Jim Rogers, BFSI News, ET BFSI

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NEW DELHI: Investment guru Jim Rogers says central banks globally would come to the market rescue if things go downhill from here on.

Rogers said when things start shaking for a while, central bankers panic and they would do anything they can to save the bubble, the bull market and prosperity.

“If something causes the markets to go down, whether there is a new virus or whatever, central bankers would get scared and they would do something to save us all,” Rogers said while answering a question.

In an interview with ET NOW, Rogers said stocks like Amazon and Google are wildly expensive in the US market. He said stocks such as Samsung and certain Japanese stocks go up every day and could be in a bubble, but not everything.

“I am not selling yet because I can see there are a lot of stocks that have still not skyrocketed. When everything skyrockets, then you know we are very close to the top and then maybe I should get out,” Rogers said.

Rogers said when things get overpriced, inexperienced people enter the market, leading to a bubble.

Lastly, he said the best trade for next year could be agriculture.

“Sugar is still down 70 per from its all time high, that is not a bubble. When anything is down 70 per cent from its all time high, that is certainly not overpriced. Now maybe my timing is wrong, but I still prefer agriculture to nearly anything.,” he said.



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“BUY” This Large Cap Maharatna Stock With A Target Price of INR 200: Motilal Oswal

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Motilal Oswal’s take on Coal India Ltd

According to the brokerage, the company’s “dispatch guidance for FY22 has been increased to 660-670mt compared to its previous guidance of ~640mt. This is in light of a recovery in demand, especially from the Power sector, driven by higher international coal prices, leading to higher demand from COAL. With a recovery in demand from the Power sector, supplies to non-regulated sectors have been squeezed. The same has now begun to recover as both production and dispatches have improved post-monsoon. Our FY22 e-auction ASP at INR1650 is conservative, considering 2Q e-auction ASP of INR1,594/t (a 15.3% premium over FSA prices), while the current premium over FSA is ~50%. We see scope for an upward revision to our FY22 estimate, if current e-auction premiums sustain, provided volumes pick up.”

Motilal Oswal in its research report has commented that “COAL last raised prices in FY18. With wage negotiations underway, we expect COAL to immediately announce a price hike, which should cover the increased wage bill and leave room for a margin improvement. Receivables have improved significantly to INR120b from INR180b at the end of FY21, thus improving its liquidity position. COAL now carries a cash balance of ~INR300b. The stock is attractively available at 3.4x/3x FY22E/FY23E EV/EBITDA. While demand is likely to improve post-monsoon, the second half of the fiscal is generally stronger compared to the first half for COAL. The strong dividend yield of ~11% supports the downside.”

Key takeaways from the management conference call according to Motilal Oswal

Key takeaways from the management conference call according to Motilal Oswal

  • CAPEX for FY22 is pegged ~INR170b, of which COAL has so far spent INR70b. It is still sitting on a liquidity of ~INR300b.
  • The company has fixed 7th Dec’21 as the record date for declaring dividends.
  • COAL is likely to sell about 95mt in the e-auction (similar to FY21), provided demand from the Power sector is not as overwhelming as it was in Sep-Oct’21. Sales to the Power sector is at a 20% discount to the non-Power sector, so any significant uptick to the Power sector at the cost of sales to the non-Power sector dampens COAL’s profitability
  • The company is still working on a plan for achieving a production capacity of 1b tonne. While it had planned to previously reach the target by FY23-end, the revised target now stands at FY24-end. This plan could be further delayed as first-mile connectivity is the most challenging part of any mine’s evacuation plan.
  • India imports about 70mt of thermal coal of a grade that can be replaced by COAL. This is equivalent to about 100mt for COAL. The management highlighted that it has been able to supply about 60-60mt.

