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“Ye le beta, humare khaandani sone ke gehne. Ise girvi rakhva de, shayad kuch paise aa jaye ghar main.” How many times have we seen similar dialogues repeat itself in Bollywood films of the 70s and 80s—abject poverty and a frail-looking old mother pleading to her son to pawn the family’s heirloom gold ornaments to a jeweller, all to get a few bucks? Well, if you’d ask that son in 2024, he’d rather hit the loan button on his <keyword id="105386" type="General" weightage="20" keywordseo="Demat-account" source="Orion">Demat account</keyword> than pawn his mother’s gold jewellery. Given how Indians are rapidly resorting to taking loans against their investments in shares and mutual funds, these might as well be a cherished family heirloom in today’s time. Fair warning though; it's not as if gold and loans against it are going down in India’s lending scene. It's very much the opposite, shining brighter than ever! The secured loan category is having its time in the spotlight, and people are certainly looking beyond land and property to get their hands on some extra monies! But what is funding the steep rise behind these loans? And are they as failsafe and secure as they’re made out to be? We decode for you in this week’s Simply Put. <h2 style="margin-bottom: 0.7em; line-height: 1.3; color: rgb(0, 0, 0); font-size: 24px; background: 0px 0px; text-rendering: optimizelegibility;">The great Indian pawning party</h2>Pawning one’s gold has been, by far, the OG Indian financial move to get a loan. That continues well into 2024, and apparently, more so when India decides to wed and celebrate! Data from <keyword id="30067" type="General" weightage="20" keywordseo="RBI" source="Orion">RBI</keyword> suggests that the outstanding amount on gold loans has swelled from Rs 85,009 crore in September 2022 to Rs 1,47,081 crore in September 2024. It looks like Gold took the motto of rise and shine too seriously! Table 1: Growth in gold loans <table class="redcator-table-advance" style="border-width: initial; border-style: none; background-color: rgb(255, 255, 255); font-size: 16px; line-height: 1.6em; box-shadow: none; width: 468pt; font-family: Merriweather; table-layout: fixed; padding-bottom: 10px !important; background-image: inherit !important; background-position: inherit !important; background-size: inherit !important; background-repeat: inherit !important; background-attachment: inherit !important; background-origin: inherit !important; background-clip: inherit !important;"></colgroup><tbody><tr><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">Year </td><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">Amount (In Rs crore) </td></tr><tr><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">September 2022 </td><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">85,009 </td></tr><tr><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">March 2023 </td><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">89,370 </td></tr><tr><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">September 2023 </td><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">97,426 </td></tr><tr><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">March 2024 </td><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">1,02,562 </td></tr><tr><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">September 2024 </td><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">1,47,081 </td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table> Source: RBI data While the world continues to be riled up in multiple geopolitical crises in 2024, gold has been making merry of these tough times. Thus far this year, <keyword id="3886593" type="General" weightage="20" keywordseo="domestic-gold" source="Orion">domestic gold</keyword> prices have grown by 23%, outperforming benchmark indices like Nifty and Sensex by a mile, which have gone up by 9.85% and 8.86%, respectively. The growth in gold loan disbursal rates month on month this year could also put Nifty and Sensex’s growth to shame. In just September 2024, gold loans grew an astounding 51%, up from 40.9% in August, 30.5% in June, and just 14.8% in March. <h2 style="margin-bottom: 0.7em; line-height: 1.3; color: rgb(0, 0, 0); font-size: 24px; background: 0px 0px; text-rendering: optimizelegibility;">Hey, wait up for me, says LAS</h2>In lockstep with the elder, gold loan sibling, advances against shares and bonds have also been inching up since 2022. Data from RBI (Reserve Bank of India) notes that as of September 2022, the outstanding quantum of loans that were taken against shares (LAS) and bonds stood at Rs 7,397.94 crores. This inched up to Rs 7,764 crore in September 2023. Come 2024, and it looked like this was LAS’ time to shine. Loans swiftly skyrocketed, with outstanding loans in this category going up from Rs 8,492 crore in March 2022 to a staggering Rs 9,546 crore at the end of September 2024. Naturally, the smoke of LAS has its fire in the record inflows that Indians are pouring into the stock market and mutual funds month on month. Per AMFI (<keyword id="134904" type="General" weightage="20" keywordseo="Association-of-Mutual-Funds-in-India" source="Orion">Association of Mutual Funds in India</keyword>), the net AUM (assets under management) of India’s mutual fund industry grew to Rs 67,25,614.61 crores in October 2024, up from Rs 67,09,259.24 crores in September 2024. Even the number of retail mutual fund folios, which include equity, hybrid, and solution-oriented mutual funds, burgeoned to 17,23,52,296 in October, as compared to 16,81,61,366 in September. The same goes for stock investments in India, where the number of new demat accounts that are added every month just simply refuses to climb down. As of last month, total demat accounts in the country stood at 17.9 crore, which is more than the entire population of full-fledged nations like Japan (12.45 crore), Russia (14.38 crore), and Bangladesh (17.3 crore). In fact, since February this year, the monthly growth of LAS has been hitting double digits. From 11.3% in March to 21.6% in May to 26.8% in August, growth in LAS has been exceptional, hitting 22.9% in September this year. For context, monthly growth in the LAS segment was at a mere 5% in September 2023. <h2 style="margin-bottom: 0.7em; line-height: 1.3; color: rgb(0, 0, 0); font-size: 24px; background: 0px 0px; text-rendering: optimizelegibility;">What's driving the growth?</h2>It's a win-win for both the bank and the customer. Customers love them because LAS is available at a lower interest rate compared to unsecured personal loans. You can get a loan at an interest rate of anywhere between 9 and 12% by pledging your gold, MF units, or shares. Compare this to over 10-28% rates, which is the range where unsecured personal loans charge interest. Banks love <keyword id="827883" type="General" weightage="100" keywordseo="Secured-Loans" source="Orion">secured loans</keyword> since they are well-secured. In case you default on paying back, the bank can sell off your gold, shares, or mutual fund units to recover the amount. This takes a lot of stress off the banks, which are already dealing with secured loans’ riskier sibling-<keyword id="947940" type="General" weightage="20" keywordseo="unsecured-lending" source="Orion">unsecured lending</keyword>. High NPAs (non-performing assets) and non-payments in the unsecured borrowing space have already put RBI on red alert, which is why the apex bank is tightening the screws on unsecured lending, which was well on its way to becoming a ticking time bomb. As a result, credit growth has moderated to 12.8% YoY in October, as against the 19.3% rise recorded in the year-ago period. Yet it's not like the banks won't feel the heat. Analysts at Nomura note that <keyword id="23954457" type="General" weightage="20" keywordseo="personal-loan-delinquencies" source="Orion">personal loan delinquencies</keyword> in India that have been overdue by over 90 days rose to 5.1% in the last financial year, as opposed to just 3.9% in the year prior. <h2 style="margin-bottom: 0.7em; line-height: 1.3; color: rgb(0, 0, 0); font-size: 24px; background: 0px 0px; text-rendering: optimizelegibility;">How does it work?</h2>Both these loans work on a similar principle: Your <keyword id="857141" type="General" weightage="20" keywordseo="loan-amount" source="Orion">loan amount</keyword> is equal to a certain percentage of the actual market value of your asset. This is known as the LTV (loan-to-value ratio). In the case of gold and debt mutual funds, RBI mandates that this LTV be about 75-80%. So, for every Rs 100 of gold or debt mutual fund unit you pledge, your maximum loan amount cannot exceed Rs 80. If you pledge gold, which has a market value of Rs 10 lakh, you can take a loan of up to Rs 8,00,000. In the case of shares and mutual fund units, this limit is set at 50%. So, your shares worth Rs 5,00,000 can only get you a loan worth Rs 2,50,000. But the bright side? You can continue earning returns on your investments and pay interest only on the amount you use, since this loan works as an overdraft facility. <h2 style="margin-bottom: 0.7em; line-height: 1.3; color: rgb(0, 0, 0); font-size: 24px; background: 0px 0px; text-rendering: optimizelegibility;">Super safe, you say?</h2>Interest rates on both of these loans are very much dependent on the market value of the asset, which wildly fluctuates on a day-to-day basis. So, in case the value of your asset falls, you’ll have to keep a margin or more of the same asset in order to continue with the loan and maintain the LTV balance. Failure to do so could mean the bank can even sell off your asset. Says financial planner Nema Chaya Buch. “Yes, LAS offers easy availability of funds since these loans come with a lower interest rate as compared to personal loans. Also, you continue to earn average returns of 10–13% on your equity investments. But the downside is, in case of emergency, those pledged securities cannot be sold. Also, if the equity market goes down, then the bank may ask for additional collateral. Raghvendra Nath, MD, Ladderup Wealth Management notes that taking a LAS is best when the value of your securities has appreciated significantly. “This allows you to maximize the loan amount based on your collateral while also addressing financial needs without having to liquidate your investment portfolio. However, there are notable disadvantages to consider. The market risk is significant; a substantial decline in market value could lead to margin calls, which may incur fees and charges if there are delays or prepayments, ultimately increasing the effective cost of borrowing. Furthermore, failure to make timely payments could result in the loss of your assets.”. Umesh Mohanan, ED &amp; CEO, of Indel Money, cautions that one should have a sufficient quantity of gold to get the loan amount one wants. "According to the current RBI rules, the loan applicant/borrower can draw up to 75% of the total market value of the collateral/gold jewellery. So, always carry a sufficient quantity of gold based on one’s loan requirement. “The most important thing is that the valuation of the gold depends on the purity of the gold. If the borrower pledges gold with higher purity, such as 24 carats or 22 carats, he will get the maximum loan amount," he adds.

