Jan 03
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rbi proposes new law to regulate digital lending

RBI Proposes New Laws to Regulate Digital Lending

By Economy, Banking No Comments

RBI Proposes New Laws to Regulate Digital Lending

Once again, RBI has stepped up to protect the interests of the consumers, who in pursuit of excess money were preyed on by wealth-mongering organizations on various apps. In order to effectively safeguard the interest of the customers, the Reserve Bank working group has strongly and emphatically suggested the enactment of separate legislation. The legislation has been propped to strategically prevent illegal digital lending through apps of which innocent customers were victims.

It is no news that get-rich easy schemes are scams. With the involvement of Indian citizens in the same, leading to suicides, the RBI has come in to attack the loan sharks. It has emphatically suggested that digital lending apps should be thoroughly scrutinized and verified by a nodal agency.

This should lead to the establishment of a Self-Regulatory Organization that will effectively and positively cover the participants in the digital lending ecosystem.

Thus, one can state that RBI’s recent steps will help in enhancing customer protection and experience, protecting them from a digital or monetary felony, consequentially making the digital lending ecosystem safe. This will also promote healthy innovation in the digital lending system.

But here it is mandatory to mention that, at the moment, taking down all the apps from Appstore is only a temporary and a preventive measure to mitigate the disaster. The verification of the same should be a top priority for the apex bank.

It is to be noted that under the guidance of RBI, the working group has been set up in the backdrop of business conduct and customer protection concerns that are arising out of the spurt in digital lending activities, which really found momentum during the pandemic.

The case

But the aforementioned details, including RBI’s involvement, raise questions about the nature and motives of the customers to get involved in business with such scandalous groups on the apps? It is to be noted that the motivation for such an activity was the pandemic which has excessively curtailed the financial and monetary standing of the middle-class society in India.

rbi working group on digital lending

With curtailed earnings, increased healthcare expenses, and inflation, easy loans were found tantalizing. This led to a full-fledged affair with the fraudulent loan apps that provided easy loans with high interest. With higher interests and lower-income, people tuned to excessive steps like suicide and self-harm.

This emphatically led the RBI to get involved in the loan app fiasco and formulation of recommendations to mitigate the disaster.

Among other things, it is to be noted that the group also suggested the development of certain baseline technology standards. These standards will have to be adhered to as a pre-condition for offering digital lending solutions.

In order to counter the blackmailing aspect of the fiasco which gave the loan app companies leverage over the consumers in turning the public into an easy target, the RBI has recommended that data collection with the prior and explicit consent of borrowers should emphatically have verifiable audit trails.

In addition to having a verifiable audit trail, the data should also be stored in servers located in India. Data privacy has long needed attention in India, given the fact that India doesn’t have standard and well-crafted rules and regulations for the same.

Further, in order to impactfully curtail the unsolicited commercial communications for digital loans, the committee has also strategically advised the same to be governed by a Code of Conduct to be put in place.

rbi digital lendingThe whole loan app debacle brings to the forefront the need for transparency, better data privacy laws, and a strong vigilance mechanism by the RBI to protect the interest of the public which is currently quite susceptible to harm financially and monetarily.

With the pandemic curtailing financial freedom, it is quite a prevalent possibility that people will ultimately turn to dubious, surreptitious modes to accelerate their wealth. Thus, the need for effective governance and vigilance is the need of the hour. This can be effectively achieved through algorithmic features that are used in digital lending which will help ensure necessary transparency.

What greater attention to the loan apps fiasco is the fact that digital penetration in India is on the rise. Thus, laws to govern the same should be on the trajectory of implementation too. But given the state of data privacy and consumer protection laws, in the country, India has a long way to go. One can certainly state that the recent fraudulent disaster can help provide impetus to the process and safeguard the interest of the consumers.

It is mandatory to be mentioned here that in order to make digital lending a promising reality in India, the authorities will have to with the trust of the citizens, who are rather cynical about the process. Thus, the recent case can be a good start.

With the Reserve Bank constituting the Working Group (WG) on digital lending on to emphatically study all the aspects of digital lending activities in the regulated financial sector as well as by unregulated players in order to put an appropriate regulatory approach in place, one can positively state that future trust-building between the authorities and the citizens is on the rise.

 

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Jan 03
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DHFL loss to lenders

Probe Former DHFL Brass for Causing Rs. 40,000 Crore Loss to Lenders: Union bank

By Cases No Comments

Probe former DHFL Loss to Lenders: Union Bank

CBI has been receiving requests from the Union Bank of India has written to it to effectively probe the promoters of Dewan Housing Finance Corporations. Other than the promoters, the Union bank has called from a probe in the management of the Dewan Housing Finance Corporation Ltd. The ultimate reason for calling such a probe is the fact that Dewan Housing Finance has caused a total loss of Rs 40,623.36 crores. What makes this debacle all the more concerning and debilitating is the fact that the loss was caused to the consortium of the bank, which is led by the Union Bank of India.

