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<ul><li>The Society of Manufacturers of Electric Vehicles (<keyword id="2746593" type="General" weightage="20" keywordseo="smev" source="Orion">SMEV</keyword>) has sent a petition to a Parliamentary Standing Committee on unpaid subsidies.</li><li>The industry body said the allegations against EV manufacturers regarding violation of localisation norms were ‘fake’ and ‘mischievous’,</li><li>The EV body highlighted the disruptions caused by Covid-19 for two years and the 12-month delay in subsidies.</li></ul>Electric vehicles (EVs) have become quite popular in <keyword id="3658" type="General" weightage="20" keywordseo="india" source="Orion">India</keyword> over the past few years, with traditional companies also jumping on the EV bandwagon. In addition to the rising fuel prices, another major cause for adoption of EVs in the country has been the subsidy provided by the government as part of the Faster Adoption and Manufacturing of Electric Vehicles (<keyword id="6523642" type="General" weightage="20" keywordseo="fame-ii" source="Orion">FAME-II</keyword>) scheme. The Society of Manufacturers of Electric Vehicles (SMEV), an association of Indian EV manufacturers has sent a petition to the Parliamentary Standing Committee on Electric &amp; Hybrid Mobility, Energy, and Estimates, raising the issue of subsidies. <cmsannotation type="cmsannotation" annotationid="Subsidies worth ₹1,200 crore withheld" comment="subhead" text="Subsidies worth ₹1,200 crore withheld">Subsidies worth ₹1,200 crore withheld</cmsannotation> SMEV has said that ₹1,200 crore worth of subsidies have been withheld, causing a serious liquidity crisis in the industry. This is holding up the industry despite the supply chain being ready, it said. “Current trends are showing a slowing down of EV adoption due to the financial stress for the industry, which has been besieged by irritants designed to disturb the momentum of FAME 2,” SMEV said. The industry body has gone as far as to say that the unpaid subsidies are killing the EV revolution in the country. <cmsannotation type="cmsannotation" annotationid="EV body claims emails that brought FAME-II under government lens are fake" comment="subhead" text="EV body claims emails that brought FAME-II under government lens are fake">EV body claims emails that brought FAME-II under government lens are fake</cmsannotation> For those unaware of the issue, the FAME-II scheme, which was announced in 2019 has been under the government’s scanner for some time now. A<a href="https://www.businessinsider.in/business/auto/news/government-is-reportedly-reworking-the-fame-ii-scheme-to-ensure-companies-use-domestic-components/articleshow/93752352.cms"> report</a> in 2022 even suggested that the government may re-work the scheme. The controversy around the scheme began when a whistleblower claimed that EV makers were violating the localisation norms and claiming fraudulent subsidies. SMEV, however, dismissed these as “mischievous emails” and claimed that the delay in subsidies has been due to these emails. “Most of the debate on localisation - the prime misdemeanours held against OEMs (original equipment manufacturers) so far - is a matter of degrees and a subject of minor negotiations. Most OEMs have struggled over the last three years to secure local parts that adhere to quality standards but have achieved localisation to greater or smaller degree providing for availability,” SMEV said. <cmsannotation type="cmsannotation" annotationid="SMEV credits FAME-II for EV revolution" comment="subhead" text="SMEV credits FAME-II for EV revolution">SMEV credits FAME-II for EV revolution</cmsannotation> The EV body highlighted the importance of the government’s FAME-II scheme in helping the EV industry and paving the way for an EV revolution in the country. “SMEV believes that FAME 2 initiative is a path­ breaking, pioneering policy architecture that has not only opened up the EV sector dramatically, but has prepared the market to take off in full swing”, the association said. FAME got derailed by the ‘fake emails’ the industry body claimed. Talking about the challenges faced by the EV manufacturers, the body highlighted the disruptions caused by Covid-19 for two years and the 12-month delay in subsidies. The delay in subsidies has squeezed the working capital of companies that have already passed on the benefit to customers, resulting in a drop in industry volumes. SMEV has called for the industry and the government to work together to solve the issues and put the country back on track to meet its e-mobility targets. SEE ALSO: <a href="https://www.businessinsider.in/business/auto/news/ather-finally-focuses-on-affordable-electric-scooters-after-losing-its-lead-to-ola-electric-and-tvs-motor/articleshow/99456189.cms">Ather finally focuses on affordable electric scooters after losing its lead to Ola Electric and TVS Motor</a> <a href="https://www.businessinsider.in/tech/news/17-of-people-store-financial-information-on-their-smartphones/articleshow/99426637.cms">Despite a rise in financial frauds, 17% of people store financial information on their smartphones</a> <a href="https://www.businessinsider.in/tech/news/most-common-passwords-can-be-easily-cracked-by-ai-in-under-a-minute/articleshow/99379900.cms">AI chatbots are cracking the code: How PassGAN can break into 51% of common passwords in under a minute</a>

Unpaid subsidies worth ₹1,200 crore leading to ‘serious liquidity crisis’ among EV makers, says industry body

<ul><li>The troubled Deewan Housing Finance sold ₹20 billion from its loan portfolio to foreign investors, according to reports. </li><li><keyword id="127124" type="CITY" weightage="20" keywordseo="DHFL">DHFL</keyword> has been in the news for its debt crisis.</li><li>The company’s rating had also been downgraded by rating agencies like CRISIL and ICRA. </li></ul>Deewan Housing Finance (DHFL) which has been in the news for long for its high debt, sold ₹20 billion of its loan portfolio to <a href="https://www.livemint.com/market/stock-market-news/dhfl-soars-almost-10-on-clearing-dues-of-retail-investors-1560146464734.html">offshore</a> investors. DHFL has used this money to pay off its debt. According to reports, the transaction was monitored by Hong Kong-based SC Lowy, says a Mint report. In the beginning of June 2019, DHFL delayed payments on its loan for over ₹8.5 billion and had said that it would clear dues within 7 days. Earlier this month, the company had paid ₹3.5 billion to investors. After IL&amp;FS went belly up last year, there has been panic in the system and questions were raised on the performance of non-banking financial companies as well as housing finance companies. All eyes were on DHFL after the incident, who was downgraded by rating agencies CRISIL and ICRA. Having cleared an interest to the tune of ₹9.61 billion, DHFL was set to seek a rating upgrade, according to <a href="https://www.livemint.com/market/stock-market-news/dhfl-soars-almost-10-on-clearing-dues-of-retail-investors-1560146464734.html">reports</a>. To save the company from its crisis, Private Equity firm AION Capital is <a href="https://economictimes.indiatimes.com/markets/stocks/news/pe-firm-aion-capital-set-to-become-single-largest-shareholder-in-dhfl/articleshow/69819075.cms">reportedly</a> in talks to invest in the company to become its largest stakeholder. The company as much as $1 billion from the stake sale.

