If you are living in a metropolitan area in India, chances are you regularly order food from <keyword id="19901323" type="General" weightage="100" keywordseo="Zomato" source="keywords" meta.keywordsubtype="org" meta.entityname="Zomato" meta.hostid="261" meta.entityid="Zomato">Zomato</keyword>. The company launched in India in 2008 and was earlier just a food delivery service. Overtime, it evolved into a food discovery platform as people can rate restaurants, reserve tables, leave reviews and more. Now, we all know that when we order food via Zomato we end up paying slightly more. There are various charges that the company levies on users including handling charges and delivery fee. In August last year, Zomato started charging a <keyword id="20299300" type="General" weightage="20" keywordseo="platform-fee" source="keywords">platform fee</keyword> from users. And this has proved to be a successful business move for the platform as during its annual report, the company revealed that it has collected Rs 83 crore till March from levying platform fee. So what exactly is this platform fee that has raked in moolah from the company? Moreover, how does it benefit Zomato and what effect does it have on the end consumer? Read on to find out. <h2>What is Zomato’s platform fee?</h2>Zomato's platform fee is a small additional charge that the company adds to your order. Think of it as a convenience fee for using the app's services, including delivery, customer support, and the seamless experience of browsing through hundreds of restaurant options. Initially, the company used to levy Rs 2 per order as platform fee. But that amount has grown in the last one year and today Zomato charges Rs 6 as platform fee in key areas. It can be located when you load the bill details of your order. <div type="image" title="Zomato levies platform fee" msid="112313825" hostid="261" sizebytes="48995" caption="&amp;lt;p&amp;gt;Zomato levies platform fee&amp;lt;/p&amp;gt;"></div> <h2>How it impacts Zomato</h2>The Platform fee might seem like a minor addition to your bill, but when multiplied by millions of orders, it becomes a significant source of revenue for Zomato. Since every order placed incurs this charge, it increases the company’s "take rates" — the profit made per order. This fee serves as a crucial, controllable revenue stream in the supply chain, providing a steady income source that companies can directly manage. Alongside advertising fees and restaurant commissions, the platform fee has become a significant revenue generator for Zomato. In other words, levying a platform fee is basically a clever way for Zomato to boost its revenue without significantly increasing the prices of individual menu items. During its annual report, Zomato identified the platform fee as one of the three main factors driving Zomato's Adjusted Revenue, which saw a 27 percent year-on-year growth, reaching Rs 7,792 crore in FY24. "Adjusted Revenue as a percentage of GOV (gross order value) continued to rise, primarily due to higher restaurant commission take-rates, improved ad monetization, and the introduction of the platform fee from Q2FY24 onwards," the report highlighted. The report also added that all of the above mentioned factors compensated for the reduction in customer delivery charges per order due to the free delivery benefit available on Gold orders. <h2>How are you affected by Zomato’s platform fee?</h2>Zomato’s report also revealed that most late-night orders in the last fiscal year came from Delhi NCR, while Bengaluru led in the number of breakfast orders. Now the question that arises is, how exactly is the end consumer being affected by the platform fee? One of the obvious answers is that it makes your order a bit more expensive. Especially if you order from the food delivery giant on a daily basis. You might not even notice the addition of Rs 6 in your final bill but if you order food from Zomato everyday and start calculating, it will come up to be a noticeable amount. Say you have ordered food from Zomato everyday since the last three months. In this case, you would have ended up paying around Rs 540 as platform fee. Moreover, platform fee tends to be higher during peak hours or weather conditions. Thus, the order ends up being even costlier. Just last month, CEO of Bengaluru-based company <keyword id="22689022" type="General" weightage="20" keywordseo="capitalmind-deepak-shenoy" source="keywords">Capitalmind Deepak Shenoy</keyword>, was making headlines for saying that he has reduced ordering food from <keyword id="19896956" type="General" weightage="20" keywordseo="swiggy" source="keywords">Swiggy</keyword> and Zomato because of higher platform fees. “Massively reduced ordering from Swiggy/Zomato, down to just once maybe on a weekend, like today and noticed their 'platform' charge is now ₹6. Happy that I weaned myself off the daily ordering. They also take 30 percent from restaurants, btw,” he wrote in a post on X (earlier called Twitter).

