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Stock <keyword id="20345915" type="General" weightage="20" keywordseo="exchanges" source="keywords">exchanges</keyword> and <keyword id="20710434" type="General" weightage="20" keywordseo="brokers" source="keywords">brokers</keyword>, catering to retail traders, could be hit hard by the regulator <keyword id="19901201" type="General" weightage="100" keywordseo="Sebi" source="keywords">SEBI</keyword>'s proposed measures for Futures &amp; Options (F&amp;O) <keyword id="22748189" type="General" weightage="20" keywordseo="trading-regulations" source="keywords">trading regulations</keyword>, with market volumes slumping 30-40 %, according to reports. If these measures are implemented, the number of investors could decrease, it added. Moreover, discount brokers, who depend heavily on retail investors, are expected to be more affected than traditional full-service brokers. SEBI, in its consultation paper in July, proposed seven measures, including increasing minimum contract size and upfront collection of option premiums, intra-day monitoring of position limits, rationalisation of strike prices, removal of calendar spread benefit on expiry day and increase in near contract expiry margin. SEBI stated that these measures are aimed at enhancing <keyword id="20775670" type="General" weightage="20" keywordseo="investor-protection" source="keywords">investor protection</keyword> and promoting <keyword id="20813757" type="General" weightage="20" keywordseo="market-stability" source="keywords">market stability</keyword> in derivative markets. According to a report by Jefferies, SEBI's proposed measures to reduce the number of weekly option contracts from 18 to 6 could impact around 35% of industry premiums. However, if trading shifts to the remaining contracts, the overall impact can be reduced to 20-25%. Among its 7 proposed measures, IIFL Securities see the highest impact from the withdrawal of <keyword id="22353333" type="General" weightage="20" keywordseo="weekly-options" source="keywords">weekly options</keyword> (only 1 per exchange allowed) as index Options account for 98% of the volumes. IIFL Securities expects the National Stock Exchange (NSE) to be more affected than the BSE because 60 % of NSE's revenue comes from options trading, compared to 40% for BSE. It estimates that by the financial year 2026, NSE's earnings could be reduced by 25-30% while BSE's earnings could drop by 15-18%. Jefferies also believes that the removal of Bankex weekly contract can impact BSE's earnings per share (EPS) by 7-9% over FY25-27. It further said that BSE might see a small decline in earnings, but if trading activity shifts from discontinued products, it could offset the impact or even lead to earnings growth. "We don't see any impact on MCX from these regulations. Within the value chain, discount brokers are likely to be more impacted than traditional full-service brokers given the former's dependence on retail investors," IIFL Securities said. Jefferies believes that clearing members like Nuvama, which caters to institutional players High-Frequency Traders (HFTs), and Foreign Portfolio Investors (FPIs) are less impacted. Rationalizing weekly options to only one benchmark index per exchange will significantly affect the NSE because it currently has four weekly index expiries, with "Bank Nifty" being the most important, contributing to 50 % of its options volume. The change could reduce NSE's overall trading volumes by 30-35 %, IIFL Securities said. On the other hand, BSE is expected to be less affected since it only has two contracts, with Sensex making up 85 % of its volumes in FY24. Even if "Bankex" contributes 30% by FY26, the impact on BSE's volumes is expected to be smaller compared to NSE, it said. Additionally, with just two expiries, BSE might gain market share and experience higher trading volumes, resulting in an estimated 20 % reduction in its overall volumes, it added. Jefferies said that SEBI's proposed measure of increasing lot sizes by 3-4 times over six months could lead to higher costs for retail traders, potentially reducing their participation in the market. The proposed margin increase for options sellers close to expiry could reduce leverage and profitability, especially for retail traders with limited funds. "Finally other measures like increasing ELM (extreme loss margin) around expiry, and withdrawal of calendar spread margin on expiry will increase the margin requirements and thereby could impact the liquidity. Based on our initial estimates we expect a 30-40 % impact on market volume," IIFL Securities said. SEBI Chief Madhabi Puri Buch recently mentioned that households are losing up to Rs 60,000 crore a year in the problematic futures and options segment. Earlier, SEBI research showed retail traders lose money in nine out of 10 trades in the F&amp;O segment Last month, the government in the Union Budget raised the securities transaction tax (STT) on both futures and options trade from October 1 to allay concerns about hyperactive interest in the derivative segment. Before that, the Economic Survey flagged concerns over rising retail investors' interest in derivative trading. The survey stated that speculative trade has no place in a developing country. It also pointed out that the sharp increase in retail investor participation in F&amp;O trading is likely driven by humans' gambling instincts.