This almost-defaulter saves itself by selling its loans to a foreign investor

In the ever-evolving landscape of finance, few phenomena have captured the imagination and attention of investors like <keyword id="19899404" type="General" weightage="100" keywordseo="Bitcoin" source="keywords">Bitcoin</keyword>. Whenever new-age ‘finfluencers’ hailed the arrival of this supposedly futuristic digital gold, it came crashing down like a house of cards. And as another set of ‘experts’ prepared to write the obituary for the <keyword id="12913517" type="General" weightage="20" keywordseo="crypto-bubble" source="Orion">crypto bubble</keyword>, its rollercoaster journey usually made a thunderous comeback. But the one thing Bitcoin has not done, at least in the last one and a half decades, is become irrelevant despite repeated attacks of being a scam, a bubble, or a digital tulip mania. In fact, of late, it has taken an even more legitimised position as a ‘serious’ asset as the US Securities Exchange Commission (SEC) approved the spot bitcoin exchange-traded funds (ETFs) earlier this year. “The recent approval of Bitcoin ETFs in the US has sparked a significant rally in the <keyword id="20235438" type="General" weightage="20" keywordseo="crypto-market" source="keywords">crypto market</keyword>s worldwide. This development has been closely watched in India, where the <keyword id="2721952" type="General" weightage="20" keywordseo="crypto" source="Orion">crypto</keyword> market has been experiencing a surge in interest and activity,” says Balaji Srihari, Business Head at CoinSwitch. <cmsannotation type="cmsannotation" annotationid="Doubling before halving" comment="subhead" text="Doubling before halving">Doubling before halving</cmsannotation> Bitcoin's journey has been nothing short of extraordinary. Launched in 2009 by the enigmatic Satoshi Nakamoto, its core principles – decentralisation, security, and limited supply – resonated with a growing number of investors over the past one and a half decades. Today, Bitcoin is no longer a digital outcast, with major financial institutions like BlackRock and Goldman Sachs dipping their toes into the crypto pool. Last month, Bitcoin soared to unprecedented heights again, touching an all-time high of $73,000 or ₹60.5 Lakhs on March 13. As of April 15, the digital asset stands at ₹54.4 Lakhs — 10% below its peak value. “Institutional investors made the most of the last financial year by bolstering their presence in the crypto space through different initiatives that support Fiat integration, blockchain-based solutions, as well as funds dedicated to crypto. The launch of ETFs — made possible by advocacy initiatives — ensured that the crypto market gets a strong finish with Bitcoin prices crossing its all-time high,” explains Rajagopal Menon, VP at WazirX. So, what do retail investors need to know as Bitcoin continues to redefine the notion of modern investing? Three major factors will define the path for Bitcoin in FY 2024-25: elections across major economies, ongoing geo-political conflicts, and the upcoming halving event later this week! Read: <a href="https://www.businessinsider.in/cryptocurrency/article/fervent-bitcoin-trading-approaches-fresh-supply-crunch-heres-what-this-weeks-halving-event-implies/articleshow/109310433.cms" data-type="tilCustomLink">Fervent Bitcoin trading approaches fresh supply crunch; Here’s what this week’s ‘halving’ event implies</a> The last factor has been discussed in detail in the article above, but to cut the story short, <keyword id="20575368" type="General" weightage="20" keywordseo="bitcoin-halving" source="keywords">Bitcoin halving</keyword> involves reducing the reward miners receive for validating transactions by half. This feature is hard-coded in the base protocol to control the supply with time, and it happens once every four years — and is scheduled to take place by April 20 this year. <cmsannotation type="cmsannotation" annotationid="Renewed enthusiasm in Indian crypto market" comment="subhead" text="Renewed enthusiasm in Indian crypto market">Renewed enthusiasm in <keyword id="21308792" type="General" weightage="20" keywordseo="Indian-crypto-market" source="keywords">Indian crypto market</keyword></cmsannotation> The recent surge sparked fresh enthusiasm in the market, and investors from India were not behind. India spearheaded the G20 summit and declared a crypto regulatory framework for all nations in the group to be mandated by 2025. Despite regulatory hurdles like ultra-high taxation, Indian retail investors have been flocking to the crypto market yet again, driven by the growing involvement of institutional investors and the anticipation of Bitcoin Halving. “On Coinswitch, we are seeing our best quarter in nearly two years, with higher trades and user registrations. In the first quarter of 2024 alone, our BTC trading volume surged by 220%, outpacing even our global peers,” beamed Srihari as Coinswitch became the first crypto platform to reach 2 crore users last month. Menon also forecasts a bright future for the Indian crypto market. “The next financial year will be quite promising for crypto with Bitcoin halving ensuring a surge in prices, with demand-supply dynamics being a key lever. India will witness a greater adoption rate for virtual digital assets with increased liquidity in the market. The Web3 startup funding will also see some uptick. However, it might not be as generous as the last bull run,” he says. The sharp price surge and growing retail investor interest, however, reignited the debate about Bitcoin's true nature: revolutionary asset class or a volatile gamble? <cmsannotation type="cmsannotation" annotationid="Future remains uncertain despite positive indicators" comment="subhead" text="Future remains uncertain despite positive indicators">Future remains uncertain despite positive indicators</cmsannotation> In the past, Bitcoin halving has always been followed by a sharp upward surge due to reduced supply, but this year, many other factors are at play. However, it is worth noting that almost all such rallies also coincided with larger macroeconomic trends like the European debt crisis in 2012, the crypto world seeing the initial coin offering (ICO) boom in 2016, and the COVID-19 pandemic and unprecedented quantitative easing that followed in 2020. All these events contributed to heightened interest in Bitcoin during respective years. <div type="image" title="Bitcoin" msid="109306946" hostid="261" caption="&amp;lt;p&amp;gt;Source: CoinSwitch Research&amp;lt;/p&amp;gt;"></div> This year, macroeconomic factors like dropping inflation levels, possible continuation of the governing regime, and the rise of Bitcoin-related ETFs across the globe, point to a possible surge. “Major economies like India and the USA are headed for their respective elections, which could be pivotal for their market prospects as well as Bitcoin prices. This could lead to some turbulence in prices in the crypto market. However, with the demand-supply dynamics of Bitcoin poised to undergo a major overhaul (due to halving), prices could see a significant surge. Additionally, the Fed is expected to cut interest rates by 75 bps by the end of this year, and again in the following two years, which will boost liquidity in the market. This has usually been beneficial for crypto investors who take this as a cue for flocking to assets such as crypto,” opines Menon. But the ongoing geo-political tensions can play a huge role in determining the path forward for Bitcoin. Between January and June of 2022, the Russia-Ukraine conflict was among the major factors that led to an over 50% drop in Bitcoin prices, reinforcing a crypto winter like never before. Similarly, an escalation of the Israel-Palestine-Iran conflict could trigger a broader market panic, leading investors to flee riskier assets like Bitcoin. However, the impact of the crisis is difficult to predict. With its limited supply and growing acceptance, Bitcoin could even be seen as a hedge similar to gold that investors trust as a safe-haven asset during geopolitical tensions. In such a scenario, if traditional markets falter due to the crisis, Bitcoin could see increased demand as an alternative store of value. In a Deutsche Bank survey, 52% respondents expressed belief that cryptocurrencies will become an “important asset class and method of payment transactions” in the future, compared to 40% in September 2023. However, 33% of the respondents expect Bitcoin to fall to $20,000 — less than one-third of the current levels — while only 10% believe that the prices will cross $75,000 by the end of this year. So, with Bitcoin scaling new heights and the halving looming, should you invest? The answer is, as always, be cautious! Bitcoin's recent surge and the upcoming halving create an exciting opportunity for investors with a strong stomach for volatility. However, potential investors must always consider and understand the risks involved while investing in such volatile assets and diversify investments across different asset classes to mitigate risk. Disclaimer: The content on this website is for informational purposes only and should not be construed as investment advice. We recommend readers consult certified, qualified and registered advisors for professional and personalised financial advice. Also Read: <a href="https://www.businessinsider.in/cryptocurrency/article/fervent-bitcoin-trading-approaches-fresh-supply-crunch-heres-what-this-weeks-halving-event-implies/articleshow/109310433.cms" data-type="tilCustomLink">Fervent Bitcoin trading approaches fresh supply crunch; Here’s what this week’s ‘halving’ event implies</a> <a href="https://www.businessinsider.in/cryptocurrency/news/stocks-and-real-estate-will-crash-when-everything-bubble-pops-so-buy-gold-silver-and-bitcoin-says-robert-kiyosaki/articleshow/109197133.cms" data-type="tilCustomLink">Stocks and real estate will crash when 'everything bubble' pops, so buy gold, silver and bitcoin, says Robert Kiyosaki</a> <a href="https://www.businessinsider.in/cryptocurrency/news/to-the-moon-suddenly-the-crypto-market-is-back-to-its-bubble-era-peak-/articleshow/109064190.cms" data-type="tilCustomLink">To the moon! Suddenly the crypto market is back to its bubble-era peak.</a>