Buy Coal India Ltd. with a target price of Rs. 200

Buy Coal India Ltd. with a target price of Rs. 200

According to the brokerage’s call “We value the stock at 4x FY23E EV/EBITDA with a TP of INR200. We maintain our Buy rating, with a revised TP of INR200/share (from INR185 earlier). A surge in coal demand from the Power sector, which could squeeze supplies to non-regulated sectors through e-auctions, remains a key risk as it could hurt profitability.”

Disclaimer

Disclaimer

The stock has been picked from the brokerage report of Motilal Oswal Financial Services Limited. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.



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‘The insurance sector and governments need to coordinate to hedge natural disaster risks’

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A public-private solution in the form of a National Disaster Pool, for hedging natural disaster risks, in close coordination with the insurance sector might offer many benefits over government-induced crisis loans and grants, according to Soumya Kanti Ghosh, Group Chief Economic Adviser, State Bank of India.

“If we consider 2020 floods in India, the total economic loss was of $7.5 billion (₹52,500 crore) but insurance available was only to the magnitude of 11%. If the government had insured it, then the premium for the sum assurance of ₹60,000 crore would have been only in the range of ₹13,000 to ₹15,000 crore,” Ghosh said in the latest edition of Ecowrap.

India recorded 756 instances of natural disasters (landslide, storm, earthquake, flood, drought, etc.) since 1900 with 402 events occurring during 1900-2000 and 354 during 2001-2021, indicating the preponderance of tail events off late. Since 2001, a total of 100 crore people have been impacted and nearly 83,000 people have lost lives due to these disasters. If the losses are adjusted with current prices, the losses comes out to a staggering ₹13 lakh crore i.e. 6% of India’s GDP. Also, there is huge gap in reporting of losses (loss data of only 193 events are available for India) and there are problems in existing estimation methodologies too.

Protection gap

Recently, the intensity and frequency of natural calamities, especially cyclones, have increased manifold in India. “In India, only around 8% of the total losses are covered, so, there is around 92% protection gap during the period 1991 to 2021. So, early intervention is needed to close the protection gap, which is in all lines (life & non-life) of insurance,” the report said.

Also read: SBI Ecowrap proposes 5 key agricultural reforms

Going by the 92% protection gap in India, an average Indian is only insured of roughly 8% of what may be required to protect a family from a financial shock following the death of the breadwinner. This means having savings and insurance of just ₹8 for every ₹100 needed for protection. Lack of awareness of what is an adequate life insurance cover for an individual increases the mortality protection gap.

“The insurance sector and governments need to actively engage and discuss how best to address the potential contingent liabilities from pandemic risk. This would also imply relooking at credit underwriting standards by incorporating outlier observations often ignored by modelling data. Meanwhile, we notice with elation that the level of insurance has indeed jumped post-pandemic indicating that the understanding of obtaining insurance cover is now increasing across the typical Indian households and we believe this percolates at the government level too,” Ghosh added.

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Reserve Bank of India – Press Releases

