Month: September 2021

2 Top Ranked Flexi Cap Fund By CRISIL To Initiate SIP In Now

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All About Flexicap mutual funds

What led to the origin of ‘Flexi cap fund’ category?

Typically to tackle the new mandate with regard to multi-cap fund, the flexi cap fund saw its origin. As per the SEBI mandate, without any specific guidelines on allocation to the categories, there is given that at least 65% of the corpus needs to be invested in equity and equity related investments.

Flexi-cap fund: Suitable for whom?

Those investors who want to bet across market caps and but do not want to engage in regular decision of category-wise allocation, can go about adding flexi cap fund to their category.

Features of flexi cap funds

1. Offer higher liquidity with no allocation guidelines to be adhered or complied with. Fund manager can rework the portfolio considering the market dynamics.

2. Allows investor to not only chip in good quality stocks but also allows them the way to exit non-performing stocks.

3. Steady returns can be expected during the bearish market sentiment.

Why should you allocate your funds to flexi cap mutual funds?

Why should you allocate your funds to flexi cap mutual funds?

In the equity market space, there is relative difference in performance across market caps and with no inbuilt curbs here fund manager based on their experience and understanding of the market dynamics can freely go about allocating funds across market caps for highest potential gains. Also, the remaining 35% corpus depending on the market mood can be allocated in debt, held in cash or can be deployed to take international exposure.

2 Flexi-cap fund accorded Rank 1 By Crisil with their Return performance

2 Flexi-cap fund accorded Rank 1 By Crisil with their Return performance

Crisil, an S&P Global company, is also into ranking mutual funds. And as per the CRISIL site, the rating agency’s CRISIL Mutual Fund Ranking (CMFR) is based on global best practices. The facility launched in June 2000 has gained high acceptance among investors, intermediaries and asset management companies.

For the ranking, CRISIL employs a mix of NAV as well as portfolio based attributes for evaluation. This provides a single point analysis of mutual funds, taking into consideration key parameters such as risk-adjusted returns, asset concentration, liquidity and asset quality.

The ranks are assigned on a scale of 1 to 5, with CRISIL Fund Rank 1 indicating ‘very good performance’. In any peer group, the top 10 percentile of funds are ranked as CRISIL Fund Rank 1 and the next 20 percentile as CRISIL Fund Rank 2.

Flexi cap funds CRISIL Ranking 1-year SIP Annualised return 3-year SIP Annualised return 5-year SIP Annualised return
PGIM India Flexi Cap fund Rank 1 or 5 Star rating 69.59% 42% 27%
UTI Flexi Cap fund Rank 1 or 5 Star rating 60.96% 37% 25.5%

Disclaimer:

Disclaimer:

Investing in mutual funds is risky and investors need to be cautious. Neither Greynium Information Technologies nor the author would be responsible for any losses incurred based on decisions made from the article. Investors are also advised caution as the markets have closed at an historic high.



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Top 5 Banks Promising Good Returns On Tax Saving Fixed Deposits In 2021

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Insurance

oi-Vipul Das

|

Among the debt category those investors having lower tax brackets want to seek tax benefits under section 80C of the Income Tax Act with a blend of assured returns in the form of regular income, tax-saving fixed deposits are undoubtedly a must to invest. These deposits have 5-years of lock-in period and as a result, no premature withdrawals are allowed which investors need to keep in mind before investing.

For investors who are unfamiliar with the stock market, mutual funds, or have a low-risk appetite, tax-saving fixed deposits are always preferred because they not only provide tax benefits and fixed returns, but the Deposit Insurance and Credit Guarantee Corporation (DICGC), a subsidiary of the RBI, also cover their deposits of up to Rs 5 lakh. Hence, by keeping all the above factors in mind, here we have compiled the top 5 banks in India that are now offering higher interest rates on tax-saving fixed deposits to both regular and senior citizens.

Note: Interest Rates On 5-Year Tax Saving Fixed Deposit Are Highlighted In Bold.

Suryoday Small Finance Bank

Suryoday Small Finance Bank

Suryoday Small Finance Bank FD rates have been recently revised and thus are in force from 9th September 2021. Following are the interest rates on tax-saving fixed deposits of less than Rs 2 Cr of Suryoday Small Finance Bank for both regular and senior citizens.

Period Regular Interest Rates In% (p.a.) Interest Rates for Senior Citizens in % (p.a.)
7 days to 14 days 3.25% 3.25%
15 days to 45 days 3.25% 3.25%
46 days to 90 days 4.25% 4.25%
91 days to 6 months 4.75% 4.75%
Above 6 months to 9 months 5.25% 5.25%
Above 9 months to less than 1 Year 5.75% 5.75%
1 Year to 1 Year 6 Months 6.50% 6.75%
Above 1 Year 6 Months to 2 Years 6.50% 6.75%
Above 2 Years to less than 3 Years 6.25% 6.50%
3 Years 7.00% 7.30%
Above 3 Years to less than 5 Years 6.50% 6.50%
5 Years 6.75% 7.00%
Above 5 years to 10 years 6.00% 6.00%
Source: Bank Website

Jana Small Finance Bank

Jana Small Finance Bank

With effect from 07.05.2021 interest rates on fixed deposits of Jana Small Finance Bank are in force. For investors who want to open to open an FD account of less than Rs 2 Cr for 5 years of lock-in term at Jana SFB, the following interest rates would be applicable to them.