Secured Loans 2.0 — why more and more Indians are turning to gold, shares and mutual funds to get loans

<div type="image" title="Data from RBI suggests that the outstanding amount on gold loans has swelled from Rs 85,009 crore in September 2022 to Rs 1,47,081 crore in September 2024." msid="115250619" hostid="261" sizebytes="118350" caption="&amp;lt;p&amp;gt;Data from RBI suggests that the outstanding amount on gold loans has swelled from Rs 85,009 crore in September 2022 to Rs 1,47,081 crore in September 2024.&amp;lt;/p&amp;gt;"></div> “Ye le beta, humare khaandani sone ke gehne. Ise girvi rakhva de, shayad kuch paise aa jaye ghar main.” How many times have we seen similar dialogues repeat itself in Bollywood films of the 70s and 80s—abject poverty and a frail-looking old mother pleading to her son to pawn the family’s heirloom <keyword id="18712" type="General" weightage="20" keywordseo="gold" source="Orion">gold</keyword> ornaments to a jeweller, all to get a few bucks? Well, if you’d ask that son in 2024, he’d rather hit the loan button on his <keyword id="19977340" type="General" weightage="20" keywordseo="demat" source="keywords">Demat</keyword> account than pawn his mother’s gold jewellery. Given how Indians are rapidly resorting to taking loans against their investments in shares and mutual funds, these might as well be a cherished family heirloom in today’s time. Fair warning though; it's not as if gold and loans against it are going down in India’s lending scene. It's very much the opposite, shining brighter than ever! The secured loan category is having its time in the spotlight, and people are certainly looking beyond land and property to get their hands on some extra monies! But what is funding the steep rise behind these loans? And are they as failsafe and secure as they’re made out to be? We decode for you in this week’s Simply Put. <h2>The great Indian pawning party</h2>Pawning one’s gold has been, by far, the OG Indian financial move to get a loan. That continues well into 2024, and apparently, more so when India decides to wed and celebrate! Data from <keyword id="19899808" type="General" weightage="20" keywordseo="rbi" source="keywords">RBI</keyword> suggests that the outstanding amount on gold loans has swelled from Rs 85,009 crore in September 2022 to Rs 1,47,081 crore in September 2024. It looks like Gold took the motto of rise and shine too seriously! Table 1: Growth in gold loans <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Year </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Amount (In Rs crore) </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">September 2022 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">85,009 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">March 2023 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">89,370 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">September 2023 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">97,426 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">March 2024 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">1,02,562 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">September 2024 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">1,47,081 </td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table> Source: RBI data While the world continues to be riled up in multiple geopolitical crises in 2024, gold has been making merry of these tough times. Thus far this year, domestic gold prices have grown by 23%, outperforming benchmark indices like Nifty and Sensex by a mile, which have gone up by 9.85% and 8.86%, respectively. The growth in gold loan disbursal rates month on month this year could also put Nifty and Sensex’s growth to shame. In just September 2024, gold loans grew an astounding 51%, up from 40.9% in August, 30.5% in June, and just 14.8% in March. <h2>Hey, wait up for me, says <keyword id="23953567" type="General" weightage="20" keywordseo="las" source="keywords">LAS</keyword></h2>In lockstep with the elder, gold loan sibling, advances against shares and bonds have also been inching up since 2022. Data from RBI (Reserve Bank of India) notes that as of September 2022, the outstanding quantum of loans that were taken against shares (LAS) and bonds stood at Rs 7,397.94 crores. This inched up to Rs 7,764 crore in September 2023. Come 2024, and it looked like this was LAS’ time to shine. Loans swiftly skyrocketed, with outstanding loans in this category going up from Rs 8,492 crore in March 2022 to a staggering Rs 9,546 crore at the end of September 2024. Naturally, the smoke of LAS has its fire in the record inflows that Indians are pouring into the stock market and mutual funds month on month. Per AMFI (<keyword id="20090034" type="General" weightage="20" keywordseo="association-of-mutual-funds" source="keywords">Association of Mutual Funds</keyword> in India), the net AUM (assets under management) of India’s mutual fund industry grew to Rs 67,25,614.61 crores in October 2024, up from Rs 67,09,259.24 crores in September 2024. Even the number of retail mutual fund folios, which include equity, hybrid, and solution-oriented mutual funds, burgeoned to 17,23,52,296 in October, as compared to 16,81,61,366 in September. The same goes for stock investments in India, where the number of new demat accounts that are added every month just simply refuses to climb down. As of last month, total demat accounts in the country stood at 17.9 crore, which is more than the entire population of full-fledged nations like Japan (12.45 crore), Russia (14.38 crore), and Bangladesh (17.3 crore). In fact, since February this year, the monthly growth of LAS has been hitting double digits. From 11.3% in March to 21.6% in May to 26.8% in August, growth in LAS has been exceptional, hitting 22.9% in September this year. For context, monthly growth in the LAS segment was at a mere 5% in September 2023. <h2>What's driving the growth?</h2>It's a win-win for both the bank and the customer. Customers love them because LAS is available at a lower interest rate compared to unsecured personal loans. You can get a loan at an interest rate of anywhere between 9 and 12% by pledging your gold, MF units, or shares. Compare this to over 10-28% rates, which is the range where unsecured personal loans charge interest. Banks love <keyword id="827883" type="General" weightage="100" keywordseo="secured-loans" source="Orion">secured loans</keyword> since they are well-secured. In case you default on paying back, the bank can sell off your gold, shares, or mutual fund units to recover the amount. This takes a lot of stress off the banks, which are already dealing with secured loans’ riskier sibling-unsecured lending. High NPAs (non-performing assets) and non-payments in the unsecured borrowing space have already put RBI on red alert, which is why the apex bank is tightening the screws on unsecured lending, which was well on its way to becoming a ticking time bomb. As a result, credit growth has moderated to 12.8% YoY in October, as against the 19.3% rise recorded in the year-ago period. Yet it's not like the banks won't feel the heat. Analysts at Nomura note that personal loan delinquencies in India that have been overdue by over 90 days rose to 5.1% in the last financial year, as opposed to just 3.9% in the year prior. <h2>How does it work?</h2>Both these loans work on a similar principle: Your loan amount is equal to a certain percentage of the actual market value of your asset. This is known as the <keyword id="20051485" type="General" weightage="20" keywordseo="ltv" source="keywords">LTV</keyword> (loan-to-value ratio). In the case of gold and debt mutual funds, RBI mandates that this LTV be about 75-80%. So, for every Rs 100 of gold or debt mutual fund unit you pledge, your maximum loan amount cannot exceed Rs 80. If you pledge gold, which has a market value of Rs 10 lakh, you can take a loan of up to Rs 8,00,000. In the case of shares and mutual fund units, this limit is set at 50%. So, your shares worth Rs 5,00,000 can only get you a loan worth Rs 2,50,000. But the bright side? You can continue earning returns on your investments and pay interest only on the amount you use, since this loan works as an overdraft facility. <h2>Super safe, you say?</h2>Interest rates on both of these loans are very much dependent on the market value of the asset, which wildly fluctuates on a day-to-day basis. So, in case the value of your asset falls, you’ll have to keep a margin or more of the same asset in order to continue with the loan and maintain the LTV balance. Failure to do so could mean the bank can even sell off your asset. Says financial planner Nema Chaya Buch. “Yes, LAS offers easy availability of funds since these loans come with a lower interest rate as compared to personal loans. Also, you continue to earn average returns of 10–13% on your equity investments. But the downside is, in case of emergency, those pledged securities cannot be sold. Also, if the equity market goes down, then the bank may ask for additional collateral. Raghvendra Nath, MD, Ladderup Wealth Management notes that taking a LAS is best when the value of your securities has appreciated significantly. “This allows you to maximize the loan amount based on your collateral while also addressing financial needs without having to liquidate your investment portfolio. However, there are notable disadvantages to consider. The market risk is significant; a substantial decline in market value could lead to margin calls, which may incur fees and charges if there are delays or prepayments, ultimately increasing the effective cost of borrowing. Furthermore, failure to make timely payments could result in the loss of your assets.”. Umesh Mohanan, ED &amp; CEO, of Indel Money, cautions that one should have a sufficient quantity of gold to get the loan amount one wants. "According to the current RBI rules, the loan applicant/borrower can draw up to 75% of the total market value of the collateral/gold jewellery. So, always carry a sufficient quantity of gold based on one’s loan requirement. “The most important thing is that the valuation of the gold depends on the purity of the gold. If the borrower pledges gold with higher purity, such as 24 carats or 22 carats, he will get the maximum loan amount," he adds.