The basis of inquiry
The appeal to scrutinize dewan housing finance is based on the ultimate findings by the KPMG, the esteemed audit firm, that deviation of laid down norms and procedures have been committed seriously through manipulation of accounts and concealments. Dewan housing finance has been primarily accused of clandestine activities that were committed by it in terms of undisclosed bank accounts and misrepresentation.

dhfl lossgiven the seriousness of the claim at hand, the CBI has been actively probing the promoters namely Kapil and Dheeraj Wadhawan in the Yes Bank scam. According to the reports, given the pieces of evidence, there is a heavy case of fraud or loss of public money.

But even though the claims of the consortium of banks seem legitimate, the federal agency effectively and emphatically cannot register a fresh FIR. This is merely due to the fact that there is a need or a want of general consent which needs to be accorded by the Maharashtra government.

Last year, in the month of August, in the aftermath of the infamous probe into the Dewan Housing Finance debacle, attempts were made for the manipulation of television rating points (TRP), the state government had effetely withdrawn consent that had been accorded to the CBI.

This was done under Section 6 of the Delhi Special Police Establishment Act. Thus, given the turn of events that had taken place in the case last year, it was made mandatory that general consent is a must for the federal agency, namely CBI, to register an offense in the state, in its absence. Thus, in totality due to the events of the past, the federal agency now has to effectively approach the state government. This will help them get access to permission to conduct the investigation on a case-to-case basis.

union bank net banking

but is Maharashtra the only state to withdraw its consent? Apparently, many non-NDA governments, claiming serious vendetta by the center, have withdrawn their consent. These states mainly include Kerala, West Bengal, Rajasthan, Chhattisgarh, and Punjab.

The woes of the CBI have been aggravated as even after the portrayal, communication, and representation that has been effectively presented to the state government, consent hasn’t been still accorded. This brings to the forefront, the dreadfully awful state of the politics that tend to delay the process of recognition and effective addressal of the inconsistencies and corporate felonies at hand.

What makes this political deadlock all the more debilitating is the fact that the loss due to mismanagement and clandestine, illegal activities caused a loss of public money of over Rs 40,000 crores. Given the threat to social and public welfare, effective and immediate investigation is needed, which cannot go through due to the political deadlock.

To analyze the fraud, it is to be noted that the illegal tampering was found to have been conducted on a large scale as it was found that DHFL disbursed loans and advances totaling a total of Rs19,754 crores to 35 entities with commonalities to DHFL promoter. In fact, what made the whole process surreptitious and unnoticeable was due to DHFL promoters’ tight control of multiple entities. The control was so extensive that even the appointment of directors and auditors was carried out by the DHFL promoters.

It is no news that much of the debacle in the lending business is due to noncredit-worthy disbursement by the lender. The same was the case in the DHFL lending debacle, where it was found that humongous loans and advances to the tune of Rs 25,595 crores were disbursed to 65 entities that effectively and efficiently had various deficiencies.

These discrepancies and deficiencies included inadequate loan documentation and inadequate mortgage security valuation which form the very basis of the debacle. Similarly, to corroborate this claim, various loans can be found missing in the DHFL finance sheet that never made it back to the bank.

union bank of india net banking

in fact to cover up the surreptitious activities of the corporations, the “Bandra Book entity” had been created which effectively and wrongly maintained the details of non-existing retail loans. This was created using dummy names which were maintained in a separate accounting system.

Thus, in totality, it can be argued that the DHFL debacle brings to the forefront the fact that a strong regulatory environment is needed to end clandestine activities that are conducted craft fully under the authorities’ eyes.

 

Terms related to the article:

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Jan 03
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payment services regulations

Payment Services Framework – Demystifying Regulations

By Economy, Corporate Law No Comments

Understanding The New Payment Services Regulations

Even though the pandemic might have inflicted severe wounds on economies around the world but one silver lining that can be deciphered from such a debacle is that it has been an ushered of technology usage in various economies.

Given the rapid speed of adoption, it can be stated that it is effectively taking the speed and convenience of being a digitally savvy individual in a globalized world to new and greater heights. But with the increase of convenience and speed in the economy, is also effectively enabling cybercrime.

This is certainly leading to absurdity and discrepancy too as cybercrime is on an alarming rise. Such a claim has been corroborated by the global 2018 study that was conducted by PwC. The study revealed that at least 49% of organizations effectively admitted to being victims of fraud.

If such statistics are put in perspective, it is significantly up 36% in 2016. With the rise of cybercrime, Payment service providers and merchants are facing the challenge of reinforcing eCommerce security. This gains all the more important because it needs to be done without creating any discrepancies and obstacles that could severely lead to cart abandonment.

It is to be noted that much has materialized in the decade since the first Payment Services Directive was introduced. The inefficiency in the system can be accommodated by the fact that fraud losses are on an extreme rise year on year. This has significantly happened due to the rapid digital change. Additionally, this has been also due to the open banking and FinTech industry that has arisen in recent years and has gained momentum radically through the pandemic.

payment services

It is to be noted that the condition is applicable globally and is especially true for a progressing country like India which is imbibing the richness of the digital revolution. It is no news that electronic payments have made a humungous impact on the lives of millions of Indians. This has been seen through the increase in the usage of UPI payments around the country.