Press Releases

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(Amount in ₹ crore, Rate in Per cent)
  Volume
(One Leg)		 Weighted
Average Rate 		Range
A. Overnight Segment (I+II+III+IV) 5,33,643.07 3.27 1.00-5.20
     I. Call Money 6,898.92 3.21 2.00-3.50
     II. Triparty Repo 3,94,694.05 3.25 3.11-3.34
     III. Market Repo 1,30,965.10 3.31 1.00-3.45
     IV. Repo in Corporate Bond 1,085.00 3.59 3.45-5.20
B. Term Segment      
     I. Notice Money** 463.15 3.29 2.75-3.45
     II. Term Money@@ 229.00 – 3.20-4.00
     III. Triparty Repo 2,800.00 3.31 3.30-3.33
     IV. Market Repo 100.00 2.80 2.80-2.80
     V. Repo in Corporate Bond 70.00 5.60 5.00-6.20
  Auction Date Tenor (Days) Maturity Date Amount Current Rate /
Cut off Rate
C. Liquidity Adjustment Facility (LAF) & Marginal Standing Facility (MSF)
I. Today’s Operations
1. Fixed Rate          
     (i) Repo          
    (ii) Reverse Repo Thu, 25/11/2021 1 Fri, 26/11/2021 1,91,837.00 3.35
    (iii) Special Reverse Repo~          
    (iv) Special Reverse Repoψ          
2. Variable Rate&          
  (I) Main Operation          
     (a) Reverse Repo          
  (II) Fine Tuning Operations          
     (a) Repo          
     (b) Reverse Repo          
3. MSF Thu, 25/11/2021 1 Fri, 26/11/2021 0.00 4.25
4. Special Long-Term Repo Operations (SLTRO) for Small Finance Banks (SFBs)£          
5. Net liquidity injected from today’s operations
[injection (+)/absorption (-)]*		       -1,91,837.00  
II. Outstanding Operations
1. Fixed Rate          
    (i) Repo          
    (ii) Reverse Repo          
    (iii) Special Reverse Repo~          
    (iv) Special Reverse Repoψ          
2. Variable Rate&          
  (I) Main Operation          
     (a) Reverse Repo Thu, 18/11/2021 15 Fri, 03/12/2021 4,45,742.00 3.99
  (II) Fine Tuning Operations          
     (a) Repo          
     (b) Reverse Repo Tue, 23/11/2021 7 Tue, 30/11/2021 1,48,073.00 3.99
  Tue, 02/11/2021 28 Tue, 30/11/2021 50,007.00 3.97
3. MSF          
4. Long-Term Repo Operations# Mon, 17/02/2020 1095 Thu, 16/02/2023 499.00 5.15
  Mon, 02/03/2020 1094 Wed, 01/03/2023 253.00 5.15
  Mon, 09/03/2020 1093 Tue, 07/03/2023 484.00 5.15
  Wed, 18/03/2020 1094 Fri, 17/03/2023 294.00 5.15
5. Targeted Long Term Repo Operations^ Fri, 27/03/2020 1092 Fri, 24/03/2023 12,236.00 4.40
  Fri, 03/04/2020 1095 Mon, 03/04/2023 16,925.00 4.40
  Thu, 09/04/2020 1093 Fri, 07/04/2023 18,042.00 4.40
  Fri, 17/04/2020 1091 Thu, 13/04/2023 20,399.00 4.40
6. Targeted Long Term Repo Operations 2.0^ Thu, 23/04/2020 1093 Fri, 21/04/2023 7,950.00 4.40
7. On Tap Targeted Long Term Repo Operations€ Mon, 22/03/2021 1095 Thu, 21/03/2024 5,000.00 4.00
  Mon, 14/06/2021 1096 Fri, 14/06/2024 320.00 4.00
  Mon, 30/08/2021 1095 Thu, 29/08/2024 50.00 4.00
  Mon, 13/09/2021 1095 Thu, 12/09/2024 200.00 4.00
  Mon, 27/09/2021 1095 Thu, 26/09/2024 600.00 4.00
  Mon, 04/10/2021 1095 Thu, 03/10/2024 350.00 4.00
  Mon, 15/11/2021 1095 Thu, 14/11/2024 250.00 4.00
8. Special Long-Term Repo Operations (SLTRO) for Small Finance Banks (SFBs)£ Mon, 17/05/2021 1095 Thu, 16/05/2024 400.00 4.00
Tue, 15/06/2021 1095 Fri, 14/06/2024 490.00 4.00
Thu, 15/07/2021 1093 Fri, 12/07/2024 750.00 4.00
Tue, 17/08/2021 1095 Fri, 16/08/2024 250.00 4.00
Wed, 15/09/2021 1094 Fri, 13/09/2024 150.00 4.00
Mon, 15/11/2021 1095 Thu, 14/11/2024 105.00 4.00
Mon, 22/11/2021 1095 Thu, 21/11/2024 100.00 4.00
D. Standing Liquidity Facility (SLF) Availed from RBI$       20,001.80  
E. Net liquidity injected from outstanding operations [injection (+)/absorption (-)]*     -5,37,723.2  
F. Net liquidity injected (outstanding including today’s operations) [injection (+)/absorption (-)]*     -7,29,560.2  
G. Cash Reserves Position of Scheduled Commercial Banks
     (i) Cash balances with RBI as on 25/11/2021 6,41,235.30  
     (ii) Average daily cash reserve requirement for the fortnight ending 03/12/2021 6,50,308.00  
H. Government of India Surplus Cash Balance Reckoned for Auction as on¥ 25/11/2021 0.00  
I. Net durable liquidity [surplus (+)/deficit (-)] as on 05/11/2021 11,23,716.00  
@ Based on Reserve Bank of India (RBI) / Clearing Corporation of India Limited (CCIL).
– Not Applicable / No Transaction.
** Relates to uncollateralized transactions of 2 to 14 days tenor.
@@ Relates to uncollateralized transactions of 15 days to one year tenor.
$ Includes refinance facilities extended by RBI.
& As per the Press Release No. 2019-2020/1900 dated February 06, 2020.
* Net liquidity is calculated as Repo+MSF+SLF-Reverse Repo.
# As per the Press Release No. 2020-2021/287 dated September 04, 2020.
^ As per the Press Release No. 2020-2021/605 dated November 06, 2020.
€ As per the Press Release No. 2020-2021/520 dated October 21, 2020, Press Release No. 2020-2021/763 dated December 11, 2020, Press Release No. 2020-2021/1057 dated February 05, 2021 and Press Release No. 2021-2022/695 dated August 13, 2021.
¥ As per the Press Release No. 2014-2015/1971 dated March 19, 2015.
£ As per the Press Release No. 2021-2022/181 dated May 07, 2021 and Press Release No. 2021-2022/1023 dated October 11, 2021.
~ As per the Press Release No. 2021-2022/177 dated May 07, 2021.
ψ As per the Press Release No. 2021-2022/323 dated June 04, 2021.
Ajit Prasad            
Director (Communications)
Press Release: 2021-2022/1250