Zomato earned Rs 83 crore from platform fee: What it is, how it benefits the company and how it affects you

<ul><li><keyword id="45660" type="General" weightage="100" keywordseo="yes-bank" source="Orion">Yes Bank</keyword>’s shares have rallied 26% in the last five days after the bank received approval from the Reserve Bank of India to raise funds.</li><li>Global brokerage firm Morgan Stanley initiated coverage of Yes Bank, giving it an ‘underweight’ rating, saying that it is moving in the ‘right direction’.</li><li>However, analysts recommend caution despite being optimistic about the bank’s prospects.</li></ul>Yes Bank’s shares tumbled nearly 8% on Wednesday after rallying 26% in the last five days. This fall comes at a time when the bank has announced an investment of ₹8,896 crore by two private equity funds, the Carlyle Group and Verventa Holdings, an Advent group entity, for a 9.99% stake. Yes Bank’s shares had rallied in the last five days after the bank received approval from the Reserve Bank of India to raise funds from the two private equity funds. This rally helped the bank’s shares hit a 52-week high of ₹24.75, with year-to-date gains of nearly 57%. <div type="image" title="Yes Bank 01_01_22 to 14_12_22." msid="96226707" hostid="261" sizebytes="20454" caption="&amp;lt;p&amp;gt;Yes Bank share price in 2022&amp;lt;/p&amp;gt;"></div> Initiating coverage of Yes Bank, global brokerage firm Morgan Stanley gave the private sector lender an ‘underweight’ rating. “Yes Bank has focused on reducing asset quality challenges by accelerating provisions and cleaning up its balance sheet (organically as well as via asset sales). We expect its gross impaired loans to fall to 9% by end-F23 from a peak of 22% in March 2020,” said Morgan Stanley in its latest report. <cmsannotation type="cmsannotation" annotationid="Bank moving in the right direction, but analysts recommend caution" comment="subhead" text="Bank moving in the right direction, but analysts recommend caution">Bank moving in the right direction, but analysts recommend caution</cmsannotation> While remaining slightly optimistic about the bank’s prospects, analysts recommend caution. Despite saying that the bank is moving in the ‘right direction’ post the 2020 NPA (non-performing assets) crisis, Morgan Stanley’s target price of ₹20.5 indicates a downside of 7% from the current market price of ₹22.05. “Yes Bank's asset quality has improved, and we see further room for it to surprise on the upside in the next few years given a benign macro cycle,” the firm said, noting that it expects the pre-provisioning operating profit to grow at a compounded annual growth rate of over 50% between FY23-25. However, the brokerage says that these gains are already priced in, which limits the upside potential at current estimations. A further rerating from here on would require “much stronger execution” in terms of funding and high margin retail assets, the brokerage said. “We would like to see a more visible improvement in the earnings, though we do like the trajectory of the bank,” Hemali Dhame, associate vice president, research, Kotak Securities, told Business Insider India. Another reason for caution is the fact that the three-year lock-in period for shares acquired by State Bank of India, ICICI Bank, Axis Bank, and Kotak Mahindra Bank, among other investors, will expire in March 2023. These banks had picked up stakes in Yes Bank in March 2020 as part of its revival plan. “If you're getting very excited about Yes Bank and all the stuff that's happening, remember that the 3 year lock-in for 75% of the pre-drama shares expires in March 2023,3 months from now,” Deepak Shenoy, founder and CEO of Capitalmind, said in a<a href="https://twitter.com/deepakshenoy/status/1602225814161924096"> tweet</a>. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/paytm-share-buyback-at-a-50-premium-could-support-the-stock-in-near-term-jp-morgan/articleshow/96220518.cms">Paytm share buyback at a 50% premium could support the stock in near term: JP Morgan</a> <a href="https://www.businessinsider.in/stock-market/news/paytm-hdfc-tvs-motor-among-stocks-to-watch-out-for-on-wednesday/articleshow/96214505.cms">Sensex, Nifty50 open higher amid positive global cues – Paytm, HDFC, TVS Motor among stocks in focus</a> <a href="https://www.businessinsider.in/stock-market/news/best-and-worst-performing-ipos-of-2022-in-india/articleshow/96160391.cms">Best and worst performing IPOs of 2022</a>

Yes Bank shares tumble after rallying 26% in the last five days – analysts recommend caution

