for the series, as outlined in the RFP, includes five episodes of about 25-30 minutes each. This format will allow for an engaging, in-depth look into the RBI’s journey, from its establishment in pre-independence India to its modern-day functions. The episodes will delve into the RBI's mission and vision, major achievements, and ongoing developments, aiming to make the central bank’s functions more relatable and accessible to the general public. With expert interviews, high-quality visuals, and storytelling, the series is designed to demystify complex financial topics for a broad audience. By presenting the RBI's key initiatives, collaborations, and challenges in an engaging way, Star India hopes to foster greater transparency and trust in the central bank. The series will be available on both national television and OTT platforms, expanding its reach and impact. The RBI views this web series as a valuable tool to promote financial literacy. By making the central bank's work understandable and interesting, the series could serve as a bridge between the RBI and the public, contributing to a more financially aware society. (With inputs from agencies)

Curious to know what the Reserve Bank does? Star India will soon produce a web series narrating the RBI's 90-year journey

On September 18, 2024, the US <keyword id="19900043" type="General" weightage="20" keywordseo="fed" source="keywords">Fed</keyword> delivered a jumbo-sized surprise to the global economy. Not only did they trim their interest rates by a massive 50 basis points to bring their yields down to 5%, but also hinted at further rate cuts in the upcoming months. This move from the fed and several other central banks globally had pushed expectations high for a similar rate slash closer home, from the <keyword id="19899808" type="General" weightage="20" keywordseo="rbi" source="keywords">RBI</keyword> this month. But governor <keyword id="19913110" type="General" weightage="20" keywordseo="shaktikanta-das" source="keywords">Shaktikanta Das</keyword>, in a “picture abhi baaki hai” moment, decided to hold the repo rates here steady, leaving them unchanged at 6.5% for the record 10th straight time. Although, he did tinker with the policy stand, changing it from “rate cuts are absolutely off the table” to a more accommodating “we’re okay with bringing down the rates, if needed”. This, rather neutral, stance from India’s financial custodian sparked hopes for a rate cut in December this year. However, the stubborn inflation levels in September have again dented such hopes. As consumers, you may be wondering what all the hullabaloo this is about, since it hardly makes a difference to your regular financial routine. Well, the majority of both economic growth and inflation is closely connected to this policy stance from the central bank and it does have a rather indirect effect on both our earnings and spending. But more directly, it would have clear implications for those looking to own a house. Even the slightest modification of interest rates, or the lack of it, influences the <keyword id="19916018" type="General" weightage="20" keywordseo="emi" source="keywords">EMI</keyword> you pay significantly. So, all aspiring homebuyers, is this the right time to take out a loan and buy a house? Can you expect a rate cut anytime soon, and what will that mean for your home-owning dreams? We lay it out. <h2>What’s the connection?</h2>You see, buying a house is no small feat, at least financially. The task becomes even more herculean if you are scouting for your own roof in cities like Delhi, Noida, Bangalore or Mumbai where, as Circuit from Munnabhai says, “room shuru hote hi khatam ho jata hai”. Naturally, you’ll have to take a <keyword id="6354730" type="General" weightage="100" keywordseo="home-loan" source="Orion">home loan</keyword> from the bank. Don’t be mistaken, the bank won't give you a loan that covers 100% of the value of the property you want to own. Rather, your loan amount will be equivalent to a certain percentage of the property’s total value. RBI’s guidelines on this are pretty clear: <ul><li>If your loan amount is up to Rs 30 lakh, you can get a loan worth 90% of the property’s value.</li></ul><ul><li>If the loan amount is between Rs 30 lakh and Rs 75 lakh, you are eligible for a loan worth 80% of the property’s value.</li><li>If you are taking a loan of more than Rs 75 lakh, your loan amount will be equivalent to 70% of the property’s value.</li></ul>Now assuming that you have the money, it's all about paying back the principal amount, but not without a little (read hefty) interest added on top. See, when you’re taking a home loan, you are actually signing up for a long-term, even multi-decadal financial commitment, which will unfailingly present itself to your bank accounts and finances every single month, in the form of EMIs, or equated monthly instalments). When you take a home loan, you can choose to pay the interest in two ways (talk about choices!). One is that you decide to keep a fixed rate of interest throughout the tenure of your home loan. So, if you opt for a 25-year fixed-rate home loan at the rate of 8.8% p.a., you’ll have to pay interest at this rate for the next 25 years, till your entire loan is paid off. Yes, you can go backsies and switch to a floating-rate home loan by paying a fee. Floating, as the name suggests, means that your interest rate is not set in stone. But starting October 2019, when it comes to a floating interest rate home loan, your payable interest and EMIs are directly impacted by any changes in <keyword id="20094323" type="General" weightage="20" keywordseo="repo-rate" source="keywords">repo rate</keyword>, which were left unchanged by RBI this time around. Why are these two so chummy, you might ask. Well, home loan interest rates are a sum of two things: <ol><li>Repo Rate (the rate at which RBI lends money to banks)</li><li>Operational cost + margins</li></ol>Any plus or minus in this equation would send your home loan interests tanking, or skyrocketing. Vivek Iyer, Partner, Grant Thornton Bharat explains that any change in the repo rates impacts the cost of funds and thereby the home loan interest rates. “When the interest rates are expected to reduce, the corresponding impact will be in the form of a reduced EMI. Home loan borrowers should always try to borrow at a floating rate when interest rates are expected to reduce and at a fixed rate when the interest rates are expected to increase. This minimizes the outflow in the form of EMIs that the home loan borrowers will experience”, he continues. So, no change in repo rates means no change in your home loan interest payout and no financial relief whatsoever. A rate cut, which most experts are anticipating will start this December, would mean your EMI payments come down, and your wallet might save a little more. But there’s also a chance of an UNO reverse happening. In case RBI is in the mood to hike the interest, your home loan EMIs might end up taking more from your pockets. Consider this. You took a floating interest rate home loan worth Rs 50 lakh in January 2022 at 8% p.a., for a period of 20 years. This brings your total monthly EMI to Rs Rs 41,822. But, as luck would (or won't) have it, RBI raised the interest rate by 250 basis points between May 2022 and February 2023, bringing it to its current status of 6.5%. Some back-of-the-envelope calculations suggest that now, your home loan interest payout will also rise by a hefty 2.5%, taking the total to 10.5%. In other words, you’ll have to dish out Rs 49,919 per month as EMI. Now, won't you heave a sigh of relief if the RBI were to bring down the interest rate by say, even 50 basis points, or 0.5%? Agreed, your EMI will come down just marginally, to Rs 48,251. But look at this over a 20-year period, and you’ll see how big the difference is. <h2>Are rates set to change anytime soon?</h2>Generally, RBI hikes the repo rates if it sees inflation spiralling out of control. Then, in a bid to reduce consumer spending, it raises interest rates to make borrowing expensive. But when the apex bank sees sluggish consumption in the economy, inflation in control and wants to boost spending, it slashes down on interest rates, making it more lucrative for people to borrow. As of now, most experts are not anticipating any changes in the interest rates anytime soon. This means home loans are not getting cheaper anytime soon. The CPI data, which came out yesterday, saw inflation rise to 5.49% in September, compared to 3.65% last month. Food and beverage prices jumped to a four-month high of 8.36% in September, as opposed to a 5.3% rise in August. So a rate cut seems a no-go at the moment! Apurva Sheth, Head of Market Perspectives and Research, SAMCO Securities explains that the RBI had probably expected a hardening of inflation and that's why it chose to hold on to the rates in the monetary policy announcement last week. “Now, it seems that RBI will take a cautious stance going ahead and will not be in a hurry into rate cuts like its global peers”, he added. In all this, one thing is clear, in the grand movie of the Indian economy, the RBI has chosen stability over drama. And just like in every good Bollywood film, we're left wondering what twist the sequel will bring. Until then, it might be “The End" for rate cuts, but the show must go on for the Indian economy!