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“BUY” Reliance Industries With A Target Price of Rs. 2900 Says Motilal Oswal

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The brokerage’s take on Reliance Industries

The brokerage has reported that “RJio’s revenue growth has decelerated in the last few quarters to the mid-single digits v/s the double digits – given the moderation in subscriber adds. However, we see two key growth levers: a) tariff hikes – RJio may likely follow Bharti and VIL with a ~20% price hike in the Smartphone category. This is because it has achieved market leadership in this category, and the intent is to now monetize this large pool of subscribers to improve growth/profitability.”

According to Motilal Oswal “This could revise our 2QFY22 annualized EBITDA by 16%. b.) JioPhone Next-led subscriber growth – The company is keen to target a large chunk of the 300m Feature Phone market through JioPhone Next. We believe the handset has limited distinguishing features; however, as the chip shortage eases, it should sharpen pricing in the Feature Phone segment and launch improved versions to revive subscriber additions. We have factored in core revenue / EBITDA growth of 15%/22% over FY20-24E to reach INR934b/INR485b, not considering a material price hike.”

The company’s “retail market has seen strong revival from COVID-19, unlike the first phase, with the festive season seeing double-digit SSSG across categories. The steady addition of >900 stores in 1HFY22 should also see accelerated additions of nearly 1500-2,000 stores in 2HFY22. However, the big surprise has been the online business, which now contributes 20% to core revenues at an annualized revenue run-rate of INR210b (from being an insignificant contributor around eight quarters ago)” the brokerage said.

According to the brokerage’s research report ” It has achieved scale closer to the category leaders in the Grocery and Apparel segments, well supported by a) the supply chain of a deep physical retail network and b) aggressive expansion in warehousing capacity (2.5m added in 2QFY22. We expect 2HFY22 to drive >40% revenue growth over pre-COVID levels (2QFY20) on the back of revival amid COVID and contribution from 52% footprint addition over the last two years. Subsequently, we expect a revenue/EBITDA CAGR of 25%/28% to INR3,137b/INR248b over FY20-24E.”