Simply Put: Secured Loans 2.0 — why more and more Indians are turning to gold, shares and mutual funds to get loans

Over the past few months, there’s been a lot of brouhaha about the lagging pace of bank deposits in India. Simply put, the rate at which Indians are depositing their hard-earned money in banks has been falling constantly, and some blame the increasing financialization of household savings in the country, or the rising preference of Indians towards mutual funds and shares. So, the hypothesis is that people are choosing to invest more in mutual funds and the Indian equity markets through direct investments, IPOs, or NFOs, the money flowing into Indian banks in the form of deposits is slowing down. But is that really the case? <h2>A crisis or a phase?</h2><keyword id="19899808" type="General" weightage="20" keywordseo="rbi" source="keywords">RBI</keyword> data suggested that for the quarter ended June 2024, bank deposits grew at 11.7%. On the other hand, credit growth has outpaced this at 15%. This means that the outflow from banks as loans is far greater than the inflow into them in the form of deposits in Q1 of FY 2024-25. The situation largely saw cut-copy-paste in the first week of September as well, with loans registering a 13.3% YoY growth during the period, while deposits rose only 11.1%. This gap has only been widening for the last 3 years. Since deposits are how banks gather assets to further lend and earn interest income as a consequence, even a slight dip could set the alarm bells ringing for banks, and rightfully so. And truth be told, mutual funds are indeed taking on bank deposits in a big way. Per a report by <keyword id="20250971" type="General" weightage="20" keywordseo="franklin-templeton" source="keywords">Franklin Templeton</keyword>, in August 2024, the AUM (assets under management) of Indian mutual funds, or the total funds managed by them, stood at 31.3% of total bank deposits in the country, up from 24.20% during the year-ago period. As of August 2024, the AUM of mutual funds stood at Rs 66.17 lakh crore, an all-time high. But all said and done, is this really the reason why the rate of bank deposits is falling behind? SBI has dismissed this to be a “statistical myth”, and experts point out that since equity and fund houses also keep the cash in their respective bank accounts, there’s no cause for concern. So, is financialization really to be blamed for the trailing tempo of deposits? Or is something else happening behind the scenes? We take a closer look: <h2>First, are <keyword id="4000333" type="General" weightage="100" keywordseo="household-deposits" source="Orion">household deposits</keyword> really slowing down? And is that a cause of concern?</h2>Data from Motilal Oswal suggests the contrary. Deposits grew by around 10.4% between March 2020 and August 2024. Data from RBI also highlights that as of August 9, 2024, bank deposits witnessed a YoY growth of 10.8%. The loan-to-deposit ratio for the retail segment, which indicates what percentage of its total deposits the banks lend out as loans, has stayed at 77.5%, above the 77% mark for the tenth straight month. Also, we can’t forego the fact that the share of Indian <keyword id="20319599" type="General" weightage="20" keywordseo="households" source="keywords">households</keyword> in bank deposits has indeed slowed down. However, data from Axis AMC shows that the dip is marginal—from 63% in 2022 to 62% in 2023 and 61% in 2024. What has slowed down even more considerably is the share of government deposits in the aggregate bank deposits, which has dipped from 14% in 2018 to 9% in 2024. So, it's not just household deposits, you see. Moreover, as of March 2024, the collective CASA ratio (current and savings account deposits) of all commercial banks in India stood at 41.00%, down from 43.1% in March 2023 and 45.2% in March 2022, marking a nearly 5% point decline over the past year, while still staying over the 10-year average of 39.2%. This implies that Indian banks are relying more on higher-cost funds (savings accounts), which can limit their profitability. <h2>What is this financialisation of savings we are talking about?</h2>Then again, there is no doubt about the growing affinity of Indians towards mutual funds and stock markets. Recent data from CBDT (<keyword id="19942037" type="General" weightage="20" keywordseo="central-board-of-direct-taxes" source="keywords">Central Board of Direct Taxes</keyword>) highlights that India’s net direct tax collection surged by around 22%, driven exclusively by the significant uptick in the collection of <keyword id="20930760" type="General" weightage="20" keywordseo="securities-transaction-tax" source="keywords">Securities Transaction Tax</keyword> (STT), which doubled to Rs 26,154 crore, from Rs 13,352 crore in the year-ago period. Why does this matter? STT is levied when you buy or sell equity shares on stock exchanges, sell equity mutual funds, and trade in futures and options in the equity segment. Such taxes, including the multiple other taxes in equity market investments, are considered as leakages as the money moves out of the economy into government coffers. Data from a ValueQuest report explains that over the last 20 years, the markets have handsomely rewarded the investors, generating over $900 billion in incremental value for them. This is the major driver behind the dramatic rise in investment flowing towards the equity markets. There’s further proof of this budding romance, if you check the demat pudding. The number of demat accounts, which are a primary requisite for participating in the stock markets, also burgeoned by 42.3 lakh in August 2024, taking India’s total tally of demat accounts beyond 17 crore. To put this in perspective, this is almost equivalent to the population of just 8 nations in the world, including China, the US, Brazil and more. Vivek Iyer, Partner, Grant Thornton Bharat thinks it's rather important, as well. “Financialisation of household savings in India is an indication of deepening capital markets in the market, especially from a retail investor standpoint. Bank deposits with a modest rate of return are no longer the only option for savings for investors. Investors today have more avenues for wealth creation in the form of public capital markets, which have democratized wealth creation and provided equality of opportunity to retail investors”, he says. Yes, Indians are investing more and more in the markets, and in mutual funds. But is it a sin to look out for inflation-beating returns, which the stock markets offer, and vanilla bank deposits don't? After all, the allure of 12-13% annual returns offered by equities can certainly pale the stability offered by good old deposits, which generally do not go beyond 9% when it comes to annual returns. But all of this is not what is behind the slowdown. India is still a toddler in the school of savings financialization, with less than 10% of the population holding a demat account, and less than 5% of us saving in equities. That's a drop in the ocean of deposits, far inadequate to trigger a tsunami. <h2>Tell me why lagging deposits have nothing to do with Indians investing more in mutual funds!</h2>Says Shweta Rajani, Head - Mutual Funds, Anand Rathi Wealth Limited, “Households' equity holdings composition grew from 11.1% in FY 23 to 14.7% in FY 24. This trend reflects a growing awareness of investment options, empowering individuals to take control of their financial futures. Despite this transition towards equities, banks still hold a significant share of household financial savings—33.5% in FY24 compared to 34.9% in FY23”. Also, household savings and their subsequent financialization do not have much to do with deposit creation, which is entirely made by banks. What actually drives increased deposits is credit growth or increased lending. When interest rates are eased, people tend to borrow more and spend more, which circulates more money in the economy. For the past 4 years, RBI has been tightening the screws on interest rates, which raises the cost of borrowings, and makes it more expensive to take loans, putting a dampener on credit growth, but effectively curbing inflationary pressures. The last time RBI cut the repo rate by 40 basis points was back in May 2020, 4 years ago. The lag in deposit growth we’re witnessing is almost 3 years old. Coincidence much, or just good old economics at work? But with the <keyword id="19900043" type="General" weightage="20" keywordseo="fed" source="keywords">Fed</keyword> recently setting a rate cut precedent by slashing 50 bps off its interest rate, RBI is expected to follow suit in the next <keyword id="19918491" type="General" weightage="20" keywordseo="mpc" source="keywords">MPC</keyword> (Monetary Policy Committee) meeting, scheduled for November 2024. A rate cut would ease the aforementioned high cost of borrowing, and increase loan-taking for corporates and institutional investors, thereby stoking consumption in the economy. And then, deposit creation in banks is likely to return to its former glory. If not, then that would be a curious case to unravel! But that worry is for another day.

