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Banks, NBFCs see home loan delinquencies rise as pandemic hits borrowers, BFSI News, ET BFSI

Banking & Finance

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It’s not just retail, non-collateralised loans that are seeing delinquencies. Home loans that are mortgage-backed are seeing stress due to the pandemic.

Home loans of many banks have seen signs of stress with data from IMGC, a leading guarantor of such advances pointing to

an increase of nearly three times in the mortgage delinquency pool over the past 15 months.

IMGC guarantees home loans for about 20 lenders, including the State Bank of India, Housing Development Finance Corp, ICICI Bank and Axis Bank.

The number of claims paid by IMGC has gone up three times in June since March 2020, but it feels that the worst is over for the segment and the situation will stabilise in the next six months.

LIC Housing Finance

LIC Housing Finance has said there has been an increase in delinquencies, mostly due to economic activities being impacted in Q1. With improvement in economic activities and our increased and focused efforts in recovery, it was confident of controlling the same.

For LIC Housing Finance, on the asset quality, the stage-3 exposure at default worsened to 5.93%, from 4.12% a quarter ago and 2.83% a year ago.

There was a sharp deterioration in asset quality across product segments. Developer/Project GNPA deteriorated to 24.4% (down 640 bps quarter on quarter). According to brokerage estimates, in addition GS3, its Developer/Project book has at least 25% of restructured advances and ~16% in Stage 2.

Total restructured advances of LIC Housing Finance stood at Rs 5,350 crore (of which an estimated 88% were loans to corporate/developers). Against this, LICHF has made additional provisions of Rs 5,000 crore. Around Rs 1,500 crore of Covid-related provisions were booked in the First quarter

Housing finance companies

Non-bank lenders have restructured loans worth 1.6% of their overall book. Out of this while housing finance companies restructured about 1.0% of their AUM, other NBFCs restructured about 2.2%.

According to the rating agency Icra, the restructured book for non-bank lenders is expected to move up to 4.1-4.3% by March 2022 while the same for housing finance companies is estimated to go up to 2.0-2.2%.

The second wave of the Covid pandemic significantly impacted the collection efforts of non-bank lenders especially those in the business segments of vehicle finance, business loans and micro finance, who witnessed their collection efforts decline by about 20-25% in May 2021 versus March 2021. The efficiency improved by 3-5% in June 2021.

TThe loans due beyond 90 days, in March 2021 increased by only 30-40 bps over March 2020 levels, as the collections had improved steadily. Several institutions resorted to high quantum of loan write-offs in the fiscal year gone by which was estimated to be about 1.6% of the total assets under management, which is higher by about 60 basis points over the last fiscal.



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UPI Autopay for Recurring Payments; List of Banks And Apps Live On UPI AutoPay

Personal Finance

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Benefits of UPI AutoPay

For Financial Services:

  • EMI payments (loans, insurance, mutual funds) can be made via UPI AutoPay without missing due dates or setting reminders.
  • Payments made on time avoid late fees and penalties.
  • In UPI recurring mandates, each customer can choose from a variety of payment modes (monthly, quarterly, etc.) and quantities (from Rs.1/- to Rs.2000+).
  • Recurring payments made in a secure and convenient manner.
  • Transacting without using cash.
  • There will be no long lines.
  • There is no paperwork required.

For Transit:

  • UPI offers a variety of passes on a daily, weekly, and monthly basis.
  • There will be no longer fines or penalties for travelling without a ticket.
  • There’s no need to be concerned about losing tickets.
  • It’s the epitome of convenience.

For Educational Services:

  • Education packages can be customized to meet specific needs.
  • Payments that are simple and quick gaining. information from the comfort of one’s own home.

For Ecom

  • The UPI AutoPay service allows you to buy now and pay later.
  • For retailers, it’s simple to deliver to their doorstep.
  • Convenience is right outside your door (No searching for change etc)
  • Modify, revoke, and pause tools are also provided for amending orders as needed.