SEBI proposed F&O norms to hit exchanges, brokers, says reports

New Delhi, Jan 7 () The Insolvency and Bankruptcy Board of India (IBBI) has amended the norms for liquidation process wherein a secured creditor is barred from selling assets of a company to any person restricted from submitting insolvency resolution plan.
 The Insolvency and Bankruptcy Code (IBC) provides for time-bound and market-linked resolution process for stressed corporates. In case the resolution process does not materialise, then the entity goes for liquidation.
 An official release on Tuesday said the IBBI has notified changes to liquidation process regulations.
 "The amendment clarifies that a person, who is not eligible under the code to submit a resolution plan for insolvency resolution of the corporate debtor, shall not be a party in any manner to a compromise or arrangement of the corporate debtor under section 230 of the Companies Act, 2013," it said.
 Further, a secured creditor cannot sell or transfer an asset, which is subject to security interest, to any person who is not eligible under the code to submit a resolution plan for insolvency resolution of the corporate debtor.
 "The amendment provides that a secured creditor, who proceeds to realise its security interest, shall contribute its share of the insolvency resolution process cost, liquidation process cost and workmen's dues, within 90 days of the liquidation commencement date," the release said.
 Also, the secured creditor has to pay excess of realised value of the asset, which is subject to security interest, over the amount of its claims admitted, within 180 days of the liquidation commencement date.
 According to the release, where the secured creditor fails to pay such amounts to the liquidator within 90 days or 180 days, as the case may be, the asset should become part of Liquidation Estate.
 Among others, the amendment provides that a liquidator should deposit the amount of unclaimed dividends and undistributed proceeds in a liquidation process along with any income earned thereon into the corporate liquidation account before an application for dissolution is submitted.
 The revised norms also provides a process for a stakeholder to seek withdrawal from the corporate liquidation account. RAM ANS

IBBI amends liquidation process norms

<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

New Delhi, Jan 21 () Industry body CII on Tuesday recommended easing of certain norms for enhancing liquidity for non-banking financial companies (NBFCs) and housing finance companies (HFCs).
 It has suggested to ease ECB norms with a higher limit for investment grade-rated companies equivalent to sovereign rating up to maybe USD 1,500 million from the current uniform limit of USD 750 million for all NBFCs.
 It has also asked for relaxation of end-use norms of external commercial borrowings (ECBs) for HFCs to facilitate credit flow to the entire housing finance sector.
 Currently, end-use is limited to affordable housing, the chamber said in a statement.
 Further, CII recommended that the Reserve Bank of India (RBI) should define a framework for lender of the last resort for them having an asset book size of more than Rs 25,000 crore.
 Unlike banks, it said these types of companies do not have the repo window facility to borrow in times of need.
 "CII has suggested that the RBI should look at creating a separate classification within the systemically important NBFCs based on asset book size," it said.
 NBFCs and HFCs have played a complementary role to banks in supplying credit to the underserved segments of the economy, it said.
 Citing RBI data, it said that for 2018-19, the share of credit from banks, NBFCs and HFCs was in the ratio of 70:30.
 "NBFCs and HFCs are important source of financing and will play a key role in taking the Indian economy to USD 5 trillion," it added. RR HRS