A Deposit Dilemma — What's the fuss about a crisis in Indian bank deposits? Are mutual fund investments to blame?

<ul class="summary-list"><li>The Kremlin ordered Yevgeny Prigozhin's death in a plane crash last August, according to reports.</li><li>Moscow has since worked to absorb Wagner's empire and militia in Ukraine and Africa, analysts said.</li></ul>Vladimir Putin reportedly ordered Yevgeny Prigozhin's demise last year — and he's now trying to do the same to his mercenary group.Since Prigozhin's <a target="_blank" href="https://www.businessinsider.com/wagner-boss-prigozhin-plane-crash-assassination-putin-patrushev-wsj-2023-12">plane crashed</a> last August, many have pondered the <a target="_blank" href="https://www.businessinsider.com/heres-what-could-happen-to-wagner-after-failed-rebellion-experts-2023-6">fate of the Wagner paramilitary organization</a> without its leader.In the hours after Wagner's <a target="_blank" href="https://www.businessinsider.com/why-wagner-rebelled-in-russia-starting-to-make-sense-2023-6">short-lived mutiny</a> last June, the Kremlin <a target="_blank" href="https://www.wsj.com/articles/putin-moves-to-seize-control-of-wagners-global-empire-26d49286">began</a> privately reassuring African and Middle Eastern governments that Russia would take full control of Prigozhin's global empire.Prigozhin <a target="_blank" href="https://www.businessinsider.com/prigozhin-tried-to-save-business-empire-days-before-death-report-2023-8">crossed Africa</a> in a frantic attempt to protect his global business empire, before his untimely demise.Six months after his death, experts say Wagner's days operating anywhere in the world could be numbered.Sergey Sukhankin, a senior fellow at the Jamestown Foundation, said there is no doubt that the Wagner Group has become "marginalized" and "de facto" subordinated to Russia's defense ministry following Prighozhin's death."The fighters will do what they are told" by the ministry, he told BI.<h2>Wagner is shrinking in Ukraine</h2>In the months since Prigozhin's death, intelligence reports have offered clues about the Kremlin's efforts to take over his organization, which had been a major player in the war in Ukraine and also operated elsewhere.Former Wagner fighters have been absorbed into Russia's national guard, also known as Rosgvardia, according to a <a target="_blank" href="https://www.businessinsider.com/ex-wagner-fighters-may-be-heading-ukraine-russia-national-guard-2024-2">report</a> by the UK government this month.Three former Wagner assault detachments are being integrated into its first Volunteer Corps formation with the likely goal of deploying them to Ukraine and Africa, the UK said.<a target="_blank" href="https://twitter.com/DefenceHQ/status/1755172681463349625">Another update</a> last week said Wagner's plan to establish a new headquarters near a Russian barracks is likely a sign of its subordination.And Russia's efforts aren't stopping there.<h2>Russia is taking over Wagner's mercenaries in Africa</h2>Russia's defense ministry <a target="_blank" href="https://www.businessinsider.com/new-russian-military-unit-recruiting-former-wagner-fighters-ukraine-veterans-2023-12">created</a> a new military unit called the Africa Corps last summer.The military formation has been actively recruiting former Wagner Group mercenaries and soldiers who fought in Ukraine for combat operations in Africa.In a <a target="_blank" href="https://t.me/KorpusAfrica/260">Telegram post last week</a>, it promised an unspecified "high monetary" allowance, payments in foreign currency, service under "competent commanders" with extensive combat experience, and medical care and social benefits.Fighters joining the new group is likely a sign of diminishing allegiance to Prigozhin's paramilitary organization, according to Raphael Parens, a fellow in the Foreign Policy Research Institute's Eurasia Program and an international security researcher specializing in small armed groups."Wagner fighters likely have little loyalty to the company itself after Prigozhin's demise and would be willing to fight for whichever Kremlin-backed organization that exists in Africa," Parens told BI."These mercenaries care about the bottom line rather than an ideological alignment with Prigozhin," he said.The Kremlin is likely using the Africa Corps to take over many of the functions of the Wagner Group, Parens added.However, it's unclear how successful Russia's efforts will be: "Prigozhin relied heavily on personal connections and a variety of shell corporations, which may be difficult for a state government to control," he said.Instead of being another attempt by Russia to subordinate Wagner, Sukhankin said its recruitment of Wagner fighters is about "making the best of professional mercenaries familiar with the African environment."<h2>Ukraine and Western allies may be trying to stop Russia</h2>Alessandro Arduino, the author of "Money for Mayhem: Mercenaries, Private Military Companies, Drones, and the Future of War," said the Wagner Group could either fall under Russia's control or split into smaller, heavily armed groups serving local warlords."Regardless, in Africa, the perception that Wagner or the new creation Africa Corp is protecting territorial integrity against militant forces is on the rise," he told BI.Last week, in a <a target="_blank" href="https://www.kyivpost.com/post/27637">video</a> obtained by the Kyiv Post, Ukrainian special forces were shown interrogating captured Wagner mercenaries in Sudan.The undated video shows one soldier confessing to being part of a Wagner mercenary outfit sent to Sudan to overthrow the local government, per the outlet.According to Parens, the presence of Ukrainian special forces in Africa highlights that Ukraine is competing with Russia in a new area."This signals the Ukrainian government's willingness to fight and defeat Russian forces via attrition regardless of their location," he said.Sukhankin suggested that the operation may be part of "some sort of tacit agreement" between Western allies and Ukraine to battle Russian mercenaries in Africa in exchange for certain military backing for Ukraine in its war against Russia."Ukrainian special services have acquired considerable experience of waging non-linear warfare against the Russian side and especially against the Wagner Group," he said. "This is something the West does not have."In Sukhankin's view, this makes Ukrainians "the best option — both in terms of effectiveness/efficiency and cost-benefit basis — in confronting Russian mercenaries in Africa."The fate of the Wagner Group, it seems, still hangs in the balance.