How does UPI AutoPay work?

How does UPI AutoPay work?

A ‘Mandate’ option will be available in any UPI-enabled application, allowing customers to establish, approve, alter, stop, or revoke an auto-debit mandate. To use the UPI Autopay feature, follow this step-by-step guide.

Authenticate your account with a UPI PIN once, and subsequent monthly payments will be automatically debited from your account.

For transactions up to Rs. 2000, create an e-mandate using a UPI-enabled bank ID or a QR scan.

Every mandate will demand a UPI PIN authentication for transactions exceeding Rs. 2000.

One-time, daily, weekly, fortnightly, monthly, bi-monthly, quarterly, half-yearly, and yearly mandates are all possible.

Live Aggregators on UPI AutoPay

Live Aggregators on UPI AutoPay

Sr. No. Live Aggregators on UPI AutoPay
1 Razorpay
2 Paytm
3 Cams Pay
4 PayG
5 Digio
6 PayU
7 Bill Desk

List of Apps Live On UPI AutoPay

Sr. No. Application
1 BHIM
2 Paytm
3 Indusind Bank App

List of Bank Live On UPI AutoPay

Sr. No. Bank Name
1 State Bank Of India
2 Paytm Payments Bank
3 HDFC BANK LTD
4 ICICI Bank
5 Bank of Baroda
6 Axis Bank Ltd.
7 Bank of India
8 INDUSIND BANK
9 IDFC FIRST Bank
10 Yes Bank Ltd
11 Federal Bank
12 IDBI Bank Limited
13 HSBC
14 Punjab and Sind Bank
15 Karur Vysya Bank
16 RBL
17 NSDL Payments Bank
18 Jio Payments Bank
19 Utkarsh Small Finance Bank
20 Saraswat Co-operative Bank
21 North East Small Finance Bank
22 Suryoday Small Finance Bank
23 Shivalik Small Finance Bank
24 Thane Janta Sahakari Bank
25 Punjab National Bank
26 Canara Bank
27 SBM



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Merchantrade Asia ties up with NPCI International, BFSI News, ET BFSI

Personal Finance

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Accept the updated privacy & cookie policy

Dear user,

ET BFSI privacy and cookie policy has been updated to align with the new data regulations in European Union. Please review and accept these changes below to continue using the website.

You can see our privacy policy & our cookie policy. We use cookies to ensure the best experience for you on our website.

If you choose to ignore this message, we’ll assume that you are happy to receive all cookies on ET BFSI.



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Doing Freelancing With A Regular Job? Here Are A Few Best Options To Save Tax?

Personal Finance

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Taxes

oi-Sunil Fernandes

By Amit Gupta

|

In the present era, especially in the wake of first and second Corona, undertaking jobs on a freelance basis has become one of the most promising patterns of working/work culture.

Here in this discussion, we shall take a dive in this issue from various perspectives and specifically from the tax perspective.

Freelancing connotes a situation wherein an individual has been temporarily hired to undertake and complete the specific assignment and instantly get paid on completion and submission of the assignment.

In such aforesaid cases of freelancing, An individual is not an employee of the company and so is not placed on its payroll. He is not entitled to get perks (like Provident Fund) as mandated by the Companies Act. An individual is not required to go to the office. He can complete the assignment at leisure (as per pre-agreed guidelines) from any place that is convenient to him.

Any income that is earned by displaying manual or intellectual skills comes within the purview of income from a profession as per prevalent income tax laws of India. And such income shall be taxable as “Profits and Gains from Business or Profession”. His gross income shall be the sum of all the receipts that he gets while carrying out his profession.

Doing Freelancing With A Regular Job? Here Are A Few Best Options To Save Tax?

To cull the information, the document taken into consideration is a bank account given the condition that an individual has received all his professional income through the banking channels.