CII suggests easing of certain norms to enhance liquidity for NBFCs, HFCs

The <keyword id="6354335" type="General" weightage="50" keywordseo="reserve-bank-of-india" source="Orion">Reserve Bank of India</keyword> (<keyword id="30067" type="General" weightage="100" keywordseo="rbi" source="Orion">RBI</keyword>) on Wednesday announced a series of measures to boost foreign exchange inflows. The central bank said that it has taken the steps in order to further diversify and expand the sources of <keyword id="6358355" type="General" weightage="20" keywordseo="forex" source="Orion">forex</keyword> funding so as to mitigate volatility and dampen global spillovers. India's foreign exchange reserves stood at $593.3 billion as on June 24, 2022, supplemented by a substantial stock of net forward assets, it said. The RBI has exempted incremental Foreign Currency Non-Resident Bank (FCNR-B) and Non-Resident (External) Rupee (NRE) deposit <keyword id="127684" type="General" weightage="20" keywordseo="Liabilities" source="Orion">liabilities</keyword> for computation of Net Demand and Time Liabilities (NDTL) for maintenance of cash reserve ratio (<keyword id="35038" type="General" weightage="20" keywordseo="crr" source="Orion">CRR</keyword>) and statutory liquidity ratio (<keyword id="46197" type="General" weightage="20" keywordseo="SLR" source="Orion">SLR</keyword>) by the banks. This will be effective from the reporting fortnight beginning July 30, 2022 with reference base date of July 1. "This relaxation will be available for deposits mobilised up to November 4, 2022. Transfers from Non-Resident (Ordinary) (NRO) accounts to NRE accounts shall not qualify for the relaxation," the RBI said. It also decided to temporarily permit banks to raise fresh FCNR(B) and NRE deposits without reference to the extant regulations on interest rates, with effect from July 7, 2022. This relaxation will be available for the period up to October 31, 2022. The RBI also relaxed rules relating to foreign portfolio investment in debt by allowing all new issuances of government securities (G-Secs) of 7-year and 14-year tenors, including the current issuances of 7.10 per cent GS 2029 and 7.54 per cent GS 2036, under the Fully Accessible Route (FAR). It also decided that <keyword id="6362476" type="General" weightage="20" keywordseo="investments" source="Orion">investments</keyword> by FPIs in government securities and corporate debt made till October 31, 2022 will be exempted from the macroprudential short term limit - not more than 30 per cent of investments each in government securities and corporate bonds can have a residual maturity of less than one year. These investments will not be reckoned for the short term limit till maturity or sale of such investments. As part of the macroprudential framework under the medium term framework (MTF), foreign portfolio investors (FPI) can invest only in corporate debt instruments with a residual maturity of at least one year. The central bank has decided that FPIs will be provided with a limited window till October 31, 2022 during which they can invest in corporate money market instruments viz., commercial paper and non-convertible debentures with an original maturity of up to one year. The FPIs can continue to stay invested in these instruments till their maturity/sale. These investments will not be included for reckoning the short term limit for investments in corporate securities. According to the RBI, Authorised Dealer Category-1 (AD Cat-I) banks can utilise overseas foreign currency borrowings (OFCB) for lending in foreign currency to entities for a wider set of end-use purposes, subject to the negative list set out for external commercial borrowings (ECBs). The measure is expected to facilitate foreign currency borrowing by a larger set of borrowers who may find it difficult to directly access overseas markets. This dispensation for raising such borrowings is available till October 31, 2022. As regards the external commercial borrowings (ECB) the RBI has temporarily increased the limit under the automatic route from $750 million or its equivalent per financial year to $1.5 billion. The all-in cost ceiling under the ECB framework is also being raised by 100 basis points, subject to the borrower being of investment grade rating. The above dispensations are available up to December 31, 2022. SEE ALSO : <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/science/environment/news/monsoon-rain-wreaks-havoc-in-himachal-and-karnataka-orange-alert-in-gujarat/articleshow/92704563.cms">Monsoon rain wreaks havoc in Himachal and Karnataka, orange alert in Gujarat</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/news/macbook-air-with-m2-chip-will-go-on-sale-from-july-15/articleshow/92704253.cms">Apple’s MacBook Air with M2 chip will go on sale from July 15, pre-orders starting July 8</a>

RBI tries to boost forex reserves by easing NRI deposit norms

New Delhi, Jan 12 () The amendments in the IBBI regulations will prevent backdoor entry of former promoters in companies under liquidation by covering the "loopholes" in the law and are in line with the objective of the Insolvency and Bankruptcy Code (IBC), experts said.
The Insolvency and Bankruptcy Board of India (IBBI) has amended the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 and the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016.
Under the amendments introduced to the liquidation process regulations, persons who were ineligible are now barred from being part of any compromise or arrangement at the stage of liquidation. 
Furthermore, a secured creditor who chooses to sell secured assets independently also cannot sell the same to a person who is ineligible under the IBC.
"This has been introduced to specifically overrule the decisions passed by some NCLTs, whereby it was held that no bar operated on the sale of secured assets to the ex-promoters of the Corporate Debtor, if such sale is carried out by a secured creditor under Section 52 of the IBC," said PunitDutt Tyagi, Executive Partner, Lakshmikumaran and Sridharan Attorneys.
Rachit Sharma, DGM, Taxmann said the new amendment to IBC norms restricts secured creditors from selling or transferring assets of a liquidating - company to any person who is not eligible to submit an insolvency resolution plan. 
"With the new amendment, the legislature has not left any loophole which could allow the ex-promoters and other ineligible persons to buy the stressed asset or even participate in a scheme of arrangement," he said. 
According to him, the law makers' intent are very clear, not only does the law bar the ex-promoters from participation under the Code, it now goes on to bar sale outside liquidation process also. 
The amendment is in line with the intent of the Section 29A of Code preventing any sort of re-entry of ex-promoters at any point of resolution/liquidation process, he said.
Another legal expert, L Viswanathan, Partner, Cyril Amarchand Mangaldas, said the changes in the regulations "is in line with the objective of the IBC" to disallow persons who are disqualified from submitting a resolution plan from re-acquiring the company through the mechanism of a scheme or in enforcement of security interests by secured creditors.
In fact, the amendment goes further to provide that such persons "shall not be a party in any manner to such compromise or arrangement thereby even possibly disenfranchising such persons also from being eligible to vote as members on any scheme of compromise or arrangement", Viswanathan said.
Mehul Bheda, Partner, Dhruva Advisors LLP was of the opinion that the amendments have been introduced to bring liquidation on par with the resolution process. 
The restrictions placed on the promoters under Section 29A of the code are now equally applicable to liquidation. 
"This means that no promoter, who is barred from the resolution process, can make a backdoor entry by buying the assets of the company under liquidation or even participating in a scheme of arrangement under Section 230," Bheda added. 
The IBC is the bankruptcy law which seeks to consolidate the existing framework by creating a single law for insolvency and bankruptcy. NKD CS
MKJ

