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<ul><li>The Ethereum-based cryptocurrency Ether’s prices have improved substantially, but gas fees — the amount charged to conduct a transaction — will take longer to stabilise.</li><li>Ethereum’s average gas fee was pegged at 41 Gwei at 1:45 pm IST on August 12.</li><li>The network has burned over 31,000 ETH in the seven days following the <keyword id="6354968" type="LOCATION" weightage="20" keywordseo="london">London</keyword> Hard Fork update.</li></ul>Ethereum’s London Hard Fork update, which went live on August 5, is said to be the biggest change to the world’s second most valuable cryptocurrency so far. The update is expected to reduce gas fees — or transaction fees — on the <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite&amp;is_retargeting=false&amp;shortlink=BI&amp;c=site&amp;pid=Business%20Insider&amp;af_click_lookback=7d&amp;af_channel=Business%20Insider&amp;af_adset=article&amp;af_force_deeplink=true">Ethereum</a> network, a problem that has plagued the platform since its inception. It does this by burning most of the gas fees involved in transactions and hence taking them out of the active circulation. The computation required for authenticating Ethereum transactions is called gas, and the fee required for these transactions is called gas fees. Burning gas fees also limit the supply of Ether, the cryptocurrency that facilitates the Ethereum network, making the available tokens more valuable. According to Etherchain’s burn <a href="https://etherchain.org/burn">tracker</a> and <a href="https://ultrasound.money/">ultrasound.money</a>, over 31,000 Ether tokens have already been burned, at a rate of 2.51 ETH per minute. Gwei is a smaller denomination of currency on the Ethereum network, which is used to determine the gas price. And, as of 12 August, at 1:08 pm Indian Standard Time (IST), Ether’s average gas fees was pegged at 33 Gwei, according to Etherscan’s tracker. This is pretty much in the normal range that you would see before the update. <cmsannotation type="cmsannotation" annotationid="Deflationary effect on Ether" comment="subhead" text="Deflationary effect on Ether">Deflationary effect on Ether</cmsannotation> A report by Coindesk two days after the update noted that 5,000 ETH had been burned at the time. A week later, data shows that the number has grown by over six times. Burning these tokens was expected to create a deflationary effect on Ether, driving its price upwards — and, that’s exactly what seems to be happening. Data from Coinmarketcap <a href="https://coinmarketcap.com/currencies/ethereum/historical-data/">shows</a> that Ether’s price rose from around $2,700 on August 4 to over $3,100 today. “A spike in the Ethereum transaction fee burn rate has resulted in at least two hours when the supply was deflationary. The network has come under heavy load over the past couple of days, which has resulted in a lot more gas being burnt,” Cointelegraph <a href="https://cointelegraph.com/news/ethereum-supply-flips-briefly-into-deflation-as-gas-fees-spike">reported</a> yesterday. <cmsannotation type="cmsannotation" annotationid="Gas fees yet to fall substantially" comment="subhead" text="Gas fees yet to fall substantially">Gas fees yet to fall substantially</cmsannotation> That said, the gas fees haven’t really lowered just yet. And some experts have said that it may not happen anytime soon. “It’s not that easy for the average user to predict what the fee will be for the next one or two minutes,” Anonymous Ethereum user Face Shaver <a href="https://www.coindesk.com/ethereum-burns-5000-coins-in-2-days">told</a> Coindesk. Shaver explained that since the fee is as volatile as the price of <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite&amp;is_retargeting=false&amp;shortlink=BI&amp;c=site&amp;pid=Business%20Insider&amp;af_click_lookback=7d&amp;af_channel=Business%20Insider&amp;af_adset=article&amp;af_force_deeplink=true">Ether</a> itself, it’s difficult to predict what fee you will encounter when your transaction goes through. For instance, the average gas fee had gone up to 41 Gwei at 1:45 pm IST, while it dropped again to 39 gwei at 1:48 pm IST, while writing this story. “If you are [trying] to get in, either in this block or the next block, the most [fee] volatility you face is ⅛ of the current base fee, but if you think of the average user as someone who is price sensitive, and so is willing to wait one, or even something like three minutes for their transaction to go through … then you have to consider what happens to the fee in next three minutes,” Shaver said. To be fair, no one expected the gas fees to stabilise overnight. “The London Fork is going for the proof-of-stake model, which will ultimately bring down the gas fees on Ethereum. Overall, for the ecosystem, it will be good news for the ecosystem of app developers, (people selling) NFTs and more,” Toshendra Sharma, founder and chief executive of Indian NFT platform NFTically, <a href="https://www.livemint.com/market/cryptocurrency/ethereums-london-hard-fork-to-help-india-s-nft-users-blockchain-app-builders-11628172486786.html">told</a> Mint on August 5. “The cost will probably go down to about one-tenth of the current fees," said Anuj Kumar Kodam, founder of another Indian NFT platform called Wall.app, told the publication. <a href="https://forum.businessinsider.in/">For a more in-depth discussion, come on over to Business Insider Cryptosphere</a> — a forum where users can deep dive into all things crypto, engage in interesting discussions and stay ahead of the curve. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/cryptocurrency/news/messis-impending-arrival-drives-the-value-of-psgs-crypto-token/articleshow/85175455.cms">Messi may or may not be going to PSG, but the French club is already seeing gains from the 'potential' signing</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/cryptocurrency/news/crypto-firm-mudrex-which-offers-mutual-fund-like-crypto-investment-tools-raises-2-5-million-in-a-seed-round/articleshow/85205115.cms">This Indian crypto company just raised $2.5 million to launch crypto mutual funds and ETFs</a>

London Hard Fork is affecting Ether’s prices already, but gas fees stabilisation will take longer

New Delhi, Feb 1 () The government on Saturday proposed a price stabilization fund (PSF) to control prices of food items like onion and tomato -- kitchen staples that pushed retail inflation to a five-year high in December.
 "Government has taken various measures from time to time to stabilize prices of essential food items..Government is also implementing PSF to help moderate volatility in prices of agri-horticultural commodities like pulses, onion, and potato," said the Union Budget 2020-21 presented by Finance Minister Nirmala Sitharaman in Parliament.
Onion prices started to flare up from August 2019 onwards peaking to about Rs 150-200 a kg due to unseasonal rains which disrupted supplies from key producing regions such as Maharahstra and Karnataka.
Prices of tomato too hovered in the range of Rs 60-80 a kg while potato sold for Rs 30 per kg towards the end of 2019. 
Pulses also turned costlier due to a fall in acreage resulting from rains in the growing states and low price realisation due to glut in market following increased production of earlier years.
 The consumer price index-based retail inflation spiked to over five-year high of 7.35 per cent in December 2019.
 The government said it resorted to trade and fiscal policy instruments like import duty, minimum export price, export restrictions, imposition of stock limits besides advising
states for effective action against hoarders and black marketers to regulate domestic availability and moderate prices.
CPI or the retail inflation averaged 4.1 per cent in during April-December period of the current fiscal, while it had declined to 3.4 per cent in 2018-19 from 3.6 per cent in 2017-18. It was at 4.5 per cent in 2016-17.
The 'food inflation' component of the retail inflation basket averaged 5.3 per cent in 2019-20 (April to December) and stood higher at 14.1 per cent in last December.
On the wholesale price front, inflation averaged 1.5 per cent during April-December in the current fiscal year and rose to 2.6 per cent in December.
The Wholesale Price Index (WPI) inflation was at 4.3 per cent in 2018-19 as compared to 3 per cent in 2017-18 and 1.7 per cent in 2016-17.
"For increasing productivity and production in key segments of agriculture towards moderating prices, government has been incentivising farmers by announcing minimum support prices and implementing schemes such as Mission for Integrated Development of Horticulture (MIDH) and, National Mission on Oilseeds and Oil Palm (NMOOP), among others," read the Budget. 
The consumer price inflation was within the targeted limits set by the monetary policy committee of Reserve Bank of India (RBI), it said.
The RBI decides on its monetary policy in every two months, targeting retail inflation to be at 4 per cent with a bias of 2 per cent on the either side. 
However, acknowledging the major challenges for the economy arising from the external front like geo-political tensions in the Middle East and rising crude oil prices due to supply disruption, the government said it may "decelerate growth and increase inflation". KPM MR
MR