Period Regular FD Interest Rate (p.a.) Senior Citizen FD Interest Rate (p.a.)
7-14 days 2.50% 3.00%
15-60 days 3.00% 3.50%
61-90 days 3.75% 4.25%
91-180 days 4.50% 5.00%
181-364 days 5.50% 6.00%
1 Year[365 Days] 6.25% 6.75%
> 1 Year – 2 Years 6.50% 7.00%
>2 Years-3 Years 6.50% 7.00%
> 3 Year- 6.75% 7.25%
5 Years[1825 Days] 6.50% 7.00%
> 5 Years – 10 Years 6.00% 6.50%
Source: Bank Website

North East Small Finance Bank

North East Small Finance Bank

After Suryoday and Jana SFB, North East SFB is among the banks that offer higher interest rates on tax-saving fixed deposits. With effect from 19th April 2021, the following interest rates are in force for a deposit amount of less than Rs 2 Cr.

Tenure Regular Rates In % (p.a.) Senior Citizen FD Rates In % (p.a.)
7-14 Days 3 3.5
15-29 Days 3 3.5
30-45 Days 3 3.5
46-90 Days 3.5 4
91-180 Days 4 4.5
181-365 Days 5 5.5
366 days to 729 days 6.75 7.25
730 days to less than 1095 6.75 7.25
777 days 7 7.5
1096 days to less than 1825 days 6.5 7
1826 days to less than 3650 days 6.25 6.75
Source: Bank Website

RBL Bank

RBL Bank

RBL Bank has recently revised the interest rates of its fixed deposit scheme. The latest interest rates are in force from 01 September 2021 which are as follows and will be applicable on a deposit amount of less than Rs 3 Cr.

Period of Deposit Interest Rates p.a. Senior Citizen Interest Rates p.a.
7 days to 14 days 3.25% 3.75%
15 days to 45 days 3.75% 4.25%
46 days to 90 days 4.00% 4.50%
91 days to 180 days 4.50% 5.00%
181 days to 240 days 5.00% 5.50%
241 days to 364 days 5.25% 5.75%
12 months to less than 24 months 6.00% 6.50%
24 months to less than 36 months 6.00% 6.50%
36 months to less than 60 months 6.30% 6.80%
60 months to 60 months 1 day 6.30% 6.80%
60 months 2 days to less than 120 months 5.75% 6.25%
120 months to 240 months 5.75% 6.25%
Tax Savings Fixed Deposit (60 months) 6.30% 6.80%
Source: Bank Website

Yes Bank

Yes Bank

Among the private sector banks and after RBL Bank, Yes Bank is now offering the highest interest rates on fixed deposits. For a deposit amount of less than Rs 2 Cr and for a deposit period of 5 years, here are the most recent interest rates on FD of the bank which is in force from 5th August 2021.

Period Regular Interest Rates Senior Citizen Interest Rates
7 to 14 days 3.25% 3.75%
15 to 45 days 3.50% 4.00%
46 to 90 days 4.00% 4.50%
3 months to 4.50% 5.00%
6 months to 5.00% 5.50%
9 months to 5.25% 5.75%
1 year 5.75% 6.25%
18 Months to 6.00% 6.50%
3 Years to 6.25% 7.00%
5 Years to 6.50% 7.25%
Source: Bank Website



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Festival season to give boost to retail credit demand

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With the festival season now starting, lenders are expecting a further uptick in retail loan demand and many banks are now announcing special schemes.

“Credit demand from retail customers has been reviving. With Covid cases low in many parts of the country and the festival season starting, there is expectation of heightened interest in loans for items such as consumer durables as well as home and auto loans. Typically, this is the time when people invest in new homes and purchase vehicles,” noted an executive with a private bank.

Kotak Bank

Private sector lender Kotak Mahindra Bank has announced a 15-basis point reduction in home loan rates as a limited period festival season offer beginning September 10 and ending November 8.

State-run Punjab National Bank and Bank of India too have announced festival loan schemes and many other lenders are expected to announce special festival offers in coming weeks.

Fintech lenders have also reported rising demand for credit from retail customers.

“We are seeing improved demand for credit from the first quarter of 2021, supported by economic recovery and improving domestic market due to the reduced risk of Covid-19. We are currently disbursing loans worth ₹120-130 crore per month on a consistent basis since July 2021 which is nearly 70 per cent higher compared to a year ago,” said Yogi Sadana, CEO, CASHe, adding that with the festival season around the corner, he expects an uptick for loan demand for purposes specifically related to wedding, travel, house improvement and purchase of white goods.

Yezdi Lashkari, Founder and CEO, Flexmoney Technologies, said there has been over 4.5 times year on year growth in consumer credit disbursed through its network just this past quarter. “The main use of these loans is for the purchase of electronics and appliances, fashion and personal care, mobile, home and furnishing,” he noted.

In recent months, retail loans have been growing at a robust pace with most banks focussing on this book. According to RBI data, personal loans registered an accelerated growth of 11.2 per cent in July 2021 as compared to 9 per cent a year ago, primarily due to higher growth in ‘loans against gold jewellery’ and ‘vehicle loans’.

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What to expect from the week ending September 17, 2021, BFSI News, ET BFSI

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Nifty march takes a break: Nifty was on a one way trip after breaking the 16,000 barrier. However, it then decided to take a pause. Nifty’s gain during the last week was just 46 points or 0.3%. Increasing number of delta covid variant cases and its negative impact on the global economy continues to be the main worry. However, central bankers continue to support the economy. For instance, European Central Bank (ECB), in its recent meeting, has signalled that it will only slightly reduce its emergency bond purchases over the coming quarter.