Boom or bust — how RBI’s decision to leave rates unchanged affects homebuyers

<div type="image" title="In case RBI is in the mood to hike the interest, your home loan EMIs might end up taking more from your pockets. Or, if it leaves the rates unchanged, your EMIs wont budge one bit" msid="114284206" hostid="261" caption="&amp;lt;p&amp;gt;In case RBI is in the mood to hike the interest, your home loan EMIs might end up taking more from your pockets. Or, if it leaves the rates unchanged, your EMIs wont budge one bit&amp;lt;/p&amp;gt;"></div> On September 18, 2024, the <keyword id="19951097" type="General" weightage="20" keywordseo="us-fed" source="keywords">US Fed</keyword> delivered a jumbo-sized surprise to the global economy. Not only did they trim their interest rates by a massive 50 basis points to bring their yields down to 5%, but also hinted at further rate cuts in the upcoming months. This move from the fed and several other central banks globally had pushed expectations high for a similar rate slash closer home, from the <keyword id="19899808" type="General" weightage="100" keywordseo="rbi" source="keywords">RBI</keyword> this month. But governor <keyword id="19913110" type="General" weightage="20" keywordseo="shaktikanta-das" source="keywords">Shaktikanta Das</keyword>, in a “picture abhi baaki hai” moment, decided to hold the repo rates here steady, leaving them unchanged at 6.5% for the record 10th straight time. Although, he did tinker with the policy stand, changing it from “rate cuts are absolutely off the table” to a more accommodating “we’re okay with bringing down the rates, if needed”. This, rather neutral, stance from India’s financial custodian sparked hopes for a rate cut in December this year. However, the stubborn <keyword id="22195" type="General" weightage="20" keywordseo="inflation" source="Orion">inflation</keyword> levels in September have again dented such hopes. As consumers, you may be wondering what all the hullabaloo this is about, since it hardly makes a difference to your regular financial routine. Well, the majority of both economic growth and inflation is closely connected to this policy stance from the central bank and it does have a rather indirect effect on both our earnings and spending. But more directly, it would have clear implications for those looking to own a house. Even the slightest modification of interest rates, or the lack of it, influences the <keyword id="19916018" type="General" weightage="20" keywordseo="emi" source="keywords">EMI</keyword> you pay significantly. So, all aspiring homebuyers, is this the right time to take out a loan and buy a house? Can you expect a rate cut anytime soon, and what will that mean for your home-owning dreams? We lay it out. <h2>What’s the connection?</h2>You see, buying a house is no small feat, at least financially. The task becomes even more herculean if you are scouting for your own roof in cities like Delhi, Noida, Bangalore or Mumbai where, as Circuit from Munnabhai says, “room shuru hote hi khatam ho jata hai”. Naturally, you’ll have to take a <keyword id="6354730" type="General" weightage="20" keywordseo="Home-loan" source="Orion">home loan</keyword> from the bank. Don’t be mistaken, the bank won't give you a loan that covers 100% of the value of the property you want to own. Rather, your loan amount will be equivalent to a certain percentage of the property’s total value. RBI’s guidelines on this are pretty clear: <ul><li>If your loan amount is up to Rs 30 lakh, you can get a loan worth 90% of the property’s value.</li></ul><ul><li>If the loan amount is between Rs 30 lakh and Rs 75 lakh, you are eligible for a loan worth 80% of the property’s value. </li><li>If you are taking a loan of more than Rs 75 lakh, your loan amount will be equivalent to 70% of the property’s value. </li></ul>Now assuming that you have the money, it's all about paying back the principal amount, but not without a little (read hefty) interest added on top. See, when you’re taking a home loan, you are actually signing up for a long-term, even multi-decadal financial commitment, which will unfailingly present itself to your bank accounts and finances every single month, in the form of EMIs, or equated monthly instalments). When you take a home loan, you can choose to pay the interest in two ways (talk about choices!). One is that you decide to keep a fixed rate of interest throughout the tenure of your home loan. So, if you opt for a 25-year fixed-rate home loan at the rate of 8.8% p.a., you’ll have to pay interest at this rate for the next 25 years, till your entire loan is paid off. Yes, you can go backsies and switch to a floating-rate home loan by paying a fee. Floating, as the name suggests, means that your interest rate is not set in stone. But starting October 2019, when it comes to a floating interest rate home loan, your payable interest and EMIs are directly impacted by any changes in <keyword id="20094323" type="General" weightage="20" keywordseo="repo-rate" source="keywords">repo rate</keyword>, which were left unchanged by RBI this time around. Why are these two so chummy, you might ask. Well, <keyword id="173069" type="General" weightage="20" keywordseo="Home-loan-interest" source="Orion">home loan interest</keyword> rates are a sum of two things: <ol><li>Repo Rate (the rate at which RBI lends money to banks)</li><li>Operational cost + margins</li></ol>Any plus or minus in this equation would send your home loan interests tanking, or skyrocketing. Vivek Iyer, Partner, Grant Thornton Bharat explains that any change in the repo rates impacts the cost of funds and thereby the home loan interest rates. “When the interest rates are expected to reduce, the corresponding impact will be in the form of a reduced EMI. Home loan borrowers should always try to borrow at a floating rate when interest rates are expected to reduce and at a fixed rate when the interest rates are expected to increase. This minimizes the outflow in the form of EMIs that the home loan borrowers will experience”, he continues. So, no change in repo rates means no change in your home loan interest payout and no financial relief whatsoever. A rate cut, which most experts are anticipating will start this December, would mean your EMI payments come down, and your wallet might save a little more. But there’s also a chance of an UNO reverse happening. In case RBI is in the mood to hike the interest, your home loan EMIs might end up taking more from your pockets. Consider this. You took a floating interest rate home loan worth Rs 50 lakh in January 2022 at 8% p.a., for a period of 20 years. This brings your total monthly EMI to Rs Rs 41,822. But, as luck would (or won't) have it, RBI raised the interest rate by 250 basis points between May 2022 and February 2023, bringing it to its current status of 6.5%. Some back-of-the-envelope calculations suggest that now, your home loan interest payout will also rise by a hefty 2.5%, taking the total to 10.5%. In other words, you’ll have to dish out Rs 49,919 per month as EMI. Now, won't you heave a sigh of relief if the RBI were to bring down the interest rate by say, even 50 basis points, or 0.5%? Agreed, your EMI will come down just marginally, to Rs 48,251. But look at this over a 20-year period, and you’ll see how big the difference is. <h2>Are rates set to change anytime soon?</h2>Generally, RBI hikes the repo rates if it sees inflation spiralling out of control. Then, in a bid to reduce consumer spending, it raises interest rates to make borrowing expensive. But when the apex bank sees sluggish consumption in the economy, inflation in control and wants to boost spending, it slashes down on interest rates, making it more lucrative for people to borrow. As of now, most experts are not anticipating any changes in the interest rates anytime soon. This means home loans are not getting cheaper anytime soon. The CPI data, which came out yesterday, saw inflation rise to 5.49% in September, compared to 3.65% last month. Food and beverage prices jumped to a four-month high of 8.36% in September, as opposed to a 5.3% rise in August. So a rate cut seems a no-go at the moment! Apurva Sheth, Head of Market Perspectives and Research, SAMCO Securities explains that the RBI had probably expected a hardening of inflation and that's why it chose to hold on to the rates in the monetary policy announcement last week. “Now, it seems that RBI will take a cautious stance going ahead and will not be in a hurry into rate cuts like its global peers”, he added. In all this, one thing is clear, in the grand movie of the Indian economy, the RBI has chosen stability over drama. And just like in every good Bollywood film, we're left wondering what twist the sequel will bring. Until then, it might be “The End" for rate cuts, but the show must go on for the Indian economy!