<ul><li>All startups will now have to disclose the source of capital of the creditor they are borrowing from.</li><li>This means a startup would have to prove the genuineness and creditworthiness of the said creditor.</li><li>The Income Tax department is empowered to impose tax on this loan or borrowing if it is unable to offer a satisfactory explanation.</li><li>You can see Business Insider’s budget coverage <a href="https://www.businessinsider.in/budget">here</a>.</li></ul>While the government of India has set forth the agenda of “trust-based governance”, it has also issued a counter-argument by making startups responsible for the source of income of their creditors. According to the latest amendment of Section 68 of the Income Tax Act, all startups will have to disclose the source of capital of the creditor they are borrowing from. The amendment was highlighted in the latest finance bill issued by the government on February 1, the day India’s Union Budget for 2022-23, was announced. This means a startup would have to prove the genuineness and creditworthiness of the said creditor. This is an issue as several startups do borrow money from high networth individuals and family offices. Rahul Charkha, Partner at Economic Laws Practice, told Business Insider, the tax authorities are well within their right to treat the loans and borrowings as unexplained cash credits if one is unable to prove the source of income. It can then “tax the same at 60% (plus surcharge and cess) without providing any benefit of basic exemption limit and slabs and would also attract penal consequences,” he added. Even though Finance Minister Nirmala Sitharaman has <a href="https://www.businessinsider.in/budget/news/budget-for-startups-2022-finance-ministry-proposes-to-extend-tax-holiday-by-another-year/articleshow/89269955.cms">mentioned</a> that “startups have emerged as a driver of growth for our economy”, the latest amendment is being seen as a set back to the same ecosystem. Tax experts like Deepak Shenoy, founder and chief executive of Capitalmind, have highlighted that the onus of this sort of verification should be with the income tax authorities and not on the startup. The regulation is basically urging the startups to ask for the investor’s income tax returns when the government can simply track it with a pan card number, he explained. In the current form, the Income Tax Act only mentions that investment from Securities and Exchange Board of India (SEBI)-registered venture capital funds or companies would not need such disclosure. “So technically, if a bank gives you a loan, you have the right to go to the bank and ask them their source of income,” Shenoy told Business Insider. Earlier the government was concerned<a href="https://www.businessinsider.in/business/startups/news/tax-rates-and-rules-change-expected-from-budget-2022/amp_articleshow/88899801.cms"> over Angel Tax </a>by trying to determine a startup’s valuation and that had issues of its own, he said. If one of my entrepreneur friends wants to borrow capital from me to pay salaries of their company's employees and I do give that capital for a short span of 15 days, the government would still require the startup founder to disclose the source of my income, Shenoy explained. I say I inherited that money from my father, then I show my father’s income proof?, he added. “What is the ease of doing business here?,” he added. But it seems like the government’s simple logic here is to avoid tax evasion. “The simple mechanism to avoid tax is that if I pay you, you have to charge me 18% GST [goods and services tax]. If you don’t want to pay that GST, instead of giving you the money, I say I invest in you or I buy your shares. Let’s say you give me 0.0001%, saying that the shares are sold at ₹75,000 a share and avoid taxes on it. You don’t have to pay income tax and GST, and you can use the money however you like,” Shenoy explained why the government had started scrutinising startup valuation in the first place. He also emphasised that the government needs to take notice that not all startups engage in such activities like tax evasion. According to Paras Nath, Partner of Tax and regulatory Services at TR Chadha and CO LLP, it was not always possible for the revenue department to scrutinise the books of creditor with reference to such credit transactions due to multiple challenges — including difference of jurisdiction, inability to scrutinise due to different assessment years involved and more. The government has added a compliance layer on startup's end to further strengthen Section 68 of the Income Tax Act and avoid tax evasion. SEE ALSO <a href="https://www.businessinsider.in/business/startups/news/zomato-founder-deepinder-goyal-sells-all-his-shares-in-blinkit-to-tiger-global/articleshow/89314970.cms" data-type="tilCustomLink">Zomato founder Deepinder Goyal sells all his shares in Blinkit to Tiger Global</a> <a class="tout-title-link" href="https://www.businessinsider.in/stock-market/news/hdfc-itc-titan-zee-entertainment-and-other-hot-stocks-on-february-3/slidelist/89311999.cms">HDFC, ITC, Titan, Zee Entertainment and other hot stocks on February 3</a> <a href="https://www.businessinsider.in/tech/news/whatsapp-india-banned-over-2-million-accounts-in-december-2021/articleshow/89290341.cms">WhatsApp India banned over 2 million accounts in December 2021</a>

A tax guru explains all that is wrong with Indian government’s latest requirement for startups to disclose creditors’ source of income