Buy Reliance Industries with a target price of Rs. 2,900

Buy Reliance Industries with a target price of Rs. 2,900

According to the brokerage’s call “RIL, in the last year, has seen strong deleveraging on the back of value unlocking in the Consumer business, which has aided valuations. The Consumer biz – RJio and Reliance Retail are richly valued given their strong growth potential. We see price hikes in the Telecom business and revival in the Retail business – led by strong growth potential in JioMart – as key levers for the stock over the next two years. RIL is trading at 11.9x FY23E EV/EBITDA and 19.2x FY23E P/E. Using SOTP, we value the stock at INR2,900 and reiterate Buy.”

Disclaimer

Disclaimer

The stock has been picked from the brokerage report of Motilal Oswal Financial Services Limited. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.



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Choosing the right annuity plan for post-retirement life

Personal Finance

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We spend about 30 years plus of our life working to make a living. With increase in life spans, planning for retirement has become even more important. Most of us will enjoy two decades plus of retired life. Thus, retirement planning is essential for everyone irrespective of their income or lifestyle.

Annuity plans are an important part of retirement planning. In simple words, an annuity plan provides a regular and guaranteed income, or ‘salary’ in the retirement years. Annuity is treated as income for tax purposes and is taxed as such. The annuity paid is dependent on the lump sum investment that you make to the insurance company when buying the plan. Insurers invest this money into various financial instruments and the returns generated are used to pay the annuity. An annuity is usually purchased by people above the age of 55.

Here are a few key factors that you should consider when purchasing one.

Identify the amount you want every month

The first step is to identify how much lump sum investment you can make or how much pay-out you need. An easy-to-use calculator on insurers’ website will allow you to determine the lump sum amount based on the pay-out you wish to receive, or vice versa. Insurers also allow you to choose the periodicity – ranging from monthly, quarterly, half-yearly to yearly.

Choose the right category

There are primarily two types of annuity products. One is the ‘Immediate Annuity Plan’, wherein the pay-outs begin as soon as the lump sum amount is invested. This is suitable for a person buying the plan very close to retirement. The second is ‘Deferred Annuity’, wherein the pay-outs begin after a certain date. This option is suitable for a person who is buying a policy before retirement age and would need the pay-out only after a few years.

Find the right plan

You need to choose between Policy with Return of Purchase Price (ROP) or Policy Without ROP. For the former, the principal amount invested is returned to the legal heirs on death of the policyholder. This allows you to leave a lump sum amount for your nominee on your demise. For policy without ROP, the principal amount invested is not passed on to legal heirs, but the annuity amount paid each month is much higher as compared to first option. This is a good option to pass on the risk of living too long to the insurer. For an investment of ₹10 lakh today, a 60-year-old person in policy with ROP will get around ₹4,500 per month. For the same investment in a policy without ROP, he / she will get around ₹6,000 per month.

Expand coverage to include life of spouse

One also needs to choose prudently on whether the annuity is for a single life or joint life. In a case of single life policy, the annuity is paid till the death of the policyholder. But in case of a joint life policy, the annuity is paid till the death of last survivor among self and spouse. The annuity payout for joint life is lower than for single life. Hence you need to weigh your option judiciously.

To sum up, annuity provides steady income throughout your life. In the end, choose a plan that will help you play your second innings even better than the first.