Changes in IBBI norms to prevent backdoor entry of ex-promoters in cos under liquidation: Experts

<ul class="summary-list"><li><keyword id="158169" type="CITY" weightage="60" keywordseo="BlackRock">BlackRock</keyword>'s CIO of global fixed income, <keyword id="732961" type="PERSON" weightage="60" keywordseo="Rick-Rieder">Rick Rieder</keyword>, says the <keyword id="6355253" type="UNKNOWN" weightage="60" keywordseo="federal-reserve">Federal Reserve</keyword> should consider reducing its <keyword id="471672" type="PERSON" weightage="60" keywordseo="bond-buying">bond buying</keyword>.</li><li>Rieder believes there is too much <keyword id="6355375" type="DEFINITION" weightage="60" keywordseo="Liquidity">liquidity</keyword> in the system, which could cause the <keyword id="31671" type="CITY" weightage="100" keywordseo="markets">markets</keyword> to overheat.</li><li>The Fed has maintained $120 billion of bond purchases each month throughout 2021.</li></ul>BlackRock's chief investment officer of global fixed income Rick Rieder sat down with <a href="https://www.youtube.com/watch?v=gzT4wsRRF0A">CNBC</a> on Wednesday to discuss the Federal Reserve's <a href="https://www.businessinsider.com/fed-likely-to-stay-the-course-despite-us-economys-growing-momentum-2021-4">meeting this week.</a>Rieder said that he believes the financial system is "too flush with liquidity" due to the US central bank's bond purchases of $120 billion each month coupled with fiscal stimulus.Fed chair <keyword id="1727754" type="PERSON" weightage="60" keywordseo="Jerome-Powell">Jerome Powell</keyword> has said he will keep the historic bond-buying program in place "until substantial further progress has been made toward the Committee's maximum employment and price stability goals."When asked what the Fed should do moving forward, Rieder said he believes the bond-buying program needs to be reduced."I think that they could start hinting that it could start reducing the tapering program. Right now the amount of liquidity that's come into the system is extraordinary," Rieder said. "Quite frankly, the system is too flush with liquidity.""Not only are you getting the $120 billion a month in from the fed, but what's happening from treasury now is you're getting this immense amount of money coming in since February. The total, if you add up the total amount of fed and treasury you're getting about a trillion into the system," Rieder added.The BlackRock CIO also pointed out that bank deposits are up $800 billion this year and said that the concern of overheating is "starting to permeate the discussions we're hearing in a number of different circles."Rieder added that overall he believes the Fed is doing a good job, but the amount of cash it has been pumping into the economy is "just too high right now."He then clarified that he is not asking the fed to tighten conditions, but rather to move away from the emergency conditions that have been the norm since the pandemic began.The BlackRock CIO said he's looking for a policy that's "accommodative," but with less liquidity, because a continued rise could create some "overheating."When asked about inflation, Rieder said most of the inflation that's occurring now is "transitory inflation" and he expects much of it will come back down to Earth or be absorbed in margins.The real effect of the excess liquidity in the markets, according to Rieder, is rising asset prices and valuations.

BlackRock's Rick Rieder says there is too much liquidity in the system and the Fed should taper its bond-buying