In addition to the increasing pace of vaccination, market sentiment is also buoyed by continued support by RBI and government of India.

“India’s domestic and external dynamics remain strong with both government and the RBI continuing to take appropriate policy decisions which will continue to act as tailwind to economic recovery as well as equity markets performance,” says Hemant Kanawala, Head – Equity, Kotak Mahindra Life Insurance.

Though Nifty is capable of climbing to 17,600 level,—the upper end of the rising channel, technical analysts were expecting this pause. As mentioned in previous week, Nifty may even fall to its support band of 17,000 – 17,170 before climbing back to 17,600. 17,170 is a good support now because it was a major resistance earlier. Despite Nifty going up, 17,000 continues to be the major point for Nifty put option writers. For instance, the open interest at 17,000 is placed at 84,843 contracts, compared to 23,223 contracts at 17,100, 36,725 at 17,200 and 34,263 at 17,300. Since the metal prices are still trading at higher levels (eg aluminium prices hit a 13 months high recently), the next upmove may be triggered by metal stocks.

(Narendra Nathan/ET Bureau)

Sector update: Engineering & Capital Goods

Tendering shows signs of uptick

April-August tendering grew 13% y-o-y on the back of higher tendering in the power, T&D and road segments. While tendering in the rail segment was flat, water and real estate saw a decline. The road segment accounted for the largest share of tenders, 30% of overall tenders. Water/railways/irrigation tenders accounted for 11-14%/8%/6-14% of total tenders during the April-August period. For July-Aug 2021, the pace of tendering activity exceeded the April-June 2021 level (by 15%), led by road, power equipment, railways and water supply, indicating a healthy pickup in capex activity.

Awarding activity
YTD awarding activity increased by more than 67% y-o-y on a low base. The 2-year CAGR for this period stood at 28%. road/power T&D/railways/real estate witnessed strong growth. Excluding the road segment, the 2-year CAGR for tenders stood at 14%. Apart from roads, railways/power distribution segments have also seen strong growth in recent years. Roads/railways constituted 26%/16% of the awards during April-August. On account of a large award won by BHEL (Rs 108 billion by Nuclear Power Corp of India), power equipment awards have jumped 6x in the second quarter, leading to growth of 18% in overall awards during the period, further supported by roads and water supply.

Central and state capex
For the April-July1 period, the Central government achieved 23% of its annual budget target with an outflow of Rs 1.28 trillion (up 15% y-o-y). While the overall Central government capex growth during April-July stood in mid-teens, key ministries, roads and railways, reported growth of 110% and 22%, respectively. Taking cues from such figures, developing these sectors, in addition to defence, remains the government’s top priority. Additionally, state government spending (top 15 states) at Rs 565 billion during current financial year (up more than 100% y-o-y) has been far higher than last year’s spending (12% of BE has been achieved vs. 7% y-o-y). On a combined basis (Central + States), capex growth stood at 34% y-o-y.

Credit growth to industries grew marginally by 0.1% y-o-y as of July 2021, while infrastructure credit grew 2.5%. At Rs 10.8 trillion, outstanding infrastructure credit is near the historical high, though it has been in the Rs 10-11 trillion range for the last two years. Overall industrial credit outstanding (as % of non-food credit) has gradually declined to 26% as of July 2021 and currently stands at a decadal low. Top picks from Emkay coverage Our top picks in the sector are L&T, KEC International and Kalpataru Power Transmission, considering their superior execution capabilities, existing order backlog, and relative valuations.

(Emkay)



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Why you should pay attention, BFSI News, ET BFSI

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Football superstar Lionel Messi recently launched his own collection of NFTs, or non-fungible tokens, that were created using his image by an Australia-based digital designer and are expected to make billions of dollars.

In India too, Bollywood superstar Amitabh Bachchan has launched his own NFTs, which are themed around his life. Before him, Sunny Leone became the first Bollywood actress to launch her own NFT collection of unique, hand-animated art.

Messi, Big B and Leone are not alone in this business. The popularity of NFT, a type of digital asset, has exploded beyond anyone’s imagination in recent years. NFT artworks have been selling for millions and attracting the attention of big brands, celebrities and icons.

What are NFTs?
In simple terms, NFTs are digital assets that exist on a public blockchain that serves as a record of ownership. While anyone can view the items, only the buyer of an NFT has the ‘official’ status of being its owner.

Unlike digital items that can be endlessly modified and reproduced, each NFT has its own digital footprint, which makes it one of a kind. All kinds of digital objects such as images, text, videos, music and even tweets can be converted into NFTs and that process is called “minting” (Yes, like in the cryptocurrency world).

Growing Popularity
The fact that NFTs can give buyers a sense of “unique ownership” and “Digital Immortality” has unlocked exciting opportunities for digital commerce and engagement.

Despite being in existence since 2017, the popularity of NFTs surged only in 2021. According to DappRadar, a Lithuania-based data tracking company, trading volumes of top NFT collections such as Axie Infinity, CryptoPunks and ArtBlocks increased 300% and generated more than $1.5 billion in sales.

Another report published in Forbes pegged NFT sales at over $1.2 billion – almost half of the $2.5 billion cumulative sales volume in the first two quarters of 2021 – while the dapp (decentralised applications) industry as a whole registered more than 1.4 million daily unique users, a 23.72% increase from the previous month.