The writer is President-Business Strategy, SBI Life Insurance

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“BUY” This Small Cap Industrial Stock For ~109% Upside: Monarch Networth(MNCL)

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The brokerage’s take on IFGL Refractories

According to the brokerage’s research report “IFGL is expected to deliver strong earnings growth with Consolidated EBITDA to double to Rs1.9-2bn (in FY23E/FY24E) vs Rs0.9-1bn range for last 3-4 years. This is led by the addition of customers especially mini-mills (10-11% of the revenue now as compared to no presence before), recruitment of industry veterans from peers at key positions, market share gains in domestic refractory business and favourable demand scenario from both domestic and global steel industry. We expect an improved performance by IFGL’s overseas subsidiaries on recovery in demand in EU and USA along with higher acceptability of products sold by Hoffman. Additionally, location benefits of the new plant in south and product additions (precast at Vizag) should help IFGL achieve revenue growth of at least 12% CAGR over FY21-FY24E.”

The brokerage has also said that “IFGL has maintained Net cash for the last 3 years, thereby financing expansions through internal accruals as also ensuring higher returns to shareholders (FY21 dividend yield 5.8%). IFGL’s cash flow generation is also very efficient due to the tight working capital cycle leading to OCF/Cash PAT > 1 for the last 5years. Despite such compelling financials, IFGL currently trades at 4.1x FY23E EV/EBITDA vs 14-17x for peers. We believe that the stock certainly qualifies for a re-rating.”

Buy IFGL Refractories with a target price of Rs. 585

Buy IFGL Refractories with a target price of Rs. 585

The brokerage has claimed in its research report that “We initiate on IFGL Refractories Ltd. (IFGL), a highly undervalued business in the booming refractory sector, with a TP of Rs585 (~109% upside) and BUY. We value the overseas subsidiary business at 4.2x Sept’23E EV/EBITDA, which is a 40% discount to its global peers and domestic business at 10.2x Sept’23E EV/EBITDA which is a 40% discount to leading domestic peer to arrive at the fair value of Rs585/share. At a CMP of Rs292, the stock trades at 3.9x FY23E EV/EBITDA. Key risks: RM cost risk impacted by sea freight inflation, change in management.”

Disclaimer

Disclaimer

The stock has been picked from the brokerage report of Monarch Networth Capital Limited (MNCL). Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.



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After India, US regulators to mull over crypto risks in 2022, BFSI News, ET BFSI

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San Francisco/New Delhi, The banking regulators in the US have announced a plan to clarify the rules and regulations around how banks can use cryptocurrencies over the next year, at a time when governments the world over, including India, are weighing the risks associated with cryptocurrencies and safeguard investors.

The Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency said in a statement that they recognise that the emerging crypto-asset sector presents potential opportunities and risks for banking organisations, their customers and the overall financial system.

“As supervised institutions seek to engage in crypto-asset-related activities, it is important that the agencies provide coordinated and timely clarity where appropriate to promote safety and soundness, consumer protection, and compliance with applicable laws and regulations, including anti-money laundering and illicit finance statutes and rules,” the regulators said in a joint statement on Wednesday.

Throughout 2022, the US agencies plan to provide greater clarity on whether certain activities related to crypto-assets conducted by banking organisations are legally permissible, and expectations for safety and soundness, consumer protection, and compliance with existing laws and regulations.

The agencies said that they continue to monitor developments in crypto-assets and may address other issues as the market evolves.

Further, the agencies will continue to engage and collaborate with other relevant authorities, as appropriate, on issues arising from activities involving crypto-assets.

In India, the upcoming Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 seeks to prohibit all private cryptocurrencies in India.

It, however, allows for certain exceptions to promote the underlying technology of cryptocurrency and its usage.

With the Indian government seeking to ban all private cryptocurrencies in the Crypto Bill 2021, experts and leading industry players have said that provisions relating to “banning” private cryptocurrencies would have to be looked at very carefully.

Several high-profile meetings have been held to discuss the regulation of cryptocurrencies in recent days. The Parliamentary Standing Committee had also called for the regulation on cryptocurrencies and its ecosystem.

Prime Minister Narendra Modi had earlier said that all democratic countries need to work together on cryptocurrency and ensure that it does not end up in the wrong hands.

Giving an example of the virtual currency, he had said: “Take cryptocurrency or Bitcoin for example. It is important that all nations work together on this and ensure it does not end up in the wrong hands, which can spoil our youth.”

