According to a recent official memorandum issued by the Ministry of Personnel, Public Grievances’ Department of Pensions and Pensioners’ Welfare “on death of a pensioner, the spouse/family members of the deceased pensioner are asked by the Pension Disbursing Banks to submit details and documents, which are otherwise not required for commencement of family pension. This amounts to harassment of the spouse and family members and often leads to avoidable delay in commencement of family pension by the banks.” The OM has also further added that “The spouse/family member, whose name is incl deceased pensioner, is required to submit commencement of family pension to him or her.”
In cases where the deceased pensioner and spouse were holding a joint account:
A simple letter or application form for the initiation of a family pension.
Death certificate of the deceased pensioner.
Copy of PPO granted to the pensioner if any.
Proof of the applicant’s age or date of birth.
For the initiation of the family pension, the spouse/family member does not need to submit Form 14 to the bank.
In cases where the spouse did not have the joint account with the deceased pensioner:
Two witnesses’ signatures are required on the Form 14 application.
Death certificate of the deceased pensioner.
Copy of PPO granted to the pensioner if any.
Proof of the applicant’s age or date of birth.
It is not necessary to have Form 14 certified by a Gazetted Officer, etc. Based on the information provided in the PPO and its own “Know Your Customer” standards, the issuing bank will determine the spouse/family member.
In cases where, on death of the pensioner and spouse, family pension has to pass over to another family member;
If any other family member has been co-authorized in the PPO for a family pension, the same protocol as above must be undertaken.
If the other family member’s name is not on the PPO, he or she may be instructed to get a fresh PPO at the office where the Government servant/pensioner last employed.
According to the OM “you are requested to issue suitable instructions to the CPPC(s) and the pension paying branches of your Bank to obtain only the minimum essential details/documents, as mentioned above, from the claimants of family pension, and to ensure that they are not subjected to any harassment by seeking unnecessary details and documents. The details of family members, other than the Applicant, are not relevant for commencement of family pension by the bank and the same should not, therefore, be sought from the Applicant under any circumstances.”
Family pension rules after death of pensioner
According to Union Minister Dr. Jitendra Singh of the Department of Pension & Pensioners Welfare (DoP&PW), the family pension will be authorised immediately upon receipt of a claim application for a Family Pension and Death Certificate from an eligible family member, without the need to complete any other procedures. This provision is applicable in the event of death during the pandemic, whether due to COVID or without it. According to Rule 80 (A) of the CCS (Pension) Rule 1972, if a government employee dies while on duty, the eligible member of the family can receive a Provisional Family Pension only after the Family Pension application has been submitted at the Pay and Accounts Office.
But the Provisional Family Pension could be sanctioned immediately upon receipt of a Family Pension claim and Death Certificate from an eligible family member, rather than waiting for the Family Pension case to be forwarded to the Pay and Accounts Office due to the ongoing pandemic condition. According to the most current revisions, provisional pension payments may be extended for up to one year from the date of retirement with the consent of the Pay and Accounts Office (PAO) and the Head of the Department. Provisional pension is usually approved for a period of six months under Rule 64 of CCS (Pension), 1972, in instances where a government employee is going to retire before his pension is finalised. In light of the COVID epidemic, however, orders were given for the issuance of a Provisional Family Pension in line with Rule 64 in cases where documents were not submitted on time.
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Pledging of household gold is expected to go up across states with the gradual easing of lockdown restrictions, according to Umesh Mohanan, Executive Director and CEO, Indel Money, a Mumbai-based NBFC.
He says that customers are strapped for cash to honour committed outflows. The virus has been deadly this time with rising infection rate, caseloads and number of deaths, forcing people to borrow more. All these have added to the financial woes of the common people, he adds. Edited excerpts of an interview:
What is the outlook on gold loan for the current fiscal? And what will drive the growth of gold loans?