To rein in rising inflation, Govt to set-up a price stabilisation fund for key staples

It has been just over a year since India's mobile payments and Quick Response (QR) pioneer <keyword id="6357120" type="General" weightage="100" keywordseo="paytm" source="Orion">Paytm</keyword> made its debut on the stock market and the company has made quite an impression. The initial public offering (IPO), which was the largest in the country's history, drew attention from investors far and wide. Paytm's impressive growth has sparked the interest of savvy investors, both retail and institutional, who are clamouring to add more Paytm stock to their portfolios. As the fintech firm continues to make significant strides towards achieving operating profitability, investors' belief in the Paytm story and the company's long-term potential for success has grown stronger than ever. The company's latest shareholding pattern for the quarter that ended December shows that mutual funds increased their stake by 0.47 per cent to 1.73 per cent. Two new mutual funds entered the stock, taking the total mutual fund shareholders in Paytm from 19 to 21 in the December quarter. Meanwhile, more retail investors have also jumped on board, with their shareholding increasing by 3 per cent to 9.7 per cent. Over 70,000 new investors were added during the quarter, bringing the total number of retail shareholders to around 12 lakh. These developments are a clear indication that more Indians believe in Paytm's ability to deliver profitability without compromising on growth. The increase in domestic investors' shareholding is a vote of confidence in the company's future prospects. Global investment firm <keyword id="6361649" type="General" weightage="50" keywordseo="goldman-sachs" source="Orion">Goldman Sachs</keyword> expects Paytm to be adjusted earnings before interest, taxes, depreciation, and amortisation (Ebitda) positive by the March quarter, two quarters ahead of the estimates and the company's guidance of September 2023. Goldman Sachs has reiterated its 'Buy' rating for Paytm and has upwardly revised its share price target to Rs 1,120. The firm has stated that the current share price continues to offer a compelling entry point into India's largest and one of the fastest-growing fintech platforms. The increase in shareholding by domestic investors is also a positive sign for the Indian economy, as it shows that more and more Indians are investing in the country's rapidly growing fintech sector. An increase in retail shareholding can bring a number of benefits for a company. One of the most significant benefits is increased liquidity, which can help to stabilise the stock price and improve overall market sentiment. Retail shareholders also tend to have a long-term investment horizon and may be more likely to hold on to their shares, making the company more attractive to investors. The overall <keyword id="44528" type="General" weightage="50" keywordseo="fdi" source="Orion">FDI</keyword> shareholding in Paytm has declined from 71.49 per cent to 66.12 per cent, mainly because of SoftBank offloading a 4.53 per cent stake. The Japanese conglomerate, through its <keyword id="4031888" type="General" weightage="50" keywordseo="vision-fund" source="Orion">Vision Fund</keyword>, continues to own 12.92 per cent of Paytm. Meanwhile, foreign portfolio investors (FPI) holding in the company has gone up by 0.91 per cent to 6.68 per cent. The number of FPIs holding the Paytm stock has increased from 88 to 128 in the third quarter, representing a net addition of 40 investors. As a pioneer in India's fintech revolution, Paytm has been at the forefront of the country's technology-driven shift towards a cashless economy. The <keyword id="13945656" type="General" weightage="50" keywordseo="paytm-super-app" source="Orion">Paytm Super App</keyword> has become a household name that is synonymous with convenience and ease of use. Paytm is expected to post another strong quarter when it announces Q3 (third quarter) results. Meanwhile, its Q3 operating performance update shows strong growth in monthly transacting users, loan disbursals and devices deployed. According to data available, eight out of 12 analysts tracking the company have a 'buy' rating. Paytm is also included in Goldman Sachs' Asia (ex-Japan) 'Conviction List' of stocks that have a high potential for returns and are rated as 'buy'. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/mobile/news/samsung-galaxy-s23-series-to-launch-soon-launch-date-expected-price-and-features/articleshow/97243146.cms">Samsung Galaxy S23 series to launch soon – launch date, expected price and features</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/international/news/b20-has-important-role-to-play-can-be-value-adding-for-world-says-n-chandrasekaran/articleshow/97244919.cms">B20 has important role to play; can be value adding for world, says N Chandrasekaran</a>