Putin is tightening his grip over what's left of the Wagner Group

<ul class="summary-list"><li>Russia's economic strength is likely to wane this year, economists say. </li><li>Putin could lose support if Western sanctions make life more difficult for ordinary Russians. </li></ul>Russia's economic resilience in the face of sanctions will be challenged this year, economists say, and they predict that Vladimir Putin could lose the support of the people if the West ramps up sanctions and makes life in the country more difficult. Russia has so far weathered the impact of<a href="https://markets.businessinsider.com/news/currencies/russia-economy-putin-sanctions-markets-currency-labor-recession-emigration-2023-7"> Western sanctions</a>, but the nation could see a turning point at the November US presidential election, according to Jeffrey Sonnenfeld and Steven Tian, two Yale researchers who think the West is likely to keep <a href="https://www.businessinsider.com/biden-changes-tone-ukraine-support-as-long-as-we-can-2023-12#:~:text=When%20speaking%20about%20providing%20Ukraine,it%20wins%2C%20whatever%20it%20takes.">providing support for Ukraine</a> while tightening sanctions on Russia if President Joe Biden gets re-elected.More economic pressure could make Russians more resistant to Putin's leadership, they said, after a long period of complacency as the president drags the nation <a href="https://www.businessinsider.com/the-ukraine-war-grinds-4-ways-conflict-russia-could-end-2024-2">into its third year of war</a>."People are living regular lives for now, but it's a completely unsustainable strategy, and the fundamental growth drivers underpinning that economy are deteriorating in front of our eyes," Tian told Business Insider. "And if Trump's not elected, then all of that will rise to the surface ... The house of cards [will come] crashing down."Sergei Guriev, a Russian economist and the incoming Dean of the London Business School, also thinks social unrest could be coming for Moscow. Russia's economy is mirroring its late Soviet Union days, he said, right before intense economic support from the government dropped off and sent some sectors, like manufacturing, spiraling into "deep recession" territory.<h3>Putin's economic fantasy</h3>The tailspin Sonnenfeld, Tian, and Guriev are predicting seems contradictory to what Russia is presenting on the surface. <a href="https://tass.com/economy/1743227">The nation's economy grew 3.6%</a> in 2023, according to data from Russia's federal statistics service. Meanwhile, a <a href="https://news.gallup.com/opinion/gallup/546836/kremlin-kitchen-russian-life-charts.aspx#:~:text=In%202023,%20record%20percentages%20of,standards%20(46%25)%20are%20improving.">record 56% of Russians believe the economy is improving</a>, according to a 2023 poll.But polls and economics stats coming out of Russia are "beyond misleading," Sonnenfeld argued. Previously, he's made the case that Russia's growth figures are figments of "<a href="https://markets.businessinsider.com/news/currencies/russia-economy-putin-gdp-forecast-ukraine-war-western-sanctions-oil-2023-4?utm_campaign=business-sf&amp;utm_source=twitter&amp;utm_medium=social">Putin's imagination</a>," with the Kremlin cherry-picking favorable stats while keeping the more dire data points out of the public eye. "There's no confidence in the objectivity or the security of Russian polling," he added. "It's fully propaganda."Putin has claimed that <a href="https://www.businessinsider.com/russia-economy-ukraine-war-putin-moscow-budget-isolation-west-sanctions-2023-12">Russia is on its way to becoming the new growth hub</a> of the world. That too, is probably a lie, Guriev suggested."Putin doesn't believe that Russia is doing very well. Putin understands the deficiencies of the statistics, but he needs to convince Russians that everything is fine," he added. "This is his job as a dictator, to distribute this."Other economic indicators show a decidedly bleaker picture of Russia's financial situation. The nation saw the flight of <a href="https://www.businessinsider.com/russian-economy-worker-shortage-prison-labor-ukraine-war-putin-kremlin-2023-10">1 million citizens</a> from the country, <a href="https://www.businessinsider.com/rich-people-leaving-russia-millionaires-invasion-ukraine-war-2022-6">15% of its millionaires</a>, and <a href="https://unctad.org/system/files/official-document/wir2023_en.pdf" target="_blank" rel="noopener">$19 billion in foreign direct investment in 2022 alone</a>. And while robust military spending has propped up Moscow's economy, that's unlikely to last for much longer, with European researchers predicting a more <a href="https://www.businessinsider.com/russia-economy-outlook-ukraine-war-moscow-growth-military-spending-inflation-2024-3" target="_blank" rel="noopener">sluggish growth trajectory for Russia into 2024</a>.Those stats show that the country's <a href="https://markets.businessinsider.com/news/currencies/putin-russia-economy-ukraine-war-wagner-mutiny-rebellion-west-sanctions-2023-7">economy is being "cannibalized" by the Ukraine war</a>, Sonnenfeld previously said, no matter how much Putin touts the country's resilience against sanctions. Biden's reelection and tighter sanctions could be the event that awakens Russian citizens to that reality, Sonnenfeld and Tian said. The West could deliver a potentially crippling blow to Russia's economy if it were to look beyond the oil trade and sanction Russian steel, copper, and other metal commodities, which account for around 20% of the nation's total revenue, they estimated.Living standards in Russia, meanwhile, are already on the decline. <a href="https://www.businessinsider.com/russia-economy-winter-freeze-soviet-infrastructure-heating-fails-war-spending-2024-2">Civilian infrastructure is breaking down</a>, partly because Russia is spending too much on its war. <a href="https://tass.com/economy/1762789" target="_blank" rel="noopener">Russian inflation is also high</a>, clocking in at 7.58%, according to data from Russia's economic ministry. "[There] would be massive unrest when people in Russia realize that Putin's promised path to victory is not going to materialize the way he's promising, when people realize that in terms of Ukraine, there is no pathway to victory."Guriev doesn't believe Russia's economy will completely unravel, as central bankers will work hard to limit the damage. But inflation and constricted growth will be huge problems for Moscow, resulting in a painful economic restructuring. "It's unlikely the Russian economy will spiral into a macroeconomic meltdown, and that the Russian political system will," he said. "The necessary condition for the end of this war is of course the change of the political regime and in particular the departure of Mr. Putin."Other economists have argued that at this point, <a href="https://www.businessinsider.com/russia-economy-ukraine-war-moscow-military-spending-inflation-worker-shortage-2024-2#:~:text=Russia's%20economy%20can't%20afford,massive%2C%22%20Renaud%20Foucart%20says.">Russia can neither afford to win nor lose its war</a>, as its economy is too dependent on military spending to be able to stand up on its own.

Russia could turn on Putin as the nation's economic strength wanes and sanctions keep tightening, economists say

Mumbai, The Reserve Bank on Thursday tightened norms for unsecured personal loans for banks and non-banking financial companies. The revised norms wherein risk weights have been increased by 25 percentage points will not be applicable on certain consumer loans, including housing, education, and vehicle loans. Besides, the norms will not be applicable on loans secured by gold and gold jewellery. These loans will continue to attract 100 per cent risk weight. Higher risk weight implies that banks have to keep aside more money as buffer when it comes to unsecured personal loans. In simple words, a higher risk weight restricts banks' lending capacity. Recently, RBI Governor Shaktikanta Das had flagged the high growth in certain components of consumer credit and advised banks and Non-Banking Financial Companies (NBFCs) to strengthen their internal surveillance mechanisms, address the build-up of risks and institute suitable safeguards, in their own interest. The high growth seen in consumer credit and increasing dependency of NBFCs on bank borrowings were also highlighted by the governor during the interactions with MD/CEOs of major banks and large NBFCs in July and August, respectively. "On a review, it has been decided to increase the risk weights in respect of consumer credit exposure of commercial banks (outstanding as well as new), including personal loans, but excluding housing loans, education loans, vehicle loans and loans secured by gold and gold jewellery, by 25 percentage points to 125 per cent," the RBI said in a circular. The central bank has also increased the risk weights on credit receivables by 25 percentage points to 150 per cent and 125 per cent for banks and NBFCs, respectively.