Bitcoin’s bizarre hike renewed enthusiasm last quarter! What does the future hold for investors?

<ul><li><keyword id="6359483" type="COMPANY" weightage="20" keywordseo="Crisil">CRISIL</keyword> said that less than 1% of 32,500 rating Indian companies would actually be able to achieve a top credit rating of AAA. </li><li>This is significantly less than China (12.8%), Taiwan (8.6%) and even Thailand (4.8%). </li><li>Since India’s sovereign debt is rating BBB, the debt of any Indian firm is usually assessed against a ceiling of BBB. </li></ul>As India’s regulators increase their oversight on the country’s credit rating agencies in the wake of the <keyword id="6357293" type="UNKNOWN" weightage="20" keywordseo="ILFS">IL&amp;FS</keyword> crisis, CRISIL, one of India’s most prominent rating agencies, has <a href="https://www.crisil.com/en/home/newsroom/press-releases/2019/02/global-national-AAA-ratings-not-comparable-says-crisil.html">highlighted the difference</a> between global and national rating systems. In a statement that could set alarm bells ringing, CRISIL said that less than 1% of 32,500 rating Indian companies would actually be able to achieve a top credit rating of AAA. This is significantly less than China (12.8%), Taiwan (8.6%) and even Thailand (4.8%). However, that isn’t a cause for concern as much as it is an explanation for how credit ratings work. The rating agency explained that global ratings could not be compared with national ratings because the latter is an assessment of credit risk that is relative to a country’s credit rating. For example, since India’s sovereign debt is rating BBB, the debt of any Indian firm is usually assessed against a ceiling of BBB. Sovereign debt is generally considered a low-risk and safe investment when compared to corporate paper. On a national level, CRISIL found that 85-90% of bond issuances were carried out by Indian companies that were either rated AAA or AA on a national scale, pointing to saturation at the top of the market. Around 13% of Indian farms have been given a rating of A or higher on a national scale, compared to a global average of 25%. Rating agencies in developed markets usually employ a global ratings scale as opposed to a national one. Credit rating agencies have come under fire for failing to alert investors to the IL&amp;FS crisis. Up until its first default in August 2018, IL&amp;FS was still <a href="https://timesofindia.indiatimes.com/business/india-business/why-ilfs-was-aaa-till-two-months-ago/articleshow/66113222.cms">rated a AAA entity</a>. ICRA, a ratings agency, eventually downgraded <a href="https://www.bloombergquint.com/business/icra-junks-rs-12-000-cr-of-il-fs-group-s-borrowing-programmes">IL&amp;FS to a junk rating </a>around a month later. CRISIL further explained that the number of AAA-rated companies in the world has come down significantly between 2008 and 2018 - from 89 to 9, according to its parent S&amp;P Global Ratings, and from 170 to 53, according to Moody’s. It attributed this to not only to the higher costs of maintaining an <keyword id="624008" type="PERSON" weightage="20" keywordseo="AAA-rating">AAA rating</keyword> - which includes a well-capitalised balance sheet, manageable debt levels and strong risk ratios - but to the fact that companies have become increasingly leveraged since the financial crisis. According to Gurpreet Chhatwal, President, CRISIL Ratings, “Over the past decade or more, companies in the developed economies have relied more on debt in their quest to increase shareholder value. When reliance on debt increases, financial risk also rises leading to a lowering of credit ratings”. SEE ALSO: <a href="https://www.businessinsider.in/indias-securities-regulator-is-forcing-rating-agencies-to-comply-with-stricter-assessment-norms-to-prevent-a-repeat-of-the-ilfs-crisis/articleshow/66616962.cms">India’s securities regulator is forcing rating agencies to comply with stricter assessment norms to prevent a repeat of the IL&amp;FS crisis</a> <a href="https://www.businessinsider.in/as-indias-shadow-banks-brace-for-a-tough-2019-the-central-bank-and-government-will-try-and-prevent-a-repeat-of-the-ilfs-crisis-by-solving-the-data-problem/articleshow/67419846.cms">As India’s shadow banks brace for a tough 2019, the central bank and government will try and prevent a repeat of the IL&amp;FS crisis by solving the data problem</a>