Mutual funds increase their stake in Paytm

<ul><li>The <keyword id="30067" type="General" weightage="20" keywordseo="rbi" source="Orion">RBI</keyword> is likely to maintain status quo on policy rates for the fourth time in a row month, say experts.</li><li>This is in view of the stubbornly high retail <keyword id="22195" type="General" weightage="20" keywordseo="inflation" source="Orion">inflation</keyword>, elevated crude oil prices and more.</li><li>The <keyword id="6357126" type="General" weightage="20" keywordseo="monetary-policy" source="Orion">Monetary Policy</keyword> Committee (MPC) meeting is scheduled for October 4-6, 2023.</li></ul> The Reserve Bank is likely to maintain status quo on policy rates for the fourth time in a row at its bi-monthly monetary policy review meeting early next month, as retail inflation continues to remain high and the US Federal Reserve has decided to keep a hawkish stance for some more time, according to experts. The Reserve Bank had raised the benchmark repo rate to 6.5 per cent on February 8, 2023 and since then it has retained the rates at the same level in view of the stubbornly high retail inflation and certain global factors including elevated crude oil prices in the international market. The Reserve Bank Governor-headed six-member Monetary Policy Committee (MPC) meeting is scheduled for October 4-6, 2023. The last meeting of the MPC, the highest rating-setting panel, was in August. "We do expect the RBI to hold on to a status quo position this time as inflation is still high and liquidity tight. In fact, going by RBI forecast on inflation, it would be above 5 per cent in Q3 too, which will ensure that the status quo prevails for the calendar year for sure and probably Q4 too," said Madan Sabnavis, Chief Economist, Bank of Baroda. Sabnavis further said there are uncertainties relating to Kharif crop, especially on pulses, which can increase prices. "The comfort is that there is less concern on growth which is on target," he added. Although the <keyword id="134096" type="General" weightage="20" keywordseo="consumer-price-index" source="Orion">Consumer Price Index</keyword> (CPI)-based retail inflation eased a bit to 6.83 per cent in August from 7.44 per cent in the preceding month in July, it remained above the Reserve Bank's comfort level of 6 per cent. It may be mentioned that the government has mandated the RBI to keep inflation at 4 per cent with 2 per cent margin on either side. Aditi Nayar, Chief Economist, ICRA Limited said the headline CPI inflation is expected to ease to 5.3-5.5 per cent in September 2023 from 6.8 per cent in August 2023, benefitting from the halving of the average price of tomatoes as well as a favourable base. "... We expect the CPI inflation to ease to 5.6 per cent in Q3 FY2024 and further to 5.1 per cent in Q4 FY2024, amid upside risks to food inflation on account of the impact of uneven and sub-par monsoons and low reservoir levels on Kharif yields and Rabi sowing, respectively," she said. Nayar said ICRA expects the MPC to remain on hold in October 2023 policy, while continuing to demonstrate caution amid a cloudy outlook for food inflation and elevated crude oil prices. The Reserve Bank has projected CPI inflation at 5.4 per cent for 2023-24, with Q2 at 6.2 per cent, Q3 at 5.7 per cent and Q4 at 5.2 per cent, with risks evenly balanced. CPI inflation for Q1, 2024-25 is projected at 5.2 per cent. On his expectations from the next bi-monthly monetary policy, Sanjay Bhutani, Director, Medical Technology Association of India (MTaI) said the RBI has gone along with the market sentiment of retaining the benchmark interest rate at 6.5 per cent for quite some time now. However, it's time for the central bank to contemplate a reduction of the interest rate with the objective of boosting growth, he said. "...if that is not possible in view of high retail inflation and the hawkish stance of the Federal Reserve, the medical technology sector, which is reeling under the burden of high debt, does expect the RBI to continue with the pause and at the same time provide some firm indication of easing rates in the near future," Bhutani opined. Sandeep Bagla, CEO, Trust Mutual Fund was of the opinion that the environment for <keyword id="6371181" type="General" weightage="20" keywordseo="interest-rates" source="Orion">interest rates</keyword> has worsened considerably from MPC's last policy review in August. In the US and in India, the economy has shown resilient growth, and inflation numbers have risen beyond comfort levels. "While food prices have softened, crude oil prices have climbed up, thereby raising inflationary expectations as evidenced by sharp rise in US treasury yields. The MPC will consider all these factors and maintain status quo on repo rates, as headline inflation is expected to come down in the coming months," he said. The Reserve Bank mainly factors in the CPI-based inflation while arriving at its bi-monthly monetary policy. The borrowing cost which started rising in May last year has stabilised with RBI keeping the repo rate unchanged at 6.5 per cent since February, when it was raised from 6.25 per cent. Later in the next three bi-monthly policy reviews in April, June and August the benchmark rate was retained. The MPC consists of three external members and three officials of the RBI. The external members on the panel are Shashanka Bhide, Ashima Goyal, and Jayanth R Varma. Besides Governor Das, the other RBI officials in MPC are Rajiv Ranjan (Executive Director) and Michael Debabrata Patra (Deputy Governor).

As inflation continues to remain high, RBI likely to keep interest rates unchanged

<ul><li>In the national capital, <keyword id="46002" type="General" weightage="20" keywordseo="gold-prices" source="Orion">gold prices</keyword> climbed by ₹450 to ₹59,350 per 10 grams on Thursday. </li><li>The dollar index slipped to seven week lows after the Fed meeting outcome, leading to safe-haven demand for precious metals. </li></ul>Gold prices bounced back on Thursday after retracing for two straight days. Its prices jumped over 1% to end the day at $1969.6 per ounce. In the national capital, gold prices climbed by ₹450 to ₹59,350 per 10 grams on Thursday. Analysts believe that the precious metal prices will move ahead with a positive momentum. The Federal Reserve hiked the fed funds target rate range by 25 basis points to 4.75-5% on Wednesday. The dollar index slipped to seven-week lows after the Fed meeting outcome and the US 10-year bond yields also slipped below 3.50% once again that led to<a href="https://www.businessinsider.in/investment/news/as-markets-turn-topsy-turvy-sovereign-gold-bonds-offer-hopes-of-a-safe-haven/articleshow/98545327.cms"> safe-haven demand for precious metals</a>. “Gold prices rose after the Fed raised interest rates; however, it indicated that further increases in borrowing costs might be postponed due to the recent failure of two US banks. Gold has traditionally been regarded as an inflation hedge, and a low-interest-rate environment makes non-yielding bullion a more appealing bet,” said Prathamesh Mallya, AVP- research, non-agri commodities and currencies, Angel One. Silver also zoomed ₹815 to ₹69,800 per kilogram on Thursday. In the overseas markets, both gold and silver were trading higher at $1,975 per ounce and $22.84 per ounce, respectively. “The Fed is having to balance inflation risks and economic stability, both are factors that could drive further safe-haven demand for precious metals,” said Rahul Kalantri, VP of commodities at Mehta Equities. In the last two weeks, troubles at four banks – Signature Bank, Silicon Valley Bank, First Republic and Credit Suisse — have sent global equities into a tizzy. That, however, also helped gold prices breach the ₹60,000 per 10 gram this Monday. Going ahead, analysts believe that the gold prices will continue to trend higher. The US treasury secretary <keyword id="116249" type="General" weightage="50" keywordseo="janet-yellen" source="Orion">Janet Yellen</keyword>, during a hearing before a Senate sub-committee, said that regulators aren’t looking to provide ‘blanket’ deposit insurance to stabilise the US banking system. “With prospects of nearing an end to the fastest rate hike in decades coupled with a looming recession and Yellen’s comments, we might see gold prices trading with a positive momentum,” said Ravindra Rao, VP- head commodity research at Kotak Securities. Kalantri however believes that gold prices could be volatile saying that gold has support at $1,955-1,942 while resistance is at $1,986-1,998. Analysts also predict that gold<a href="https://www.businessinsider.in/personal-finance/news/gold-likely-to-reach-70000-levels-by-year-end/articleshow/98862160.cms"> prices might touch ₹70,000</a> per 10 grams by the end of the year. (With PTI inputs) SEE ALSO <a href="https://www.businessinsider.in/personal-finance/news/gold-likely-to-reach-70000-levels-by-year-end/articleshow/98862160.cms">Gold likely to reach ₹70,000 levels by year end</a> <a href="https://www.businessinsider.in/investment/news/as-markets-turn-topsy-turvy-sovereign-gold-bonds-offer-hopes-of-a-safe-haven/articleshow/98545327.cms">As markets turn topsy turvy, sovereign gold bonds offer hopes of a safe haven</a>