The outlook for gold loan demand is positive and the demand will be fuelled by healthcare requirements, pandemic-driven uncertainty, the limitations of the banking sector to serve gold loan demand at the earlier pace due to decreased gold prices and end of 90 per cent LTV lending on last March 2021, apart from increased credit crunch due to the prevailing policies.
Our gold loan book has registered around 40 per cent growth in FY20-21. We expect around 50 per cent plus growth in FY21-22, thanks to our expanded geographical presence.
Has there been growth in the gold loan business in April and May of FY22 compared to the same period last year?
The branches in locations with reduced restrictions on movements have witnessed larger pent-up demand in comparison to last year. The industry has been growing at over 25 per cent. Gold loan demand is expected to spike after the lockdown and the post-lockdown demand growth is expected to surpass growth registered during the post lockdown period last year.
Recently, gold loan NBFCs auctioned record tonnage of pledged gold through auctions. Does this point to the growing credit risks for firms offering short-term loans?
Truly, at this point when cash flow is constrained for the common consumer, the facility to keep their gold live by remitting interest and continuing at their original LTV would be a better option than the short-term loans. The consumers have to settle interest along with principal within a short period of time, and correspondingly re-pledge at relatively lower LTV. This will result in huge cash outflow for the customer, in comparison with the longer-tenure schemes.
What are your plans for the company?
We are planning to explore various options such as capital injection by the group holding company, raising funds through public NCDs and PE/VC placement for our expansion. We have recently opened 25 branches across Andhra Pradesh and Telangana. We also have plans to enter Maharashtra and Gujarat with our conventional brick-and-mortar format by Q4 FY21-22. We are also planning to set up a support hub in all major cities to spread our doorstep gold loan facility which functions through the network of virtual branches.
We are planning to launch pre-paid cards. Our disbursals are fully automated because of our tie-ups with banks through our app. Existing customers can use our portal or mobile app to extend the exposure of the gold pledged with us on the basis of the prevailing LTV.
We will set up an automated process in which customers can manage the credit line according to their preferences. We are also planning to expand our online gold loan facility to take the branches to the homes of customers as the upper segments of MSMEs are not comfortable visit gold loan company branches during the gold appraisal process.
Here are the key points you need to know about the SBI RD scheme before investing:
SBI provides RD schemes that are available at all branches across India.
The minimum and the maximum period of investment range from 12 months to 120 months.
One can start making contributions by a minimum amount of Rs. 100/- per month (thereafter in multiples of Rs. 10/-) with no upper limit.
For non-Deposit of monthly Instalments SBI levies a fixed amount of penalty to the responsible customer. For deposits with a maturity period of 5 years or less, a monthly charge of Rs. 1.50 per Rs. 100/- is levied. The bank charges Rs. 2.00 per Rs. 100/- per month for deposits having a maturity duration of more than 5 years.
On Recurring Deposit accounts handed on or after the maturity date, where three or more sequential instalments have been missed, and the account has not been regularised, a service fee of Rs. 10/- will be imposed.
If six sequential instalments are not made, the account will be terminated early and the remaining amount will be remitted to the depositor.
Nomination can also be done at the time of account opening.
On successful account opening, a universal passbook is also issued by the bank.
One can transfer his or her RD account and also avail loan or overdraft facility.
Interest rates as of term deposits will be applicable on recurring deposits.
Premature withdrawal penalty for term deposits up to Rs 5.00 lacs will be 0.50 percent for all tenors, and for term deposits above Rs 5.00 lacs, the relevant penalty will be 1 percent for all tenors. The interest rate shall be 0.50 percent or 1% below the rate prevailing at the time of deposit for the duration the account remained with the bank, or 1% below the specified rate, whichever is lower.
Deposits are subject to TDS, which can be avoided by submitting Form 15G/H to the bank.
SBI RD Interest Rates
For regular customers, SBI RD rates range from 5% to 5.4 percent, whereas senior citizens are eligible to get additional 50 basis points on their deposits. Here are the most recent RD rates of SBI which are in force from 8 January 2021.