Expenses Allowed as Deduction

As per the Income Tax Act 1961, freelancers can deduct those expenses that they have incurred to carry on the job from their income. And This could be anything that is directly related to the job of the freelancer ranging from the office furniture to expenses on visiting the clients.

Prerequisites to claim the deduction of expenses from the Freelancing Income:

  • The expense must have been incurred during the year in which tax is to be paid.
  • The expense must have been spent fully and exclusively too for the purpose of carrying on the freelance income.
  • The income must not be illegal.
  • The expense incurred must not be personal expenditure or capital expenditure of the freelancer
  • Taxes payable for a freelancer

If the total tax liability during a particular financial year amounts to Rs 10,000 or more, then the taxpayer is required to pay the taxes every quarter which is called advance tax.

Modus operandi of calculating the advance tax

  • Add up all your total receipts and then determine your total income.
  • Subtract those expenses that are directly related to your work.
  • Then Add the income from other sources, for instance, house property or a savings account.
  • Thereafter, Find out the tax slab that you belong to and then calculate your tax that is due.
  • Don’t forget to deduct the TDS
  • If the tax that is due exceeds Rs.10,000, then you are necessarily required to pay the advance tax by the due dates.

Penalties for non-payment of advance tax

If the advance tax is not paid by the free-lancer then interest as per section 234B and section 234C is applicable. So to remove paying the interest penalty, follow the below-mentioned guidelines:
● Pay advance Tax only when your tax liability for a year is Rs 10,000 or more
● The Advance tax payments that have been made until 31st March of the year should be 100% of the individual’s total tax payable.

The Applicability of GST to freelancers

Before July 2017, VAT & Service Tax were applicable on freelancers. Now the above-mentioned taxes have been replaced by the GST.

1) Tax if you sell goods

The GST rate applicable shall be decided by nature of items.For Instance, if you make and sell confectionery items such as cake, the GST levied shall be 18%.

2) Tax If you provide Service

Again, it depends on the nature of the services. In most cases, 18% GST is applicable on most of the services. And keep in mind to charge GST from your clients.

(Amit Gupta, the author of the article is the Managing Director of SAG Infotech)

Story first published: Wednesday, August 4, 2021, 13:29 [IST]



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India’s first Bitcoin rewards company, GoSats raises seed funding of $700k, BFSI News, ET BFSI

Personal Finance

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GoSats; a Bitcoin Rewards Company, has raised $700k seed funding from a group of investors. The platform focuses on mainstreaming bitcoin adoption to help average consumers become passive earners of bitcoin.

The seed funding round featured some prominent names like Alphabit Fund, Fulgur Ventures, Stacks Accelerator, and SBX Capital. The funding round was also supported by a few angel investors including Ajeet Khurana, former CEO of Zebpay, Sathvik Vishwanath, CEO of Unocoin, Mohit Madan, Co-Founder of Oropocket, Sharan Nair, CBO of Coinswitch Kuber, and a few others.

Trevor Owens, the Managing Partner at Stacks Accelerator said, “GoSats is the gateway for a billion people in India to own Bitcoin. In a time when inflation is destroying wealth around the world, Bitcoin protects the wealth of people and allows them greater freedom and ownership over their future. That’s a great thing, and I’m honored to be an investor in a company that can benefit so many people.”

CEO of GoSats, Roshan, also the former Chief Scientist of Unocoin, shares his views about the vision and growth of the company saying, “It’s fascinating that a significant number of our user-base never held bitcoin before they signed up with GoSats and we are happy to facilitate their journey into the world of crypto-assets in a risk-free manner. Through this funding, our focus is to scale the adoption of bitcoin in India and to build a bitcoin rewards solution for brands.”



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balancing growth and inflation, BFSI News, ET BFSI

Banking & Finance

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2021 is witnessing a K-shaped recovery, with most developed countries seeing higher growth rates while most developing countries are decelerating post the initial growth.