–IANS

na/dpb



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India to consider allowing crypto trading for some investors, BFSI News, ET BFSI

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India is considering a proposal to treat cryptocurrencies as a financial asset while safeguarding small investors, according to people familiar with the matter.

The discussions come as authorities race to finalize a bill Prime Minister Narendra Modi’s government wants to present to parliament in the session starting Nov. 29. The legislation may stipulate a minimum amount for investments in digital currencies, while banning their use as legal tender, the people said, asking not to be identified as no final decision has been taken.

Policy makers left themselves some wiggle room when they posted a description of the bill on parliament’s website late Tuesday, by saying the bill seeks to prohibit all private cryptocurrencies except “certain exceptions to promote the underlying technology of cryptocurrency and its uses.”

The uncertainty triggered a sell-off on Wednesday in cryptocurrencies including Shiba Inu and Dogecoin, which were at one point down more than 20 per cent in trading on the WazirX platform, one of India’s leading cryptocurrency exchanges. They were far less affected on trading platforms such as Binance or Kraken.

A spokesman for the finance ministry couldn’t be immediately reached for a comment.

The Reserve Bank of India wants a complete ban on digital currencies as the central bank feels it could affect the nation’s macroeconomic and financial stability. While the government is considering taxing gains from cryptocurrency in the next budget, Governor Shaktikanta Das last week said the country needs much deeper discussions on the issue.

The Prime Minister’s Office is actively looking at the issue, and once the contents of the bill are finalized it would be taken to the Cabinet for its approval, the people said.

Earlier this month, Modi held a meeting on cryptocurrencies, after which officials said India wont let unregulated crypto markets become avenues for money laundering and terror financing. Later, in a speech last week, he urged democratic nations to cooperate in regulating private virtual currencies failing which they could land up in the “wrong hands”.



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Cryptocurrency: Indian Govt Should Create Framework For Exchanges And Investors

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Personal Finance

oi-Sunil Fernandes

By Hitesh Malviya

|

The USA has one of the best policies in place for usage, and trading or cryptocurrency. Cryptocurrency exchanges are regulated in the same way as conventional AML/CFT facilitators, financial firms, and capital transmitters in the United States, and are subject to the same rules, including those outlined in the Bank Secrecy Act amendments of 2021.

There are a lot of uncertainties around because we see different reports almost everyday. It’s an environment of FUD, we need to wait and watch when the cryptocurrency regulation bill goes on the table in the upcoming winter session.

The Indian government should create a regulatory framework for both exchanges, and investors who are dealing in cryptocurrency-based trading, and services. A well-defined regulation will also accelerate the growth of the cryptocurrency and blockchain ecosystem in India, more foreign investment will get attracted after such implementation of policies. For investors, the government should work on creating awareness about the usage, and risk of cryptocurrency by leveraging media and communication. Government should also be working towards investor protection by creating cybercrime laws, and resources to deal with cryptocurrency-based scams.

The Blanket ban on cryptocurrencies would be the worst-case scenario, I doubt it won’t happen. But if it happens then the one possible reason could be the launch of CBDC. China implemented a blanket ban on cryptocurrency trading and mining to create a safe passage for the adoption of their CDBC. India may follow the same route. Chances are low though.

Nothing will happen to the cryptocurrency market, because it’s a global market, and investors would have plenty of options available to move their crypto assets and trade on decentralized and international exchanges. It’s hard to stop the crypto movement now, no government can stop it. It will grow more even if a ban comes into place.

Cryptocurrency: Indian Govt Should Create Framework For Exchanges And Investors

(Hitesh Malviya, the author of the article is founder of itsblockchain.com, India’s First & Oldest Blockchain Cryptocurrency Publication. The comments are that of the author and do not reflect the opinion of Greynium Information Technologies Pvt Ltd).

Story first published: Friday, November 26, 2021, 8:30 [IST]



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