Tenure
Regular RD Rates In %
Senior Citizen RD Rates In %
7 days to 45 days
2.9
3.4
46 days to 179 days
3.9
4.4
180 days to 210 days
4.4
4.9
211 days to less than 1 year
4.4
4.9
1 year to less than 2 year
5
5.5
2 years to less than 3 years
5.1
5.6
3 years to less than 5 years
5.3
5.8
5 years and up to 10 years
5.4
6.2
Source: SBI, (Below Rs. 2 crore)
Post Office Recurring Deposit (RD)
One can open an RD account in a post office by making an initial contribution of Rs 100/- per month or any amount in multiples of Rs 10/-.with no upper limit.
On a quarterly compounded basis the post office RD scheme is currently promising an interest rate of 5.8%.
One can open a single account or a joint account with up to 3 adults.
If a consecutive deposit is not made by the required date for a month, a default will be levied for each missed month. A default of 1 rupee per Rs 100 will be charged. The account becomes terminated after four normal defaults and can be retrieved within two months of the fourth default; however, if the account is not restored within this timeframe, no subsequent deposits can be made in the account, and it remains terminated. The account holder can extend his or her account if there are no more than four defaults in monthly contributions or installments.
After contributing 12 instalments and keeping the account open for a year, the depositor is eligible for a loan of up to 50% of the account’s balance. The interest rate on the loan will be charged at 2% plus the applicable interest rate on the RD account.
After three years from the date of account establishment, an RD account can be closed early by submitting an application form to the relevant Post Office. If the account is closed prematurely, the interest rate of the Post Office Savings Account will apply.
Post office RD account comes with a maturity period of 5 years. By submitting an application to the relevant Post Office, the account can be extended for the next 5 years. The interest rate that applied throughout the extension will be the same as when the account was first established.
A nominee or claimant can file a claim of maturity amount upon death of the account holder. By submitting an application form to the relevant Post Office after the claim has been approved, the nominee/legal heirs can keep the RD account open till maturity.
Conclusion
When it comes to a secure investment with moderate returns, debt investments or debt instruments are mostly preferred. Since debt investments are not affected by market behaviour, investing in them can be a decent choice for your portfolio. In the current low-interest rate regime, investors are looking for an alternative to fixed deposits or recurring deposits as banks have been lowering FD rates. Although bank FDs or RDs are covered by DICGC and post office RD can be a secure bet, investing in them can give you good and assured returns if you stay invested for 5 years. But as an alternative, you can invest in National Savings Certificate (NSC), Tax Saving Fixed Deposits, and Debt Mutual Funds for better returns across the same maturity period.
Gold prices on the MCX, international markets and the local jewellers were absolutely flat on Monday June, 28. This was in line with the trend we have seen in the last few days in the precious metal.
Gold for August delivery was little changed at Rs 49,650, marginally up by 0.09%, while gold in the international markets too was flat at $1779.70 an ounce, up 0.105. Spot gold in the Indian markets was also flat.
Gold in the Indian markets follows international prices, which in turn move on bond yields, economic data and comments by the US Fed on interest rates.
Amit Khare, AVP- Research Commodities, Ganganagar Commodities says, ” The Fed has for years (pre-pandemic) used 2% percent as their inflation target. During the pandemic, they altered their mandate to let inflation run hot or above 2% and instead focused on boosting employment in the United States. However, the current PCE index is roughly double the Federal Reserve’s target of 2%. The Bureau of Economic Analysis revealed that U.S. inflation rose sharply in May. It showed that prices are rising at their fastest pace since 2008. The PCE climbed 0.4% in May, which takes the annual PCE inflation rate to 3.9%.
The momentum indicators are turning up, and a base appears to have been forged around $1,773. A move above $1,800 is needed to confirm the bottom. Initial target $1,820 (38.2%) of June ‘s decline and $1,833 (~200-day moving average). U.S. 10-year yield stalled at 1.50%, Another bullish signal is that bitcoin is not seeing a renewed rally after briefly falling below $30,000 and erasing all the year-to-date gains this week.”