This has resulted in a varied response by the central banks. Few markets like Turkey and Russia have increased their interest rate to control inflationary pressures. At the same time, others like European central banks (ECB) and Chinese central banks maintain an accommodative stance.

The European central bank (ECB) has maintained an accommodative stance with a negative interest rate with the main deposit rate at -0.5%. The bank has increased the inflation target to 2%, indicating it is looking at a dovish stance even in 2022.

In contrast, the federal reserve is looking at pulling out liquidity in 2022 as the fiscal stimulus creates inflationary pressure. The indication of this can be seen within the latest Federal Open Market Committee (FOMC) meeting minutes.

In Asia, the Chinese central bank, in its latest policy, has undertaken liquidity boosting measures which is expected to release 1 trillion Yuan into the Economy. This action points to the concern the Chinese central bank has regarding the impact of the current geopolitical situation on its Economy. Japan has also kept an accommodative stance, with COVID-19 being a key concern given the vaccination rate.

We believe this variance in policy across countries is driven primarily by three key factors:
1. Success in fighting the pandemic through vaccinations
2. Ability to provide a sizeable fiscal stimulus
3. Impact of COVID-19 on critical drivers of economic growth

Countries that have been relatively successful in vaccinating the majority of their population are returning to pre-pandemic levels of economic activity. They see their employment rates rise while the supply chains are normalized. Central banks here are targeting the normalization of rates by the end of this year.

Also, governments that have provided massive fiscal stimulus to bolster initial monetary support have been able to moderate the impact of covid on growth. This has provided the central bank with headroom to increase rates to control inflation.

Finally, export-driven economies that have been able to take advantage of the record commodity prices are experiencing higher growth than consumption-driven economies. Central banks here are prioritizing currency stability.

In the case of India, while we have been able to recover from the devastating second wave, the vaccination coverage required to lift all restrictions is not expected to be reached before the end of 2021. Also, there is limited scope to provide a large fiscal stimulus given India’s fiscal deficit. With consumption which is a crucial driver of economic growth impacted due to second wave and resultant local lockdown, India’s growth is expected to be at 9.5% compared to the previous
estimate of 12.5%.

Given the current scenario, the Reserve Bank of India (RBI) will have to prioritize growth. Most central banks globally have stuck to their dovish stand, with only countries seeing high inflationary pressure raising rates. Globally, central banks, especially in developed countries, are expected to start taking a hawkish stance only by the beginning of 2022.

RBI should also maintain an accommodative stance with a gradual pull back of liquidity measures once sustained economic growth is observed. We expect the government of India to continue its reform push and look at providing additional fiscal stimulus. These measures are expected to accelerate growth once we can lift covid restrictions across sectors and states.

Synchronizing the monetary tightening with economic growth is critical. RBI, just like its global counterparts, has been able to walk the tightrope of balancing growth and inflation. The key going forward will be to identify the right time to rebalance the pole, focusing on shifting from growth to inflation.

The blog has been authored by Nilaya Varma, CEO, Primus Partners and Shravan Shetty, MD, Primus Partners

DISCLAIMER: The views expressed are solely of the author and ETBFSI.com does not necessarily subscribe to it. ETBFSI.com shall not be responsible for any damage caused to any person/organisation directly or indirectly.



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5 Best Dividend Paying Stocks In August 2021

Personal Finance

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5 Best Dividend Paying Stocks In August 2021

Company Dividend EX Date
Apar Industries Rs 9.50 05/08/2021
Avanti Feeds Rs 6.25 05/08/2021
Sonata software Rs 10.00 06/08/2021
MCX Rs 27.60 26/08/2021
India Mortor parts Rs 10.00 30/08/2021

Avanti Feeds

Avanti Feeds

Avanti Feeds is a major supplier of high-quality shrimp feed, providing the greatest technical support to farmers and meeting the quality requirements of worldwide shrimp consumers.