Here’s why less than 1% of India’s companies would get a top credit rating by global standards

<ul><li>On 27 September, India’s central bank eased a liquidity coverage requirement imposed on banks and said it would provide all necessary funding support to the banking sector. </li><li>The <keyword id="30067" type="ORGANIZATION" weightage="20" keywordseo="RBI">RBI</keyword> has raised the facility to avail funds for liquidity coverage ratio (LCR), which measures the amount of liquid assets held by banks against short-term <keyword id="44647" type="ORGANIZATION" weightage="20" keywordseo="debt">debt</keyword>, from 11% to 13%. </li><li>This will allow banks to increase the weightage given to government securities when calculating their <keyword id="6493444" type="DEFINITION" weightage="20" keywordseo="Statutory-Liquidity-Ratio">statutory liquidity ratio</keyword> and free up deposits for their short-term funding needs. </li></ul>Following <a href="https://www.businessinsider.in/indias-main-financial-regulators-and-its-largest-bank-are-trying-to-calm-investors-amid-fears-of-a-liquidity-crisis/articleshow/65929921.cms">a promise </a>to investors that it would step in to prevent a liquidity crisis amongst Indian lenders as well as a subsequent <a href="https://in.reuters.com/article/india-shadowlenders/finance-ministry-urges-rbi-to-take-steps-to-ease-liquidity-tackle-credit-crunch-idINKCN1M609Y">push</a> from India’s finance ministry, the Reserve Bank of India (RBI) looks like its making good on its word, albeit at the cost of its mandate to manage risk. On 27 September, India’s central bank eased a requirement imposed on banks related to liquidity coverage and said it would provide all necessary funding support to the banking sector. The RBI raised the facility to avail funds for liquidity coverage ratio (LCR), which measures the amount of liquid assets held by banks against short-term debt, from 11% to 13%. This will allow banks to increase the weightage given to government securities, which is a liquid asset, when calculating their statutory liquidity ratio, which measures the amount of deposits invested in liquid assets. Hence, this will free up banks’ deposits so they can meet their funding needs in the short-term. And their funding needs are dire. Earlier this week, the liquidity deficit was estimated to be ₹1.4 trillion. However, In doing so, the RBI is effectively trading short-term benefits for longer-term pain. The current liquidity crisis stems from the aversion of institutional investors to buy the debt instruments of non-banking financial companies like IL&amp;FS, which is on the brink of default. By relaxing liquidity coverage requirements for banks, the RBI is allowing banks greater freedom in how they use their deposits and also letting them take on riskier short-term debt so a lot more money will enter the system, which will have an inflationary effect. In essence, domestic lenders are being allowed to use a greater percentage of their deposit-holders’ money to pay down their short-term debt obligations and extend credit to borrowers. In the event of a market downturn or a loss of faith in these banks, they could face a run on their deposits, which will be fatal given their lower risk buffer. The finance ministry has insisted that the RBI also relax reserve requirements for banks, under which banks set aside a certain portion of funds with the central bank. Earlier this week, the RBI took a page out of the European Central Bank’s playbook on <a href="https://www.ecb.europa.eu/explainers/show-me/html/app_infographic.en.html">“quantitative easing”</a> and said it would buy around <a href="https://www.thehindubusinessline.com/money-and-banking/rbi-to-conduct-omo-to-infuse-liquidity/article25029705.ece">₹100 billion</a> worth of <keyword id="6370709" type="UNKNOWN" weightage="20" keywordseo="Government-bonds">government bonds</keyword> from the open market to inject funds into the economy.

The Reserve Bank of India is trying to prevent a liquidity crisis at banks by relaxing an important risk requirement

Mumbai, Apr 17 () Non-bank financial players have welcomed the Reserve Bank of India's decision to provide Rs 50,000 crore of additional liquidity support to the sector by conducting targeted long term repo operations (TLTRO 2.0). Shadow banking players also hope to get more liquidity support from banks after the RBI reduced the reverse repo rate by 25 basis points to 3.75 per cent from 4 per cent. The RBI on Friday said it will conduct (TLTRO 2.0) for an aggregate amount of Rs 50,000 crore, to begin with, in tranches of appropriate sizes.The funds availed by banks under TLTRO 2.0 should be invested in investment grade bonds, commercial paper, and non-convertible debentures of NBFCs, with at least 50 per cent of the total amount availed going to small and mid-sized non-banking financial companies (NBFCs) and micro-finance institutions (MFIs)."It (TLTRO) is a very-very favourable decision. Now, they (RBI) have specifically allotted (liquidity through TLTRO) to NBFCs, of which 50 per cent will be for small and medium NBFCs. It is a great liquidity support from the RBI," Mahindra and Mahindra Financial vice chairman and managing director Ramesh Iyer told . MFIN's CEO Harsh Shrivastava said the microfinance sector is highly appreciative of RBI for acknowledging the industry concerns and for infusing liquidity of Rs 50,000 crore, a substantial part of which will help the small and medium NBFC MFI's to support the bottom of the pyramid customers.In order to encourage banks to deploy their surplus funds in investments and loans in productive sectors of the economy, the RBI reduced the reverse repo rate to 3.75 per cent. Shriram Transport's managing director and CEO Umesh Revankar, said the decision to cut the reverse repo rate by 25 bps will encourage banks to look for lending opportunities. "We would appreciate it if banks reciprocate positively to NBFCs request on moratorium to manage cash flow smoothly," Revankar said.The RBI, on March 27, had permitted all lending institutions (LIs) to grant a moratorium of three months on payment of current dues falling between March 1 and May 31, 2020.On Friday, the RBI said in respect of all accounts for which lending institutions decide to grant moratorium or deferment, and which were standard as on March 1, 2020, the 90-day NPA norm shall exclude the moratorium period,"There would be an asset classification standstill for all such accounts from March 1, 2020 to May 31, 2020," it said.It also allowed NBFC players to extend the date for commencement for commercial operations (DCCO) for loans given commercial real estate by additional one year without considering it as restructuring."The 90 day NPA norm won't be applicable to loans where the moratorium is granted. This along with a one year extension on loans given to the real estate sector will help preserve asset quality," Centrum Group executive chairman Jaspal Bindra said. The central bank announced to provide special refinance facilities for a total amount of Rs 50,000 crore to Nabard, Sidbi and NHB to enable them to meet sectoral credit needs."The special refinance facilities of Rs. 50,000 crore to NHB, Sidbi and Nabard will help meet credit needs of MSME sector and housing finance which has been severely affected by Covid-19," Capri Global Capital's managing director, Rajesh Sharma said. Edelweiss Group chairman and CEO Rashesh Shah said RBI has shown its commitment to go the extra mile and more stimulus measures will help in reviving the financial sector. Tourism Finance Corporation of India (TFCI) managing director and CEO Anirban Chakraborty said the RBI's announcement brings much needed relief to the sectors with an eye on the developing situation at the ground level. HV MKJ