According to Sandeep Matta, Founder, TRADEIT Investment Advisor, sideways sideways consolidation is likely to continue until it closing above Rs 47, 500 levels. He says that key level for GOLD AUG Contract is Rs 46,991 and the Buy zone would be above – 46995 for a target of Rs 47150-47329.
“The sell zone below Rs 46,991 for the target of 46775-46613,” he says.
Gold prices have fallen a bit since the US Fed indicated that there could be interest rate hikes in the US as early 2023. In fact, the Fed indicated that there could be two hikes by the end of 2023 as inflation continues to rise.
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Story first published: Monday, June 28, 2021, 10:02 [IST]
The co-operative bank turned Small Finance Bank, Shivalik Bank is going to raise funds for the first time as a small finance bank.
The recently turned SFB is looking to raise Rs 100 crore growth capital from institutional investors.
Harsh Mittal, Chief Financial Officer, Shivalik Small Finance Bank
Harsh Mittal, Chief Financial Officer, Shivalik Small Finance Bank in a conversation talks about the fundraising and expansion plans.
Maiden Fundraise
Mittal said, “This is the first raise we are going to raise funds as a small finance bank and there wasn’t a debt in the market that existed for co-operative banks before and this is the first raise the bank is going to do.”
He added, “We are looking to raise Rs 100 crore in this year and hopefully do it in next quarter for which requisite board approvals are in place. Board has given the scope to increase the amount.”
This is growth capital as the bank has already invested heavily in the digital and tech infrastructures in the past. Mittal said, “Most part of this capital will be used as growth capital towards ramping up disbursements and growing business to achieve our stated targets. This year we want to grow the business by 50% and increase the total business size to Rs 3000 crore and by 2024-25 we want to triple the size by Rs 6000 crore.”
Debt-Equity
Mittal explained that the great part is that the balance sheet has a lot of flexibility as we don’t have much debt on our balance sheet. Most of our capital adequacy is in Tier1 equity so this Rs 100 crore we are largely looking at equity raise and there’s a small component which will also be raised from debt.”
He adds, “80:20 split would be a reasonable number and are appointing investment bankers to run the process for us and the names will be finalised by the end of this month or mid-July.”
The bank is looking to onboard an institutional investor base including insurance companies especially the ones who already are in tie-ups and a couple of private equity players who have been investing in the SFB space. The idea is to broaden the investor base as at the moment it is broadly retail, Mittal said. Credit Disbursement
The bank’s 50% of the book is secured business loans and will continue to focus on that.
Mittal explains, “One of the differentiating factors for us is that as an SFB 90% of our book is secured either by property or gold collateral. So we are a very secured lender in that sense and only 10% of our book is MFI.”
He adds, “Our focus would be on secured and gold loan business. The gold loan book has doubled in the last year and we plan to increase it further substantially again. Now that lockdowns have eased up we would want to cater to small businesses too.”
Expansion Plans
Shivalik Bank will be opening branches in unbanked regions as per the norm of RBI and is aiming to open 15 branches in FY22.
Mittal said, “This covers us on the regulatory requirement and in addition to regulatory requirement we are also looking at expansion in adjoining states in Delhi & Uttarakhand as we are already present in UP and Madhya Pradesh. On the digital side, we’ve tied up with India Gold for gold-related business and this year we are looking to add more FinTech partnerships which would help us to source customers on the liability side as well.”
Impact of Second Wave
The NPA recognition case in the Supreme Court didn’t allow it to issue recovery notices or proceedings. Mittal explained, “Since that got lifted towards the end of March, April was much better for us as we were able to issue some of the proceedings, and as a result borrower discipline was improved on the secured side.”
There was no major challenge in collection efficiency as due to the secured nature of our book, customers were more amenable discussing how they can improve their position and we don’t have large exposures in any of the currently challenging sectors like hospitality or aviation impacted due to Covid-19. Our book is very granular and the average ticket size is Rs 4 lakhs, said Mittal.