<ul class="summary-list"><li><keyword id="6355375" type="DEFINITION" weightage="60" keywordseo="Liquidity">Liquidity</keyword> in the <keyword id="6354947" type="UNKNOWN" weightage="60" keywordseo="bitcoin">bitcoin</keyword> market should recovery quickly after the recent price falls, <keyword id="44660" type="CITY" weightage="60" keywordseo="JPMorgan">JPMorgan</keyword> said.</li><li>The bank's analysts said activity in the spot and futures <keyword id="31671" type="CITY" weightage="100" keywordseo="markets">markets</keyword> is growing more resilient.</li><li>They said the recent price falls were worsened by the liquidation of futures contracts.</li></ul>Liquidity in the <keyword id="5290028" type="UNKNOWN" weightage="60" keywordseo="cryptocurrency-market">cryptocurrency market</keyword> should recover rapidly after bitcoin's recent tumble, which was worsened by a sell-off in futures contracts, according to analysts at JPMorgan.The volume of activity on bitcoin exchanges is generally proving more resilient and quicker to recover as time goes on, the analysts, led by Joshua Younger, said. The note was published Wednesday and seen by Insider on Monday.They added that traders' buying of futures contracts appeared to have picked up sharply again after the <keyword id="4948040" type="PERSON" weightage="60" keywordseo="bitcoin-price">bitcoin price</keyword> fell dramatically on April 18, and that bitcoin mining rates had also recovered after a recent drop.<a href="https://markets.businessinsider.com/currencies/btc-usd">Bitcoin</a> started to slide on Friday, April 16 and continued to fall across the week to <a href="https://www.businessinsider.in/stock-market/news/bitcoin-slides-below-50000-with-260-billion-wiped-off-the-crypto-market-as-bidens-tax-proposals-crush-risk-appetite/articleshow/82212583.cms">below $50,000</a> from a high of more than $64,000 touched a week earlier.However, bitcoin <a href="https://markets.businessinsider.com/currencies/news/bitcoin-price-after-hitting-lowest-level-early-march-buying-opportunity-2021-4-1030344222">picked up</a> on Monday, rising roughly 4% to trade at around $52,600.Analysts said a number of factors seemed to have triggered the recent drop, including general fatigue and profit-taking after a rapid rally during <a href="https://markets.businessinsider.com/news/stocks/coinbase-stock-price-ipo-direct-listing-trading-debut-cryptocurrency-platform-2021-4-1030304997">Coinbase's listing on the stock market</a>; a sharp drop in mining rates around the world; and a <a href="https://markets.businessinsider.com/currencies/news/bitcoin-price-today-turkey-central-bank-crypto-payment-ban-lira-2021-4-1030313525">ban on cryptocurrency payments</a> in Turkey.JPMorgan's note said bitcoin derivatives, such as futures, were likely a key accelerant. Futures are contracts to buy, or sell, a particular asset at a specific price and at a specific time at a later date.<keyword id="6045525" type="UNKNOWN" weightage="60" keywordseo="Bitcoin-futures">Bitcoin futures</keyword> are often traded using borrowed money and can add to volatility in the market. JPMorgan said billions of dollars of long positions - that is, bets that the price will rise - had to be unwound during the recent sell-off, adding to downward momentum.Yet the analysts said: "Data tracking the futures market suggested open interest has mostly stabilized after steep drops coming out of the weekend [beginning April 17]." They added that the mining of bitcoin around the world appeared to have recovered.The analysts also said round-the-clock trading of bitcoin, which is very rare in financial markets, should support the market."A well-developed norm of access to 24/7 stable liquidity pools should benefit cryptocurrencies over time, as the market continues to deepen and mature," they wrote."Data suggest [the] worst of these liquidations is likely behind us, suggesting little overhang to work through."A recovery in [mining] and signs of more efficient arbitrage trading suggests liquidity should continue to improve from here."

Liquidity in the bitcoin market should recover quickly after the futures-driven price crash, JPMorgan says

New Delhi, Apr 17 () Steps announced by the Reserve Bank of India will provide liquidity for growth, Commerce and Industry Minister Piyush Goyal said.The RBI on Friday further eased bad-loan rules, froze dividend payment by lenders and pushed banks to lend more by cutting the reverse repo rate by 25 basis points, as it unveiled the second set of measures to support the economy hit hard by the coronavirus-led slowdown."Today's steps by RBI will provide liquidity for growth and help India emerge as a world leader in a post COVID-19 world," he said in a series of tweets.The minister said that exclusion of moratorium period from 90 day NPA norm will help borrowers, while simultaneously the health of banks is being maintained through 10 per cent higher provisioning and stopping dividends for the year."Liquidity in the economy will be ensured as banks are being encouraged to lend by reducing Reverse Repo Rate by 0.25 per cent while banks which are facing liquidity issues will benefit from reduction in liquidity coverage ratio," he added. RR BALBAL