Simply Put: Boom or bust — how RBI’s decision to leave rates unchanged affects homebuyers

<ul><li>The <keyword id="6354335" type="General" weightage="50" keywordseo="reserve-bank-of-india" source="Orion">Reserve Bank of India</keyword> has announced that it is working on a dedicated cloud facility.</li><li>The cloud facility is being developed for the country’s financial sector.</li><li>The new facility is aimed at enhancing data security and privacy.</li></ul>India’s central bank, the <keyword id="50847" type="General" weightage="80" keywordseo="reserve-bank" source="Orion">Reserve Bank</keyword> of India (<keyword id="30067" type="General" weightage="80" keywordseo="rbi" source="Orion">RBI</keyword>) is working on a dedicated cloud facility for the booming financial sector in India. This was announced by RBI governor <keyword id="6359111" type="General" weightage="50" keywordseo="shaktikanta-das" source="Orion">Shaktikanta Das</keyword> during the central bank’s Monetary Policy Committee (MPC) announcement. The cloud facility is aimed at enhancing data security and privacy. It will also offer better scalability and ensure business continuity for companies. "Banks and financial entities are maintaining an ever-increasing volume of data. Many of them are utilising the cloud facilities for this purpose. The Reserve Bank is working on establishing a cloud facility for the financial sector in India for this purpose,” said Das. Its purpose is to help smaller entities build efficiencies in terms of scale, explained Rabi Sankar, deputy governor of RBI at the post-monetary policy press conference. The cloud facility will be set up in a phased manner in the medium term. It will be initially operated by Indian Financial Technology &amp; Allied Services (IFTAS), which is a wholly-owned subsidiary of the RBI. The facility will later be transferred to a different entity, owned by companies from the country’s financial sector. There is a growing need for improved data security as there has been a steady increase in digital transactions in the country. The setting up of this cloud facility will help startups and small enterprises handle data efficiently, probably at a reduced cost compared to existing international options available. RBI MPC has decided to keep key rates unchanged at 6.5% in its December policy. Other announcements from the meet include enhancements to limits for specific categories of transactions for Unified Payments Interface (<keyword id="6358921" type="General" weightage="80" keywordseo="upi" source="Orion">UPI</keyword>). As per the new UPI transaction limits, individuals can now make payments up to ₹5 lakh per day to hospitals and educational institutions by UPI. This was earlier capped at ₹1 lakh. The central bank has also proposed to increase the e-mandate for recurring payments to ₹1 lakh from current ₹15,000. SEE ALSO: <a href="https://www.businessinsider.in/finance/news/rbi-expects-indias-gdp-to-grow-at-7-in-fy24-keeps-repo-rate-unchanged/articleshow/105828012.cms">RBI expects India’s GDP to grow at 7% in FY24; keeps repo rate unchanged</a> <a href="https://www.businessinsider.in/stock-market/webstories/doms-industries-ipo-check-out-open-date-and-price-band/slidelist/105831826.cms">DOMS to raise ₹1,200 cr via IPO: Journey, investors and everything you need to know</a> <a href="https://www.businessinsider.in/finance/news/rbi-hikes-upi-transaction-limit-for-education-and-healthcare/articleshow/105832824.cms">UPI transaction limit for education and healthcare hiked to ₹5 lakh per day</a>

India’s central bank to establish cloud facility for financial institutions

<ul><li><keyword id="13332975" type="General" weightage="20" keywordseo="digisaathi" source="Orion">DigiSaathi</keyword> is a helpline for the customers of payments systems including cards, ATM, UPI.</li><li>It will also provide contact details of various payment system participants, both banks and non-banks.</li><li>There are 13 constituents of the working committee for DigiSaathi, including SBI, Amazon Pay and Google Pay.</li></ul>The Reserve Bank of India (<keyword id="30067" type="General" weightage="20" keywordseo="rbi" source="Orion">RBI</keyword>), along with the National Payments Corporation of India (NPCI), launched DigiSaathi — a helpline for the customers of payments systems including cards, ATM, UPI — on Tuesday afternoon. Along with this, the central bank also launched UPI123Pay, which will allow feature phone users to make payments through unified payments interface (UPI). RBI governor Shaktikanta Das, while announcing the initiatives mentioned that “the initiatives launched today have the potential to deepen the digital ecosystem and financial inclusion.” You can read more about how RBI plans to enable UPI payments on feature phones without the internet <a href="https://www.businessinsider.in/india/news/rbi-launched-upi123pay-here-is-how-upi-would-work-on-feature-phones/articleshow/90073275.cms">here</a>. What is DigiSaathi? What information will it offer? DigiSaathi is a 24-hour information hotline built for the users of digital payments products and services. The helpline would offer information on various products and services offered across payment cards of all kinds (including debit, credit and prepaid cards), UPI, QR-based payments, mobile or net banking, ATMs and more. Besides this, it will also provide contact details of various payment system participants, both banks and non-banks. “This initiative will help customers address queries in the digital payments umbrella including cards. Right now it is available in two languages – English and Hindi; we are working towards including all vernacular languages. Going forward, human intervention could also be included,” T Rabi Sankar, the deputy governor of RBI, said. The platform would be set up, operated, and maintained by the NPCI on behalf of a group of payments system operators and participants. How to reach out to DigiSaathi? There are two ways to get information from DigiSaathi. A user can simply call on a toll-free number 14431 or 1800 891 3333. Besides this, they can also search its official website,<a href="https://digisaathi.info/#/about"> digisaathi.info</a>, for the same. The website has incorporated chatbots, which will be regularly trained to improve response and accuracy in the time to come, DigiSaathi’s website read. A user can simply type their query on the “search bar” on the <keyword id="13335262" type="General" weightage="20" keywordseo="digisaathi-website" source="Orion">DigiSaathi website</keyword> or interact with the chatbot for the response. “The user can ask queries about digital payment products and services, most relevant and appropriate information towards, which shall be provided to [the] user on a best effort basis,” the website reads. There are 13 constituents of the working committee for the DigiSaathi, including State Bank of India (SBI), Bank of Baroda (BoB), ICICI Bank, Visa, Master Card, Amazon Pay, Google Pay, Indian Banks Association and Payments Council of India (PCI). SEE ALSO <a href="https://www.businessinsider.in/india/news/india-records-3993-new-covid-19-cases-lowest-in-almost-two-years/articleshow/90068925.cms" style="">India records 3,993 new COVID-19 cases, lowest in almost two years</a> <a href="https://www.businessinsider.in/sports/news/cristiano-ronaldo-is-reportedly-looking-to-leave-manchester-united-to-join-paris-saint-germain/articleshow/90068443.cms" style="">Cristiano Ronaldo is reportedly looking to leave Manchester United to join Messi and Neymar at Paris Saint-Germain</a> <a href="https://www.businessinsider.in/stock-market/news/amid-a-highly-volatile-market-here-is-an-outlier-stock-that-surged-9/articleshow/90068465.cms" data-type="tilCustomLink" style="">Amid a highly volatile market, here is an outlier stock that surged 9%</a>