RBI tightens norms on personal loans for banks, NBFCs

<ul class="summary-list"><li>Policymakers in China are cracking down on lending shares to short a stock. </li><li>New rules will ban big investors from lending shares during lock-up periods, per Bloomberg. </li></ul>Officials in China will limit the ability of big investors to lend certain stocks for the purposes of short selling, adding to efforts undertaken by regulators to help stem a sell-off in the country's stock market this year. Per Bloomberg, the new measures include banning so-called strategic investors from lending out shares during agreed lock-up periods, a practice that often adds pressure on markets during a prolonged slump. The move aims to promote fairness and curb the advantages of some institutions, as well as provide all investors with extra time to analyze market information, the China Securities Regulatory Commission, <a href="https://mp.weixin.qq.com/s/cdoK5BiO4f6vW4iyR_32Gw" target="_blank" rel="noopener">said in a statement released Sunday</a>. It's the latest move by officials in Beijing to boost the market as the country's economic outlook deteriorates.Last week, officials announced <a href="https://markets.businessinsider.com/news/stocks/china-economy-outlook-liquidity-pboc-stimulus-stock-market-yuan-2024-1?_gl=1*jfev2k*_ga*ODAxNTgzMjcxLjE3MDU5NTE2MDY.*_ga_E21CV80ZCZ*MTcwNjU0MzY3Ny4zOS4xLjE3MDY1NDU0MzUuNDYuMC4w">cuts to bank reserves requirements that would inject $140 billion into the banking system</a>, which helped lift Chinese stocks from five-year lows early last week. Bloomberg also reported that the country is eyeing a $248 billion stock-market rescue. <a href="https://markets.businessinsider.com/news/stocks/china-outlook-economy-beijing-stock-market-rescue-property-real-estate-2024-1#:~:text=China's%20economy%20is%20ailing%20and,short%2Dterm%2C%20minimal%20impact.">Experts told Business Insider</a> that the move won't be enough to bring investors back to the country's financial markets. China's gloomy economic outlook has led to a <a href="https://markets.businessinsider.com/news/stocks/china-outlook-economy-beijing-stock-market-rescue-property-real-estate-2024-1?_gl=1*17qt2cv*_ga*ODAxNTgzMjcxLjE3MDU5NTE2MDY.*_ga_E21CV80ZCZ*MTcwNjU0MzY3Ny4zOS4xLjE3MDY1NDQ4OTkuMjEuMC4w">severe stock-market decline</a>. Multiple factors, including a struggling post-pandemic recovery, a distressed real estate market, mounting debt, unprecedented youth unemployment, and the flight of foreign capital have weighed on the world's second-largest economy.

China is tightening the screws on short selling to prop up its ailing stock market

<ul class="summary-list"><li>Synagogues require heavier security as antisemitic incidents surge during the Israel-Hamas war.</li><li>As congregations pay the price, rabbis call the increasing security costs an "antisemitism tax."</li></ul>In the wooden pews of Congregation Kehilath Jeshurun synagogue in New York City, next to the prayer books and Bibles, laminated sheets detail instructions for an active-shooter scenario."What do I do in an emergency?" the placards read in bold, red letters. Directives include "Proceed quickly and quietly to the nearest exit," "Follow instructions from synagogue staff," and "Do not panic."The burden of his congregation's safety weighs heavily on Rabbi Chaim Steinmetz, Kehilath Jeshurun's senior rabbi."You become a rabbi to teach, to inspire, to bring forward all of the teachings of Judaism," he told Business Insider. "And now, instead of being a rabbi, I'm doing something very different. I'm a community organizer; I'm a security expert. I'm now worried, not so much about the souls of my congregation, but about their bodies."The 2018 <a target="_blank" href="https://www.businessinsider.com/pittsburgh-synagogue-shooting-how-it-unfolded-2018-10">Tree of Life synagogue shooting</a> in Pittsburgh — in which 11 worshipers were killed and seven injured, making it the deadliest attack on Jewish people in US history — brought ever-present fears about synagogue safety to the forefront. These concerns have escalated amid a sharp spike in antisemitic incidents in the wake of the <a target="_blank" href="https://www.businessinsider.com/israel-hamas-war-israeli-economy-central-bank-forecast-conflict-finance-2023-11">Israel-Hamas war</a>, with the <a target="_blank" href="https://www.adl.org/resources/press-release/adl-records-dramatic-increase-us-antisemitic-incidents-following-oct-7">Anti-Defamation League</a> reporting a nearly 400% increase in antisemitic incidents year over year since <a target="_blank" href="https://www.businessinsider.com/why-hamas-chose-attack-israel-now-after-decades-conflict-gaza-2023-10">October 7,</a> when Hamas launched attacks that killed about 1,200 Israelis.The antisemitic incidents in the US include harassment, vandalism, and assault, but the fear of more violent, armed attacks looms large in Jewish spaces, forcing religious leaders to further fortify their places of worship.The increased security costs amount to what some rabbis are calling an unsustainable "antisemitism tax" draining their communal resources.<div type="image" title="tree of life synagogue" height="2000" width="3000" msid="105938670" hostid="261"></div><h2>The cost of antisemitism</h2>The <a target="_blank" href="https://www.businessinsider.com/israel-ground-invasion-gaza-hamas-war-2023-10">Israel-Hamas war</a> has sparked widespread <a target="_blank" href="https://www.businessinsider.com/pro-palestinian-protests-london-new-york-la-baghdad-syndey-ceasefire-2023-10">protests</a> and increased incidents of antisemitism and anti-Arab and anti-Muslim bias. According to FBI hate-crime statistics, Jewish people are still the most targeted religious group in the US.Experts attribute the recent surge in <a target="_blank" href="https://www.insider.com/iceland-rabbi-jews-religion-antisemitism-europe-2023-9">antisemitism</a> to people wrongfully equating the actions of the Israeli government with all Jewish people and institutions."A lot of people don't have a very sophisticated understanding of antisemitism," said Rabbi Jill Jacobs of T'ruah, a Jewish organization mobilizing rabbis and cantors to protect human rights in the US, Israel, and Palestinian territories. "Because Israel is, obviously, a Jewish country, sometimes people who are angry at Israel about the war in Gaza and about the occupation and about the killing of Palestinian civilians, beyond protesting Israel as a country the way you would protest any country, also have been targeting Jewish institutions. And that is absolutely antisemitism, holding all Jews responsible for the actions of the Israeli government."Because of this constant targeting, Jewish institutions like <a target="_blank" href="https://www.businessinsider.com/neo-nazis-chanted-there-will-be-blood-in-madison-wisconsin">synagogues</a> operate differently than most religious organizations.<div type="image" title="NYPD officers respond to a bomb threat after a man called and stated he placed two backpacks filled with pipe bombs inside of the occupied Central Synagogue located on Lexington Avenue in Manhattan on Saturday, Nov. 11, 2023." height="683" width="1024" msid="105938671" hostid="261"></div>Rabbi Daniel Bogard of St. Louis, an adjunct professor at a local Christian seminary, said he can simply walk through the front doors at the seminary. But at his synagogue, Central Reform Congregation, he does not have that luxury.Bogard said that even casual synagogue gatherings now require the heightened security of larger events, citing the monthly family-friendly singing circles he hosts as an example of how quickly those costs add up."It's a great free program. It costs us nothing to run. Except now all of a sudden, it's going to cost, I don't know, $400 in security costs to do it," he said. "And that means if I want to run this program once a month, I've got to find almost $5,000 to cover security to do something in our own building. It's wild. And that's what I mean when I say that it's unsustainable."In New York, Steinmetz said that Kehilath Jeshurun spends "multiple hundreds of thousands of dollars" annually on security assessments and upgrades. The synagogue has turned to congregants to foot the bill, charging a security fee of $250 per family as part of membership dues, an increase from past years. Even with 1,150 families paying the fee, the amount doesn't fully offset the cost of keeping congregants safe.Steinmetz and Bogard refer to this strain on communal resources as an "<a target="_blank" href="https://www.businessinsider.com/jewish-institutions-pay-security-rabbi-2022-2">antisemitism tax</a>," quantifying the financial and emotional burden of the vigilance required for a Jewish organization to function in America."If there is a population in the United States that feels that they're under attack, it's the responsibility of the government to ensure that they feel safe and secure and to ensure that they are not attacked," Steinmetz said. "It should not be passed on as a private responsibility."<div type="image" title="A security guard stands watch in front of a synagogue on October 9, 2023 in Los Angeles, California." height="683" width="911" msid="105938672" hostid="261"></div><h2>'The gap between the need and funding is profound'</h2>Federal funding subsidizes some synagogue-security costs, but rabbis say it's not enough to meet the growing need.The Nonprofit Security Grant Program, administered by the Department of Homeland Security and the Federal Emergency Management Agency, awards grants of up to $150,000 for nonprofit organizations at risk of terror attacks, including houses of worship, to spend on "physical security enhancements" such as bulletproof windows.Rabbi Charlie Cytron-Walker, who was <a target="_blank" href="https://www.insider.com/texas-rabbi-security-training-hostages-escape-synagogue-2022-1">held hostage by a gunman</a> in his Texas synagogue for 11 hours in January 2022, told lawmakers in a congressional hearing a month later that "the gap between the need and funding is profound."With synagogues diverting more resources to security, rabbis have found that other community-building initiatives are losing funding."If there's $150,000 that is going to security, that's definitionally $150,000 that's not going to any other things," Bogard said. "It's not going to pay for youth programs. It's not going to pay for education. It's not going to pay for equitable salaries for our employees. It's not going to pay for social-justice work."There's other positions that would exist at our synagogue and in our office if we weren't paying for security. There's huge amounts of Jewish communal dollars that would be available that instead go to security. It's constant, and it's increasing."<div type="image" title="A Miami Beach police patrol drives past Temple Emanu-El synagogue in Miami Beach, Florida, on October 9, 2023." height="683" width="1024" msid="105938673" hostid="261"></div><h2>Balancing community and safety</h2>A visible police presence can reassure synagogue members nervous about the current atmosphere. Bogard has started including a note saying "security will be present" on Central Reform Congregation's programming flyers to encourage attendance.But it can make synagogues feel closed-off and inaccessible, particularly for members belonging to groups that police violence has disproportionately affected, such as <a target="_blank" href="https://www.insider.com/keith-ellison-police-brutality-george-floyd-america-what-works-2023-5">people of color</a> and <a target="_blank" href="https://www.insider.com/police-officer-accused-beating-transgender-man-bitten-records-lawyer-video-2023-7">transgender people</a>.Reverend Lauren Ahava Jacobs, a Jewish interfaith minister and the cochair of the social-action committee at Manhattan's Romemu congregation, was volunteering at the synagogue food pantry days before the building was vandalized with a swastika and other white-supremacist symbols on November 21. She said the synagogue immediately tightened security measures, and while such precautions are essential, they can also hinder the congregation's outreach work."The true cost is communal in the sense that when we, or any group, perceive a sense of hate or resistance to our presence, the tendency is to fold inward, when instead what I wish we would do is look for our allies," she said. "It doesn't mean it's not scary, but my instinct is not to hunker down — it's to reach out and see where the love already is."<div type="image" title="Crowds gather for a musical event at B'nai Jeshurun on October 22, 2023 in New York City." height="683" width="911" msid="105938674" hostid="261"></div>Jill Jacobs said that while synagogue security is certainly a necessity in today's world, antisemitism can also be fought comprehensively through training, education, and relationships with other communities — by breaking down walls instead of building bigger ones."I don't want to diminish the need for security. It's real," she said. "And also, ultimately, you can't protect yourself by just building a fortress around every Jewish institution."Balancing physical safety with fostering welcoming, financially sustainable organizations remains an ongoing challenge for Jewish spaces — one that becomes more difficult with every swastika scratched into a synagogue door."We livestream our services — this is a pandemic and post-pandemic thing," Bogard said. "And I remember the person who runs our stream, a few years ago, turned to me and said, 'I live in fear that I'm going to end up livestreaming our mass murder.' That one has haunted me."