With the increased usage by Indians and increasing cyber-attacks, RBI has recently released regulations for all Payment System providers. The regulations significantly state that any payments that will be made in Indian entities for domestic payments transactions need to be stored only in India itself. As for the data for payments that are made outside India, the data has to be effectively deleted from those systems abroad. In addition to deletion of such data abroad systems, it has to be stored in India no later than 1 business day or 24 hours. from payment processing, whichever is earlier.

The need for such payment services regulations

This might give rise to a query that why is there a need for such regulations by the RBI? It is to be noted that with the growth in electronic payments systems and cyber-attacks, there is an urgent need for regulations. Such regulations are needed to protect the interests of millions of users to safeguard their primary data. This is also needed to safeguard the integrity of the newly formed payments systems.

new payment services regulationsGiven the objectives of the RBI regulation, it is quite sagacious to mention what might be the impact of such regulations. It is to be noted that the newer regulations have posed some urgency within the financial institutions and the banks.

This is mainly due to the fact that the financial system and banks need to significantly adhere to such regulations which are crippling and to the working hours of the bank. This in fact has led many of the banks to miss the deadline or breach the regulations, though extensions have been generously provided.

However, it is worth mentioning here that given the arduous list of tasks and regulations that the various banks have to adhere to, it is a significant step in the direction of imbibing the user data privacy norms and strengthening the cyber laws. Given that there has been an immense increase in online businesses, a robust payment system is the need of the hour to usher India into being a digital economy.

Though it is worth noting here that India had its payment system in place with its Level 4 data centers and major cloud providers. In addition to this, it has formidable payments technology. But given the advanced progression that has been made in the cyber-attack industry, such a system usually falters.

payment rules and regulationsThus, given the nature of the issue and the relevance and importance of such robust censoring and payment system, the recent regulations will greatly safeguard the users’ data. This has all the more important as data privacy concerns are becoming a big concern for users across the globe now. Thus the regulations will emphatically ensure that surveillance and right monitoring will ease out in the investigations.

 

Terms associated with the article:

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Jan 03
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no proposal to recognise bitcoin as a currency

No Proposal to Recognize Bitcoin As a Currency in India

By Economy, Banking No Comments

No Proposal to Recognize Bitcoin As a Currency

In a world where the contentious digital asset namely bitcoin is garnering growing appreciation and acceptance, India is untouched by its charms.

Bitcoin, throughout this year, has gained a special status of legal tender in El Salvador and huge endorsement from public figures like Jack Dorsey and Elon Musk. But is it just the high popularity of the digital asset that has set it on the pinnacle of success in such a short period of time?

Probably not. It is to be noted that the contentious asset has many merits to it that make it an appreciable currency over others. Its property of making trading an easy business and facilitating easy cross-border transactions is what leads to its soaring merits and applicability.

Given its merits, it is crucial to also note that the contentious asset is also, quite fondly, used for nefarious purposes like money laundering and trafficking. It is this use of the currency that makes the authorities hesitant in accepting the better side of the contentious asset.

bitcoin as a currency

This gives rise to a pertinent and inquisitive question that every side has two sides to it, with its merit and demerits, thus, why is bitcoin suffering the wrath of the government authorities in India? Well, it is to be noted here that the authority loathes uncertainty and lack of action that comes with the crypto package.

With the nefarious side of the coin, the added disadvantage of not being able to regulate is what adds to the agony of the authorities. Given the anonymous character that the crypto gives to the user, authorities usually find it arduous to track the users’ activities and the user itself.

With unregulated transitions that take place through the contentious assets, the government loses a humungous amount of revenue. Thus, given the merits of the currency, its disadvantages outweigh the positives.

Such antagonizing and aversive attitude of the government can be corroborated by the fact that recently the Union Finance Minister Nirmala Sitharaman has emphatically informed the Lok Sabha that there effectively will be no proposal before the government.

Thus, the proposal recognizing bitcoin as a currency is effectively not on the table. Sitharaman, in fact, also emphasized o the fact that the government does not collect data on bitcoin transactions. This strategically shows that the government has no interest in granting the status to the currency any time soon in the future.

In fact, it is to be noted that in the recent turn of events, the Indian government had got the Indian crypto traders anxious again due to its antagonistic stance against the contentious digital currency. With its introduction of the recent crypto regulation law, many traders were found desperately trying to sell a part, if not all, of their cryptocurrency portfolio.

This was mainly due to the fact that the panic sell-off amongst crypto investors was triggered by the announcement that a crypto bill would be introduced in Parliament’s winter session. What had made the whole scenario all the more concerning and frightening for the traders and investors was the declaration of the fact that the bill mentioned that trading of all private cryptocurrencies would be prohibited.

Though, given the Indian government’s odious stance against cryptocurrency, such a step must not have come as a surprise. But given the speculative, whimsical nature of the market, this led to havoc and anxiety, which led to panic selling in the market. This had effectively led to plunging values in the crypto market, where the prices had fluctuated frequently. Given that speculation can do such harm and lead to such panic, it can be argued, that a complete ban will definitely lead to havoc in the market.

It is to be noted that Bitcoin, which is a digital currency that was introduced in 2008 by programmers, strategically allows people to buy goods and services and exchange money without involving banks.