Future Possibilities
In the crypto world, the idea of integrating NFTs and e-commerce platforms has been making headlines for a while now. Experts believe due to its digital nature and long shelf life, NFTs can play a significant role in the world of e-commerce and market with high-end goods.

“As mixed reality technologies mature, regular people are going to spend more and more of their time — and therefore money — in virtual environments,” a research associate affiliated with a French international banking group told a Business channel.

Since NFTs are digital in nature, they do not involve the hassles or cost of shipping products (even though there is a certain minting and hosting fee that needs to be paid to the marketplace showcasing the NFTs as collections).

Big opportunities await luxury brands that can potentially offer exclusive and limited NFTs without having to worry about counterfeits since the metadata on the token cannot be changed by users.

Need for Precaution
However, all good things come with certain challenges. And in the case of NFTs, the issue of copyright is one. As the market for NFT grows, cases of digital art being copied on the NFT platforms have surfaced, calling for a strict recourse on digital theft and modification.

Though some platforms such as OpenSea and Nifty Gateway provide users with the option to report or appeal copyright infringement in their terms of service, the absence of any official trademark makes it harder for the creators to lay a claim in the world of the internet.

The issue of cyber-security also looms, as several users have reported about accounts being hacked and NFTs worth thousands of dollars getting stolen.

Crypto could be a threat to brokers, exchanges

OTHER BIG STORIES FROM THE CRYPTO WORLD



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Why you should pay attention, BFSI News, ET BFSI

Personal Finance

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Football superstar Lionel Messi recently launched his own collection of NFTs, or non-fungible tokens, that were created using his image by an Australia-based digital designer and are expected to make billions of dollars.

In India too, Bollywood superstar Amitabh Bachchan has launched his own NFTs, which are themed around his life. Before him, Sunny Leone became the first Bollywood actress to launch her own NFT collection of unique, hand-animated art.

Messi, Big B and Leone are not alone in this business. The popularity of NFT, a type of digital asset, has exploded beyond anyone’s imagination in recent years. NFT artworks have been selling for millions and attracting the attention of big brands, celebrities and icons.

What are NFTs?
In simple terms, NFTs are digital assets that exist on a public blockchain that serves as a record of ownership. While anyone can view the items, only the buyer of an NFT has the ‘official’ status of being its owner.

Unlike digital items that can be endlessly modified and reproduced, each NFT has its own digital footprint, which makes it one of a kind. All kinds of digital objects such as images, text, videos, music and even tweets can be converted into NFTs and that process is called “minting” (Yes, like in the cryptocurrency world).
NFTs: Why you should pay attention
Growing Popularity
The fact that NFTs can give buyers a sense of “unique ownership” and “Digital Immortality” has unlocked exciting opportunities for digital commerce and engagement.

Despite being in existence since 2017, the popularity of NFTs surged only in 2021. According to DappRadar, a Lithuania-based data tracking company, trading volumes of top NFT collections such as Axie Infinity, CryptoPunks and ArtBlocks increased 300% and generated more than $1.5 billion in sales.

Another report published in Forbes pegged NFT sales at over $1.2 billion – almost half of the $2.5 billion cumulative sales volume in the first two quarters of 2021 – while the dapp (decentralised applications) industry as a whole registered more than 1.4 million daily unique users, a 23.72% increase from the previous month.

Future Possibilities
In the crypto world, the idea of integrating NFTs and e-commerce platforms has been making headlines for a while now. Experts believe due to its digital nature and long shelf life, NFTs can play a significant role in the world of e-commerce and market with high-end goods.

“As mixed reality technologies mature, regular people are going to spend more and more of their time — and therefore money — in virtual environments,” a research associate affiliated with a French international banking group told a Business channel.

Since NFTs are digital in nature, they do not involve the hassles or cost of shipping products (even though there is a certain minting and hosting fee that needs to be paid to the marketplace showcasing the NFTs as collections).

Big opportunities await luxury brands that can potentially offer exclusive and limited NFTs without having to worry about counterfeits since the metadata on the token cannot be changed by users.

Need for Precaution
However, all good things come with certain challenges. And in the case of NFTs, the issue of copyright is one. As the market for NFT grows, cases of digital art being copied on the NFT platforms have surfaced, calling for a strict recourse on digital theft and modification.

Though some platforms such as OpenSea and Nifty Gateway provide users with the option to report or appeal copyright infringement in their terms of service, the absence of any official trademark makes it harder for the creators to lay a claim in the world of the internet.

The issue of cyber-security also looms, as several users have reported about accounts being hacked and NFTs worth thousands of dollars getting stolen.

Crypto could be a threat to brokers, exchanges

OTHER BIG STORIES FROM THE CRYPTO WORLD



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CBDT, BFSI News, ET BFSI

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In order to make disinvestment deals of ailing state-owned firms more attractive for strategic investors, the government on Friday allowed erstwhile public sector companies to carry forward losses to be set off against future profits. The Central Board of Direct Taxes (CBDT) in a clarification said that Section 79 of the Income Tax Act shall not apply to an erstwhile public sector company which has become so as a result of strategic disinvestment.

“Accordingly, loss incurred in any previous year prior to, and including, the previous year of strategic disinvestment shall be carried forward and set off by the erstwhile public sector company,” the CBDT under the Finance Ministry said in a statement

The relaxation, it added, will cease to apply from the previous year in which the company, that was the ultimate holding company of such erstwhile public sector company immediately after completion of the strategic disinvestment, ceases to hold 51 per cent of the voting power of the erstwhile company.