RBI measures to provide liquidity for growth: Goyal

Mumbai, Dec 30 () The RBI on Monday proposed reduction in loan amount an urban co-operative bank can lend to a single entity and a group of borrowers to 10 per cent and 25 per cent, respectively, with an aim to prevent PMC Bank like scams caused by large exposure to one group.
Currently, primary (urban) co-operative banks (UCBs) are permitted to have exposures up to 15 per cent and 40 per cent of their capital funds to a single borrower and a group of borrowers, respectively.
Punjab and Maharashtra Co-operative (PMC) Bank collapsed because of its huge exposure totalling Rs 6,226.01 crore to Housing Development and Infrastructure Ltd (HDIL) Group companies.
Earlier this month, the RBI Central Board had reviewed functioning of the urban cooperative banks and the enforcement framework.
In a draft circular, the RBI said large exposure of banks to single borrowers/parties or groups of connected borrowers/parties leads to credit concentration risk.
When large exposures to a few single parties/groups become non-performing, it affects the capital/net worth of the concerned bank significantly and, at times, leads to liquidity and solvency risk for the lender.
"Keeping in view the above aspects, the extant single/group exposure limits of UCBs have been reviewed and it has been decided to rationalize the single/group exposure limits for UCBs with a view to containing the concentration risk," the draft said on which the RBI had sought comments till January 20.
The RBI now proposes that the prudential exposure limits for UCBs for a single borrower/party and a group of connected borrowers/parties should henceforth be 10 per cent and 25 per cent, respectively, of their Tier-I capital. 
The revised exposure limits shall apply to all types of fresh exposures taken by UCBs, it said.
Also once the proposal comes into force, UCBs will have to bring down their existing exposures, which are in excess, within the aforesaid revised limits by March 31, 2023.
The draft also suggests that UCBs should have at least 50 per cent of their loan portfolio comprising loans of not more than Rs 25 lakh per borrower/party.
Further, it proposes to increase the overall priority sector lending (PSL) target for UCBs from the present level of 40 per cent of adjusted net bank credit (ANBC) to 75 per cent.
Following exposure of scam in the PMC Bank, which had over 9.15 lakh depositors, the RBI had imposed restrictions on withdrawals.
Statutory inspection of PMC by the RBI had revealed large group exposure toward Housing Development and Infrastructure Ltd (HDIL) Group companies to the tune of about Rs 6,226.01 crore (inclusive of interest accrued in the related accounts).
Out of the total exposure of Rs 6,226.01 crore at the end of March 2019 to the HDIL group, only Rs 439.58 crore was disclosed to the RBI and remaining Rs 5,786.43 crore remained undisclosed. NKD CS
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RBI proposes to tighten lending norms for UCBs

Mumbai, Apr 17 () The BSE Sensex soared over 986 points on Friday after RBI's second batch of stimulus measures lifted sentiment amid the coronavirus gloom. Announcing a slew of liquidity-boosting measures for NBFCs and other segments, the RBI further eased bad-loan rules, froze dividend payment by lenders and pushed banks to lend more by cutting the reverse repo rate by 25 basis points. After starting over 1,116 points higher, the 30-share BSE Sensex pared some early gains to end 986.11 points or 3.22 per cent higher at 31,588.72. Similarly, the NSE Nifty zoomed 273.95 points, or 3.03 per cent, to finish at 9,266.75. Axis Bank was the top gainer in the Sensex pack, surging 13.45 per cent, followed by ICICI Bank (9.89 per cent), IndusInd Bank (9.13 per cent), Maruti (7.36 per cent), TCS (5.32 per cent), Kotak Bank (4.96 per cent)and Reliance Industries (4.86 per cent). On the other hand, Nestle India, HUL, Tech Mahindra and Sun Pharma ended in the red, shedding up to 3.15 per cent. Interest rate-sensitive banking, financial, auto and realty indices on the BSE settled up to 6.83 per cent higher. In his second televised address since the nationwide lockdown began on March 25, Reserve Bank of India (RBI) Governor Shaktikanta Das pledged to boost liquidity and expand bank credit. He announced measures 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. The rupee rebounded 48 paise to provisionally settle at 76.39 against the US dollar, buoyed by RBI announcements. During the holiday-shortened week, the Sensex rose 429.10 points or 1.37 per cent, while Nifty advanced 154.85 points or 1.69 per cent. Market ended on a firm note tracking positive global cues and announcement of stimulus package by the RBI, said Sanjeev Zarbade, VP PCG Research, Kotak Securities. Further, reports from the US that a drug from Gilead is showing great results in treating Covid-19 cases also led to positive sentiments, he added. "NBFCs are clear beneficiaries of these measures. For investors in banks, the provision of higher liquidity and relaxation in provisioning norms are welcome, but the bar on dividend distribution and new provisioning norms are negatives for the time being. "While the RBI is doing its part in providing reliefs in the current times, the street could keep expecting more and there could also be some concern about the time it would take for these measures to have an impact at the ground level," said Deepak Jasani - Head Retail Research, HDFC Securities. BSE bankex, finance, auto, realty, energy indices rallied up to 6.83 per cent, while FMCG and healthcare closed in the red. Broader BSE midcap and smallcap indices jumped up to 2.44 per cent. TCS posted a smart gain of 5.32 per cent after the IT major on Thursday reported a marginal dip in March quarter net at Rs 8,049 crore. On the global front, markets shrugged off China's GDP contraction data and looked ahead to the gradual reopening of economies, including the US. China's gross domestic product (GDP) contracted 6.8 per cent in the first quarter of 2020 as the Covid-19 outbreak brought economic activity to a halt. Bourses in Shanghai, Hong Kong, Seoul and Tokyo ended with significant gains. Stock exchanges in Europe were also trading on a strong note. Meanwhile, Brent crude futures, the global oil benchmark, rose marginally to USD 27.84 per barrel. The death toll due to Covid-19 rose to 437, while the number of cases in the country climbed to 13,387. Global tally of the infections has crossed 21 lakh, with over 1.45 lakh deaths. ANS ABMABM