According to the reports, the speculations remain true as the government actually plans to introduce a bill in this regard. The Cryptocurrency and Regulation of Official Digital Currency Bill 2021 can be introduced in the ongoing session. Given the nature of the bill, it can be conjured that the bill will ban all private cryptocurrencies but might allow the underlying technologies.

is it legal to buy bitcoin in indiaBut in the pursuit to eradicate the non-conforming, non-perfect aspect of the asset, will the government forgo the positive potential of the currency? Luckily, the answer might come as good news for the investors, as the government plans to roll out its regulated version, CBDC, in the market.

This claim can be corroborated by the fact that the government has effectively received a proposal from the Reserve Bank of India strategically seeking an amendment to the RBI Act, 1934. The proposal is demanding to enhance the scope of the definition of “banknote”. This is being done to include the currency in digital form.

Given the extensive research that is going on in the CBDC, with RBI examining use cases and working of the currency, one can conjure that the CBDC can be a reality in the near future.

CBDC has its own merits if it is introduced in an undisputed, phased manner. The introduction of a CBDC has immense potential to provide significant benefits in the future. These benefits will include such as reduced dependency on cash in the society, reduced settlement risk, and higher seigniorage due to lower transaction costs.

bitcoin in indiaThus, one can finally state that the phased introduction of CBDC in India will possibly lead to a more efficient, robust, regulated, and legal tender-based payments option for the public which will be an added advantage. Though, it cannot be denied that there are associated risks with such introduction which, in the light of protecting the welfare of the user, need to be carefully evaluated, but given the potential benefits in the future, one can robustly state that something efficient can be born out of the meticulous efforts of the central bank.

 

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Jan 03
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discoms in india

No Immunity from IBC for State Discoms in India Says Centre

By Cases No Comments

Understanding IBC Code For State Discoms in India

In a turn of recent events, the Tamil Nadu government’s response to IBC proceedings against the discoms has brought to the forefront the discrepancy prevailing between the electricity act and the Insolvency and bankruptcy code.

The power ministry has released its say and has stated that state-owned discoms also effectively known as the electrical energy distribution corporations, don’t have any immunity from company insolvency lawsuits. The ministry has also cleared the air around the narrative that there is a discrepancy between the electricity act of 2003 and the Insolvency and Bankruptcy Code of 2016 on the solution of economic claims.

These claims were effectively maintained after the Tamil nandu government had stated that the IBC insolvency doesn’t follow to discoms. The rationale behind such a statement was that discoms have immunity since they have been discharging services for public purposes as an extension of the state executive. This had also led to the cropping up of the conspiracy that there is a struggle or discrepancy between the IBC and the Electrical energy Act.

ibc discoms in india

Discoms in India & The Sense of False Safety

It is to be noted that such revelations by the ministry have brought to the forefront the discrepancy that had prevailed amongst the electrical energy distribution corporations that they were immune to the proceedings of the Insolvency and bankruptcy code. Given that such a false sense of immunity persists in government units, it tells us a lot about the mismanagement that prevails in such units due to the nature of it being government.

One can also state that this episode brings to the forefront the rationale that plays out in the public sector units that have the largest number of NPAs, Given the sense of immunity that such units feel due to their governmental nature. With the government’s needless recapitalization, one can also state that it reinstates or fosters the attitude of mismanagement due to a false sense of safety. Such attitude is detrimental to the efficiency of the banking sector and the discoms as well.

thus, the newer clarification that has been released by the ministry maintains to get rid of a false sense of safety in opposition to insolvency lawsuits for discoms. This effectively and emphatically offers borrowers contemporary prison ammunition for improving dues. Given the recent clarification, it can be seen that the government wants to increase accountability and efficiency in the sector.

ibc - insolvency bankruptcy code The Story of India’s Weak Indian Power Sector

It is to be noted that it would be an understatement to argue that the power distribution is the weakest link in the entire value chain of the Indian power sector.

In fact, severely ailing state-owned power distribution companies also known as discoms emphatically continue to severely hamper the efficient functioning of the transmission and generation sectors. Given the fact that by 2020, discoms had accumulated massive overdue payments amounting to Rs116,340 crore, an effective immunity from IBC will only help the government lose efficiency and revenue.

This will also help create an immense liquidity crunch across India’s power sector, given the deplorable state of the discoms.

Though, it is worth mentioning here that various government reforms have been repeatedly initiated in the sector to effectively improve the sector’s commercial and performance but, it cannot the fact that it is yet to make a sizable impact cannot be denied.

On the other hand, as the case unravels, the discoms continue to incur humungous financial losses which is a clear reflection of massive subsidies and ineffective government funds. From time to time, cases of bailout by the governments, to help state-owned discoms to pare their mounting losses have come forward. But what exactly is leading to such humungous losses in the discoms other than the government’s inefficient methods to bail out?

It is to be noted that the absence of economically inefficient tariff setting processes, healthy competition, and unsustainable cross-subsidies, economically inefficient tariff setting processes, infrastructure development, and technology are severely adding to discoms’ losses.