Section 79 of the Income Tax Act deals with carry forward and set off of losses in case of companies.

“In order to facilitate the strategic disinvestment, it has been decided that Section 79 of the Income-tax Act, 1961, shall not apply to an erstwhile public sector company which has become so as a result of strategic disinvestment,” it said.

Necessary legislative amendments for the above decision shall be proposed in due course of time, the statement said.

Commenting on clarification, Nangia Andersen LLP Head (Government and Public Sector Advisory) Suraj Nangia said “the Government has allowed that even after change in shareholding of such ailing PSUs due to transfer of shares in such PSUs by Government to strategic investors, past losses of such PSUs will be allowed to be carried forward for set off against future profits.”

This will make disinvestment deals of ailing PSUs more attractive for strategic investors, he said.

Under normal tax provisions, he said, without this relaxation, past losses of a company are not allowed to be set off, if there is change in majority shareholding of a company (i.e. 51 per cent).

“It may be noted that such relaxation will be available, only till the strategic investor retains at least 51 per cent in the PSU after takeover. In case the strategic investor’s shareholding falls below 51 per cent, such relaxation will be withdrawn,” he added.

The ambitious divestment pipeline also includes loss making national carrier Air India for which the deadline for submission of financial bids is September 15.

The government will be selling budget airline Air India Express and Air India’s 50 per cent stake in Air India SATS Airport Services Private Limited (AISATS) besides offloading its entire stake in loss-making Air India.

The deadline for submission of Expressions of Interest (EoI) or preliminary bids was extended five times earlier before closing it in December last year.

Finance Act, 2021 has amended section 72A of the Income-tax Act, 1961 that deals with amalgamation of a public sector company (PSU) which ceases to be a PSU (erstwhile public sector company), as part of strategic disinvestment, with one or more company or companies and carry forward of losses in case of change in shareholding following sale by the government.

The Centre budgeted Rs 1.75 lakh crore from stake sale in public sector companies and financial institutions, including 2 PSU banks and one insurance company, in the current fiscal year.

As part of the privatisation strategy, the government aims to complete the strategic sale of Bharat Petroleum Corporation Ltd (BPCL), Shipping Corp, Container Corporation, Neelachal Ispat Nigam Ltd, Pawan Hans, Air India, among others, by March 2022.

So far this financial year, Rs 8,368 crore has been mopped up through minority stake sales in PSUs and the sale of SUUTI (Specified Undertaking of the Unit Trust of India) stake in Axis Bank.



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Stablecoins face crackdown as US discusses risk council review, BFSI News, ET BFSI

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U.S. officials are discussing launching a formal review into whether Tether and other stablecoins threaten financial stability, scrutiny that could lead to dramatically ramped-up oversight for a fast-growing corner of the crypto market.

After weeks of deliberations, the Treasury Department and other federal agencies are nearing a decision on whether to launch an examination by the Financial Stability Oversight Council, said three people familiar with the matter who asked not to be named in commenting on closed-door discussions. FSOC has the power to deem companies or activities a systemic threat to the financial system — a label that typically sets off tough rules and aggressive monitoring by regulators.

Such a designation would likely be a gamechanger for stablecoins, which are considered crucial to the crypto market because traders widely use them to buy Bitcoin and other virtual currencies.

Stablecoins have thrived in the unregulated shadows, with tokens in circulation now worth more than $120 billion, according to CoinMarketCap.com. And they are increasingly being used for transactions that resemble traditional financial products — like bank savings accounts — without offering anywhere near the same level of consumer protections.

A hallmark of stablecoins is that they are pegged to fiat currencies, meaning they are supposed to be immune to the wild price swings that have plagued Bitcoin. Tether and other firms achieve that by backing their tokens with assets like U.S. dollars and corporate debt.

The President’s Working Group on Financial Markets, which is led by Treasury Secretary Janet Yellen, has been particularly focused on Tether’s claims that it holds massive amounts of commercial paper — debt issued by companies to meet their short-term funding needs. In a private meeting U.S. officials held in July, they likened the situation to an unregulated money-market mutual fund that could be susceptible to chaotic investor runs if cryptocurrencies plunge.

The President’s Working Group plans to issue stablecoin recommendations by December, and a consensus is building among regulators involved that an FSOC review is warranted, the people said. The groups overlap, as Yellen, Federal Reserve Chairman Jerome Powell and Securities and Exchange Commission Chair Gary Gensler are members of both the PWG and oversight council.

A Treasury spokesman declined to comment.

The FSOC process includes a lengthy study and an assessment of which federal agencies should respond and how. In the end, the council could direct those agencies to intervene in the market and reduce the dangers posed by stablecoin transactions.

While Tether is the most popular stablecoin, there are multiple rivals, including Coinbase Global Inc.’s USDC token and a dollar-linked offering from Binance Holdings Ltd.

Scrutiny has been ratcheting up as stablecoins proliferate. Coinbase made headlines this week by disclosing the SEC had threatened to sue if the crypto exchange launched a product that would allow customers to earn 4% yields for lending out their USDCs to other traders. The SEC believes the Coinbase proposal is an investment contract that should be registered with the agency, a view the company aggressively contested in a blog post and a series of tweets.

Watchdogs have also privately expressed worries about Diem, a stablecoin being developed by an association that includes Facebook Inc. A top concern is that the token’s market impact could be massive because of its potential for widespread adoption — Facebook’s social media network has almost 3 billion active users.

