Several exchanges are facing a cash crunch with committed investment not coming from venture capital funds and trading activity seeing a sharp decline, reports Rajesh Bhayani.
'When the gold price rises rapidly, India's physical gold market remains on standby.'
Thanks to an ambiguous law on the import of platinum alloys, some bullion importers are making big profits. A handful of them are importing refined gold cloaked as platinum alloy. Gold attracts 15 per cent import duty, as opposed to platinum alloy that invites a duty of 10.75 per cent. Industry sources say this is a case of mis-declaration and duty violation.
The money sent home by Indians from West Asian countries took a beating in 2020-21 due to the pandemic. On the other hand, overseas Indians in advanced nations - the United States, United Kingdom and Singapore - emerged as important sources of remittance, according to a Reserve Bank of India (RBI) survey. Indians working in informal sectors in West Asia seem to have been impacted the most due to the lockdowns and subdued crude oil prices as well as slower pace of migration in recent years.
After the finance minister directed public sector banks to join the account aggregator (AA) ecosystem, 5-6 major ones, including State Bank of India (SBI) and Bank of Baroda are expected to go live by July-end. Sahmati, an industry alliance for the AA ecosystem, has been working with PSU banks to get them onboarded for quite some time now. So far, Union Bank of India and Punjab National Bank (PNB) have gone live on the AA ecosystem. While Union Bank has been live for a while, PNB went live earlier this month.
The depreciation in rupee may pose a problem for students who have taken loans from Indian lenders.
A sharp fall in the price of Bitcoin and other cryptocurrencies is another hard blow to the already sinking cryptocurrency market in India. Global and domestic prices have been on a downward trail since November last year when Bitcoin prices hit a peak of close to $68,000 in international markets. The recent past has seen a much sharper fall in the price of the leading cryptocurrency, Bitcoin.
Spending on international travel tripled in April 2022 as Covid-related curbs were eased in various countries in FY22.
There are loans to salaried people where the borrower is employed, but has failed to make repayment. Such loans would be identified and sold in a pool to ARCs.
Flow of money into non-resident Indian (NRI) deposits moderated sharply to $3.23 billion in April 2021-March 2022 from $7.36 billion in the same period of the previous year. Outstanding deposits have also gone down to $139.02 billion at the end of March 2022. This compares to $141.89 billion a year ago, according to Reserve Bank of India (RBI) data.
However, NFTs and Metaverse are in their first-generation (Gen 1) or initial phase and the market is filtering the assets from the point of view of their worthiness. NFTs having real artistic value have not participated as much in the fall. Some innovations are also happening or expected going ahead, which will take this asset class to the next phase.
Global rating agency Moody's on Monday said the high commodity prices and supply chain disruptions due to further escalation in the Russia-Ukraine crisis could expose about 42 per cent of rated Indian companies to significant risks. They are mainly in the oil and gas and automotive sectors. The impact may be seen under two scenarios: first, revised base line and second being downside economic scenarios incorporating a global recession and a more severe liquidity squeeze, it said. The military conflict between Russia and Ukraine is impacting companies in Asia Pacific, adding to existing challenges from supply chain disruption and the coronavirus pandemic.
The Indian lenders are worried over the fast depleting asset base of the Future group companies which would make their recovery of dues difficult. The asset base of Future group has eroded in the last two years due to lockdown and takeover of 947 stores by rival Reliance Retail after Future group's lease on the properties expired. Bankers said they have approached bankruptcy court so as to avoid any duplication of legal action and reduce time at the legal forums.
Transiting from "survival mode", which took most of the management time in FY21, the bank has been able to take a long-term view in terms of growth and preparing technology in the past 12 months.
With days to go before the new tax regime around crypto assets kicks in, several investors are reportedly either booking profits, rejigging their portfolios or moving their crypto assets to their private wallets outside of India. Starting April, gains from trading in crypto and other virtual assets like non-fungible tokens (NFTs) will be taxed at a flat 30 per cent, as announced in the Union Budget. And, 1 per cent of tax will be deducted at source (TDS) on every transaction involving crypto and other virtual assets. The new tax regime also bars investors from offsetting losses from one crypto asset (such as Bitcoin) against gains from another (say, Ethereum).
Is the worst over for Indian banks? The past two years saw them ride on treasury trades as deposits soared and credit growth dipped sharply. Gross and net non-performing assets (NPAs) moved south, and the provision coverage ratio (PCR), capital buffers, and profitability indicators are back at pre-pandemic levels. So, what's the plot ahead?
Gold is usually seen as a safe-haven when stocks are falling or when inflation is rising. With prices of the yellow metal hovering near record highs, people are also putting off their jewellery purchases. Along with a subdued marriage season, the orders with price open and settled on delivery day, too, are getting cancelled. Apart from high, volatile prices, there is no gold rush yet for the safe-haven asset, crimping demand.
The country's largest lender State Bank of India (SBI) will revamp its banking application (app) YONO and position it as a complete digital bank (DB) under a new rubric 'Only YONO' for enhancing customer experience and ease of use. The bank plans to bring in a consultant to help draw up the project plan, keeping in mind business goals for the next five years. With 54 million monthly active users (MAUs), SBI YONO has seen growth of over 35 per cent in MAUs in 2021.
With the international markets facing uncertainty after Russia invaded Ukraine and Western nations retaliated with sanctions, Indian companies are putting their international fundraising plans on hold as they wait for the markets to recover. Bankers said apart from the geopolitical crisis, international rates are hardening in anticipation of interest rate hikes by the US Federal Reserve to control rising prices in the US. The Ukraine situation has implications for the market. In such a situation, international investors try to shift to safe haven assets by exiting from emerging markets.
Zombies a.k.a perpetually loss-making firms in India seem to have dampened the effectiveness of monetary policy at the margin as they use borrowed resources more for their survival than for undertaking new investment, according to a RBI study. The monetary policy does not hinder the creative destruction process by misallocating credit flows to zombies during periods of economic slowdown, showed a study by officers of Reserve Bank of India. It has been published in RBI's bulletin for February 2022. In India, zombie firms are estimated to account for about 10 per cent of total debt of the non-financial corporate sector.
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