<ul><li>Buying a home remains one of the obsessions of the average Indian, with a very high ownership ratio in urban India.</li><li>While the Indian government has been hoping for real estate prices to cool down, it has set an outlay of ₹48,000 crore for affordable housing under the PM Awas Yojana.</li><li>But does the relatively high price of homes make home buying a good option in 2022?</li><li>Business Insider tries to decode this with the help of experts.</li></ul>Indians are <a href="https://www.livemint.com/Money/QdFkLbtD8iCeZWa1XLfggJ/Obsession-with-buying-a-house-Why-do-Indians-prefer-real-es.html">obsessed</a> with buying a house, and now might be a good time to get one. From tax incentives to historically low interest rates on home loans, now might be the time to buy your dream home. “When one gets a home, a poor person gets courage,” said Finance Minister Nirmala Sitharaman while announcing the budget, clearly outlining the government’s priority when it comes to homes. But before you make a decision, you should know what the <keyword id="10547300" type="General" weightage="20" keywordseo="budget-2022" source="Orion">Budget 2022</keyword> has in store for home buyers, and how the new announcements may impact home prices going forward. In her Budget 2022 speech, Sitharaman also announced a slew of incentives for home buyers. The most eye-catching is the allocation of ₹48,000 crore for the Pradhan Mantri Awas Yojana (PMAY). But there’s a lot more to digest beyond that, and here’s what the experts think will impact home prices, thanks to Budget 2022. <cmsannotation type="cmsannotation" annotationid="What about the prices of homes?" comment="subhead" text="What about the prices of homes?">What about the prices of homes?</cmsannotation> The steady and multi-fold increase in prices of inputs used in constructing homes could be the biggest contributor to real estate prices not coming down. This is despite Piyush Goyal – one of the key ministers in the government, urging real estate developers to cool down prices of homes at a time when other sectors have also passed on price cuts to customers. “This government is more comfortable with real estate prices cooling off,” said Shubhada Rao, the founder of QuantEco Research. However, is there enough room for real estate prices to correct? Vikram Kotak, cofounder of Ace Landsdowne Investments, points out that while land prices may not have gone up by much in relative terms, the prices of other core inputs like cement have gone up by three to four times. And the fact that there is sustained demand makes it difficult for a price correction to take place – both in terms of the inputs as well as the finished product, which is the house itself. The relatively high prices of real estate may seem attractive from an investment standpoint, but Deepak Shenoy, the founder of Capitalmind, has a different view. “Houses are not investments if you live in them, they are expenses and therefore, I don’t consider them as useful investments,” he told Business Insider, which is something you will want to keep in mind before making your home purchase. <cmsannotation type="cmsannotation" annotationid="Why are home loans so cheap, then?" comment="subhead" text="Why are home loans so cheap, then?">Why are home loans so cheap, then?</cmsannotation> But houses are still an attractive avenue for banks and finance companies to lend money for, since they have a lower risk factor than, say, starting a business. This is one of the reasons why interest rates for home loans start around 6-7%, while business loans start at upwards of 8%, going all the way up to 21%. Apart from this, there are a multitude of tax incentives for home buyers, from additional deductions on the interest component, to exemptions on reinvesting the proceeds from the sale of an asset into a new home. For instance, under the provisions of the Income Tax Act, you can invest up to ₹50 lakh into a house or park the money from proceeds of a house property sale in qualifying investments to claim exemption from capital gains tax, which makes it one of the most lucrative tax incentives available in India. <cmsannotation type="cmsannotation" annotationid="Here are home loan interest rates offered by some of the most popular banks and finance companies in 2022:" comment="subhead" text="Here are home loan interest rates offered by some of the most popular banks and finance companies in 2022:">Here are home loan interest rates offered by some of the most popular banks and finance companies in 2022:</cmsannotation> <table style="border-width: initial; border-style: none;" class="redcator-table-advance"><colgroup></colgroup><col /><col /><tbody><tr><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.99375pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Bank/Financier </td><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.99375pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Starting interest rate (per annum) </td></tr><tr><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.99375pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Union Bank of India </td><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.99375pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.40% </td></tr><tr><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Bank of Baroda </td><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.50% </td></tr><tr><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Kotak