The Case of Discoms in India Being an Extension of The State Executives

  1. In the case of the Tamil Nadu government, the government’s letter used to be precipitated by means of a writ petition for initiation of lawsuits below IBC filed within the Madras top courtroom by means of South India Corporation Pvt. Ltd.
  2. But on November, 8, the ministry had effectively and positively cited that the apex court had in its ruling announced that state-run discoms are arranged below the Corporations Act and are no longer below statute just like the NHAI.
  3. Therefore, they strategically aren’t an extension of the state executive. It was additionally stated, to clear the matter, that the subject has been “settled” by means of the Ideally suited Courtroom. In fact, the dichotomy surrounding the IBC and Electricity Act has been settled. It has been stated that there effectively used to be no dichotomy between the provisions of IBC and the Electrical energy Act, which applies to other operational problems with discoms.

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Jan 03
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Nationalization of banks in comparison to Covid effects on the Indian economy

By Economy No Comments

Nationalization of banks in comparison to Covid effects on the Indian economy

 


If there are two things that have grabbed the political attention of the masses in India, it has to be the odious covid 19 pandemic that ravaged the already battered economy and the nationalization of the public assets.

Public assets, time and again have been a touchy subject for the masses of India. This is especially is true given the widespread notion or belief that government assets are invariably and emphatically public assets.

The government assets have been the talk of the town for two specific reasons. First is the selling off of the public’s property and heavy corporatization of the banking sector and secondly, the government’s close relations with the Ambani-Adani. With outrage pouring in from the masses the idea has become a contentious issue of debate.

nationalization
Government’s inspiration

But what exactly inspired the government’s decision for disinvestment in the economy? The answer to the question lies in the arrival of the pandemic which severely affected and crippled the finances of the government.

With the need for robust public finance and expenditure in the economy, lower expenditure and finances spelled trouble for the battered economy. Thus, in order to finance the needs of the economy, the government innovatively thought of disinvestment of the public assets on which it could cash on.

But is disinvestment such a bad though Afterall? It is to be noted that privatization might actually ramp up the efficiency of the asset which had been reductant under the government’s rule. With higher NPAs in the public banking sector, the introduction of healthy competition can lead to the revamping of the banking sector.

What more pertinent reason for such a disinvestment spree can be? Given, the circumstances of the pandemic which the banking sector weathered, NPAs were reported to surge. Mortarium on payments and easy lending had put immense pressure on the banking sector.

Though many banks did reduce their NPA ratio, that was merely due to the act of writing off of the loans from the financial books.

As a matter of fact, RBI’s Financial Stability Report of 2020 effectively and emphatically foresaw a huge surge in the Gross NPA ratio of the banking sector. This was projected to be at a significant 13.5 percent for the month of September for the financial year 2021. The NPAs were projected to heavily surge from 7.5 percent in September 2020.

nationalization
What made the Indian banking industry suffer the wrath of the covid more than the other countries was due to India’s despicable legacy of bad debt even before the COVID-19.

Thus, one can strongly argue that as the odious variants of the virus despicably assailed the country which had pervasive and floundering health sector, the already battered pre-pandemic financial infrastructure, cracked and worsened.

The aforementioned situation is even more exacerbated for the public sector, which is inefficient even under normal circumstances. Thus, the government’s solemn decision to privatize certain banks and cash on them has some merit to it.

With increased efficiency and losses, one can effectively expect the better performance of the sector in the economy which is in the nascent stage of recovery.

However, taking an ill view of the banking sector too can be a biased opinion. With strict, increased monitoring, the immense increase in market capitalization in the stock market, and the introduction of stimulus packages, there is hope that green shoots for the sector and the economy are a possibility.

nationalization
This can be effectively corroborated by the fact that throughout 2020-21, SCBs’ RoE and RoA sustained a positive rise of an impressive 6% in March 2021 on their CRAR. In fact, the GNPA and NNPA ratios too displayed signs of stability over a period of time, which spells good for the economy.

As aforementioned, last year, the moratorium on compound interest, which was sanctioned by the RBI, had a despicable effect on the bank’s finances. But it is to be noted that contrary to the earlier inferences, banks are now much better equipped to manage profitability.

Their resilience in terms of higher recoveries and as higher capital buffers too has been improved. Thus, one can maintain that the moratorium and the pandemic did have a silver lining for the banking sector.

Thus, in totality, disinvestment, which has been a petulant topic for the public, can be a step in the right direction for the industry. Given the immense importance of the banking sector in the economy, which drives the demand and the investment, its timely resolution is the need of the hour.

If this required extreme means, one should brace themselves for the inevitable. Thus, one should not be much abrasive or unappreciative of the scheme the government is concocting for the banking sector. As for the future, one can only be patient to witness what the scheme will offer for the industry and how will impact the economy in the long run.

Jan 03
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understanding mobility laws

Understanding Mobility Laws in India

By Other No Comments

Understanding The Mobility Laws

India has been changing. Recent digitalization bears testimony to the fact that India is digitally and electrically transforming itself in this era. Amongst all digitalization, electrification, and mechanization, which will bore fruits for the economy, Electric mobility has caught the fancy of the government.

lawSuch a claim can be corroborated by the fact that diesel and petrol automobile purchase in India is dropping and the conventional market is facing tough competition from its electrical competitors.

One major reason for try hype the same is that the adoption of EVs serves to solve and address the problem of air pollution, noise pollution, dependence on fossil fuels. On the other hand, the public has been discarding age-old conventional automobiles due to increasing inefficiencies like high maintenance of such vehicles and urban decongestion in India.