Only 6.3 percent of trading sessions in the last 11 years had intraday drops of more than 5%. The current share price is 643. It currently has a market capitalization of Rs 8798.06 crore. The company reported gross sales of Rs. 32425.08 crores and total income of Rs. 33076.09 crores in the most recent quarter. The stock returned 25.48 percent over three years, compared to 47.81 percent for the Nifty Midcap 100.

Since May 30, 2001, Avanti Feeds Ltd. has declared 21 dividends.

Avanti Feeds Ltd. has declared an equity dividend of Rs 0.10 per share in the last 12 months.

This translates to a dividend yield of 0.02 percent at the current share price of Rs 642.40.

Apar Industries

Apar Industries

Apar Industries Limited, founded in 1958 by Late Shri. Dharmsinh D. Desai, is one of India’s most well-known enterprises in the sectors of electrical and metallurgical engineering. The current share price is 692.2. It currently has a market capitalization of Rs 2674.79 crore. The company reported gross sales of Rs. 59608.2 crores and total income of Rs. 59978.6 crores in the most recent quarter.

Since September 3, 2001, Apar Industries Ltd. has declared 29 dividends. Apar Inds has a PE ratio of 13.17, which is low and inexpensive in comparison. The current year’s dividend yield for Apar Inds is 1.38 percent.

The stock gave a 3-year return of 9.69% as compared to Nifty Smallcap 100 which gave a return of 40.04%.

Sonata software

Sonata software

Sonata Software Limited is a global IT services firm specialising in corporate intelligence and analytics, application development management, mobile, cloud, social media, testing, enterprise services, and infrastructure management.

The current share price is 801.7. It currently has a market capitalization of Rs 8384.88 crore. The company reported gross sales of Rs. 7814.1 crores and total income of Rs. 8267.6 crores in the most recent quarter. Stock returned 137.71 percent over three years, compared to 47.81 percent for the Nifty Midcap 100.

Since November 27, 2000, Sonata Software Ltd. has issued 44 dividends.

Sonata Software Ltd. has declared an equity dividend of Rs 4.00 per share in the last 12 months.

This equates to a dividend yield of 0.5 percent at the current share price of Rs 802.90.

MCX

MCX

Only 1.94 percent of trading sessions in the last nine years had intraday drops of more than 5%. The stock returned 77.82 percent over three years, compared to 47.81 percent for the Nifty Midcap 100. Its share price presently is 1562.85. It currently has a market capitalization of Rs 7985.58 crore. The company reported gross sales of Rs. 3704.4 crores and total income of Rs. 4817.7 crores in the most recent quarter.

Since April 26, 2012, the Multi Commodity Exchange of India Ltd. has issued 13 dividends.

Multi Commodity Exchange of India Ltd. has given an equity dividend of Rs 30.00 per share in the last 12 months.

This equates to a dividend yield of 1.92 percent at the current share price of Rs 1562.00.

India Mortor parts

India Mortor parts

The TVS Group company India Motor Parts & Accessories Limited (IMPAL) was founded on July 12, 1954. Through its 70+ branch network, which represents over 50 manufacturers, the company distributes vehicle spare parts and accessories.

Stock returned 31.35 percent over three years, compared to 40.04 percent for the Nifty Smallcap 100. Its share price presently is $823.35. It currently has a market capitalization of Rs 1027.54 crore. The company reported gross sales of Rs. 5185.8 crores and total income of Rs. 5449.69 crores in the most recent quarter. Since July 25, 2006, India Motor Parts & Accessories Ltd. has issued 23 dividends.

Disclaimer

Disclaimer

Investing in stocks is risky and investors should do their own research. The author, the brokerage firms or Greynium Information Technologies are not responsible for any losses incurred due to a decision based on the above article. Investors should hence exercise due caution as are at record peaks. Please consult a professional advisor.