US synagogues face skyrocketing security costs. Rabbis call it an 'antisemitism tax.'

<ul class="summary-list"><li>Commercial real estate lending fell for the first time in two years last month amid tight credit conditions</li><li>Debt on commercial property fell to $5.44 trillion in June, driven by a large drop in multifamily lending. </li></ul>Lending in the commercial real estate shrank for the first time since 2021, a sign that higher mortgage rates and tighter credit conditions are weighing on the sector. Outstanding commercial real estate debt dropped to $5.44 trillion in June, marking the first drop in commercial real estate lending recorded in two years, according to Refinitiv data cited by Capital Economics. That's largely due to the overall slowdown in lending on multifamily properties, with demand slumping as rates rise. Multifamily property debt fell by $21.6 billion last month, the research firm said.Still, commercial property debt saw sluggish growth in June, increasing by just $7.4 billion last month. "CRE lending is likely to remain weak in the second half of 2023," Capital Economics assistant property economist Charlie Cornes said on Monday, pointing to rising delinquencies on US commercial mortgage-backed securities.The delinquency rate for loans back commercial mortgage bonds rose for the second-straight month to 1.91% in June. Banks began to pull back on lending in the aftermath of failures of several regional lenders earlier this year. In April, <a href="https://markets.businessinsider.com/news/stocks/credit-crunch-us-bank-crisis-stock-corporate-earnings-recession-svb-2023-4">credit availability for small businesses</a> saw its largest drop in two decades, per Morgan Stanley data. That could spell <a href="https://markets.businessinsider.com/news/stocks/commercial-real-estate-debt-regional-banks-risk-stock-market-cre-2023-3">trouble for the commercial real estate</a> sector, which has struggled with anemic demand and has around $1.5 trillion in debt approaching maturity in the next few years.Those factors could lead to a rise in <a href="https://markets.businessinsider.com/news/bonds/commercial-real-estate-loan-defaults-svb-offices-banking-crisis-deliquencies-2023-4">commercial mortgage defaults</a> experts say, as property owners feel the pain of tighter financial conditions. <a href="https://markets.businessinsider.com/news/stocks/commercial-real-estate-prices-outlook-crash-financial-crisis-morgan-stanley-2023-4">Commercial real estate prices could plunge as much as 40%</a> from their peak, Morgan Stanley previously estimated, which would mark an even more severe crash than what was seen in the 2008 financial crisis.

Commercial real estate lending fell for the first time in 2 years last month as credit conditions tighten

<ul class="summary-list"><li>Bitcoin fell below $25,000 on Thursday, as monetary policy adds to pressure from regulators. </li><li>Central bankers held interest rates steady but signaled more rate hikes to come.</li></ul>Bitcoin fell below $25,000 early on Thursday, as digital assets take a hit from an aggressive crackdown by US regulators and hawkish signals from the Federal Reserve. The world's biggest cryptocurrency by market value traded lower to $24,897 on Thursday morning, down around 4% from $25,930 on Wednesday. Ethereum, meanwhile, fell to $1,636, down nearly 6% from Wednesday's levels.The slump came shortly after the Fed kept interest rates steady at the conclusion of its two-day policy meeting, but signaled that more interest rate hikes could come later this year as central bankers continue to wage war against inflation. The central bank's dot-plot of projected rate moves and Chairman Jerome Powell's "hawkish pause" spooked traders, who had been thinking going into the meeting that the Fed could be about to signal its rate-hike campaign was over. Markets are currently <a href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html?redirect=/trading/interest-rates/countdown-to-fomc.html" target="_blank" rel="noopener">pricing in a 65% chance that the Fed will raise rates</a> another 25 basis-points in July. Tighter monetary policy is adding to pressures being exerted by regulators, with bitcoin and ethereum prices stumbling as the Securities and Exchange Commission looks to police the sector more tightly.Binance and Coinbase were sued this month by the SEC. The regulator's complaint states that both firms are operating illegally in the US and that they have broken rules by offering their customers unregulated securities. The suits are part of the <a href="https://markets.businessinsider.com/news/currencies/binance-us-customers-withdrawals-sec-lawsuit-cash-deposits-crypto-regulation-2023-6">SEC's siege against the wider crypto industry</a>, Binance said in a statement last week while denying the allegations. Experts told Insider that the lawsuits could set a precedent for how crypto firms are treated in the US, potentially leading to an <a href="https://markets.businessinsider.com/news/currencies/cryptocurrency-regulation-outlook-forecast-implications-coinbase-binance-sec-lawsuits-existential-2023-6">existential crisis for the crypto industry</a> at large.