Treasury held meetings this week with industry representatives to ask them about the potential dangers associated with stablecoins. As it and other agencies consider taking action, they’re facing intense pressure from Capitol Hill.

“I urge FSOC to act with urgency and use its statutory authority to address cryptocurrencies’ risks,” Senator Elizabeth Warren wrote in a July 26 letter to Yellen that flagged the stablecoin market’s interconnectedness and its susceptibility to investor runs. “The longer that the United States waits to adapt the proper regulatory regime for these assets, the more likely they will become so intertwined in our financial system that there could be potentially serious consequences.”

Stablecoins already face another threat from the U.S. government, as the Fed is discussing whether to launch its own digital currency. Powell told lawmakers in July that a central bank token would make stablecoins obsolete.

“That’s one of the stronger arguments in its favor,” he said.



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Top gold loan rates and comparison, BFSI News, ET BFSI

Banking & Finance

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To take care of a financial emergency, an individual has various options. These include taking a personal loan or redeeming their investments in financial instruments like the provident fund, mutual funds etc.

When it comes to borrowing from a financial institution, other than availing a personal loan, one can also opt for a gold loan. If you are planning on taking a gold loan (or a loan against gold), here is what you need to know.

What is a gold loan?
A gold loan is a loan against gold. It is a secured loan where gold articles such as gold jewellery, ornaments etc. are taken as collateral by the lending bank/NBFC. The loan is given to the borrower against this gold as collateral.

Where to avail gold loan?
Apart from banks such as SBI, ICICI Bank, HDFC Bank etc., non-banking finance companies (NBFCs) also offer gold loans to individuals. NBFCs which offer gold loans include Muthoot Finance, Manappuram Finance etc.

Minimum and maximum gold loan amount
The amount of loan that an individual can get against a gold article will vary from lender to lender. For instance, ICICI Bank offers gold loans between Rs 10,000 and Rs 1 crore. Whereas the State Bank of India (SBI) offers gold loans between Rs 20,000 and Rs 20 lakh. While Muthoot Finance offers gold loans starting from a minimum amount of Rs 1,500 with no maximum limit.

Tenure of gold loan
The tenure of the gold loan will also vary from lender to lender. For instance, HDFC Bank offers gold loans with tenures between three months and 24 months. Maximum period of repayment of an SBI gold loan is 36 months. Muthoot Finance offers different types of gold loan schemes that come with different tenures.

Interest rate on gold loan charged by bank and NBFC

Bank / NBFC Gold Loan Interest Rate Processing Fee
SBI 7.00% to 7.50% 0.50% + GST
Bank of India 7.40% Rs.125 to Rs. 300 per lakh
Canara Bank 7.35% RLLR
Bank of Maharashtra RLLR + 0.20% Rs.500/- exclusive of GST.
Uco Bank 8.50%
Indian Bank 7 % Floating
Punjab National Bank RLLR + 1.95% 0.75% of loan amount
Central Bank of India MCLR + 0.25% NIL
Punjab & Sind Bank 7.50%
Federal Bank 8.50% onwards
United Bank 1 Year MCLR (9.35%)
Dhanlaxmi Bank Starting 9.65% (Fixed)
J & K Bank One Year MCLR + Spread = 10.00% p.a
Karur Vysya Bank 9.50%
Indusind Bank 10.00% to 16% Processing Fee – 1%
Kotak Mahindra Bank 10% to 17% Upto 2%
HDFC Bank 8.85% to 17.10% 1.50% + GST
Bandhan Bank Competitive rates of interest 1% + GST
ICICI Bank 9% to 19.76% 1% of loan amount
South Indian Bank 1 Year MCLR + 1.60% to 1 Year MCLR + 2.60%
Muthoot Finance 24% to 26%
Axis Bank 14.50% 1% + GST
AU Small Finance Bank Up to 24% 1% of loan amount
Manappuram Finance Max 29%
City Union Bank 9.50%
Union Bank MCLR+0.40% to MCLR+ 2.65%
Bank of Baroda 1 year MCLR+S.P+3% 0.50% + GST
Karnataka Bank 8.49% to 8.79%

All data sourced from Economic Times Intelligence Group (ETIG)
Interest rate on gold loan sorted based on increasing order of maximum interest rate charged by bank/NBFC
Interest rate data as on September 11, 2021What are the documents required?
To avail a gold loan, the bank or NBFC will ask you to provide various documents. Documents normally required include your proof of identity such as PAN, Aadhaar etc. and proof of address like Aadhaar, passport, Voter-ID card etc, and your photograph. Any additional documents required would vary from lender to lender.

What are the charges?
For loans like home, auto and personal loans, the borrower is usually required to pay processing charges/fees to avail the loan. While taking a gold loan, apart from processing fees, an applicant may be asked to pay for valuation of gold which will be used as collateral by the lending institution. For instance, HDFC Bank charges Rs 250 as valuation fees for loan up to Rs 1.5 lakh and Rs 500 for loan over Rs 1.5 lakh.

Apart from processing fees and valuation charges, a bank can also charge documentation and foreclosure charges.
Therefore, you should check with the bank and/or NBFC for all the charges that will be levied before availing the loan.

Disclaimer: The data/information given above is subject to change, hence before taking any decision based on it, please check terms and conditions with the bank/institution concerned.