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Bond market witnessed 60% decline in issuances: CARE Ratings

Banking & Finance

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The bond market witnessed a sharp 60 per cent decline in issuances in the first quarter (Q1) of FY22, with total issuances being at ₹87,885 crore as against ₹2,21,668 crore during the same period last year, according to CARE Ratings.

In 2020, the Reserve Bank of India (RBI) had announced a series of Long-Term Repo Operations (LTRO) and Targeted LTRO operations which helped the corporate bond market.

“This year, while there have been announcements made for special LTROs for small finance banks the response has been limited.” the agency said in a statement.

CARE Ratings observed that bank credit growth has been in the negative zone with de-growth of 1 per cent on top of -1.2 per cent last year.

On a sector-wise basis for the first quarter of the year, there was a fall in growth in credit by 1.7 per cent for industry and 1.1 per cent for services.

Growth in outstanding Commercial Papers was lower at 3.2 per cent this quarter against 13.6 per cent in 2020.

Meanwhile, CARE Ratings reported a 10 per cent increase in standalone net profit at ₹11 crore in the first quarter ended June 30, against ₹10 crore in the year ago quarter.

Standalone total income increased by 16.31 per cent from ₹42.49 crore in Q1 FY21 to ₹49.42 crore in Q1 FY22. Total expenses rose by 21.07 per cent from ₹30.09 crore to ₹36.43 crore.

“The first quarter of the year started with lockdowns being imposed by several states sequentially over the first two months which restricted consumption activity. This has been reflected in the lower PMI indices for manufacturing and services this quarter.”

“Therefore, the overall environment in the credit and debt markets was subdued amid lockdown conditions which affected real sector activity. All this affected investment activity in the economy which had a bearing on the credit rating industry,” the agency said in a statement.

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Mahindra Finance: Macro sentiments turning positive in July

Banking & Finance

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Mahindra and Mahindra Financial Services said it has witnessed an improvement in macro sentiments in July with normalcy returning to the economy as the second wave of the Covid-19 pandemic subsided.

It also expects a significant reduction in a number of NPA contracts in August and September with improved mobility and customer cash flows.

“The NPA contract counts are showing stability and a declining trend,” the NBFC said in a stock exchange filing on Wednesday.

The disbursement during the month at about ₹2,400 crore, more than doubled over a smaller base in July 2020, it further said.

Mahindra Finance also reported an improvement in collection efficiency to about 95 per cent, up from nearly 90 per cent in June 2021, it further said.

With the second wave of the Covid-19 pandemic impacting the semi-urban and rural markets, Mahindra Finance had reported a consolidated net loss of ₹1,573.4 crore in the first quarter of the fiscal.

The gross NPAs were higher at 15.5 per cent as on June 30, 2021 versus 9 per cent as of March 31, 2021.

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BharatPe raises $370 million in series E

Banking & Finance

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BharatPe has raised $370 million funds in Series E equity round, led by Tiger Global and participation from new investors Dragoneer Investment Group and Steadfast Capital.

“Five out of the seven existing institutional investors participated in the round — namely Coatue Management, Insight Partners, Sequoia Growth, Ribbit Capital and Amplo,” it said in a statement on Wednesday.

The primary component of the round is $350 million, with secondary component of $20 million. All employees holding vested ESOPs have been given full liquidity in the secondary.

The post money valuation is at $2.85 billion.

BharatPe to spread PoS business to 80 cities

“BharatPe is now amongst the Top 5 most valued Fintech start-ups in India and has one of the strongest cap tables for any start-up in India,” it further said.

New roles

Ashneer Grover, Co-Founder and CEO, BharatPe, will be elevated to Co-Founder and Managing Director and will lead strategy, product, technology, capital (IPO, equity and debt) and drive the overall people agenda for the company.

BharatPe acquires PAYBACK India

Suhail Sameer, Group President, BharatPe, has been appointed as the CEO.

“We now have $0.5B cash on books and are extremely well capitalised to deliver on our mandate to build India’s first truly Digital Bank,” Grover said on the fund raise.

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