EXPLAINED: What is DigiSaathi and how it can help you with digital payments

The size of <keyword id="102024" type="General" weightage="20" keywordseo="the-reserve-bank-of-india" source="Orion">the Reserve Bank of India</keyword>'s (<keyword id="30067" type="General" weightage="20" keywordseo="rbi" source="Orion">RBI</keyword>) balance sheet increased by 8.46 per cent as on March 31, 2022, mainly reflecting its liquidity and foreign exchange operations during the entire fiscal year. While income for the year increased by 20.14 per cent, expenditure increased by 280.13 per cent, according to the RBI's Annual Report for 2021-22 released on Friday. The increase on the asset side was due to increase in foreign investments, domestic investments, gold, and loans and advances and on the liability side due to the increase in deposits and notes by it. FY22 was the first full year of the April-March accounting cycle after transition from July-June. It shifted to a new accounting year in FY21 which was for nine months ended March 2021. The year 2021-22 ended with an overall surplus of Rs 30,307.45 crore as against Rs 99,122 crore in the previous year, resulting in its decrease of 69.42 per cent, the report cited. Earlier this month, the RBI said its Board approved the transfer of Rs 30,307 crore surplus as dividend to the Centre for the accounting year FY22, besides deciding to maintain the contingency risk buffer at 5.50 per cent. As per a framework, the RBI has to maintain a contingency risk buffer of 5.5-6.5 per cent of its balance sheet. Further, the report said the supply of notes during the year 2021-22 was at 222,505 lakh pieces, 0.36 per cent lower than that of the year 2020-21. The expenditure incurred on printing of bank notes increased from Rs 4,012.09 crore in 2020-21 to Rs 4,984.80 crore in 2021-22. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/science/environment/news/why-assam-gets-flooded-every-year/articleshow/91828506.cms">Explained: Why Assam gets flooded every year</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/thelife/personalities/news/gautam-adani-a-story-on-how-to-generate-wealth-via-hope-fomo-and-of-course-debt/articleshow/91829090.cms">Understanding Gautam Adani’s rise: a story on how to generate wealth via hope, equity and of course debt</a>

RBI's income grew 20% while expenses shot up by 280% in FY22

<ul><li>Fintechs issuing <keyword id="4294146" type="General" weightage="20" keywordseo="digital-loans" source="Orion">digital loans</keyword> witnessed an over three-fold disbursal growth in Q2. </li><li>The number and value of disbursals showed an increase in both year-on-year as well as sequential basis. </li><li>The average loan ticket size, however, witnessed a relatively moderate growth of 27% year-on-year to ₹8,602. </li></ul><keyword id="59794" type="General" weightage="20" keywordseo="digital-lending" source="Orion">Digital lending</keyword> platforms have seen their disbursals rise by over threefold year-on-year in Q2 FY23 to ₹14,016 crore. In the same period last year, they stood at ₹4,435 crore. According to a report by Fintech Association for Consumer Empowerment (FACE) which collated data from 21 FACE members, disbursals grew both in volume and value terms on a year-on-year, as well as sequential basis. The number of loans disbursed in Q2 increased 149% YoY to 16.3 million. The average loan ticket size stood at ₹8,602 — increasing 27% YoY. The report notes that the average ticket size varies across lenders due to the different target audience and segments. “We also see upward and downward movements regarding ticket size across lenders as they transition to other products and customer segments,” the report said. The difference in the consumer profiles and segments is also evident from the huge ‘spread’ in the processing fee and rate of interest charged by these fintech companies. According to the report, the processing fee spread is between 1.1% to 5.3%, while the interest rate spread is between 14.5% to 38.3%. “A number of factors, including the cost of funds, operations and risk profile of customers, influence the pricing for the customers and the range is perhaps reflective of the same,” the report said, explaining the reasons for the spread. <cmsannotation type="cmsannotation" annotationid="RBI’s digital lending and microfinance norms aimed at consumer protection" comment="subhead" text="RBI’s digital lending and microfinance norms aimed at consumer protection"><keyword id="30067" type="General" weightage="80" keywordseo="rbi" source="Orion">RBI</keyword>’s <keyword id="50691" type="General" weightage="100" keywordseo="digital" source="Orion">digital</keyword> lending and microfinance norms aimed at consumer protection</cmsannotation> The report also says new regulations in the sector will act as growth boosters. “Implementation of RBI’s Digital Lending norms brings tailwinds for the industry as it sets clear rules and standards, boosting the confidence of the customers, fintech lenders and other market participants,” said Sugandh Saxena, CEO at FACE. The norms were announced in August and notified in September this year. RBI’s digital lending norms provide for transparent pricing, cutting out the lending service providers out of the loan sanction process, an easier and transparent mode for borrowers to prepay their digital loans without any penalty, among other things. In addition to this, the RBI had also<a href="https://www.businessinsider.in/finance/news/customer-protection-guiding-light-of-revamped-microfinance-regulations-says-rbi-deputy-governor/articleshow/95352941.cms/"> announced</a> a slew of measures for the microfinance sector, including policies for conduct of employees, preventing coercive measures against borrowers, and transparent pricing of loans. This year, Chinese lending apps also <a href="https://www.businessinsider.in/india/news/rbi-tightens-norms-for-chinese-lending-apps/articleshow/93629917.cms">came under scrutiny</a> of the Enforcement Directorate, which booked cases against more than 400 apps and 50 non-banking finance companies (NBFC). SEE ALSO: <a href="https://www.businessinsider.in/science/health/news/can-diabetic-drugs-help-you-lose-weight-heres-what-experts-say/articleshow/95817157.cms">Can diabetic drugs help you lose weight? Here’s what experts say</a> <a href="https://www.businessinsider.in/finance/news/customer-protection-guiding-light-of-revamped-microfinance-regulations-says-rbi-deputy-governor/articleshow/95352941.cms">Customer protection 'guiding light' of revamped microfinance regulations, says RBI deputy governor</a> <a href="https://www.businessinsider.in/stock-market/news/a-year-after-market-debut-paytm-is-the-worst-performer-among-recent-large-ipos-cartrade-policybazaar-and-lic-join-the-party/articleshow/95762071.cms">A year after market debut, Paytm is the worst performer among recent large IPOs – Cartrade, Policybazaar and LIC join the party</a>