NBFCs hail RBI's additional liquidity support move to tide through Covid crisis

Mumbai, Apr 17 () The Reserve Bank on Friday announced a slew of measures to infuse liquidity in the financial system including a cut in the reverse repo rate, Rs 50,000-crore targeted long-term repo operations (TLTRO) and refinancing facilities for Nabard, Sidbi and NHB. Drawing comfort from the surplus liquidity in the system, the governor slashed the reverse repo rate by 25 basis points to 3.75 per cent. The reverse repo rate is the rate banks earn by parking deposits with the Reserve Bank of India (RBI). "In order to encourage banks to deploy these surplus funds in investments and loans in productive sectors of the economy, it has been decided to reduce the fixed rate reverse repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 4 per cent to 3.75 per cent with immediate effect," he said. Emphasising that the RBI has moved in a calibrated fashion to ensure conducive financial conditions and normalcy in the functioning of financial markets and institutions, he said, the initial efforts to provide adequate system level liquidity are reflected in the sizable net absorptions under reverse repo operations. With this achieved, the RBI has undertaken measures to target liquidity provision to sectors and entities which are experiencing liquidity constraints and/or hindrances to market access. To ensure cash availability, RBI supplied fresh currency of Rs 1.2 lakh crore from March 1 till April 14, 2020, to currency chests across the country to meet increased demand for currency in the wake of the Covid-19 pandemic. With a view to enhance liquidity flow to the shadow the banking sector, RBI launched a TLTRO window of Rs 50,000 crore, to begin with, in tranches of appropriate sizes. "The funds availed by banks under TLTRO 2.0 should be invested in investment grade bonds, commercial paper, and non-convertible debentures of NBFCs, with at least 50 per cent of the total amount availed going to small and mid-sized NBFCs and MFIs," he said.To further provide liquidity, the RBI provide Rs 50,000 crore refinance window to all India financial institutions (AIFIs) such as the National Bank for Agriculture and Rural Development (Nabard), the Small Industries Development Bank of India (Sidbi) and the National Housing Bank (NHB). These institutions raise resources from the market through specified instruments allowed by the RBI, in addition to relying on their internal sources. "It has been decided to provide special refinance facilities for a total amount of Rs 50,000 crore to Nabard, Sidbi and NHB to enable them to meet sectoral credit needs," he said. This will comprise Rs 25,000 crore to Nabard for refinancing regional rural banks, cooperative banks and micro finance institutions (MFIs); Rs 15,000 crore to Sidbi for on-lending/refinancing; and Rs 10,000 crore to NHB for supporting housing finance companies (HFCs). Advances under this facility will be charged at the RBI's policy repo rate at the time of availment. To improve liquidity needs of states, RBI earlier this month had announced an increase in the ways and means advances (WMA) limit of states by 30 per cent. "It has now been decided to increase the WMA limit of states by 60 per cent over and above the level as on March 31, 2020 to provide greater comfort to the states for undertaking COVID-19 containment and mitigation efforts, and to plan their market borrowing programmes better. "The increased limit will be available till September 30, 2020," he said. DP CS ANZ SHW ANSANS

RBI unveils measures to boost liquidity in financial system during Covid-19 crisis

<ul><li>On 23 September, the <keyword id="30067" type="ORGANIZATION" weightage="20" keywordseo="RBI">RBI</keyword> and <keyword id="35210" type="ORGANIZATION" weightage="20" keywordseo="sebi">SEBI</keyword> said that they were monitoring the situation in financial markets and would work to prevent any adverse developments. </li><li>The situation in question refers to a recent plunge in stock markets owing to the selloff in <keyword id="44647" type="ORGANIZATION" weightage="20" keywordseo="debt">debt</keyword> securities of mortgage lenders DHFL and Indiabulls as well as the potential default of IL&amp;FS. </li><li>The <keyword id="6354731" type="DOMAIN" weightage="20" keywordseo="state-bank-of-india">State Bank of India</keyword> (SBI), India’s largest bank, also announced that it would extend funds to <keyword id="6354598" type="UNKNOWN" weightage="20" keywordseo="NBFCs">NBFCs</keyword> if they encountered <keyword id="6355375" type="DEFINITION" weightage="20" keywordseo="Liquidity">liquidity</keyword> problems.</li></ul> It’s not everyday that a country’s financial watchdogs have to step in to reassure investors that a debt default crisis won’t take place. On 23 September, the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI) - the country’s central bank and markets regulator, respectively - issued a statement explaining that they were monitoring the situation in financial markets and would work to prevent any crises or adverse developments. The situation in question refers to a plunge in stock markets on 21 September - owing to the selloff in debt securities of mortgage lenders Dewan Housing Finance and Indiabulls Housing Finance - and the potential default of IL&amp;FS, the country’s largest infrastructure lender. Foreign investors have also been exiting their investments, pulling out <a href="https://www.financialexpress.com/economy/fpis-sell-bonds-worth-1-bn-so-far-in-september-on-weak-rupee/1321000/">$1 billion</a> from bond markets in the month so far as the rupee has weakened. The panicked selling of shares and debt instruments of non-banking financial companies (NBFCs) such as the ones mentioned above comes amid fears that they will face a liquidity shortage in the event that IL&amp;FS defaults on its loans. The State Bank of India (SBI), India’s largest bank, announced that it would extend funds to NBFCs if they encountered liquidity problems. Even Finance Minister Arun Jaitley weighed in this morning to ensure that the government would take appropriate action where necessary. 
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 The IL&amp;FS conundrum IL&amp;FS was recently downgraded to a “default” rating by ICRA, the Indian arm of Moody’s, after it wasn’t able to make its payments on loans from IDBI Bank and SIDBI, inter-corporate deposits and commercial paper. Its collapse will pose a problem for India’s financial markets given the fact that it owes a lot of money to domestic lenders and that its securities are held by a number of mutual funds, pension funds and insurers. The RBI will meet the company’s shareholders this week to discuss a resolution plan. The infrastructure lender, which has total liabilities of over ₹900 billion- could see one of its major shareholders, LIC or Japan’s Orix Corp, take a majority stake ahead of a turnaround. The board of IL&amp;FS will meet on 29 September to approve a plan to raise ₹40-₹50 billion of share capital and sell ₹200 billion worth of assets to meet its immediate debt obligations. The Indian government will also reportedly step into facilitate the sale of IL&amp;FS’s assets to state-owned companies so it can raise funds quickly.