The bank saw restructuring of less than half a percent of its book in FY 20-21 and Gross NPA at 31 March 2021 was 3.9% which is expected to remain largely unchanged in Q1 21-22
A bad bank in India that’s expected to launch this month may help reduce one of the world’s worst bad-loan piles, but market participants say it’s a long path ahead.
The new institution, which is set to start operations by the end of June, is likely to handle stressed debt worth ₹2 lakh crore ($27 billion) over time, according to a BloombergQuint report. That would be about a quarter of the nation’s non-performing debt load. By housing bad loans of many lenders under one roof, the entity should help speed up decision-making and improve bargaining power when resolving these assets.
But for India to overcome its struggles with bad debt and stabilize the financial system of Asia’s third-largest economy, more fundamental problems with insolvency laws introduced in 2016 need to be addressed, investors say. Their confidence in the country’s bankruptcy reforms has been shaken as creditors’ recovery rates fall, delays in closing cases increase, and liquidations exceed resolutions in the insolvency courts.
Market participants will watch whether the bad bank focuses on resolving the assets rather than keeping them like a warehouse, and whether its team includes appropriate industry and turnaround experts.
“The proposed bad bank is useful as a one-time clean-up exercise of the bad loans that are pending resolution for years now,” said Raj Kumar Bansal, managing director at Edelweiss Asset Reconstruction Co. “But it’s not a long-term solution in dealing with the stressed assets,” he said, adding that bankruptcy reform is key.
Less than one in 10 companies admitted in the insolvency courts is getting resolved while a third are facing liquidation, data compiled by Insolvency and Bankruptcy Board of India show. The recoveries for financiers from the resolved cases have also dropped to 39 per cent of dues as of March from 46 per cent a year earlier. And if the top nine cases by recovery are excluded, lenders received just 24% of dues, according to Macquarie Capital.
Bankruptcy reforms
“India’s bankruptcy reforms started off well but they have slowed currently,” said Nikhil Shah, managing director at Alvarez & Marsal India. “Prolonged delays in resolutions, lengthy court battles, and uncertainty of recoveries post-approval of resolution plans are pushing many potential investors away” from the bankruptcy process, he said.
Shah expects the delays in resolutions to worsen further unless the government and judiciary address some of the primary issues, such as increasing the number of judges and investing in digital infrastructure to boost productivity.
Indian Banks’ Association, which is helping with plans for the proposed bad bank, and Insolvency and Bankruptcy Board of India, didn’t immediately respond to emails seeking comment.
For now, Indian banks will be happy to finally kick away some of the stressed loans to the proposed entity. The sector’s bad-loan ratio is set to almost double to 13.5 per cent of total advances by the end of September, India’s central bank said in a report published before the second wave of coronavirus infections hit the country.
“Stressed loans have taken far too much management time across the industry in the past couple of years,” Prashant Kumar, chief executive officer at Yes Bank Ltd., told Bloomberg. “This bad bank will help shift focus from resolving soured loans to improving credit growth.”
The cryptocurrency aficionados’ mantra that Bitcoin is equivalent to digital gold is winning converts among the world’s biggest holders of the precious metal.
In India, where households own more than 25,000 tonnes of gold, investments in crypto grew from about $200 million to nearly $40 billion in the past year, according to Chainalysis. That is despite outright hostility toward the asset class from the central bank and a proposed trading ban.
Richi Sood, a 32-year-old entrepreneur is one of those who swerved from gold to crypto. Since December, she’s put in just over 1 million rupees ($13,400) – some of it borrowed from her father – into Bitcoin, Dogecoin and Ether.
And she’s been fortunate with her timing. She cashed out part of her position when Bitcoin smashed through $50,000 in February and bought back in after the recent tumble, allowing her to fund the overseas expansion of her education startup Study Mate India.