Bitcoin falls below $25,000 as Fed signals more hawkish moves ahead and regulatory screws tighten on the sector

<ul class="summary-list"><li><keyword id="11893572" type="UNKNOWN" weightage="60" keywordseo="jamie-dimon" source="Orion">Jamie Dimon</keyword> said the Fed's planned cuts to its bond holdings are a headwind <keyword id="11893875" type="UNKNOWN" weightage="100" keywordseo="markets" source="Orion">markets</keyword> "have never seen before."</li><li>The <keyword id="12002884" type="UNKNOWN" weightage="60" keywordseo="jpmorgan" source="Orion">JPMorgan</keyword> CEO said it's highly uncertain what the effects of the so-called <keyword id="13159024" type="UNKNOWN" weightage="60" keywordseo="quantitative-tightening" source="Orion">quantitative tightening</keyword> will be.</li></ul>Jamie Dimon has said the <keyword id="11895523" type="UNKNOWN" weightage="60" keywordseo="federal-reserve" source="Orion">Federal Reserve</keyword>'s plan to reduce its bond holdings is a countervailing force against the economy, the likes of which investors have "never seen before" — and added that the effects of it are anyone's guess.The JPMorgan CEO said Monday the <a href="https://markets.businessinsider.com/news/stocks/jpmorgan-stock-price-jamie-dimon-consumer-strength-economy-morgan-stanley-2022-5">US economy remains strong</a>, thanks in large part to consumer savings built up as activity was restricted during the coronavirus pandemic."But that strong economy is being met by two countervailing forces, both of which you've never seen before — high <keyword id="11894140" type="UNKNOWN" weightage="60" keywordseo="inflation" source="Orion">inflation</keyword> and <keyword id="13159025" type="UNKNOWN" weightage="60" keywordseo="qt" source="Orion">QT</keyword>," he said at the bank's investor day.QT refers to quantitative tightening, which is when a central bank reduces its holdings of <keyword id="35147" type="UNKNOWN" weightage="60" keywordseo="bonds" source="Orion">bonds</keyword> by either letting them mature or actively selling them.The Fed this month pledged to start reducing its <a href="https://fred.stlouisfed.org/series/WALCL">$9 trillion of assets</a> in June, after snapping up government bonds and mortgage-backed securities in an effort to soothe markets and the economy during the pandemic. It hopes to be shedding $95 billion a month of bonds by the end of September.Dimon said the effects of the Fed's efforts to tackle inflation by rapidly reducing its bond holdings — which comes on top of <a href="https://www.businessinsider.com/fed-raises-interest-rates-may-double-sized-hike-mortgages-loans-2022-5">interest-rate hikes</a> — is highly uncertain."The Fed's going to try to meet it, we don't know the outcome, that's your guess," he told investors. "You can have anything from a good scenario to a bad scenario."QT is one of the major question marks <a href="https://markets.businessinsider.com/news/bonds/quantitative-tightening-explained-qt-federal-reserve-bonds-stocks-interest-rates-2022-2">hanging over markets</a>. The Fed has never reduced its bond holdings so rapidly.The central bank embarked on QT in 2018, after buying bonds to soothe markets in the wake of the financial crisis. But it reversed course on the policy within a year, as market volatility picked up. Analysts say the US-China trade war also contributed to the ructions in the period.Read more: <a href="https://www.businessinsider.com/stock-picks-to-buy-undervalued-cheap-earnings-forecasts-crash-morningstar-2022-5" target="_blank" rel="noopener noreferrer">Buy these 11 undervalued stocks that crushed earnings forecasts even as fears of a market crash continue to intensify, according to Morningstar</a>

Jamie Dimon says the Fed's bond-buying pullback is an unprecedented headwind for markets &mdash; and no one knows what its effects will be

<ul class="summary-list"><li>Two Chinese stock exchanges have frozen more than 40 planned IPOs, according to Reuters.</li><li>The exchanges say the freeze is due to a pending investigation by <keyword id="11892748" type="UNKNOWN" weightage="60" keywordseo="china" source="Orion">China</keyword>'s securities regulator.</li><li>The securities regulator also indicated it would pursue cooperation with the US on auditing supervision.</li></ul>Two Chinese stock exchanges have frozen more than 40 planned IPOs as an investigation by China's securities regulator into middlemen is underway, according to a new report from <a href="https://www.reuters.com/world/china/china-halts-over-40-ipos-amid-regulatory-probe-2021-08-23/">Reuters</a>.The Shanghai and Shenzhen stock exchanges have reportedly halted over 40 combined IPOs in the last week, according to disclosures reviewed by Reuters. The companies run the gamut from gas-engine and circuit breaker manufacturers to medical tech and semiconductors. The exchanges say the freeze is due to a pending investigation by China's securities regulator into four accounting and law firms that assist in the <keyword id="6354763" type="UNKNOWN" weightage="60" keywordseo="ipo" source="Orion">IPO</keyword> process.While the IPO halt seems to have begun days ago, on Monday China's State Council said it would escalate a crackdown on fraudulent accounting and auditing, blaming accounting firms for permitting forgery, according to another <a href="https://www.reuters.com/world/china/china-strengthens-supervision-accounting-firms-fight-against-forgery-2021-08-23/">Reuters report</a>. Likewise, over the weekend, the securities regulator said it would start demanding higher-quality IPO disclosures.The renewed scrutiny of IPOs is just the latest front in China's stepped-up regulatory campaign against a variety of domestic industries from <a href="https://markets.businessinsider.com/news/stocks/china-education-stocks-tutoring-regulations-tech-shares-jpmorgan-2021-7">tutoring</a> to big tech.The securities regulator also indicated it would pursue cooperation with America on auditing supervision, according to Reuters.In March, the Securities and Exchange Commission moved to <a href="https://markets.businessinsider.com/news/stocks/sec-enforcing-law-could-kick-chinese-companies-off-us-exchanges-2021-3">implement a new law</a> that would force US-listed foreign firms - in this case, largely Chinese ones - to disclose their audits to American regulators or risk delisting.Later, in July, the <keyword id="11898795" type="UNKNOWN" weightage="60" keywordseo="sec" source="Orion">SEC</keyword> <a href="https://markets.businessinsider.com/news/stocks/sec-china-ipo-freeze-didi-vie-regulatory-crackdown-2021-07">froze Chinese listings in America</a> as it reviewed what disclosures should be made to protect investors. Scrutiny has focused on opaque structures called variable interest entities, often used to execute US-based Chinese IPOs.

You Searched For "Security tightened" and got 12 results

Secured Loans 2.0 — why more and more Indians are turning to gold, shares and mutual funds to get loans

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Simply Put: Secured Loans 2.0 — why more and more Indians are turning to gold, shares and mutual funds to get loans

Ira Alok Puranik

A Deposit Dilemma — What's the fuss about a crisis in Indian bank deposits? Are mutual fund investments to blame?

Ira Alok Puranik

Putin is tightening his grip over what's left of the Wagner Group

Thibault Spirlet

Russia could turn on Putin as the nation's economic strength wanes and sanctions keep tightening, economists say

Jennifer Sor

RBI tightens norms on personal loans for banks, NBFCs

PTI

China is tightening the screws on short selling to prop up its ailing stock market

Yuheng Zhan

US synagogues face skyrocketing security costs. Rabbis call it an 'antisemitism tax.'

Talia Lakritz

Commercial real estate lending fell for the first time in 2 years last month as credit conditions tighten

Jennifer Sor

Bitcoin falls below $25,000 as Fed signals more hawkish moves ahead and regulatory screws tighten on the sector

Jennifer Sor

Jamie Dimon says the Fed's bond-buying pullback is an unprecedented headwind for markets and no one knows what its effects will be

Harry Robertson

China freezes more than 40 IPOs pending an investigation as regulatory screws tighten

Ethan Wu

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