Mahindra Bank </td><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.55% </td></tr><tr><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">HDFC </td><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.70% </td></tr><tr><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">ICICI Bank </td><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.70% </td></tr><tr><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Citibank </td><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.75% </td></tr><tr><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">State Bank of India </td><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.75% </td></tr><tr><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">LIC Housing Finance </td><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.90% </td></tr><tr><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Axis Bank </td><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.90% </td></tr></tbody><tbody></tbody></table> Source: Banks, finance company websites <cmsannotation type="cmsannotation" annotationid="Should you invest in real estate stocks if you don’t want to buy a home?" comment="subhead" text="Should you invest in real estate stocks if you don’t want to buy a home?">Should you invest in real estate stocks if you don’t want to buy a home?</cmsannotation> If you have the additional income that you would like to invest in equity, the real estate sector could be one of the avenues for you to plough in some money, but what should you be looking out for, exactly? Shenoy says that the criteria that he would consider for real estate stocks is how well they are selling their inventory of homes, rather than the pressure or performance of the stocks themselves. If purchasing a home is not your top priority and if you expect the real estate sector to perform well over the next few years, real estate stocks could be an option worth considering. However, this is not investment advice, Shenoy added, so you will have to do your own due diligence. SEE ALSO: <a href="https://www.businessinsider.in/budget/news/from-new-updated-it-return-to-surcharge-on-ltcg-at-15-here-are-the-personal-finance-highlights-from-budget-2022/articleshow/89268183.cms">From crypto tax to updated IT return, here are the personal finance highlights from Budget 2022</a> <a href="https://www.businessinsider.in/tech/enterprise/news/cognizant-reports-strong-revenue-growth-with-an-improving-attrition-rate/articleshow/89315375.cms">Cognizant is giving positive vibes to the Indian IT industry with strong revenue growth and an improving attrition rate</a> <a href="https://www.businessinsider.in/business/startups/news/budget-2022-mandates-all-startups-to-disclose-source-of-income-of-their-creditors/articleshow/89315291.cms">A tax guru explains all that is wrong with Indian government’s latest requirement for startups to disclose creditors’ source of income</a>

Want to buy your dream home? Know how the union budget may impact home prices

<ul><li><keyword id="35210" type="General" weightage="20" keywordseo="sebi" source="Orion">SEBI</keyword> has put out a consultation paper on <keyword id="152818" type="General" weightage="20" keywordseo="algorithmic-trading" source="Orion">algorithmic trading</keyword> by retail investors yesterday.</li><li>The market regulator has suggested additional restrictions before executing an algo trade to which online broking firms providing such services have raised their concerns.</li><li><keyword id="6377626" type="General" weightage="20" keywordseo="algo-trading" source="Orion">Algo trading</keyword> means a sell/buy order gets executed automatically when the pre-defined levels are met.</li></ul>A consultation paper by India’s market regulator Securities and Exchange Board of India (SEBI), that came out on December 9, regarding algorithmic trading by retail investors is a topic of concern for online trading platforms offering automated services to trade in the stock market. Algorithmic/algo trading means a sell/buy order gets executed automatically when the predefined levels are met. For example: You have 10 stocks of ABC company bought at ₹10 and you feel the stock will move up to ₹20. In such a case you can put an upper limit to the selling price and execute a trade beforehand. This sets you free from monitoring the stock every minute and executing the trade conveniently. So, definitely it feels like algo trading is the future, but apparently there are many concerns for the regulator regarding the misuse of such automated products especially by retail investors who have a small ticket size (average amount of investment). "This kind of unregulated/unapproved algos pose a risk to the market and can be misused for systematic market manipulation as well as to lure the retail investors by guaranteeing them higher returns. The potential loss in case of failed algo strategy is huge for retail investor [sic],” said SEBI in the consultation paper. Some of the key factors from <keyword id="12710158" type="General" weightage="20" keywordseo="sebi-consultation-paper" source="Orion">SEBI consultation paper</keyword> that indicates it wants to control algo services for retail investors. <ul><li>Stock exchanges — BSE, NSE — should approve all algo trades before execution from stock brokers.