“I’d rather put my money in crypto than gold,” Sood said. “Crypto is more transparent than gold or property and returns are more in a short period of time.”
She’s part of a growing number of Indians — now totalling more than 15 million — buying and selling digital coins. That is catching up with the 23 million traders of these assets in the U.S. and compares with just 2.3 million in the U.K.
The growth in India is coming from the 18-35 year old cohort, says the co-founder of India’s first cryptocurrency exchange. Latest World Gold Council data indicated Indian adults under age 34 have less appetite for gold than older consumers.
“They find it far easier to invest in crypto than gold because the process is very simple,” said Sandeep Goenka, who co-founded ZebPay and spent years representing the industry in discussions with the government on regulation. “You go online, you can buy crypto, you don’t have to verify it, unlike gold.”
Regulatory issues
One of the biggest barriers preventing wider adoption is the regulatory uncertainty. Last year, the Supreme Court quashed a 2018 rule banning crypto trading by banking entities, resulting in a trading surge.
However, authorities show no signs of embracing cryptocurrencies. The nation’s central bank says it has “major concerns” about the asset class and six months ago, the Indian government proposed a ban on trading in digital coins – though it has been silent on the topic since.
“I am flying blind,” said Sood. “I have a risk-taking appetite, so I’m willing to take a risk of a ban.”
The official hostility though means many bigger individual investors are reluctant to speak openly about their holdings. One banker Bloomberg spoke to who invested more than $1 million into crypto assets said with no clear income tax rules at present, he was concerned about the possibility of retrospective tax raids if he was publicly known to be a big-ticket crypto investor.
He’s already got contingency plans in place to move his trading to an offshore Singapore bank account if a ban was to be introduced.
Increasing investment
To be sure, the value of Indian digital asset holdings remain a sliver of its gold market. Still, the growth is clear, especially in trading — the four biggest crypto exchanges saw daily trading jump to $102 million from $10.6 million a year ago, according to CoinGecko. The country’s $40 billion market significantly trails China’s $161 billion, according to Chainalysis.
For now, the increasing adoption is another sign of Indians’ willingness to take risk within a consumer finance sector that’s plagued with examples of regulatory short falls.
“I think over time everyone is going to adopt it in every country,“ said Keneth Alvares, 22, an independent digital marketer who has invested more than $1,300 in crypto so far. “Right now the whole thing is scary with regulation but it doesn’t worry me because I’m not planning to remove anything for now.”
Bengaluru | London: Binance Markets Ltd., one of the world’s largest cryptocurrency exchanges, cannot conduct any regulated activity in the UK, Britain’s financial regulator said, and issued a warning to consumers about the platform, which is coming under growing scrutiny globally.
In a notice dated June 25, the Financial Conduct Authority (FCA) said Binance Markets, Binance’s only regulated UK entity, “must not, without the prior written consent of the FCA, carry out any regulated activities…with immediate effect”.
It also issued a warning to consumers about Binance Markets and the wider Binance group.
Binance in a statement said that Binance Markets, which it acquired in 2020, was not yet using its regulatory permissions, and that the FCA’s move would not impact services offered on its website. “We take a collaborative approach in working with regulators and we take our compliance obligations very seriously, a spokesperson said. “We are actively keeping abreast of changing policies, rules and laws in this new space.”
Binance announced in June last year that it had bought an FCA-regulated entity and would use it to offer cryptocurrency trading services using pounds and euros.
Authorisation
While trading of cryptocurrencies is not directly regulated in Britain, offering services such as trading in cryptocurrency derivatives does require authorisation.
The FCA has told Binance that by June 30 it must display a notice stating “BINANCE MARKETS LIMITED IS NOT PERMITTED TO UNDERTAKE ANY REGULATED ACTIVITY IN THE UK” on its website and social media channels. It must also secure and preserve all records relating to UK consumers and inform the FCA this has been done by July 2.
The regulator did not explain why it had taken these measures.