The government has been providing incentives to the public to initiate the process of booming EV market acceptance in India. For this, a notification was released on August 12, 2020. This was effectively released by the Ministry of Road Transport and Highways which had pompously permitted the effective sale and registration of 2-3-wheeler electric vehicles, which did not process pre-installed batteries.

It is to be noted that in this notification release, the government had adhered to the recommendations that were made by the industry. The recommendation included a strategy to delink the cost of the battery which emphatically accounts hefty, by 30 to 40 percent of the EV cost.

Thus, it can be stated that in order to reduce the upfront vehicle cost, the government had gone ahead with the scheme. This, in fact, quite positively shows the commitment of the government to adhere to its greener promise for the future.

electric mobilityFurther, it is to be noted that this scheme will be emphatically carried on the welcoming lines of how subsidies under EV policies can be availed of. What needs to be paid attention to is the fact that how will government implement the subsidy implementation plan?

This is due to the fact that under the Faster Adoption and Manufacture of Electric Vehicles policy, EV purchase attracts direct subsidy. This is effectively linked to the battery capacity of the vehicle.

Is the policy being updated and implemented by various states? It is to be noted that the Delhi government has too emphatically launched a new EV policy for the next 3 years. To induce the public to embrace the change, the policy had offered many additional benefits over and above the FAME-II policy that was devised by the Central Government.

But what do these investments include? These incentives include financial incentives that will be provided in the form of direct subsidies for EV purchases in order to induce customers to opt for EVs. At the same time, the government is trying to disincentivize the usage of combustion vehicles by effectively scrapping the incentives for cars with internal combustion engines.

Other enticing offers that are being provided entail exemption from road tax, interest waiver on loans for various commercial buyers, and waiver of the registration fee.

Also in pursuit to develop infrastructure that is viable for the EV market in India to boom, the government has also been trying to invest in the infrastructure for charging batteries and increasing the network of charging stations. This has also led the government to promote EV usage on various ride-hailing service providers by effectively granting the rights to effectively operate electric 2-wheeler taxis.

Thus, one can effectively state that in addition to the central government, the state governments are also extensively trying to appeal to the fancy of the masses with advertisements and concessions. On the other hand, one can also scrutinize that the policy in Delhi appears to show a paradigm shift in policy in comparison to other states that are seeking to incentivize the manufacturing of EVs.

Another state that has too positively come forward to greatly incentivize the adoption of EV is the state of Telangana. Unlike the Delhi government, one can witness the change in policy as it has taken the route of supply rather than demand appraisal. According to the policy that has been unveiled, one can state the main thrust of the policy contains instruments to incentivize the manufacturing in the state by the effective and emphatical establishment of energy and EV parks.

human mobilityThe major call for such incentives was seen when provisions were made for 775 acres of land for EV manufacturing facilities. On top of this, it was also witnessed that some preferential market access for EV manufacturers was also being provided for the enticement process for further manufacturing.

I a major policy alteration, the Telangana government had gone as forward as to state that the sale of the first 2,00,000 and first 5,000 units of two-wheelers and four-wheelers respectively will procure 100% exemption of road tax and registration fee.

Thus, one can state that the Telangana government has based its policy on the model of effectively leveraging the existing electronics manufacturing facilities to f\drive investments in the burgeoning sector. Additionally, the policy also includes the tint of usage of supply chain advantages to make the prospects of investments more attractive for the investors.

Though no one can deny the fact that with the automobile sector, the EV market too was affected by the pandemic, with the aforementioned policies and incentives one can state that the government is trying its level best to signify institutional intent to focus specifically on electric mobility.

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Jan 03
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medius

Medius

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Medius

History bears testimony to the fact that India’s economic and financial woes bear a long arduous history and complications. With the pandemic right here to inflict economic and humanitarian woes, India yet again stands at a point where such economic and financial anguishes will be exacerbated.

Not only has the pandemic contributed immensely to the problem, but it can be rightfully claimed that the government’s preventive strategies have been contributing to such an impending debacle.

medius technologies private limitedAs it is quite widely known that the banking sector is booming as the Indian economy is gaining momentum. But with the rise of credit, delinquency is on the rise too. But here it is worthy of mentioning that Medius, using its Predict-Act-Reduce technology (P-A-R) is successfully attempting to mitigate the NPA crisis in the Indian banking sector.

Medius gains are all the more relevant given various detestable predictions like the detestable NPAs all set to increase from 11.3 percent in March 2020 to 15.2 percent in March 2021.

Consequently, highly odious predictions like an increase in stress assets to 16.3 percent under a very severe stress scenario do not spark much confidence in the post-pandemic rueful world. Thus, given the debacle that is in making,

Medius through its P-A-R technology has been cautiously and strategically predicting historical bank data and generating borrower information, which is the prerequisite demand to tackle the NPA crisis.

medius technologiesOn the other hand, the problem is all set to be exacerbated by the moratorium that was provided by the government on bank loan repayments.

It is quite true that the banking sector is already in troubled waters but the moratorium that had been provided to ease the pains of one sector will definitely lead to the accentuating of the other.