Gold, silver prices zoom after Fed rate hike, analysts see positive momentum ahead

<keyword id="22195" type="General" weightage="20" keywordseo="Inflation" source="Orion">Inflation</keyword> is likely to have reached its peak in 2022 but there is no end in sight for the <keyword id="533011" type="General" weightage="20" keywordseo="cost-of-living" source="Orion">cost of living</keyword> crisis, experts said on Tuesday. Speaking at a panel discussion during the World Economic Forum Annual Meeting 2023, they said those on low income and in the developing world will be grappling with high prices for years to come. <keyword id="154034" type="General" weightage="50" keywordseo="gita-gopinath" source="Orion">Gita Gopinath</keyword>, Deputy Managing Director of the <keyword id="6366068" type="General" weightage="80" keywordseo="international-monetary-fund" source="Orion">International Monetary Fund</keyword>, said, "we do believe that, in terms of headline inflation for the global economy, we think it peaked in 2022." Participants agreed that inflation is inextricably linked to the cost of living crisis and tackling inflation is key to easing the cost crunch in the long run. However, <keyword id="60820" type="General" weightage="80" keywordseo="gopinath" source="Orion">Gopinath</keyword> warned, "even if inflation comes down, prices are high because we don't have deflation, we have lower levels of inflation. The prices have gone up. How much of an impact that has had on households and on consumption varies across countries." German Finance Minister <keyword id="1084060" type="General" weightage="50" keywordseo="christian-lindner" source="Orion">Christian Lindner</keyword> highlighted his country's 200 billion euro "economic shield" mobilised to protect consumers from the cost of living crisis but said that he expects the country might not need the full amount. "The price levels are lower than we expected. We have fewer hardship cases, and so my expectation is that we won't need the whole protective shield of two hundred billion, which is good news," he said. According to him, on top of protecting the society's most vulnerable, the sections in the middle also need shielding from the cost of living crisis. "From the German, European, perspective, we are doing a lot for the most vulnerable, paying welfare subsidies. But we have to ask: what can we do to stabilise the qualified people who are working hard, playing by the rules?". "A renaissance of competitiveness, so that our companies are able to pay their wages... we have to reform the electricity market, we have to reduce the burdens, for example, in taxation, we have to improve the framework conditions for our SMEs (Small and Medium-sized Enterprises) in Germany and all of these supply-side measures," the minister said. The panel also agreed that the knee-jerk reaction of the "re-shoring" industry in response to the supply chain shock of the COVID pandemic must be averted if inflation and the cost of living crisis are to be tackled effectively. Giving the perspective from business, Unilever CEO Alan Jope said the "fragmentation of supply chains is frankly another inflationary pressure in this economy" and warned more generally of the dangers of inequality. "The cost-of-living crisis disproportionately impacts those at the bottom of the pyramid. There is so much talk about tightening rates, and about stimulus spending, I think the only way to break the long-term trend of rising inequality is productivity," he added. He explained that Unilever has increased the wages it pays to its own workers, imploring others to do the same. Laura D'Andrea Tyson, Professor of Economics at the University of California, Berkeley, also highlighted the fundamental issue of wages. "I almost want to say, without calling it a cost of living crisis, let's call it what existed before, and that is a living wage crisis for many people." She also suggested tackling long-standing issues around planning and approvals for housing -- in order to build more stock and bring down prices -- and addressing the climate crisis and utilising technology would aid the global response to inflation. In closing, IMF's Gopinath cautioned that any meaningful moves to bring down inflation will likely mean rising unemployment. "We are at record low unemployment rates in the US and the euro area. Everything we know about our monetary policy when you tighten interest rates is for the unemployment rate to go up." "That is how you bring down inflation," she added. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/sebi-slaps-final-hearing-notices-to-9-missing-entities/articleshow/97171426.cms">SEBI slaps final hearing notices to 9 'missing' entities</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/jsw-steel-q3-net-profit-falls-over-85-to-474-crore/articleshow/97174189.cms">JSW Steel Q3 net profit falls over 85 % to ₹474 crore</a>

Inflation may be past peak but cost of living crisis is far from over, say experts

<keyword id="1334" type="General" weightage="100" keywordseo="china" source="Orion">China</keyword>'s once booming real estate sector and a pillar of economic growth is rapidly losing its sheen with prices of new homes in several major cities nosediving. This could dent China's economic recovery at a time when it is just coming out of the stringent Covid 19 lockdown shock. Real estate sector accounts for about 30 per cent of China's GDP. In June the average prices of new homes declined by 0.5 per cent year-on-year, following a 0.1 per cent drop a month earlier, data website <keyword id="13040067" type="General" weightage="50" keywordseo="trading-economics" source="Orion">Trading Economics</keyword> revealed. The problem is deep rooted. The non payment would impact the country's banking industry as the non-performing assets will pile up further. The shadow banking sector, which includes trust companies and is an important funding source for Chinese developers, will be hurt as well, <keyword id="608422" type="General" weightage="50" keywordseo="peterson-institute-for-international-economics" source="Orion">Peterson Institute for International Economics</keyword> (PIIE) said in a blog. Though Beijing has started firefighting to stabilise the situation by asking banks to ease lending for property developers, confidence among home buyers is at its lowest. The authorities are even looking at carving out a scheme facilitating a freeze of mortgage payment by homebuyers who have not been handed over the apartments. "There is a real crisis-like situation in China and the authorities are aware of this. They are taking all measures required to address this. But we will have to wait and watch to understand how things take shape in the coming months," a person engaged with the education sector in China told <keyword id="14220074" type="General" weightage="50" keywordseo="india-narrative" source="Orion">India Narrative</keyword>. The crumbling of real estate behemoths <keyword id="3283111" type="General" weightage="50" keywordseo="evergrande-group" source="Orion">Evergrande Group</keyword> last year and subsequently the fall of several other property giants have shaken up the market. Prices of new homes have been steadily falling for the last one year. While the demand for new homes, considered one of the safest investment options for the Chinese, have been surging until last year, developers continued to increase their debt levels. The total debt level stood at about $5.2 trillion as of June 2021, according to financial services company <keyword id="6354527" type="General" weightage="50" keywordseo="nomura" source="Orion">Nomura</keyword>. Protests by home buyers have become rampant. Earlier this month thousands of home buyers announced on social media they would not pay their mortgage loans. The protests have intensified spreading across 100 cities in the country. <keyword id="14549689" type="General" weightage="50" keywordseo="china-briefing" source="Orion">China Briefing</keyword> said that the homes in question were acquired through a pre-pay model, in which buyers acquire apartments that are unfinished - or in some cases have not yet broken ground - when the initial deposits are paid and developers are required to hand over the homes within a stipulated time frame. But amid overly ambitious development plans, sky-high debt, and a tightening regulatory environment aimed at deleveraging the industry, many have failed to do so. "This has left some households making mortgage payments for several years before being able to move in," it said. Will this be China's <keyword id="50209" type="General" weightage="50" keywordseo="lehman-brothers" source="Orion">Lehman Brothers</keyword> moment? (The content is being carried under an arrangement with indianarrative.com) SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/apps/news/list-of-top-new-upcoming-whatsapp-features-in-second-half-2022/articleshow/93103440.cms">From avatars to hiding online status—list of top new upcoming WhatsApp features</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/india/news/india-has-the-highest-rate-of-women-taking-action-against-harassment-calls-and-messages/articleshow/93107553.cms">India has the highest rate of women taking action against harassment calls and messages</a>