India’s main financial regulators and its largest bank are trying to calm investors amid fears of a liquidity crisis

There is a growing view that global central banks perpetuating a kind of ‘inequality’ ⁠— and it may be happening in India too

<ul class="summary-list"><li>This year, the world made several major achievements in the race to space. </li><li>They included SpaceX sending its most powerful rocket to space and India reaching the moon. </li></ul>Every year, space agencies and private companies move closer to making us a multi-planetary species, breaking barriers along the way.This year was no exception. 2023 saw groundbreaking rocket launches, unprecedented lunar missions, and remarkable scientific discoveries.Ahead of the new year, here's everything you need to know to catch up.<h2>1. SpaceX's Starship soared toward space twice – and blew up both times</h2><div type="image" title="starship rocket launching" height="1596" width="2842" msid="106403268" hostid="261" sizebytes="146050"></div>One of the most long-awaited spaceflight events of the decade took place in 2023, after SpaceX launched its gargantuan Starship mega-rocket in its fully-stacked form for the first time.Starship is the most powerful rocket ever built. Standing at almost 400ft, it is designed to be a workhorse to ferry humans and cargo to and from Mars. It could also play a crucial role in <a target="_blank" href="https://www.businessinsider.com/elon-musk-spacex-starship-launch-crucial-nasa-moon-return-sls-2023-3">NASA's return to the moon</a>.Elon Musk's SpaceX had previously shown it could fly the <a target="_blank" href="https://www.businessinsider.com/watch-spacex-starship-rocket-exploded-five-times-2023-4">Starship spaceship</a> on its own. But the company had never attempted to launch it on top of its Super Heavy booster — a necessary step to bring the spaceship to outer space.That seal was broken this year, twice. The fully stacked mega-rocket took its maiden flight on April 21.The flight, in some measure, was a success. The rocket cleared the launchpad and flew for a few minutes. But it eventually burst into flames after tumbling out of control. It later came to light that Starship's powerful engines had also <a target="_blank" href="https://www.businessinsider.com/spacex-starship-rocket-crater-concrete-launchpad-upon-liftoff-2023-4">blown a crater</a> in its concrete launchpad.Undeterred, SpaceX modified the rocket and <a target="_blank" href="https://www.businessinsider.com/spacex-starship-launch-rocket-blows-up-explosion-elon-musk-mars-2023-11?r=US&amp;IR=T">flew again</a> on November 18. This time, the spacecraft successfully separated and flew into space, though it burst again within <a target="_blank" href="https://www.businessinsider.com/spacex-starship-launch-rocket-blows-up-explosion-elon-musk-mars-2023-11?r=US&amp;IR=T">seconds of reaching its apex</a>.<h2>2. Private space companies made waves</h2><div type="image" title="A photomontage shows Terran 1 ready to launch on its launchpad next to a picture of the rocket's trajectory after launch." height="1000" width="2000" msid="106403270" hostid="261" sizebytes="73662"></div>It was a big year for other spaceflight companies as well.<a target="_blank" href="https://www.businessinsider.com/relativity-space-3d-printed-rocket-mars-musk-spacex-bezos-launch-2023-3?r=US&amp;IR=T">Relativity Space</a> showed the capability of its monstrous 3D printers by launching and flying a rocket that was made of 85% printed materials. Terran 1 successfully separated from its first stage but didn't quite make it to orbit.The company now aims to develop an even bigger rocket, called Terran R, in a bid to <a target="_blank" href="https://www.relativityspace.com/press-release/2022/7/19/impulse-space-and-relativity-space-announce-first-commercial-mission-to-mars">beat Musk to Mars</a>. While Relativity will keep pushing its rocket development, its main purpose is to demonstrate the power of its 3D printers, which could one day be used to create custom equipment for Martian settlers, the company CEO Tim Ellis previously told Business Insider.Meanwhile, Jeff Bezos's Blue Origin got a much-needed vote of confidence from NASA. In May, it became the second private company, after SpaceX, to land the agency's coveted contract to develop tech to land astronauts on the moon. The company was awarded $3.4 billion.The firm was also awarded the Escape and Plasma Acceleration and Dynamics Explorers (ESCAPADE) NASA contract, which means New Glenn, a heavy-lift orbital launch vehicle in development by Blue Origin, could fly a research payload to Mars on its first flight.SpaceX also beat a record that it had set only last year.By October, the company had launched 74 orbital missions, up from its previous record of 62 in 2022.The firm aims to launch 100 flights by the end of 2023, Bill Gerstenmaier, a senior SpaceX official, said on October 18 during a hearing of the U.S. Senate's Subcommittee on Space and Science, <a target="_blank" href="https://www.space.com/spacex-launch-144-missions-2024">per Space.com.</a>He added that next year it would aim for 12 flights per month, or a mission every three days or less, per Space.com.<h2>3. China got serious about the moon</h2>China once again demonstrated its precise spaceflight engineering capabilities, reporting it had reached orbit with a rocket fueled<a target="_blank" href="https://www.businessinsider.com/china-beats-spacex-blue-origin-orbit-methane-rocket-2023-7?r=US&amp;IR=T"> with methalox,</a> a composite liquid fuel of methane and oxygen, in July.In doing so, the country beat several US companies trying to get methalox-fueled rockets to orbit, including SpaceX and Blue Origin.