Digital lending platforms see 3x year-on-year rise in disbursals to ₹14,016 crore in Q2 FY23

The RBI on Friday asked <keyword id="3236791" type="General" weightage="20" keywordseo="paytm-payments-bank" source="Orion">Paytm Payments Bank</keyword> to stop opening new accounts amid “material supervisory concerns” observed in the bank. “Reserve Bank of India has today, in exercise of its powers, inter alia, under section 35A of the Banking Regulation Act, 1949, directed <keyword id="6357120" type="General" weightage="20" keywordseo="paytm" source="Orion">Paytm</keyword> Payments Bank Ltd to stop, with immediate effect, onboarding of new customers,” the central bank said in a statement. The bank has also been directed to appoint an IT audit firm to conduct a comprehensive system audit of its IT system. “Onboarding of new customers by Paytm Payments Bank Ltd will be subject to specific permission to be granted by RBI after reviewing report of the IT auditors. This action is based on certain material supervisory concerns observed in the bank,” it said. Paytm Payments Bank was incorporated in August 2016 and formally began its operations in May 2017 from a branch in Noida. In December 2020, the RBI had barred HDFC Bank from launching any new digital products or services and issuing new credit cards till the lender resolved recurring tech issues. SEE ALSO <a class="tout-title-link" href="https://www.businessinsider.in/business/startups/news/info-edges-latest-acquisition-aisle-explains-why-it-was-difficult-for-them-to-raise-funds/articleshow/90145724.cms">INTERVIEW: Info Edge’s latest acquisition Aisle’s founder explains why it was difficult for him to raise funds</a> <a href="https://www.businessinsider.in/business/startups/news/boat-has-rejigged-its-entire-upper-management-in-the-run-up-to-the-ipo/articleshow/90140785.cms">BoAt has rejigged its entire upper management in the run up to the IPO</a> <a href="https://www.businessinsider.in/stock-market/news/wipro-colgate-lupin-among-hot-stocks-to-watch-out-for-on-march-11/slidelist/90139884.cms">Wipro, Colgate, Lupin among hot stocks to watch out for on March 11</a>

RBI stops Paytm Payments Bank from opening new accounts

<ul class="summary-list"><li>Fast-food chains are grappling with inflation and rising costs.</li><li>To cope with pricing pressures, many chains are increasing prices and eliminating deals.</li></ul><keyword id="11894143" type="UNKNOWN" weightage="60" keywordseo="fast-food" source="Orion">Fast food</keyword> isn't as affordable as it used to be, and value menus are another victim of inflation and the pandemic.Chains have to consider raising prices thanks to new and costly challenges that have emerged, like inflation and growing labor costs, Kalinowski Equity Research CEO Mark Kalinowski told Insider. They "don't necessarily want to discount as heavily" as they did a few years ago, so low-cost value menus can be the easiest choice to go.One way to quietly raise prices is by swapping in lower-cost ingredients or shrinking portion sizes to make the meal seem cheaper, <a href="https://www.cnbc.com/2022/01/24/fast-food-value-meals-return-to-menus-but-the-deals-arent-as-cheap.html">David Henkes of Technomic told CNBC.</a> <keyword id="11946626" type="UNKNOWN" weightage="60" keywordseo="dominos" source="Orion">Domino's</keyword> is adopting this strategy by downsizing its $7.99 wing deal from 10 pieces to eight pieces, <a href="https://www.businessinsider.com/reviews/out?u=https%3A%2F%2Fwww.wsj.com%2Farticles%2Fburger-king-dominos-pull-back-on-value-menus-as-costs-rise-11643554803%3Fmod%3Dbusiness_lead_pos7">CEO Richard Allison said.</a> The pizza chain also made the deal exclusive to online orders, which Allison said is cheaper to process and gives Domino's access to more valuable customer data. Despite projections for between eight and 10% inflation in 2022, Allison explained on CNBC that the chain decided not to increase the price, which customers were already familiar with. <keyword id="11930190" type="UNKNOWN" weightage="60" keywordseo="burger-king" source="Orion">Burger King</keyword> made a similar move, <a href="https://www.businessinsider.com/reviews/out?u=https%3A%2F%2Fwww.wsj.com%2Farticles%2Fburger-king-dominos-pull-back-on-value-menus-as-costs-rise-11643554803%3Fmod%3Dbusiness_lead_pos7">reducing nuggets in one menu deal from ten pieces to eight</a>. Other chains have been more open about raising prices on menu items. <keyword id="11916300" type="UNKNOWN" weightage="60" keywordseo="mcdonalds" source="Orion">McDonald's</keyword>, for example, is allowing franchise operators to sell sodas for higher prices after they were kept at a dollar for several years as part of a nationwide promotion, <a href="https://www.businessinsider.com/reviews/out?u=https%3A%2F%2Fwww.wsj.com%2Farticles%2Fburger-king-dominos-pull-back-on-value-menus-as-costs-rise-11643554803%3Fmod%3Dbusiness_lead_pos7">The Wall Street Journal reported.</a>Then, some chains opted to eliminate some of the lower-priced deals. Burger King is <a href="https://www.restaurantbusinessonline.com/financing/burger-king-decides-cut-coupons">eliminating paper coupons</a> and <a href="https://www.businessinsider.com/reviews/out?u=https%3A%2F%2Fwww.wsj.com%2Farticles%2Fburger-king-dominos-pull-back-on-value-menus-as-costs-rise-11643554803%3Fmod%3Dbusiness_lead_pos7">making around a dozen changes to US menus</a> to increase profits, the chain said, including raising prices on nuggets, french fries, and bacon cheeseburgers. Denny's is reducing promotions of low-priced menu items, and has stopped advertising its <keyword id="13105837" type="UNKNOWN" weightage="60" keywordseo="value-menu" source="Orion">value menu</keyword> of items starting at $2, <a href="https://www.businessinsider.com/reviews/out?u=https%3A%2F%2Fwww.wsj.com%2Farticles%2Fburger-king-dominos-pull-back-on-value-menus-as-costs-rise-11643554803%3Fmod%3Dbusiness_lead_pos7">CEO John Miller said. </a>Straight menu price increases are the most common way brands do this, Kalinowski said, though they ideally like to keep it quiet.As brands eliminate or raise prices on lower price items, they shift to promoting combos or more expensive long-term offerings. <keyword id="11921796" type="UNKNOWN" weightage="60" keywordseo="taco-bell" source="Orion">Taco Bell</keyword>, which once seemed to be the <a href="https://www.businessinsider.com/taco-bell-battles-mcdonalds-for-best-dollar-menu-2017-12">last refuge of dollar menus</a> in fast food, has raised prices on staple menu items. The Mexican chain had <a href="https://www.businessinsider.com/dunkin-mcdonalds-and-other-fast-food-chains-are-raising-prices-2021-7">raised prices by 10%</a> between July 2020 and July 2021, an analysis by Gordon Haskett found.Since then, Taco Bell has focused on combo meals exclusively available online, and higher-priced limited-time items. The chain brought back the <a href="https://www.businessinsider.com/taco-bell-grilled-cheese-burrito-loss-of-potatoes-boost-profits-2020-10">Grilled Cheese Burrito</a> in November, which helped boost profits the first time it was sold in July 2020. Taco Bell also recently promoted <a href="https://www.cnn.com/2022/01/12/business-food/taco-bell-wings-fast-food-limited-time-items/index.html">wings</a> for just one week, which were priced at $5.99 for five wings. This is an example of a menu shift, where a chain rolls out more expensive offerings while quietly taking cheaper ones off menus, Kalinowski said.Inflation has hit fast food, along with the rest of the economy, as ingredients and labor both become more expensive. US inflation was up <a href="https://www.businessinsider.com/inflation-december-cpi-price-growth-index-supply-chain-economic-recovery-2022-1">7% year-over-year</a> in December according to the Bureau of Labor Statistics, the highest level since 1982.Do you have a story to share about a <keyword id="11893588" type="UNKNOWN" weightage="100" keywordseo="retail" source="Orion">retail</keyword> or restaurant chain? Email this reporter at <a href="mailto:mmeisenzahl@businessinsider.com">mmeisenzahl@businessinsider.com</a>.