</li><li>Stock exchanges need to develop a system to ensure that only those algos which are approved by the exchange and having unique algo ID provided by the exchange are being deployed.</li><li>Brokers shall also deploy suitable technological tools to ensure that appropriate checks are in place to prevent unauthorised altering/tweaking of algos.</li><li>All algos developed by any entity have to run on the servers of broker wherein the broker has control of client orders, order confirmations, margin information etc</li><li>Stock brokers need to have adequate checks in place so that the algo performs in a controlled manner.</li><li>Stock broker is responsible for all algos emanating from its application programming interface (APIs) and redressal of any investor disputes.</li></ul>SEBI has put out the paper to seek comments from various stakeholders including market intermediaries. One of the online broking platforms that offer algo services to investors says that SEBI may want to control the automated process. “SEBI has put [out] a consultation paper with the intent of curbing unregulated algo platforms that promise guaranteed returns. But the way it's planned will mean brokers will have to stop offering APIs. This will be 2 steps back in a tech-first future,” said Nithin Kamath, founder and chief executive officer (CEO) of <keyword id="759851" type="General" weightage="20" keywordseo="zerodha" source="Orion">Zerodha</keyword> in a tweet. Deepak Shenoy, founder and CEO at wealth management firm Capitalmind said the problem isn’t algorithms, it's the way humans are misusing the technology. “The problem wasn’t the algorithm. It did exactly what it was supposed to do. But the human thinking that technology could save the day was exactly what ruined the day. Too many people blindly relied on technology that didn't know how to deal with the compounding effects of its own actions,” said Shenoy. Head of investment platform Dhan — Pravin Jadhav — also shared his views on SEBI’s recommendations saying SEBI is not intending to ban it, but wants more accountability on such trades. “SEBI wants stock exchanges to know which orders are coming from where and how; as a regulator it is a very fair ask [sic]. If you are worried because you are doing something wrong, then you shouldn’t be doing that in the first place,” said Jadhav. SEBI’s growing concerns over misuse of the automated features to trade in stocks is in line with the increasing popularity of algo trading platforms especially for young investors. In the consultation paper, SEBI is asking brokers to get exchange approvals for every algo trade, which is ‘an extremely tedious and complex process’ as per Kamath. Disallowing APIs will just shift investors from using broker APIs to third party automation tools which aren't in the control of the brokers. API establishes an online connection between a data provider (i.e., stock broker) and an end-user (i.e., client). SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/metro-brands-that-is-open-for-ipo-is-aggressively-planning-on-opening-new-stores-despite-covid-19s-impact-on-its-profits/articleshow/88204220.cms">Metro Brands is aggressively planning on opening new stores despite COVID-19’s impact on its profits</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/startups/news/pharmeasy-ipo-is-now-facing-a-rejection-plea-from-traders-lobby/articleshow/88207514.cms">After chemists’ body, traders demand rejection of PharmEasy’s IPO</a>

Tech-enabled broking firms like Zerodha raise concerns over SEBI’s views on algo trading

<ul><li>India’s leading banks saw their shares price jump by as much as 15% after the <keyword id="10279586" type="UNKNOWN" weightage="20" keywordseo="Budget-2021-22">Budget 2021-22</keyword> announcements on February 1.</li><li>Finance Minister <keyword id="129243" type="PERSON" weightage="20" keywordseo="Nirmala-Sitharaman">Nirmala Sitharaman</keyword> announced the creation of a ‘bad bank’ and an increase of Foreign Direct Investment (FDI) to 74% in the insurance sector.</li><li>However, experts believe the rally may be short-lived due to the lack of clarity around how the sale of bad assets will work and cost of funding likely to increase. </li></ul>In a splash of good news for the banking sector, Finance Minister Nirmala Sitharaman announced the formation of a ‘bad bank’ for India during the Budget 2021-22 — even though she never did use those words. “An Asset Reconstruction Company (ARC) and Asset Management Company (AMC) would be set up to consolidate and take over the existing stressed debt and the manage and dispose of assets to Alternative Investment Funds (AIF) and other potential investors for eventual value realisation,” said the Finance Minister in Parliament. After the announcement, the share prices of Indian <keyword id="87658" type="PERSON" weightage="20" keywordseo="banking-stocks">banking stocks</keyword> went into a frenzy. IndusInd Bank was leading the pack as it went