<div type="image" title="Chinese LandSpace's Zhuque-2 rocket is seen on its launchpad at night" height="1290" width="2000" msid="106403271" hostid="261" sizebytes="104158"></div>The country this year continued to set aggressive timelines for its space program, announcing it could <a target="_blank" href="https://www.businessinsider.com/china-to-build-moon-station-five-years-lunar-soil-bricks-2023-4?r=US&amp;IR=T">build a space station</a> on the moon within five years, and put boots on <a target="_blank" href="https://www.businessinsider.com/china-moon-mission-astronauts-by-2030-2023-5?r=US&amp;IR=T">lunar soil by 2030.</a><h2>4. Russia fell behind on its lunar ambitions</h2>Meanwhile, Russia's lunar aspirations were dealt a blow this year.Roscosmos attempted to beat nations like China, the USA, Japan, and India by aiming to be the first to land a robotic mission near the south pole of the moon, a strategically important site for upcoming lunar missions.The nation was attempting to revive its long-dormant lunar program, which hadn't landed on the moon <a target="_blank" href="https://www.businessinsider.com/photos-russia-falling-behind-us-china-in-moon-space-race-2023-9?r=US&amp;IR=T">since the collapse of the Soviet Union</a>.But after a successful launch in August, Roscosmos's Luna-25 probe broke contact with Earth and spun out of control before <a target="_blank" href="https://www.businessinsider.com/russia-attempt-land-moon-ends-in-disaster-luna-25-2023-8?r=US&amp;IR=T">crashing into the moon.</a><h2>5. Where Russia failed, India thrived — a step that puts them in pole position in the space race</h2>India surprised the world in August when it became <a target="_blank" href="https://www.businessinsider.com/watch-india-attempt-first-ever-moon-landing-2023-8?r=US&amp;IR=T">the first nation</a> to land a spacecraft near the south pole of the moon, and only the fourth country to ever land on the moon.Chandrayaan-3's dog-sized rover, released by the spacecraft a few days after it landed, collected crucial information about the <a target="_blank" href="https://www.businessinsider.com/india-vikram-lunar-lander-moon-discoveries-2023-9?r=US&amp;IR=T">lunar soil</a> before shutting down in September.<div type="image" title="image of the lander on the moon" height="1024" width="1024" msid="106403273" hostid="261" sizebytes="123486"></div>"It definitely puts them on the international stage as an emerging space power," Robert Braun, head of space exploration at Johns Hopkins Applied Physics Laboratory, previously told Business Insider.<h2>6. Europe tried to catch up</h2>The UK attempted the first launch from British soil from its new <a target="_blank" href="https://www.businessinsider.com/virgin-orbit-uk-space-launch-fail-rocket-mission-spaceport-photos-2023-1">Spaceport Cornwall</a> in Newquay in January. But celebrations were cut short when Virgin Orbit's rocket failed to reach orbit. This was a blow to the spaceport as Virgin Orbit, its only listed customer, <a target="_blank" href="https://www.businessinsider.com/virgin-orbit-bankruptcy-protection-richard-branson-space-launch-funding-2023-4">closed down shortly after.</a>This misfire is a symptom of a bigger issue at stake. The European Space Agency's (ESA's) independent access to space has been <a target="_blank" href="https://www.ft.com/content/14b060df-4cfc-4494-a3d2-2af57dc6fa2a">shrinking steadily</a>.ESA has been facing fire for the delay in its heavy-lift <a target="_blank" href="https://www.ft.com/content/55619674-9ca3-478f-9c5a-d3a7525ccac7">Ariane 6 development</a> and the recent failures of its newest rocket, <a target="_blank" href="https://www.space.com/vega-c-failure-rocket-nozzle-flaw-investigation-report">Vega-C</a>. This has left the European agency in an "acute launcher crisis" after the retirement of Ariane 5 in July, ESA head Josef Aschbacher <a target="_blank" href="https://www.linkedin.com/pulse/holistic-approach-launchers-exploration-europe-josef-aschbacher/">said</a>.The UK's newly-developed spaceports are part of a bigger push to expand commercial launching capability in the area. European countries have been investing in building continental spaceports to complement ESA's launchpad in French Guiana. The first EU mainland spaceport was inaugurated in Sweden's <a target="_blank" href="https://www.space.com/first-european-mainland-orbital-spaceport-swedish-rocket-range">Arctic Circle</a> in January. An orbital spaceport was opened in <a target="_blank" href="https://spacenews.com/norway-opens-andoya-spaceport/">Andøya, Norway</a>, in November.In announcing the Swedish spaceport, EU president <a target="_blank" href="https://www.pressclub.be/press-releases/speech-by-president-von-der-leyen-at-the-inauguration-of-the-esrange-spaceport/">Ursula van der Leyen</a> foreshadowed a "change to the way we 'do space' in Europe," promising more support for small space firms and private investors.Europe's private spaceflight ambitions did get a welcome boost in October when the bloc's first fully private rocket, a single-stage rocket called Miura-1 designed by Spanish firm PLDSpace, took its first flight.The rocket failed to reach orbit but provided precious data that the firm hopes will help them push the development of its two-stage reusable rocket Muira-5, which could launch as early as 2025, <a target="_blank" href="https://www.space.com/pld-space-first-launch-miura-1-rocket">Space.com reported.</a>