China's home prices crash as buyers refuse to pay mortgage

<ul><li>Essential fuels like petrol and diesel are already too expensive.</li><li>The <keyword id="1881337" type="PERSON" weightage="20" keywordseo="rise-in-food-prices">rise in food prices</keyword> is relatively low compared to last year but still rising fast.</li><li>From <keyword id="6357252" type="DOMAIN" weightage="20" keywordseo="Hero-MotoCorp">Hero Motocorp</keyword> to <keyword id="6912" type="LOCATION" weightage="20" keywordseo="maruti">Maruti</keyword>, from Havells to Blue Star, from <keyword id="186975" type="DOMAIN" weightage="20" keywordseo="TTK-Prestige">TTK Prestige</keyword> to Finolex, companies are looking to hike prices to meet rising costs.</li><li>Meanwhile, falling savings and rising household debt, coupled with an uncertain future due to the second wave of COVID-19 infections, is likely to put severe pressure on people’s finances and their confidence.</li></ul>The year 2020 was bad but 2021 has hardly been a relief for Indian families. The second wave of COVID-19 cases has filled WhatsApp chats (and other social media) with fearful exchanges about the possibility of yet another lockdown. The possible dent in consumer confidence, which improved in January, may take a further knock from rising cost of everyday essentials. What makes this threat to people’s livelihood even worse are the rising prices of daily essentials and the depleted savings. To top up the miserable feeling, the salaried class in the private sector is going to see a fall in take home pay due to <a href="https://www.businessinsider.in/personal-finance/news/your-take-home-salaries-could-shrink-sharply-in-april-with-indias-new-definition-of-wages/articleshow/81631662.cms#:~:text=India's%20new%20labour%20codes%2C%20which,like%20gratuity%20and%20leave%20encashment.">the new definition of wages that kicks in</a> from April 1. Food and fuel are already taking a big chunk out of people’s earnings Essential fuels like petrol and diesel are already too expensive. At 8.76%, food inflation was already high in February 2020. So compared to that a 4.25% rise in food prices in February this year may seem slower but it is still significant. <div type="image" title="B3FC84F1-0AB9-4D7E-BB9E-EB94502CE6E9_edited" msid="81667538" hostid="261" caption="&amp;lt;p&amp;gt;Attendant shows price of fuel at a petrol pump in Nagpur&amp;lt;/p&amp;gt;"></div> While the Reserve Bank of India (RBI) expects prices to be stable hereon, any supply disruption due to measures taken to curb the spike in COVID-19 cases will only make it worse. Raw materials such as palm oil, copra and edible oils have risen sharply. Since price hikes have been quite limited over the past two years, Dabur has room to raise prices this year, the management told analysts recently. The company sells everyday items like toothpaste and fruit juices to branded honey and mosquito repellents. Soap makers have already hiked prices by 5–6%, and another round of a 3% hike is likely, an Edelweiss report dated March 19 said. Crude oil prices are up 26% compared to a year earlier, which makes nylon more expensive. That, in turn, will increase prices of cotton that is a competing commodity. Wholesale prices of cotton are already up 24% between October 2020 and February this year. And that could, eventually, reflect in the prices of textiles and apparels. Hooked to WhatsApp, Facebook, Instagram or Youtube? Prepare to shell out more The glory days of India’s famous dirt-cheap mobile data plans are well behind us. The market is shrinking, effectively, into <a href="https://www.businessinsider.in/business/telecom/news/how-the-latest-spectrum-auction-may-affect-your-mobile-phone-bills-and-quality-of-network-service/articleshow/81325496.cms">a duopoly between Airtel and Reliance Jio</a>. While Vodafone Idea is getting relegated to the margin, the Aditya Birla Group company may have to increase tariff to stay in the game, allowing Mukesh Ambani and Sunil Mittal to follow suit. So mobile bills are going to get more expensive. <div type="image" title="man on mobile phone_edited" msid="81667557" hostid="261" caption="&amp;lt;p&amp;gt;The market is shrinking, effectively, into a duopoly between Airtel and Reliance Ji0, which could result in a hike in prices of data&amp;lt;br&amp;gt;&amp;lt;/p&amp;gt;"></div> Cost of metals like steel, aluminium, palladium, platinum and rhodium are up 30% in the last six months, according to JM Financial. These are key inputs for automobiles and the rise in prices reflect in the cost of buying with a lag of a few months. No wonder, India’s largest motorbike maker Hero MotoCorp just announced <a href="https://www.bseindia.com/xml-data/corpfiling/AttachLive/b4e500a3-9a79-4dc6-b18d-ec23916af252.pdf">a hike of up to ₹2,500 per unit from April 1</a>. Other major players in the two-wheeler space like Bajaj Auto and TVS Motor have already hiked by 2-3% in the last few months, over and above a 20% rise in the last couple of years due to the shift to BS-VI models to reduce pollution. Those who planned to buy cars may have to shell out more too. <a href="https://www.businessinsider.in/business/auto/news/maruti-suzuki-to-increase-price-of-cars-from-april-2021/articleshow/81632209.cms">Maruti Suzuki</a> and <a href="https://www.businessinsider.in/business/auto/news/nissan-india-to-increase-prices-of-all-models-for-nissan-and-datsun-from-april-1/articleshow/81647750.cms">Nissan</a> have already announced that the rising price of raw materials will force these companies to raise prices in April. <div type="image" title="maruti_edited" msid="81667591" hostid="261" caption="&amp;lt;p&amp;gt;Cars at a Maruti dealership in New Delhi&amp;lt;/p&amp;gt;"></div> India’s <a href="https://m.economictimes.com/markets/stocks/news/ttk-prestige-raised-prices-by-4-5-price-so-far-will-take-more-hikes-during-the-week-t-jagannathan/videoshow/79795003.cms">largest consumer appliances maker, TTK Prestige</a>, known for its pressure cookers hiked prices, on average, by 9% across product categories including mixer grinders and gas stoves. The company’s smaller peer Butterfly Gandhimathi has hiked prices by 5% in December but, yet another one, Hawkins hasn’t followed suit yet. The price of copper is near an all-time high nearly twice of what it was five years ago. So, cable makers like Finolex Cables and Polycab have already passed the pressure on to their customers. KEI Industries, which makes cables, is revising prices every 15 days based on the prices of the key raw material copper, Edelweiss said. And, that means the cost of production is significantly higher for electrical appliance makers like Havells and V-Guard Industries. Especially in the case of V-Guard, which is popular for its inverters and voltage stabilisers, over 46% of the cost is copper, according to analysts at Edelweiss. Air cooler major Symphony raised prices in January, long before the summer sun started to sting. Why will air conditioners be left behind? Blue Star, which raised prices by 5-8% in January, will push prices further up by another 3-5% from April, <a href="https://economictimes.indiatimes.com/industry/cons-products/durables/blue-star-to-increase-prices-in-first-week-of-april-md/articleshow/81648037.cms">Managing Director B Thiagarajan told the Economic Times on March 23</a>. A lot of dream homes were stalled by the pandemic and the lockdown. While the construction of these homes has resumed in full gusto, the cement needed to build these is at least 7-8% on average in the last one year. Dealers told analysts at Emkay Global that companies like Ultratech, ACC and Ambuja Cement tried to increase prices again, by ₹10-20 a bag, but it has not been implemented yet. <div type="javascript" title="Custom" contenttype="Video"><cdata><![CDATA[]]></cdata></div> There is added pressure on families in terms of healthcare, either in terms of COVID-19 treatments or the cost of vaccination or both. Even for salaried employees in India, who form a small proportion of the total workforce, the <a href="https://www.businesstoday.in/sectors/jobs/india-inc-to-offer-77-average-salary-hike-in-2021-aon/story/432174.html#:~:text=Global%20professional%20services%20firm%20Aon's,6.1%20per%20cent%20in%202020.">average rise in remuneration is likely to be 7.7%</a>. But a big chunk of the rise may not land in their bank accounts ⁠— it will go into provident fund and gratuity contribution, instead⁠ — because the new labour codes would have kicked in from April 1. Of course, if the second wave triggers another economic crisis, many families may not even have the same amount of cushion from their past savings. In the last five years, the average annual household savings in India has grown 64%. However, in the same time, average household debt has increased 133%, according to the latest data from the RBI. None of this would be comforting for households staring at a limited income and an uncertain future. SEE ALSO: <a href="https://www.businessinsider.in/science/environment/news/inequality-is-only-increasing-in-india-the-resulting-lack-of-trust-may-make-climate-change-a-tougher-challenge-to-tackle/articleshow/81666431.cms">Inequality is only increasing in India — the resulting lack of trust may make climate change a tougher challenge to tackle</a> <a href="https://www.businessinsider.in/stock-market/news/anupam-rasayan-ipo-lists-at-520-per-share-on-the-india-stock-exchange/articleshow/81663145.cms">Anupam Rasayan fails to dazzle on its stock market debut – shares down by nearly 8% soon after listing</a> <a href="https://www.businessinsider.in/business/auto/news/elon-musk-announced-now-you-can-buy-tesla-cars-with-bitcoin/articleshow/81667459.cms">You can now buy a Tesla with Bitcoin, tweets Elon Musk</a>