Rising costs and inflation are reshaping fast-food, forcing chains to cut portion sizes, eliminate deals, and hide the value menu

<ul><li>The Reserve Bank of India (RBI) Governor <keyword id="6359111" type="UNKNOWN" weightage="20" keywordseo="Shaktikanta-Das">Shaktikanta Das</keyword> was doling out optimism to the market at today’s Monetary Policy Committee (<keyword id="6369693" type="UNKNOWN" weightage="20" keywordseo="MPC">MPC</keyword>) briefing. </li><li>The MPC will be expanding the limit of open market operations (OMOs), providing on-tap TLTRO of ₹1 lakh crore, and introducing State Development Loan (SDL) OMOs.</li><li>While these measures may ease some tensions in the short run, the markets still seek predictability and interest rate cuts. </li><li>Das said that both the apex bank and markets can operate in the same space in competition without necessarily being combative. </li></ul>The Reserve Bank of India (RBI) Governor Shaktikanta Das delivered a <a href="https://www.businessinsider.in/policy/economy/news/rbis-mpc-keeps-the-policy-rates-unchanged-to-maintain-accommodative-stance-for-inflation/articleshow/78566955.cms">chipper note</a> on India’s recovery today. According to him, even though there’s some disconnect between the RBI and the markets, all will be well — soon. However, what the market participants want is for the RBI to acknowledge that the economy is in deep trouble and, therefore, cut interest rates further, boost money supply, and ease credit. <div type="Article" hostid="261" msid="78566955" title="RBI says it has decided to 'look through' the current 'high inflation' as it won’t last long⁠ but leaves interest rates unchanged" mstype="2" mssubtype="0"></div> The deep contraction of economic growth witnessed in the first quarter is behind us, he said, while emphasising that some silver linings are already visible. However, not all that glitters is gold. “We remain circumspect about generalising these early greenshoots, as they have benefitted from base effects and one-off shifts in some sectors,” said ratings agency ICRA. Despite Governor Das’ attempt to ease those tense nerves in the market, the argument seems far from over. “The <keyword id="64190" type="POSITION" weightage="20" keywordseo="RBI-Governor">RBI governor</keyword>'s push for optimism is bordering on the edge of hope,” said Sushil Kedia, the founder of KEDIANOMICS. “What's going to happen over the next one month or three is anybody’s guess.” <div type="image" title="India gdp by quarter" msid="78574635" hostid="261" caption="&amp;lt;p&amp;gt;India&amp;#39;s GDP numbers over the last two years and RBI&amp;#39;s expectations for the second half of the fiscal year&amp;lt;/p&amp;gt;"></div> The question to ask here is not who is right and who is wrong, but what happens if any one of them is wrong. If the markets are wrong and the economy recovers by March 2021, they will be in for a surprise. However, if the RBI is wrong and the economy is worse off than the picture painted by the Governor, the implication may be more dire for everyone in the country. Not just growth, RBI hopes the inflation wave will also ebb on its own “MPC has decided to look through the current inflation as a transient hump,” Governor Das explained, adding that inflation will ease between January and March next year. However, Kedia is less sanguine than the RBI Governor. “The interest rate cycle has been so overstretched and soft for so long, that I do see signals in long term data analysis, that at any point far sooner than one would expect, some global events will start reversal of the interest rate cycle,” he said. <div type="image" title="INflation india (1)" msid="78574672" hostid="261" caption="&amp;lt;p&amp;gt;Inflation in India since the outbreak of the coronavirus pandemic in the country&amp;lt;/p&amp;gt;"></div> “The relative economic growth differential between China and the rest of the world is almost 13-14%,” he added. The point Kedia is making is that if inflation rises in the rest of the world, even India will have to raise interest rates to tackle the prices, and the RBI is not preparing for it. While not the most obvious possibility, only time will tell if Kedia’s fear is proven right. RBI’s efforts have been lauded but in parts While the RBI has opened the liquidity taps time and again, a big concern in the market is that both central and state governments need to borrow more and more to meet the rising expenses due to the pandemic. The RBI said that it would buy long-term bonds — issued by both states and the centre — on tap worth ₹20,000 crore, up to ₹1 lakh crore in the coming days. <div type="image" title="india govt debt" msid="78574919" hostid="261" caption="&amp;lt;p&amp;gt;Indian government owes lenders more than &amp;#8377;101 trillion&amp;lt;/p&amp;gt;"></div> That would provide the money states need, but it will also mop up the funds that would have otherwise been available for private borrowers. In these challenging times, it is believed that lenders would rather give money to a government than risky private parties. And that would mean that the borrowing rates for private companies will remain higher than what it should have been. “It also remains to be seen if the commitment to facilitate state and central government borrowing, as well as the explicit signals aimed at softening yields, are adequate for bond markets to shrug off concerns regarding the fiscal health of the central and state governments,” ICRA pointed out. Back to the demand for another rate cut Essentially, private borrowers are back to seeking interest rate cuts, which the RBI seems reluctant to execute at this point. “These (measures announced today) should be beneficial for banks who are comfortable with the credits of corporates to lend as banks' borrowing rates are fixed. In case the repo rates are cut again, banks can refinance at lower rates also,” said Murthy Nagarajan, the head of fixed income at Tata Mutual Fund. <div type="image" title="Copy of TCS share price 2" msid="78575065" hostid="261" caption="&amp;lt;p&amp;gt;Nifty 50 closes above 11,900 points after RBI&amp;#39;s announcement today&amp;lt;/p&amp;gt;"></div> Instead of directly cutting rates, the RBI has offered up open market operations (OMOs), which — according to Abhishek Goenka, the founder and CEO of India Forex Advisors (IFA) — will help bring borrowing rates down in the commercial paper market. OMOs are conducted by the central bank to give or take currency from a bank or group of banks by buying or selling government bonds on the open market. It’s an instrument banks can use to increase or shrink liquidity in the market. “RBI was doing OMOs on an ad hoc basis,” explained Goenka, essentially saying that while RBI may be taking necessary steps, they haven’t been very predictable. And markets hate surprises. <div type="image" title="Copy of nifty50" msid="78575238" hostid="261" caption="&amp;lt;p&amp;gt;India&amp;#39;s 10-year bond yeilds over the last one month&amp;lt;/p&amp;gt;"></div> Until September 30, it wasn’t clear how cash-strapped state governments would find the money to meet the additional expenses in the wake of the pandemic. The markets are glad that RBI has opened up the emergency borrowing window — called ways and means advances or WMA — <a href="https://www.businessinsider.in/policy/economy/news/india-leaves-borrowing-calendar-unchanged-target-remains-at-12-lakh-crore/articleshow/78407506.cms">until the end of the fiscal year by 60%</a>. WMA essentially means that governments can borrow directly from the RBI to meet their emergency needs. That leaves more money in the market for private borrowers. While the decision came just in time, there was enough fear and chaos in the run-up to it. What the markets want are predictability and interest rate cuts. Meanwhile, the Governor has asked the market to keep the faith. “We look forward to cooperative solutions for the borrowing program for the second half of the year… These views can be competitive without being combative,” he said. SEE ALSO: <a href="https://www.businessinsider.in/policy/economy/news/rbis-mpc-keeps-the-policy-rates-unchanged-to-maintain-accommodative-stance-for-inflation/articleshow/78566955.cms">RBI says it has decided to 'look through' the current 'high inflation' as it won’t last long⁠ but leaves interest rates unchanged</a> <a href="https://www.businessinsider.in/business/corporates/news/tcs-beats-accenture-to-become-the-worlds-most-valuable-it-services-company/articleshow/78566487.cms">TCS beats Accenture to become the world’s most valuable IT services company — but this not the first time it has raced ahead</a> <a href="https://www.businessinsider.in/india/news/union-minister-ram-vilas-paswan-dies-at-74/articleshow/78558640.cms">India's consumer affairs minister Ram Vilas Paswan passes way at 74</a> <a href="https://www.businessinsider.in/science/space/news/mars-will-appear-bigger-redder-and-brighter-on-october-13-and-wont-get-this-close-to-earth-again-until-2035/articleshow/78556539.cms">Mars will appear bigger, redder, and brighter on October 13 — and won’t get this close to Earth again until 2035</a>