From Elon Musk's giant Starship rocket to India's spectacular moon landing, 2023 was an epic year in space

<ul><li>Vodafone Idea is left with no choice but to proceed for insolvency as the JV landed with the accumulated cumulative bill of ₹53,000 crore. </li><li>Tata Sons might either borrow or are known to either borrow or sell stakes in a business to pay it off. </li><li>Anil Ambani’s RCom was already in bankruptcy struggling to find buyers for its spectrum, fibre and other assets. </li></ul>When the government opened the telecom sector to private players, every big business house of the country rushed to invest in it. But now, right from Ambanis to Tatas and Birlas — everyone is <a href="https://www.businessinsider.in/business/news/airtel-voda-idea-tata-tele-likely-to-pay-agr-dues-on-monday-dot-source/articleshow/74162195.cms">paying the price for the many shocks this sector has posed. </a> It is yet to be seen if the sector which stood through two rounds of tariff war, will be able to survive the reparations sought<a href="https://www.businessinsider.in/business/corporates/news/airtel-and-vodafone-idea-share-price-hit-after-supreme-court-summons-sunil-mittal-and-kumar-mangalam-birla/articleshow/74129606.cms"> by telecom department as spectrum dues</a>. Birlas and the curse of Vodafone When Kumar Mangalam Birla— the tenth richest man in the country who is worth<a href="https://www.forbes.com/profile/kumar-birla/#2d68deb448ca"> $9.7 billion</a>— decided to merge his Idea Cellular with Vodafone India, he was hoping to create a stronger entity. Little did he know that it would mean merging liabilities — especially after SC backed telecom department’s definition of aggregate gross revenues. They landed with the accumulated cumulative bill of ₹53,000 crore. After seeking government relief, and pleading the courts to not take ‘coercive action’ on non-payment, Birla has ended speculation that Vodafone Idea would go under and<a href="https://www.businessinsider.in/business/telecom/vodafone-offers-to-pay-2500-crore-upfront-yet-sc-refuses-to-back-down-on-coercive-action/articleshow/74171965.cms"> decided to pay up</a>. “The Company is currently assessing the amount that it will be able to pay to DoT towards the dues calculated based on AGR as interpreted by the Hon'ble Supreme Court. The Company proposes to pay the amount so assessed in the next few days,” Vodafone Idea said in a press release. Birla who had earlier said that there is no point in good money following ‘bad’ money — had a lot more to lose i<a href="https://www.businessinsider.in/business/corporates/news/airtel-and-vodafone-idea-share-price-hit-after-supreme-court-summons-sunil-mittal-and-kumar-mangalam-birla/articleshow/74129606.cms">f Vodafone goes under </a>The group’s credit rating will be affected if Vodafone is liquidated, Sandeep Parekh, a lawyer at Finsec Law Advisors said in a TV interview. And, it will have a bearing on the Birla group’s corporate guarantees will make in the future. The conglomerate with interest in businesses ranging from cement to mining and a 147-year history might not be able to afford such a dent. Tatas to borrow or sell take to pay dues The ghost of Tata Docomo is back to haunt the Tatas. The company which started the first telecom tariff war in India had to sign a multi-billion dollar cheque to Japanese telecom major DoCoMo in 2017, as the business closed down. The predatory discounts and the slow uptake had made the group liable to their Japanese partner. After the AGR dues case, the legacy claims of losses have only extended. They have been sent a bill of ₹13,823 crore, and Tata Sons might either borrow or sell stakes in a business to pay it off, <a href="https://economictimes.indiatimes.com/industry/telecom/telecom-news/tata-sons-may-bank-on-tcs-to-clear-teleservices-agr-dues/articleshow/73709600.cms">according to Economic Times</a>. Telecom business and its failure was one of the main points that former chairman of Tata group, Cyrus Mistry pointed out as its many fallacies. Years before the cheque to DoCoMo was signed, <a href="https://www.businessinsider.in/business/corporates/news/cyrus-mistry-warning-to-ratan-tata-on-jlr-tata-motors-airasia-and-telecom/articleshow/72873129.cms">Mistry had predicted that Docomo's telecom</a> venture would leave a massive hole in Tata’s business. He said the cost of exiting the business would be $4-6 billion. Even Mistry could not have predicted the ‘extras’ (like the bill it is faced with right now) they would have to keep on paying after exiting the business. The double dues of Ambani-led RCom Anil Ambani’s problems with the telecom business started long before SC judgement. In fact, it was already in bankruptcy struggling to find buyers for its spectrum, fibre and other assets. Even after the sale, the creditors who are o<a href="https://economictimes.indiatimes.com/industry/telecom/telecom-news/rcom-insolvency-coc-expects-to-raise-rs-14000-cr-from-assets/articleshow/72357982.cms?from=mdr">wed ₹49,000 crore will only receive</a> a quarter of what they are owed. Since Government’s claim came much after, it might not receive any. But, no one is vindicated in the case. If the spectrum dues are added to the liabilities, they might have a bearing on the sale which has received ₹25,000 crore bids from Reliance Jio and UV Asset Reconstruction Company (UVARC). In addition to this, the business of telecom itself left the younger Ambani in all sorts of troubles - one of them being a court case in the UK. A UK High Court <a href="https://www.moneylife.in/article/anil-ambani-asked-to-pay-100-million-within-6-weeks-by-uk-hc-in-loan-default-case-filed-by-3-chinese-lenders/59472.html">asked Anil Ambani, the chairman of Reliance Communication to pay $100 </a>million within six weeks. This comes a week after Ambani declared his net worth zero. Three Chinese banks — Industrial and Commercial Bank of China (ICBC), China Development Bank and the Export-Import Bank of China — sued Anil Ambani <a href="https://www.businessinsider.in/thelife/personalities/news/anil-ambanis-journey-from-42-billion-net-worth-to-claiming-poverty/articleshow/74028627.cms">for defaulting on a loan</a> that was given to Reliance Communications. According to the banks, Mukesh Ambani’s younger brother owes them over ₹5000 crore (about $700 million). See also: <a href="https://www.businessinsider.in/business/corporates/news/airtel-and-vodafone-idea-share-price-hit-after-supreme-court-summons-sunil-mittal-and-kumar-mangalam-birla/articleshow/74129606.cms">India's Supreme Court threatened Airtel and Vodafone with 'contempt' proceedings⁠</a> <a href="https://www.businessinsider.in/stock-market/news/supreme-court-verdict-on-airtel-and-vodafone-idea-adjusted-gross-revenue/articleshow/71737421.cms">Airtel and Vodafone-Idea get a devastating blow from India's Supreme Court</a>

Every one of India’s biggest billionaires is dealing with the telecom crisis differently

New Delhi, Apr 17 () The RBI's move to slash reverse repo rate and provide a re-finance window of Rs 50,000 crore will infuse liquidity into the system and nudge banks to lend more, enabling businesses to overcome the financial stress caused by the coronavirus pandemic, India Inc said on Friday. CII Director General Chandrajit Banerjee said the RBI's continued resolve to ensure that the availability of liquidity, especially for the stressed sectors, remains adequate is commendable. FICCI President Sangita Reddy said relaxation in regulatory requirements further will help banks in dealing with the COVID impact. Ficci would request RBI that additional working capital should be mandated rather than depending on the discretion of the banks. Thomas Muthoot, Founder-Director, Muthoot Pappachan Group said:"Specific measures announced in terms of directing banks to invest 50 per cent of funds under TLTRO 2.0 in mid-sized NBFCs through NCDs, etc., refinancing of all-India financial institutions like SIDBI and NHB and also reduction in reverse repo rate, would help substantially in liquidity for us to lend a lot more to the common man, who are terribly impacted by the current crises." Describing the new RBI measures as a "life-saving dose" for millions of businesses, Assocham said the partial re-opening of the lockdown, further regulatory forbearances, infusion of additional liquidity and nudging banks to do real lending would provide a much-needed shield both to Corporate India as also the most vulnerable informal sectors of the economy against the Covid-19 onslaught."The Whatever-It-Takes approach of the RBI to face the challenge of the health crisis that is projected to shave USD 9 trillion off the global economy in two years, reflects courage and responsibility on the part of the RBI. Governor Shaktikanta Das is clearly on top of the situation, navigating it in the high seas of fast evolving challenges, resulting from the unprecedented health crisis, " Assocham Secretary General Deepak Sood said.He said the relief measures unveiled by the RBI should help NBFCs, housing finance companies, small businesses and above all considerably avert the risk of further NPAs. The Reserve Bank of India on Friday cut the reverse repo rate and announced a slew of measures including re-finance window of Rs 50,000 crore and targetted long term repo auction of similar amount to deal with the impact of the Covid-19 pandemic.In a video message, Das said in order to encourage banks to deploy the surplus funds in investments and loans in productive sectors of the economy, it has been decided to reduce the fixed rate reverse repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 4 per cent to 3.75 per cent with immediate effect.The reverse repo rate is the rate banks earn by parking deposits with the RBI.Surplus liquidity in the banking system has risen significantly in the wake of government spending and the various liquidity enhancing measures undertaken by the RBI, he noted.He also said it has been decided to conduct targeted long-term repo operations (TLTRO 2.0) for an aggregate amount of Rs 50,000 crore, to begin with, in tranches of appropriate sizes.Among other measures, Das also announced special refinance facilities for a total amount of Rs 50,000 crore to Nabard, Sidbi and National Housing Bank (NHB) to enable them to meet sectoral credit needs. RSN ANUANU

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