With already crippled finances of the public, the probability of repayment at the moment is at an all-time low. Thus, preventive measures that are being effectively provided by the Medius are the crucial and immediate need of the hour.

It has been quite rightly stated that prevention is better than cure. With an increasing number of curative mechanisms existing in the economy, the preventive measures by the finance ministry are quite numbered. Medius, the AI-based platform is the one-stop solution to the detestable problem of bad debts of the financial sector.

Through the AI preventive technology of Medius, bad debts can be deciphered in the early stages of its debacle. Given, timely resolution and recovery of loans is the Achilles heel of the bad bank’s industry, Medius unties the knotty situation with its strategic AI technology of early detection and suspension of the same.

with its AI technology strategic resolution are provided are highly accurate and can be trusted. Lastly, the usage of legally integrated workflows is used to strategically resolve disputes and due accounts.

One attribute that sets Medius apart from the crowd is its committed goal to provide AI structured timely resolution to recover the value of money for investors. Given, that the stakeholders have the most to lose in the bad debt revival process, Medius’s strategic functioning gives paramount importance to tending to such problems and needs.

It is no news that AI technology is the future of the banking sector. This makes Medius a forward-future-looking venture that pays attention to innovation and strategic technology usage to craft fruitful solutions. Thus, Medius is a future-oriented venture that has immense potential for growth and relevance.

In fact, Medius can be rightly hailed to have ushered the AI technology usage in the banking industry for the resolution of the predicament of the sector. Given, Medius is the first-ever AI-based venture specializing in the resolution of the odious problems that plague the banking sector, Medius can be conferred the title of “the forerunner of change”.

medius softwareMedius also emphatically believes in reducing inefficacies and reductant human participation in the bad debt resolution sector as these are the very reason for the uninformed, odious and inefficient debacle. It is no news that with the plummeting relevance of the IBC in effectively dealing with the NPA crisis in the economy, due to its falling robust edifice of the timely resolution, Medius has rightfully descended in the industry with its preventive technology for the survival of the sector.

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Jan 03
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asset reconstruction company

RBI Panel Highlights The Role of Banks in Asset Reconstruction Company Failure

By Banking No Comments

The Role of Banks in Asset Reconstruction Company Failure

India’s NPA history has been a sad one. With the piling of bad loans and lower consumer and investors’ confidence, the future looks quite bleak too.

Though many reforms have been initiated to mitigate or at least manage the crisis. But to state that they have been successful will be a false judgment.

It can be perhaps the rules or the management that were stacked against them, or maybe it was the operating framework that was not really helpful, but it stands quite true that the measures have not been able to achieve what they ought to. This is true in the case of IBC, insolvency, and bankruptcy code and especially in the case of ARC, Asset Reconstruction Company.

national asset reconstruction company
ARC works on the model of restructuring debts by acquiring them. The recovery is made when the bad loans’ underlying assets are sold to make a recovery.

Though the ARCs cash on the management fees that they earn, the recovery rate of these assets has been abysmally low. according to the reports, all these years, the results of reconstruction through ARC have been below par. Thus, one can state that there have been few instances of actual resolution or turnaround of companies.

Such a claim can be corroborated by the fact that RBI has articulated recommendations to re-invigorate the ARC ecosystem. Thus, it can be maintained, with some certainty that the operating framework in actuality suffers from some frailties.

But is ARC, individually to be blamed for the low recovery on assets? Probably no. Banks play a part by delaying the sale of stressed assets to a point where much of the value is already lost or destroyed. Thus, it wouldn’t be wrong to state that banks do help exacerbate the problem of recovery.

The problem with such delays is the fact that it is much more arduous for the ARCs to revive the business or get a good price for it. Though one might be of opinion that this is a display of inefficiency on the part of ARC, the right judgment will be to design a business to address the problem.

Taking this viewpoint into consideration, the panel too has recommended aptly incentivizing banks to sell their bad loans early or timely, to allow

asset reconstructionARCs recover a part of the asset.

Reviving the accountability

The committee has suggested that for loans that are worth Rs 100 crore and more, where effectively the borrower has been found to be a defaulter and the resolution plan is being worked on, the possibility of the sale or an auction to the ARC should be made a possibility.

Given, that such a suggestion was made recently, it can be conjured that it was not being carried out previously by the banks, which raises the question about the management of the firms.

Additionally, in order to improve the accountability of the banks, the committee has effectively suggested that two-year-old NPAs, with no resolution plan being pursued nor the bad assets being put on the sale list, the banks must emphatically put on record the reason for such a scenario.

Such suggestions by the panel confirm and reinstate the fact that if ARCs have not weathered well throughout the years, partially banks too have been the exacerbator of the problem.

Another problem that has cropped up in recent years is that of consortium arrangement. Many lenders have actually made it difficult to aggregate the debt and thus have delayed resolutions.

Thus, in order to mitigate such a problem, the panel has emphatically suggested that if as much as 66 percent of the lenders, by value, have decided to accept an offer, the resolution will have to be carried forward and will need to be closed out within 60 days of it being approved.

Given that a timeframe will be given to other lenders to comply with the offer, if they fail to do so, they will have to provide fully for the exposure. Thus, the principle of accountability not only on the level of organization but also on the lenders’ level has been incorporated.