Markets vault after RBI's liquidity boost; post weekly gains

New Delhi, Apr 17 () The real estate industry on Friday hailed RBI's decision to boost liquidity into the system and provide relief to loans taken from NBFCs for commercial projects, but sought one-time restructuring of their loans and a stimulus package to help the sector in battling the crisis caused by the lockdown to control COVID-19.The RBI on Friday reduced the reverse repo rate - the rate at which banks park their fund with the central bank - by 25 basis points to encourage banks to lend to the productive sectors of the economy. It also announced an additional Rs 50,000 crore through targeted long-term repo operation (TLTRO) and another re-financing window of Rs 50,000 crore for institutions like Nabard, National Housing Bank and Sidbi.CREDAI Chairman Jaxay Shah said: " We welcome the RBI's decision of providing the liquidity boost to the realty sector. We are hopeful that the government will soon aid the sector with the announcement of the much needed economic package."The RBI has allowed NBFCs to extend the date for commencement for commercial operations (DCCO) in respect of loans to commercial real estate projects by an additional one year if the projects got delayed for reasons beyond the control of promoters.CREDAI President Satish Magar said, measures such as extension of DCCO, fresh LTRO and reverse repo rate cut will help uplift the economic slowdown."Loans given by NBFCs to real estate companies will get similar benefits as given by scheduled commercial banks, thus easing the financial burden on developers," he said. Naredco President Niranjan Hiranandani said: "From the perspective of regulatory norms to spur an economic revival, the measures announced aim to maintain adequate liquidity in the system, facilitate bank credit flow and ease financial stress. These are absolutely welcome, given that economic activity has come to a standstill during the lockdown."He said the announcement that loans given by NBFCs to real estate companies would get similar benefits as given by the scheduled commercial banks was positive. Anshuman Magazine, Chairman &amp; CEO - India, South East Asia, Middle East &amp; Africa said NHB has been provided with a refinance facility of Rs 10,000 crore for HFCs as additional liquidity for individual housing loans, which is a much needed boost at this time.Anarock Chairman Anuj Puri said: "Among the various measures announced, commendably its allotment of Rs 10,000 crore to NHB is a big move for the real estate sector reeling under the liquidity crisis. It will help provide capital to HFCs and eventually provide major relief to developers battling liquidity issues in COVID-19 times."Tata Realty and Infrastructure MD &amp; CEO Sanjay Dutt said the RBI's measures will provide some relief to the sector, which had already been dealing with its own set of issues prior to the pandemic. "These measures...are bound to encourage banks to lend more, thereby improving the credit flow and giving more purchasing power to homebuyers and investors," Dutt said. JLL India CEO and Country Head Ramesh Nair said, "Today's announcement will give an initial fillip to the real estate sector. The central bank's focus to provide credit flow to NBFCs is a key step. This will provide a boost to various real estate activities."As per the RBI data, NBFCs outstanding credit to the commercial real estate stood at Rs 1,29,359 crore as of September-end 2019, he said. "The relaxation of NPA classification norms and extension of one year for commencement of projects to real estate developers by NBFCs will provide the much needed relief to the sector," Nair said. Dhruv Agarwala, Group CEO, Housing.com, and PropTiger, said the RBI move will help ease some financial stress in the system. This move will hopefully nudge banks to increase lending to various sectors of the economy, which is the need of the hour."We are extremely delighted and find a great sense of reassurance with the central bank taking cognizance of specific problems faced by the real estate sector and proactively taking targeted measures to address those issues," Knight Frank India CMD Shishir Baijal said. Savills India CEO Anurag Mathur said:" The central bank's decision to pump in Rs 10,000 crore to NHB for refinancing companies is expected to address some of the liquidity concerns in the residential segment."Ashish Jain, Partner at Cyril Amarchand Mangaldas, said lack of liquidity has been one of the most critical issues facing the real estate sector, even before the pandemic. Any measure to boost liquidity is, therefore, a welcome move.Reliance Home Finance CEO Ravindra Sudhalkar said, "RBI has provided a welcome relief to NBFcs and HFCs in the form of liquidity boosters, which will benefit both housing and commercial real estate.""With relaxation offered to NBFCs to extend the realty loans by a year, the real estate sector will have greater support in these difficult times," said Ankush Kaul, President (Sales &amp; Marketing) - Ambience Group. Pradeep Aggarwal, Founder &amp; Chairman, Signature Global said the infusion of liquidity in the market is of utmost importance and the latest announcement will definitely help the economy.Gaurs group MD Manoj Gaur said the banks and the NBFCs should pass on the benefits announced by the RBI.Supertech Chairman R K Arora said "one time restructuring of loans was not allowed which is a primary requirement of the real estate sector."Sushma group ED Prateek Mittal said the RBI's move will boost liquidity but sought a stimulus package to revive the property market and the economy. MJH SHW ANUANU