For any queries or changes, please write to us on etigdb@timesgroup.com or call us at 022 – 66353963



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Here are the interest rates of home loans linked to repo rate, BFSI News, ET BFSI

Banking & Finance

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Interest rates on home loans offered by banks are now linked to an external benchmark. This is because the Reserve Bank of India (RBI) has asked all scheduled commercial banks (except regional rural banks), local area banks and small finance banks to link interest rates on retail and MSME loans to an external benchmark rate with effect from October 1, 2019.

RBI, in its circular, has directed banks to link their retail lending interest rates to any of the following external benchmarks:

  • RBI’s repo rate
  • Government of India 3-months Treasury bill yield published by Financial Benchmarks India Pvt. Ltd. (FBIL)
  • Government of India 6-months Treasury bill yield published by FBIL
  • Any other benchmark market interest rate published by the FBIL

Most banks have chosen RBI’s repo rate as their choice of external benchmark. The lending interest rate linked to repo rate is known as Repo Rate Linked Lending Rate (RLLR). RLLR is made up of RBI’s repo rate plus spread or marginRLLR = Repo rate + Margin charged by the bank.

The Central Bank reviews the repo rate in every two months.

The margin charged by a bank will remain same for all home loan takers, however, as per the RBI circular, banks are allowed to charge a risk premium from borrowers. Risk premium charged by the bank will depend on how risky your bank perceives you to be and will therefore vary from one borrower to another.

Here are home loan interest rates offered by top banks for salaried individuals

BANK NAME RLLR Minimum Interest rate(%)** Maximum Interest rate (%)
IDFC First Bank 6.50 6.50 8.00
Kotak Mahindra Bank 6.65 6.65 7.10
Bank of Baroda 6.75 6.75 8.35
ICICI Bank 6.75 6.75 7.40
Punjab & Sind Bank 6.85 6.75 7.35
Union Bank of India 6.80 6.80 7.35
SBI Term Loan 6.65 6.80 7.15
Indian Bank 6.80 6.80 8.25
Central Bank of India 6.85 6.85 7.30
Bank of India 6.85 6.85 8.20
Axis Bank 6.90 6.90 8.40
Bank of Maharashtra 6.90 6.90 8.35
Canara Bank 6.90 6.90 8.90
IDBI Bank 6.90 6.95 8.55
Punjab National Bank 6.80 6.95 7.85
Indian Overseas Bank 6.85 7.05 7.30
UCO Bank 6.90 7.15 7.25
SBI Max Gain 6.65 7.15 7.50
Karur Vysya Bank 7.05 7.15 9.35
South Indian Bank 7.25 7.25 9.50
J & K Bank 7.20 7.30 7.60
Karnataka Bank 7.50 7.50 8.85
Federal Bank 7.65 7.65 7.75
Dhanlaxmi Bank 7.00 7.85 8.50
DCB Bank 8.16 8.16 8.16
Yes Bank 7.60 8.95 11.80

**Sorted on minimum interest rate charged by the bank after adding risk premium
*IDFC First Bank charges up to Rs 10,000 as processing fees (Additional premium is charged based on risk profile)
*Kotak Mahindra Bank charges a processing fee of max 2% + GST and any other statutory charges plus documentation charges up to Rs.10,000/-
*Bank of Baroda processing fees is 0.25% to 0.50% of loan; Min. Rs.8500/- Max. Rs.25000/-
*ICICI Bank charges processing fees in the range of 0.50% and 2% subject to a minimum of Rs 1,500
*Punjab & Sindh Bank offers a full waiver of processing and inspection charges
*Union Bank of India charges a processing fee of 0.50% of loan amount, Max. Rs 15000
*SBI charges 0.40 per cent plus GST as processing fees. Minimum Rs 10,000 and Maximum Rs 30,000 plus GST. (Exception builder-tie up projects)
*Indian Bank charges 0.230 per cent on loan amount as processing fees with a maximum amount of Rs 20,470.
*Central Bank of India charges 0.50% processing fee subject to Max Rs 20,000
*Bank of India charges 0.25% of loan; minimum Rs 1,500 and maximum Rs 20,000
*Axis Bank charges up to 1% of the loan amount subject to a minimum of Rs 10,000.
*Bank of Maharashtra charges a processing fee of 0.25% of Loan amount Max Rs.25,000/-
*Canara Bank charges 0.50%; minimum Rs 1,500 and maximum of Rs.10,000/-
*IDBI Bank charges a processing fee of Min Rs.2,500/- Max Rs.15,000/- (Plus GST)
*PNB charges 0.35 per cent as processing fees; minimum Rs 2,500 and maximum Rs 15,000 plus documentation charges 1,350/-
*Indian Overseas Bank charges 0.50% as processing fees; max Rs 25,000
*UCO Bank charges 0.5% of the loan amount, minimum Rs 1500 & maximum Rs 15,000.
*Karur Vysya Bank charges minimum Rs 2,500 and maximum Rs 7,500 plus GST as processing fees
*South Indian Bank charges 0.40 per cent of loan amount
*J&K Bank charges 0.25% plus GST Minimum Rs 5,000; maximum Rs 25,000 (NIL PC for takeover loans)
*Karnataka Bank charges 1 per cent with minimum Rs 500.
*Federal Bank charges 0.50% of the loan amount as processing fees; min Rs 10,000 and max Rs 45,000
*Dhanlaxmi Bank charges 1.25 per cent of loan amount
*DCB Bank charges up to 2% of the loan amount; minimum Rs 5,000
*Yes Bank charges 2% or Rs 10,000 whichever is higherHere are home loan interest rates offered by top banks for self-employed individuals