RBI Governor wants markets to keep the faith but traders want something more

<ul><li>The new <keyword id="7567986" type="General" weightage="20" keywordseo="auto-debit" source="Orion">auto-debit</keyword> guidelines for recurring <keyword id="6359540" type="General" weightage="20" keywordseo="payments" source="Orion">payments</keyword> kicked in from today, October 1.</li><li>“The current <keyword id="30067" type="General" weightage="20" keywordseo="rbi" source="Orion">RBI</keyword> guidelines place more friction in recurring payment,” said Upekkha’s Thiyagarajan Maruthavanan.</li><li>Industry experts believe that this move will push more SaaS companies to move overseas and chase international clients.</li></ul>The new auto-debit guidelines for<a href="https://businessinsider.in/business/ecommerce/news/what-is-e-mandate-or-upi-autopay-and-how-to-enable-it-for-jio-hotstar-and-others/articleshow/86650600.cms?_ga=2.76036176.459036666.1632714936-227132192.1626769520"> recurring payments</a> kicked in from today, October 1, but the Indian software-as-a-service (SaaS) industry expects this new regulation to have a much deeper impact on their businesses. Before getting into this, it is important to understand what the guidelines really say. The Reserve Bank of India (RBI) has decided to do away with automatic recurring payments by adding a layer of authentication for transactions. A user will have to manually mandate such transactions every month, dropping the idea of recurring payments altogether. Now where does the <keyword id="11064864" type="General" weightage="20" keywordseo="SaaS-industry" source="Orion">SaaS industry</keyword> come into play? The <keyword id="4360787" type="General" weightage="20" keywordseo="Indian-saas-companies" source="Orion">Indian SaaS companies</keyword> — which are poised to meet a fifth of world’s software demand and pocket a revenue of <a href="https://www.businessinsider.in/tech/enterprise/news/amazon-twitter-hyundai-and-dominos-are-buying-indian-software-fuelling-a-75-billion-dream-chased-by-top-vcs-like-sequoia-and-tiger-global/articleshow/85646116.cms">$75 million in the next four years</a> — are worried that this would lead to default or delayed payments, impacting their revenue. Suresh Sambandam, founder of work management software company Kissflow, in a conversation with Business Insider, explained that any small ticket-size SaaS companies in India — whose payments range between $5 to $500 a month — go through a credit card-enabled payments system that is recurring in nature. The latest step, which adds an additional layer of authentication, is going to introduce default in payments, a lot of paperwork and a lot of human involvement to follow up with customers on past payments. “Earlier it was a smooth transaction and now it's overcomplicated,” he added. Thiyagarajan Maruthavana, partner at Upekkha Value SaaS Accelerator, told Business Insider said, “In the last 15 years, while the global SaaS market grew manifold to $200 billion in revenue, the domestic SaaS market failed to take off due to lack of easy collection of recurring payments. Many global SaaS startups and corporations have dialled back their India market plans in the last 5 years due to this issue.” “The current RBI guidelines place more friction in recurring payment,” he further added. Both Sambandam and Thiyagarajan reiterated that this move will push more SaaS companies to go after international clients as well as headquarters. “However it does not impact the SaaS industry from India as these Indian SaaS companies had already moved away from serving the domestic market to the global market. The guidelines impact only a handful of SaaS businesses that focus on Indian customers. These companies will now be forced to move their geography focus elsewhere,” Thiyagarajan said. Ankur Bansal, co-founder of BlackSoil Capital, in a previous conversation with Business Insider, had highlighted that SaaS business margins are really high and they are even higher from customers based out of the US or Europe. This is why most SaaS companies — such as Zoho, Freshworks, Postman, MindTickle and others — usually go after clients in international markets. This, in turn, also increases their valuation in the eyes of the investors significantly. These companies, along with many others, do have a portion of their customers coming in from India as well, which is going to get impacted now. The latest move will leave Indian SaaS companies with little reason to actually operate in India. What do other experts have to say? <div type="image" title="India’s new guidelines on recurring payments sends SaaS industry in a turmoil" msid="86679002" hostid="261" caption="&amp;lt;p&amp;gt;Anand Jain, cofounder and chief strategy officer at CleverTap&amp;lt;/p&amp;gt;"></div> “Recurring services don’t need the friction of executing the payment on a recurring basis — that friction makes business, especially SaaS business, tougher… The requirement for banks to provide at least 24 hour notice before a recurring payment is executed also ensures that unnecessary payments or buyers’ guilt are reduced. The only challenge I see is that this will need better help and training by financial institutions for their end users in setup. But India is getting much more savvy with these things.” — Monish Darda, cofounder and chief technology officer at Icertis, said. “These are a matter of habit, for instance, when RBI made 2FA [two-factor authentication] mandatory, we all thought that it would dent online transaction volumes. While there was some inconvenience felt initially, digital transactions (one-time password et al) have grown manifold in recent times and are set to continue to grow. In fact, the safety net provided by these checks and balances will only bring new users to the fold. Having said that, this will [be an] inconvenience [to] merchants and customers both for pre-existing debit mandates, since the card issuers will have to revalidate the mandates now.” — Shishir Mankad, managing partner and head of financial services at management consulting firm, Praxis Global Alliance said. SEE ALSO <a href="https://www.businessinsider.in/business/startups/news/ritesh-agarwal-led-oyo-files-preliminary-papers-for-its-1-2-billion-ipo/articleshow/86674003.cms">Ritesh Agarwal-led OYO files preliminary papers for its $1.2 billion IPO</a> <a href="https://www.businessinsider.in/stock-market/markets/news/zee-entertainment-falls-nearly-3-in-trade-as-board-refuses-to-hold-egm/articleshow/86678219.cms#:~:text=to%20hold%20EGM-,Zee%20Entertainment%20falls%20nearly%203%25%20in%20trade,board%20refuses%20to%20hold%20EGM&amp;text=Zee%20Entertainment%20has%20declined%20to,board%20to%20consider%20the%20demand.&amp;text=Post%20the%20development%2C%20Zee%20Entertainment's,3%3A30%20p.m.%20on%20Friday.">Zee Entertainment falls nearly 3% in trade as board refuses to hold EGM</a> <a href="https://www.businessinsider.in/business/corporates/news/air-india-gets-a-saviour-in-tata-sons/articleshow/86675842.cms#:~:text=The%20government%20has%20reportedly%20accepted,was%20also%20among%20the%20bidders.">Tata Sons reportedly wins bid to takeover the ‘Maharaja’</a>