From Maruti to Nissan, from Hero to Havells, from cotton to cement– everyday products are set to get more expensive in India

<ul><li>The Cabinet has approved the reconstruction scheme for Yes Bank, as proposed by the RBI. </li><li>Aside from SBI, the Reserve Bank of India is also in talks with other private investors to rescue the bank. </li><li>Private investors who get shares of Yes Bank cannot have to retain 75% of their stake for three years.</li></ul>The Cabinet has approved the reconstruction scheme for Yes Bank, as proposed by the Reserve Bank of India (RBI). "It will protect depositor's interest, revive the troubled bank, and stabilise India's financial system," <keyword id="7706673" type="UNKNOWN" weightage="20" keywordseo="finance-minister-nirmala-sitharaman">Finance Minister Nirmala Sitharaman</keyword> said. Separately, ICICI Bank said that the board has approved for an equity investment of up to ₹10 billion in equity shares of Yes Bank. The rumour mill in the market was expecting more investment in Yes Bank from the state-owned Life Insurance Corporation of India (LIC). However, the Finance Minister clarified that the RBI is in talks with other private investors to rescue the bank The authorised capital of Yes Bank has been raised manifold to ₹6200 crore from the current ₹1,100 crore current. The limit on withdrawals by depositors will be lifted on the third working day after the official notification of the cabinet decision, at 6 pm. The Reserve Bank of India placed Yes Bank under moratorium and capped the withdrawal by depositors at ₹50,000 till April 3. 
 
 
 
 
 
 
 
 
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 The State Bank of India (SBI) will buy 725 crore shares in Yes Bank at ₹10 per share, which adds up to an investment of ₹7,250 crore, giving the country's largest bank a 49% stake in the troubled private bank. The SBI will not reduce its holding below 26% for at least three years from the date of investment. Those private investors who get shares of Yes Bank cannot sell 75% of their stake for three years. "A new board, having at least 2 directors of SBI, will take over within 7 days of the issuance of notification," Sitharaman added. The decision has come a day before the much-awaited quarterly earnings, which have been delayed by a month, from Yes Bank. The numbers are expected to reveal the depth of the rot in the bank which has gone from being one of the country's top banks to embattled one, neck-deep in bad loans, and one with a history of scandals under its earlier promoter Rana Kapoor who was recently forced out by the RBI. With the money of millions of Indian depositors stuck at the bank, the government and other authorities have come together to rescue the bank and stop it further wrecking India's financial system. SEE ALSO: <a href="https://www.businessinsider.in/finance/news/yes-bank-crisis-and-its-domino-effect-on-bonds-mutual-funds-and-other-corporate-defaults/articleshow/74586858.cms" data-type="tilCustomLink" target="_blank">Yes Bank crisis and its domino effect on bonds, mutual funds and other corporate defaults</a> <a href="https://www.businessinsider.in/finance-minister-assures-employment-and-salary-at-yes-bank-at-least-for-one-year/articleshow/74514015.cms" data-type="tilCustomLink" target="_blank">Finance Minister assures employment and salary at Yes Bank at least for one year</a>

ICICI Bank follows SBI to rescue Yes Bank⁠— and depositors may get to withdraw money sooner than expected

New Delhi, Dec 9 () The recent spike in retail inflation is mainly due to high food prices and the government is taking steps to moderate the volatility in prices, Minister of State for Finance Anurag Singh Thakur said in Parliament on Monday.
 "The recent spike in CPI-C (consumer price index-combined) inflation is mainly on account of increase in food price inflation. Government has taken various measures from time to time to stabilise prices of essential food items which include appropriately utilising trade and fiscal policy instruments like import duty and export management," he said in a written reply in the Lok Sabha.
 Retail inflation spiked to 4.62 per cent in October mainly on account of higher food prices.
 Mechanisms such as minimum export price, export restrictions are taken to regulate domestic availability and moderate prices. Imposition of stock limits and advising states for effective action against hoarders and black marketers are the other measures, he said.
 "Government is implementing Price Stabilization Fund (PSF) to help moderate the volatility in prices of agri-horticultural commodities like pulses, onion, and potato," he said.
 Further, the Ministry of Food Processing Industries (MoFPI) is implementing scheme 'Operation Greens' for integrated development of Tomato, Onion and Potato (TOP) value chain which has the objective of price stabilization for producers and consumers through production planning in the TOP clusters and introduction of dual use varieties.
 Review meetings on price and availability situation of essential commodities are held at the highest level, including at the level of ministers, committee of secretaries, Inter Ministerial Committee, PSF Management Committee and other Departmental level review meetings for taking appropriate price intervention decisions including possible market-intervention, he said.
 Onion prices have soared to Rs 150-180 per kg in several markets in India due to crop damage after incessant rains in key growing areas. Earlier, tomato prices had spiked to Rs 80 a kg.
 Retail inflation has risen consistently from 1.97 per cent in January to 4.62 per cent in October, according to official data. KPM MR
MR