Real estate industry hails RBI move to boost liquidity in system

New Delhi, Apr 17 () The Reserve Bank needs to further relax the income recognition and asset classification (IRAC) norms to protect the economy and the financial sector currently facing the heat of the coronavirus outbreak, said an SBI report.The deadly coronavirus or COVID-19 has infected more than 20 lakh persons around the globe and so far taken lives of over 1.47 lakh people. The decision of various countries to opt for lockdown to prevent the spread of deadly virus has severely impacted the economy.Amid such a situation, an IRAC will take a heavy toll not only on the economy but also on requirement of core capital by the banking system, said the SBI Ecowrap.Although the decision of the RBI to exclude the accounts availing moratorium from the 90-day NPA norm will provide a breather to banks as well as customers, given the working capital challenges it is advisable for the RBI now to relook at the 90-day norm, the report said.Observing that once an account is classified as NPA, the borrower won't be able to raise funds from any other lender, the report said. In the current circumstances the only way to save the economy and the financial system seems to be a relaxation of the IRAC norms i.e. extending the 90-day schedule to 180 days.This relaxation, it added, should be given along with a well laid out calendar of returning to the current norm of 90 days in the next two years by which time, hopefully, the current pandemic crisis would have subsided completely.Commenting on the Reserve Bank's decision to reduced the reverse repo rate by 25 bps to 3.75 per cent while keeping the repo rate unchanged, the SBI Ecowrap said, the move has widened the LAF corridor to 90 bps."The widening of the LAF corridor and a surplus liquidity regime effectively implies reverse repo rate could be the effective policy rate," the report said.Meanwhile, Avinash Bagdi, Head of Finance, Covestro India, said "the bold" steps taken by the RBI to ensure smooth functioning of banks and financial institutions will help the country to prevent the economic slowdown curve from steepening."The announcement of excluding moratorium period from 90-day NPA period will prove to be a relaxation of asset classification norms. In view of tightening the financial conditions, the decision to provide special refinance facilities of Rs 50,000 crore to NHB, SIDBI and NABARD is commendable," he added.While thanking RBI for announcing slew of measures including liquidity injection of Rs 50,000 crore to tackle Covid-19 crisis, the Apparel Export Promotion Council (AEPC) also requested the central bank to protect the exporters from penalty on forward covers due to exchange rate fluctuations."It is requested that the charges for exchange rate fluctuations and cancellations are waived for the period for which export orders have been cancelled due to COVID-19," AEPC Chairman A Sakthivel said in a letter to the RBI Governor.Earlier in the day, the Reserve Bank of India on 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.Governor Shaktikanta Das also assured that RBI will use all instruments at its disposal to deal with the challenges posed by the outbreak of the novel coronavirus, depending on evolving situations. NKD CS MKJ

RBI needs to further relax IRAC norms to protect financial system

New Delhi, Apr 17 () The announcements made by the RBI on Friday will help in infusing liquidity and facilitating bank credit flows for traders as well as industry at a time when both are battling the lockdown due to coronavirus outbreak, according to exporters.Trade Promotion Council of India (TPCI) Chairman Mohit Singla said steps like 90-day NPA (non-performing assets) norm not to apply on to the moratorium granted on the existing loans by banks, and lowering the reverse repo rate to 3.75 per cent will surely ease pressure on the banking system."Measures announced today to infuse liquidity, facilitate bank credit flow and ease financial stress will surely help industry and economy fight this deadly pandemic," Singla said.Commenting on the measures, Federation of Indian Export Organisations (FIEO) President Sharad Kumar Saraf said that it will be having substantial positive impact on the financial system and the economy in this difficult time."Refinancing of Rs 15,000 crore to SIDBI and 90 days NPA norms to exclude moratorium or deferment period will give relief particularly to MSME units who are struggling to keep them alive with no business but saddled with fixed costs," Saraf said.However, he added that the government should immediately announce a comprehensive economic package for the industry to provide them relief in payment of wages, statutory obligations, rental and utilities."Exporters' interest should be paramount in the package as they are the worst sufferers facing challenges both at the domestic turf and in the global market," he said.Financial advisory firm Findoc Group Managing Director Hemant Sood said that the RBI's liquidity measures may help financing companies to get liquidity relief particularly NBFCs and MFIs."The relaxation in NPA classification norms will sooth market and bring investors back to the market, and 25 basis points reduction in the fixed reverse repo rate will help banks to lend and improve liquidity in the system," Sood said. He hoped that these measures will boost investor confidence as the quarterly numbers to be published by corporates will no longer leave a negative overall impact. RR BAL

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