British citizens will still be able to access Binance’s services in other jurisdictions.
The FCA is stepping up its oversight of cryptocurrency trading, which has soared in popularity in Britain along with other countries around the globe. Since January, it has required all firms offering cryptocurrency-related services to register and show they comply with anti-money laundering rules. However, earlier this month, it said that just five firms had registered, and that the majority were not yet compliant.
Japan’s regulator said on June 25 that Binance was operating in the country illegally, a notice posted on Japan’s Financial Services Agency website showed.
Last month, Bloomberg reported that officials from the US Justice Department and Internal Revenue Service who probe money laundering and tax offences had sought information from individuals with insight into Binance’s business.
In April, Germany’s financial regulator BaFin said the exchange risked being fined for offering digital tokens without an investor prospectus.
The cryptocurrency aficionados’ mantra that Bitcoin is equivalent to digital gold is winning converts among the world’s biggest holders of the precious metal.
In India, where households own more than 25,000 tonnes of gold, investments in crypto grew from about $200 million to nearly $40 billion in the past year, according to Chainalysis. That’s despite outright hostility toward the asset class from the central bank and a proposed trading ban.
Richi Sood, a 32-year-old entrepreneur is one of those who swerved from gold to crypto. Since December, she’s put in just over 1 million rupees ($13,400) – some of it borrowed from her father – into Bitcoin, Dogecoin and Ether.
And she’s been fortunate with her timing. She cashed out part of her position when Bitcoin smashed through $50,000 in February and bought back in after the recent tumble, allowing her to fund the overseas expansion of her education startup Study Mate India.
“I’d rather put my money in crypto than gold,” Sood said. “Crypto is more transparent than gold or property and returns are more in a short period of time.”
She’s part of a growing number of Indians — now totalling more than 15 million — buying and selling digital coins. That’s catching up with the 23 million traders of these assets in the U.S. and compares with just 2.3 million in the U.K.
The growth in India is coming from the 18-35 year old cohort, says the co-founder of India’s first cryptocurrency exchange. Latest World Gold Council data indicated Indian adults under age 34 have less appetite for gold than older consumers.
“They find it far easier to invest in crypto than gold because the process is very simple,” said Sandeep Goenka, who co-founded ZebPay and spent years representing the industry in discussions with the government on regulation. “You go online, you can buy crypto, you don’t have to verify it, unlike gold.” One of the biggest barriers preventing wider adoption is the regulatory uncertainty. Last year, the Supreme Court quashed a 2018 rule banning crypto trading by banking entities, resulting in a trading surge.
However, authorities show no signs of embracing cryptocurrencies. The nation’s central bank says it has “major concerns” about the asset class and six months ago the Indian government proposed a ban on trading in digital coins – though it has been silent on the topic since.
“I am flying blind,” said Sood. “I have a risk-taking appetite, so I’m willing to take a risk of a ban.”
The official hostility though means many bigger individual investors are reluctant to speak openly about their holdings. One banker Bloomberg spoke to who invested more than $1 million into crypto assets said with no clear income tax rules at present he was concerned about the possibility of retrospective tax raids if he was publicly known to be a big-ticket crypto investor.
He’s already got contingency plans in place to move his trading to an offshore Singapore bank account if a ban was to be introduced.
To be sure, the value of Indian digital asset holdings remain a sliver of its gold market. Still, the growth is clear, especially in trading — the four biggest crypto exchanges saw daily trading jump to $102 million from $10.6 million a year ago, according to CoinGecko. The country’s $40 billion market significantly trails China’s $161 billion, according to Chainalysis.
For now, the increasing adoption is another sign of Indians’ willingness to take risk within a consumer finance sector that’s plagued with examples of regulatory short falls.
“I think over time everyone is going to adopt it in every country,“ said Keneth Alvares, 22, an independent digital marketer who has invested more than $1,300 in crypto so far. “Right now the whole thing is scary with regulation but it doesn’t worry me because I’m not planning to remove anything for now.”