BANK NAME RLLR Minimum Interest rate(%)** Maximum Interest rate (%)
IDFC First Bank 6.50 6.50 8.00
Kotak Mahindra Bank 6.65 6.75 7.20
Bank of Baroda 6.75 6.75 8.35
Union Bank of India 6.80 6.85 7.40
Central Bank of India 6.85 6.85 7.30
Bank of India 6.85 6.85 8.35
ICICI Bank 6.75 6.90 7.55
SBI Term Loan 6.65 6.95 7.30
Indian Bank 6.80 6.95 8.40
Canara Bank 6.90 6.95 8.90
IDBI Bank 6.90 6.95 10.05
Punjab National Bank 6.80 6.95 7.85
Axis Bank 6.90 7.00 8.55
Indian Overseas Bank 6.85 7.05 7.30
Punjab & Sind Bank 6.85 7.10 7.90
Bank of Maharashtra 6.90 7.15 8.45
UCO Bank 6.90 7.15 7.25
Karur Vysya Bank 7.05 7.15 9.35
SBI Max Gain 6.65 7.30 7.80
J & K Bank 7.20 7.30 7.60
Karnataka Bank 7.50 7.50 8.85
South Indian Bank 7.25 7.60 10.00
Federal Bank 7.65 7.70 7.80
DCB Bank 8.16 8.16 8.16
Dhanlaxmi Bank 7.00 8.35 9.00
Yes Bank 7.60 8.95 11.80

**Sorted on minimum interest rate charged by the bank after adding risk premium
*IDFC First Bank charges up to Rs 10,000 as processing fees (Additional premium is charged based on risk profile)
*Kotak Mahindra Bank charges a processing fee of max 2% + GST and any other statutory charges plus documentation charges up to Rs.10,000/-
*Bank of Baroda processing fees is 0.25% to 0.50% of loan; Min. Rs.8500/- Max. Rs.25000/-
*ICICI Bank charges processing fees in the range of 0.50% and 2% subject to a minimum of Rs 1,500
*Punjab & Sindh Bank offers a full waiver of processing and inspection charges
*Union Bank of India charges a processing fee of 0.50% of loan amount, Max. Rs 15000
*SBI charges 0.40 per cent plus GST as processing fees. Minimum Rs 10,000 and Maximum Rs 30,000 plus GST. (Exception builder-tie up projects)
*Indian Bank charges 0.230 per cent on loan amount as processing fees with a maximum amount of Rs 20,470.
*Central Bank of India charges 0.50% processing fee subject to Max Rs 20,000
*Bank of India charges 0.25% of loan; minimum Rs 1,500 and maximum Rs 20,000
*Axis Bank charges up to 1% of the loan amount subject to a minimum of Rs 10,000.
*Bank of Maharashtra charges a processing fee of 0.25% of Loan amount Max Rs.25,000/-
*Canara Bank charges 0.50%; minimum Rs 1,500 and maximum of Rs.10,000/-
*IDBI Bank charges a processing fee of Min Rs.2,500/- Max Rs.15,000/- (Plus GST)
*PNB charges 0.35 per cent as processing fees; minimum Rs 2,500 and maximum Rs 15,000 plus documentation charges 1,350/-
*Indian Overseas Bank charges 0.50% as processing fees; max Rs 25,000
*UCO Bank charges 0.5% of the loan amount, minimum Rs 1500 & maximum Rs 15,000.
*Karur Vysya Bank charges minimum Rs 2,500 and maximum Rs 7,500 plus GST as processing fees
*South Indian Bank charges 0.40 per cent of loan amount
*J&K Bank charges 0.25% plus GST Minimum Rs 5,000; maximum Rs 25,000 (NIL PC for takeover loans)
*Karnataka Bank charges 1 per cent with minimum Rs 500.
*Federal Bank charges 0.50% of the loan amount as processing fees; min Rs 10,000 and max Rs 45,000
*Dhanlaxmi Bank charges 1.25 per cent of loan amount
*DCB Bank charges up to 2% of the loan amount; minimum Rs 5,000
*Yes Bank charges 2% or Rs 10,000 whichever is higher
All data sourced from Economic Times Intelligence Group (ETIG)
Data as on September 11, 2021

How will your EMI change in the new external benchmark linked lending rate regime?
To categorise the borrower on the basis of credit risk, some banks have internal risk assessment teams while others rely on credit scores to grade the risk of each borrower. As per RBI’s circular, if your credit score undergoes substantial changes, the bank can revise the risk premium charged on the home loan.

Also Read: 5 lesser known things about credit score that can impact your home loan interest rates

As leading interest rates are linked to an external benchmark, banks are required to reset the interest rates at least once in three months. Therefore, any change in the external benchmark rate, will mandatorily have to be passed on to the borrower within three months of the change.

Also Read: How your EMI will be reset under external benchmark lending regime

Why RBI asked banks to link lending interest rates to an external benchmark
Under the previous marginal cost of lending rate (MCLR) regime, home loan borrowers and others often complained that banks did not pass on the benefit of a lower rate whenever RBI cut the key policy rates but often raised the interest rates quickly whenever policy rates were hiked. Linking the interest rates to an external benchmark is supposed to bring in more transparency and faster transmission of changes in key policy rates.

For any queries or changes, please write to us on etigdb@timesgroup.com or call us at 022 – 66353963



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