New guidelines on recurring payments may send SaaS companies out of India, say experts

<ul><li>The Reserve Bank of India (<keyword id="30067" type="ORGANIZATION" weightage="20" keywordseo="RBI">RBI</keyword>) has announced a set of measures to pump more liquidity into the economy, especially for small and medium businesses. </li><li>In addition to extending ₹50,000 crore to government institutions, RBI also changed the rules of classifying assets. </li><li>This means that even if a small company can’t meet its payments, it won’t be degraded. </li><li>However, there’s a catch. </li></ul> The lockdown has been tough on the economy, and the problems of big corporations have taken the spotlight. However, according to the Reserve Bank of India (<a href="https://www.businessinsider.in/india/news/rbi-governor-shaktikanta-das-speech-highlights-on-april-17/articleshow/75193359.cms">RBI</a>), the disruption has had a more severe impact on small and medium-sized businesses. While these businesses need more lending, those who generally lend to them - non-banking financial companies (NBFCs) and microfinance institutions (MFIs) - have been stressed for over a year. Apart from extending ₹50,000 crore to government institutions that will pass it on to shadow banks, RBI also changed the rules of classifying assets. It extended the period for the resolution plan of stressed assets by 90 days from 60 days currently. It means shadow banks or NBFCs will get a breather, as they have been facing a credit crunch of their own as fewer banks were lending to them ever since IL&amp;FS went into a crisis of <keyword id="142154" type="PERSON" weightage="20" keywordseo="bad-loans">bad loans</keyword>. <keyword id="2377116" type="PERSON" weightage="20" keywordseo="asset-classification">Asset classification</keyword> standstill During its first set of relief measures announced on March 27, the central bank said that payment on loans will be deferred for the next 90 days — from 1 March to 31 May. That meant that they would not turn into non-performing assets (NPAs). But that didn’t necessarily mean that they wouldn’t be ‘reclassified’ for missing their payments. Today, April 17, <a href="https://www.businessinsider.in/india/news/rbi-governor-shaktikanta-das-speech-highlights-on-april-17/articleshow/75193359.cms">RBI governor Shaktikanta Das clarified</a> that the 90-day NPA norm shall exclude the moratorium period. This means that asset classification will be halted for all such accounts from 1 March 2020 to 31 May 2020. Even if a small company can’t meet its payments, it won’t be degraded. “The market should consider this favourably as this will ease liquidity and credit classifications issues,” said Rajosik Banerjee, a partner and head of financial risk management at KPMG India. But there’s a catch Just because a bank does not call it a bad loan does not mean that it isn’t heightened risk. In order to balance that out, banks are now required to maintain sufficient buffers. This means that they have to maintain a higher provision of 10% on all such accounts under the standstill, which will be spread out over the coming two quarters. “NBFCs that are now required to report under Ind AS, will have to take this into account while performing their expected credit loss calculations, together with the positive effect of all other governmental support measures targeted directly at the borrowers, whether, retail or corporate,” said Sai Venkateshwaran, partner and head of CFO advisory at KPMG India. “This will remain an area of key judgement for NBFCs, and will have a direct impact both on their earnings as well as their lending ability,” he explained. To further address the problems faced by small and medium businesses, the RBI announced a slew of measures to ease their liquidity crunch — like targeted long-term repo operations (TLTRO), refinancing facilities for All India Financial Institutions (AIFIs), and a reduction of the reverse repo rate. A welcome immediate relief not only to these institutions but also to their borrower base,” said Sanjay Doshi, head of Financial Services Advisory at KPMG India. See also: <a href="https://www.businessinsider.in/india/news/rbi-governor-shaktikanta-das-speech-highlights-on-april-17/articleshow/75193359.cms">RBI Governor opens up a ₹50,000 crore lifeline to flailing small businesses</a> <a href="https://www.businessinsider.in/business/corporates/news/exclusive-genpact-puts-over-200-employees-in-india-on-the-bench-hoping-to-find-them-a-role/articleshow/75198685.cms">EXCLUSIVE: Genpact puts over 200 employees in India ‘on the bench’ – hoping to find them a role</a> <a href="https://www.businessinsider.in/defense/news/the-us-accuses-china-of-conducting-nuclear-tests-after-blaming-it-for-the-covid-19-pandemic/articleshow/75198330.cms">The US accuses China of conducting nuclear tests after blaming it for the Covid-19 pandemic</a>

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