'Recent spike in retail inflation mainly on costlier food, govt taking steps to moderate prices'

<div class="KonaFilter image-container display-table"><div><div class="image on-image">Thomson Reuters</div></div></div><ul class="summary-list"><li>A Barclays executive said that a complex deal with Qatar designed to rescue the bank during the 2008 financial crisis was "a nightmare," in conversations repeated at trial in London. </li><li>When former bank executives realised that Qatari investors could end up with a higher shareholding than previously expected, plus seats on the board, one banker said: "we're fucked." </li><li>Executives were also worried about the possibility of Barclays being taken over by the government because that would have put their large compensation packages at risk.</li><li>The defendants, including the bank's former CEO John Varley and coworkers Roger Jenkins, Thomas Kalaris, and Richard Boath, all pleaded not guilty to charges of misleading investors in the fundraising.</li></ul>Barclays executives became anxious in the summer of the financial crisis of 2008 as they struggled to put together a capital-raising deal with Qatari investors that would rescue the bank, a prosecutor told a London court today.The bank's senior managers were trying to raise new investor funding in order to prevent Barclays from being taken over by the government or - in a worst-case scenario - succumbing to the liquidity crisis that bankrupted several US and European banks. At the time, Lehman Brothers was just weeks from insolvency.So the Barclays execs approached a group of Qatari sovereign wealth investors, offering them equity in the bank in return for a large injection of cash, prosecutor Ed Brown told the court.The executives, particularly the former head of Barclays' European financial-institutions group Richard Boath, were wary of how the capital-raising activity would impact their overall holding in the bank. In one scenario of the deal, the possibility that the Qataris could own up to 10% of the British lender would be a "nightmare," prosecutors allege Boath said. They feared that the new investors, including Sheikh Hamad, the former Prime Minister of Qatar, could end up with a number of board seats as a result, the court heard. Boath suggested that if that came to pass, "we're fucked," prosecutors allege he told his colleagues:"We're fucked, we're fucked," Boath told the former executive chairman of investment management for MENA at Barclays Capital, Roger Jenkins, in a phonecall on July 16, prosecutors said. "It's a fucking nightmare. Is he going to settle?""Yeah, he'll settle," Roger Jenkins said, referring to the amount the Qataris would pay."Has he got the cash?" Boath said."We're just working that through now," Jenkins said.The testimony came in week two of the case, in which the UK's Serious Fraud Office <a href="https://www.ft.com/content/60ee842c-1f0a-11e9-b126-46fc3ad87c65">alleges </a>that then-CEO John Varley and the three other defendants, Boath and his colleagues Thomas Kalaris and Jenkins, misled investors in fundraisings during the financial crisis by paying Qatari companies £322 million ($423 million) - a 3.25% commission - in secret fees that were not properly disclosed.The defendants pleaded not guilty to all charges.The court also heard that Qatar Holding sent four invoices to Barclays for advisory services fees shortly after the signing of the documentation. The prosecution alleges that the short timeframe demonstrates that the advisory service agreements were not genuine agreements. Subsequently, the Qataris ended up with a large shareholding in Barclays. A "clawback" arrangement gave other shareholders the option to purchase chunks of the Qataris' stake. But because few of those shares were bought, the £322 million commission fee represented a smaller percentage return on the Qataris' investment than expected. <h3>"You'll end up paying VAT on top, which would be awful"</h3>In conversations during the same period between Boath and senior Barclays lawyer Julie Shepherd, the issue of paying value-added tax (VAT) on the service agreements to be signed with Qatar was raised. There was a wariness, according to the prosecution, that if the services to be provided under the terms of the agreement weren't clear then Barclays could be forced to pay VAT on top of the payment.This possibility was described as "awful" by Shepherd during the call on July 16, 2008, because VAT at the time stood at 17.5%.All of these conversations took place prior to the finalization of Barclays' capital raising which saw the bank collect £7 billion from Qatari investors in the form of Reserve Capital Instruments (RCIs) and Mandatorily Convertible Notes (MCNs).The Qatar deal was allegedly intended to financially stabilise the bank. Executives were concerned at the prospect that they could find themselves without jobs if it became necessary for the British government to take over the bank, as it did with Northern Rock and Lloyds.This was particularly clear because of the comparatively high levels of compensation enjoyed by the Barclays executives in question.Jenkins said, "At 2 o'clock in the morning I was panicking that we were about to get nationalised and you guys must have been the same because the government would, wouldn't look kindly on compensation over a million dollars," Brown told the court. According to records read to the court by the prosecution, all four defendants were paid more than $1 million in both 2007 and 2008.The trial at Southwark Crown Court is ongoing. <div class="margin-top"> <h3>NOW WATCH: <a href="https://www.businessinsider.com/north-korea-kim-jong-un-scariest-dictators-2016-1">North Korea's leader Kim Jong Un is 35 - here's how he became one of the world's scariest dictators</a></h3> <div> </div> </div>

"We're f---ed': Barclays insider worried his allegedly sketchy deal with Qatar would come at too high a price