Additionally, the suggestions also have brought to the forefront the idea that the NARCL will not suffer from disaggregation on the organizational or lenders level. The panel has also ensured that NARCL will ensure that it will take care of the problem of enforcing the security to back each of the assets

Finally, the panel has also suggested that it will be a good idea to have a couple of external valuers who would do a valuation exercise to come up with both the fair market value and the liquidation values.

This certainly and immensely helps in fixing the reserve price which consequently will ensure a better price discovery at the auctions.

Given that transparency and accountability will be fostered and embedded in the system through synchronization of banks and ARC. Though it is to be noted that every reform and process has its failings, the objective to make it infallible and adaptive shouldn’t be given up.

Thus, one can state that through the participation and synchronization of banks and ARC, it is a high possibility that the bad debt crisis of India can be mitigated by a large proportion.

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Jan 03
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south asia

South Asia

By Others No Comments

South Asia

The ”occasional dimness” issue is one that torments huge pieces of South Asia in long stretches of dry season (for a new outline, see Lim and Johnston, 1999).

The repeat of the El Nino Southern Oscillation (ENSO) peculiarity is likewise accepted to have drawn out the dry season also strengthened the inescapability of woods fires.

Singapore has encountered especially extreme negative natural effects of this problem, particularly in the later long periods of 1997, in the early long stretches of 1998, and in mid-1999.

The worry among Southeast Asian nations has reached a higher-than any time in recent memory level both in the public and private areas.

southeast asia The examinations done on the 1997 murkiness found that the expense for Singapore alone arrived at US$163.5–US$286.2 million, with the best effect on the travel industry during the time of the murkiness.

Table 1 shows that wellbeing expenses and misfortune in the travel industry account\ for US$3.8–US$4.5 million and US$136.6– US$210.5 million, separately.

Backhanded expenses in the type of loss of perceivability, grand perspectives, and sporting exercises are likewise huge, in the region of US$23.2–US$71.2 million.

Furthermore, these quotes might be a misjudgment of the genuine expenses since not everything is probably going to be represented.

If the recurrence of the fog scenes increment, the related expenses are probably going to increment. Henceforth, it is basic to focus on the issue brought about by the fog in Singapore.

The significant reason for this ”occasional murkiness” issue is backwoods, shrubbery, and field fires in the islands of Kalimantan and Sumatra in Indonesia, and less significantly in Sabah, Sarawak, furthermore different pieces of Malaysia.

southeast asia Practically these fires currently appear to be preventable, since they are intentionally set to clear land for development.

Hypothetically, the public authority specialists at focal, commonplace, and neighborhood levels in these nations ought to be liable for controlling exercises in their domain that cause widespread harm and pain, not just among their own populace yet additionally across their borders in adjoining nations.

Practically speaking, in any case, air contamination control through regulatory arrangements and practices is remarkably hard to carry out and keep up within a situation of this sort in agricultural nations, especially during a period of devastating financial mishaps, the new Asian financial emergency, and political vulnerability in Indonesia.

The worldwide academic local area has been checking and estimating enormous scope land and backwoods fires in various districts for numerous years, helped by refined recognition advancements.

Nino and its dry season creating impacts in Southeast Asia would empower watchful organizations in the district to plan all the more wisely in light of previous experience.

However, nobody proposes that the present lacking strategy reaction to the issue is expected principally to an absence of essential logical information about the issue.

A further logical examination of this sort is significant all around the world, yet the exploration cost is anything but a significant piece of the expenses of avoidance that ought to be met around here.

On the substance of things, a reformist (or even coalitionist) system in Indonesia may be relied upon to put generously in dimness-related research, yet with weighty reliance on worldwide wellsprings of specialized help.

Such an approach should embrace a management-directed research technique, which would comprise of two essential elements.

To begin with, this technique ought to mirror a genuinely genuine and efficient work to coordinate the many disciplines, both hard and delicate, that add to land use and sane asset the board in the fire-related spaces of the district.

Second, the logical research methodology for the battling area and woods flames ought to underscore remote detecting and GIS-related strategies for data gathering and handling. All things considered, any authorization regime will require close checking of the situation just as following methods and results.

These would seem, by all accounts, to be the two most financially savvy kinds of examination to be pushed to strategy producers in the area, however, they do experience the ill effects of specific weaknesses. Remote detecting, for instance, can just catch flames to a certain extent.

Assuming that the region impacted is little, there is a lot more modest possibility of location. This number and exactness of the factors utilized, which might incorporate the size of flames, region impacted, the thickness of overcast cover and climate conditions, decide the helpfulness of GIS-related strategies, and the Indonesian specialists may experience issues in social occasion precise data to utilize the GIS strategy.

stakeholders approach Hence, other significant sorts of logical examination additionally merit proceeded with help from outside sources. The haze resulting from the fires in Indonesia has caused severe economic and environmental damage in the region and will continue to do so if no prompt and effective measures are taken.

This study has reviewed the related issues and suggested policy responses from different perspectives, and some incentive mechanisms for preventing or reducing the effects of the fires have been discussed. A ‘‘stakeholders approach’’ to sharing the costs of certain programs to combat the fires has been suggested.

 

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