up by 15% to ₹981.40 per share, at its peak. ICICI Bank was a close runner up with a jump of more than 13%. Increase in the share price of leading Indian banks after budget announcements: <table style="border-width: initial; border-style: none; width: 468pt; table-layout: fixed;"><colgroup></colgroup><col /><col /><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;">Bank </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;">Increase in share price* </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;">IndusInd Bank </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;">15.14% </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;">ICICI Bank </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;">13.36% </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;">RBL Bank </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;">11.37% </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;">SBI </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;">10.95% </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;">Bank of Baroda </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;">8.89% </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;">Axis Bank </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;">7.71% </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;">Punjab National Bank </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;">7.20% </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;">HDFC Bank </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;">6.44% </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;">Kotak Bank </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;">5.55% </td></tr></tbody></table>Source: NSE *Closing prices on February 1 While the uptake in banks looks like it was due to the budget, they’ve also benefited from a rally in the Asian markets. Furthermore, setting up a bad bank to get rid of non-performing assets (NPAs) is only one part of the story. Sitharaman also raised the cap on the percentage of Foreign Direct Investment (FDI) in <a href="https://www.businessinsider.in/policy/news/government-proposes-higher-foreign-direct-investment-in-insurance/slidelist/80627894.cms">insurance companies from 49% to 74%</a>. Since most banks have stakes in insurance companies, they are due for a possible windfall to a foreign investor. What is a bad bank? An ARC and AMC combination will address the threat of another cycle of bad loans that are sure to come as an after-effect of the COVID-19 crisis, according to Sitharaman. The ARC will be responsible for resolution under which an independent AMC is likely to focus on asset turnaround, job creation and protection. However, the structure of how this will function isn’t clear. Experts worry that with an option of selling assets, banks will be more lax on asset recovery. Borrowers too could get bolder about lapsing payments. The question of a moral hazard “We are waiting for a lot of clarity there on that particular step. We need to see whether there can be better private participation and to what extent. If it’s a purely government organisation, the question of moral hazard remains really significant in the context of an ARC or a bad bank,” Siddharth Sanyal from Bandhan Bank told Business Insider. <div type="twitter" handle="BiIndia" handlename="Business Insider India🇮🇳" image="http://pbs.twimg.com/profile_images/1232926719016718336/sfffJHNV_normal.jpg" favoritecount="11" retweetcount="3" status="#BudgetInsider | The first cut of Finance Minister Nirmala Sitharaman's #UnionBudget2021 with industry insiders. https://t.co/uzumnPUXIt" createdat="1612176527000" id="1356192766733152257"></div> If there isn’t too much private sector participation, the question remains opaque on how the formulas are arrived at, how these ‘bad assets’ will be sold, especially in the case of large loans. The government hasn’t clarified as to who will fund the creation of the AIF. It’s possible that the banks will have to come together and will chip in money for its inception. “Unfortunately, when you create this kind of structure, the moral hazard is even good debt can then become bad debt. There could be arguments like ...my competitor mismanaged his finances but you’re letting him get away clean by selling his loans to some bad bank. And, you’re allowing him to prosper, then why should I not go through the same route and you give me the same sort of forbearance...,” explained Deepak Shenoy from CapitalMind. According to Shenoy, this kind of moral hazard — at least in corporate India — has played out negatively more often than not. Funding is going to get more expensive The good news around banking stocks however could only be temporary as the cost of funds may rise in 2021-22. “Banks will have to put a lot more money into government securities where they need ₹12 lakh crore of borrowing next year which is substantially higher. This year they had a lot of help from the RBI, next year we may not,” said Shenoy. According to him the cost of funding may increase by 15-20 basis points in the coming year that may come as a big blow to banks.

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