New Delhi: Markets regulator <keyword id="19901201" type="General" weightage="100" keywordseo="Sebi" source="keywords">Sebi</keyword> has proposed allowing Real Estate Investment Trusts (<keyword id="20186402" type="General" weightage="20" keywordseo="REITs" source="keywords">REITs</keyword>), Small and Medium REITs (SM REITs) and Infrastructure Investment Trusts (<keyword id="20186403" type="General" weightage="20" keywordseo="InvITs" source="keywords">InvITs</keyword>) to use <keyword id="21737868" type="General" weightage="20" keywordseo="interest-rate-derivatives" source="keywords">interest rate derivatives</keyword> for <keyword id="23778373" type="General" weightage="20" keywordseo="hedging-risk" source="keywords">hedging risk</keyword>. Also, the regulator has suggested approving locked-in units for REITs and InvITs to be transferred among sponsors and their groups, similar to rules for promoters in listed companies, to help sponsors manage their holdings without compromising "skin in the game". Additionally, Sebi has suggested permitting fixed deposits to be considered as cash equivalents when calculating leverage for REITs and InvITs, clarifying credit rating requirements for REIT and InvIT borrowings, and setting a timeline for filling vacancies on their boards and expanding the asset base for REITs and SM REITs. The regulator has also proposed to permit REITs to invest in liquid mutual funds. It has suggested measures to facilitate ease of doing business for REITs and InvITs, along with investors' protection. According to its consultation paper, Sebi is considering allowing REITs and InvITs to hedge against interest rate fluctuations by using derivatives like interest rate swaps. This could help stabilise cash flows, reduce risks, and protect unitholder interests, especially for long-term infrastructure projects. It is also proposed to define "Common Infrastructure" for REIT regulations. To enhance business flexibility for REITs, it has been proposed to clarify that facilities like power plants, heating/cooling systems, water treatment, and waste treatment plants -- serving one or more REIT assets -- will qualify as "common infrastructure" under REIT rules. This applies even if these facilities are not located within a single project due to their technical requirements. These facilities should supply and be used exclusively by REIT assets. For power plants, however, any excess power can be sold to the state utility/grid as per regulations, with any credits or payments going towards the benefit of REIT assets. To improve transparency, it has been proposed to amend the governance norms for quarterly reporting of InvITs. Currently, quarterly results for the investment manager and its business segments are presented to the investment manager's board, but there is no direct requirement for InvITs to report their performance. The proposed amendment would clarify that quarterly results should specifically reflect the performance of the InvITs themselves, not just the investment managers. This change aligns InvIT regulations with REIT regulations, where the focus is on the quarterly results of the REIT itself. Also, it has been suggested to align the composition of NRCs in REIT and InvIT managers with listed companies under the LODR regulations. Currently, all NRC members for REITs and InvITs must be independent directors. The proposal allows a mix of independent and non-executive directors, similar to listed companies. To enhance investors' protection, Sebi has suggested reviewing conditions for InvITs to borrow beyond the 49 per cent limit, assessing REIT investments in unlisted equity shares and outlining the roles and responsibilities of trustees for REITs, InvITs, and SM REITs. In a separate consultation paper, the regulator has proposed a regulatory framework for "restricted return InvITs" to provide infrastructure investors with predictable returns by setting limits on both upside gains and downside protection. The proposed framework for restricted return InvITs is designed to provide investors with structured returns, capped at both minimum and maximum levels to offer stability. Restricted return InvITs would include downside protection -- a minimum assured return -- and/or an upside restriction, a cap on returns -- depending on the arrangement. These investments would be limited to sophisticated investors who meet high minimum investment thresholds, with each unit priced at a minimum of Rs 500 crore and total InvIT assets of at least Rs 50,000 crore. Investors would be required to sign a waiver and undertaking form, acknowledging their understanding of the structured returns and risks involved, including the transfer of any excess returns to the sponsors. This waiver should be submitted before purchase in both primary and secondary markets, with compliance overseen by merchant bankers or brokers. The Securities and Exchange Board of India (Sebi) has sought public comments on both consultation papers by November 13.

Sebi proposes to allow InvITs, REITs, SM REITs to use interest rate derivatives for hedging risk

The <keyword id="19899810" type="General" weightage="20" keywordseo="Reserve-Bank-of-India" source="keywords" meta.keywordsubtype="org" meta.entityname="Reserve Bank of India" meta.hostid="261" meta.entityid="Reserve Bank of India">Reserve Bank of India</keyword>'s (<keyword id="19899808" type="General" weightage="20" keywordseo="RBI" source="keywords">RBI</keyword>) <keyword id="19913109" type="General" weightage="20" keywordseo="Monetary-Policy-Committee" source="keywords">Monetary Policy Committee</keyword> (MPC) has decided to keep the <keyword id="20094323" type="General" weightage="100" keywordseo="repo-rate" source="keywords">repo rate</keyword> steady at 6.5%. This decision, announced by RBI Governor <keyword id="19913110" type="General" weightage="20" keywordseo="Shaktikanta-Das" source="keywords">Shaktikanta Das</keyword> early today, marks the ninth consecutive time the central bank has maintained the current rate, which was last adjusted in February 2023. The MPC's decision was made by a majority vote of 4:2, reflecting a cautious approach to balance economic growth and <keyword id="19895000" type="General" weightage="20" keywordseo="inflation" source="keywords">inflation</keyword> control. But what exactly is repo rate and how does it impact you? Read on as we explain. <h2>Understanding the Repo Rate</h2>The repo rate, or repurchase agreement rate, is a critical monetary policy tool used by the RBI. It is the rate at which the central bank lends money to commercial banks and financial institutions against government securities. By adjusting the repo rate, the RBI influences the money supply, which in turn affects inflation and economic activity. <h2>How does it impact you?</h2>Changes in the repo rate have significant implications for both borrowers and savers. When the repo rate increases, banks incur higher costs to borrow funds from the RBI. To maintain their profit margins, these institutions raise interest rates on loans, leading to higher borrowing costs for consumers. Conversely, a lower repo rate reduces borrowing costs, resulting in lower EMIs for various loans, including home, personal, and education loans. Fixed deposit interest rates are also influenced by the repo rate. An increase in the repo rate can lead banks to offer higher interest rates on fixed deposits to attract more funds, benefiting depositors. On the other hand, a decrease in the repo rate might result in lower <keyword id="20772297" type="General" weightage="20" keywordseo="fixed-deposit-rates" source="keywords">fixed deposit rates</keyword>, affecting returns for savers. <h2>Relationship between repo rate and inflation</h2>As the lender of last resort, the RBI provides short-term funds to commercial banks through the repo rate mechanism. By doing so, it influences the interest rates that banks offer to their customers. This ability to control the cost of borrowing is a powerful tool for the RBI to manage economic stability. In times of inflation, the RBI raises the repo rate to curb borrowing and encourage saving. Higher interest rates make loans more expensive, reducing consumer spending and slowing down inflation. Conversely, in a deflationary environment, the RBI lowers the repo rate to stimulate borrowing and spending, thereby boosting economic activity. For example, there's a very popular bakery that everyone loves in a fictional town. This bakery makes the best bread and pastries, and almost everyone in town buys their daily bread from there. During a period of low inflation, the central bank of the town (similar to the Reserve Bank of India) sets a low repo rate, meaning it's cheap for commercial banks to borrow money. As a result, banks borrow money at a low cost and are willing to lend more money to the residents at lower interest rates. The residents find it easy and cheap to get loans, so they have more money to spend. With more disposable income, people in the town buy more bread and pastries. The bakery sees a surge in demand. With everyone having more money to spend, the demand for bread and pastries increases rapidly. The bakery struggles to keep up with the demand and starts raising prices. As the prices of bread and other goods in the town go up, inflation starts to rise. The central bank notices that inflation is getting too high, making everyday goods more expensive for everyone. To control this inflation, the central bank decides to increase the repo rate. During a high inflation period, with the increased repo rate, it's more expensive for commercial banks to borrow money. Consequently, banks in the town start lending less money and at higher interest rates. The residents find it harder and more expensive to get loans, so they have less extra money to spend. With less disposable income, fewer people buy bread and pastries. The demand decreases. With lower demand, the bakery reduces its prices to attract more customers. As the prices of goods in the town start to stabilise or even decrease, inflation comes under control.

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