Cricket is considered as a religion in India, while the cricketers are seen as their demigods. Many companies nowadays prefer sportspeople or athletes over actors and actress to endorse their brands. One cricketer that is upcoming in the advertising world is Umesh Yadav. Umesh Yadav is a popular Indian cricketer that plays for teams such as Vidarbha cricket, Indian National team and Indian Premier League (IPL) teams.
Umesh is the country’s fastest bowler as his estimates top speed is over 152.5 km/h. Umesh Yadav initially entered cricket as a right-arm fast-medium bowler, but later was known to be an all-rounder in the Indian Cricket team. The fast bowler first made his ODI debut against Zimbabwe in 2010. In the 2015 ICC world cup, Yadav became the highest wicket-taker for India and third highest overall.
One of best performance by him was in the semi-finals of Ranji Trophy in 2019 against Kerala’s team. Umesh Yadav has played under IPL teams such as Delhi Capitals, Kolkata Knight Riders, and even Royal Challengers Bangalore. After his powerful performances in the 2018 IPL, he was named in ESPNcricinfo’s.
So far, his best performance was against Australia and New Zealand in the 2015 Cricket World Cup. One fun fact about Yadav is that he was offered a job of being an officer in the Reserve Bank of India after becoming popular, this fulfilled his father dream of getting a government job. Because of his many achievements Yadav has earned a top spot in terms of ranking and has become one of the richest cricketers in the world.
The net worth of Umesh Yadav is estimated to be over $8 million in 2021. The cricketer is known to charge over Rs 20 to Rs 30 lakhs per endorsements deals. The brands endorsed by Umesh Yadav so far are GoodGamer, Manyavar, Nagpur’s Swachhata mission, Reserve Bank of India (RBI).
Good Gamer Corp is a fantasy gaming and technology company that has its headquarters in Vancouver, Canada, while it has a subsidiary known as Good Gamer India Private Limited located in Bengaluru, Karnataka. GoodGamer is an upcoming daily sport and esport fantasy and real money gaming app that offer a huge variety of skill-based games.
The target audience of the company are the cricket fans, hardcore esport gamers, and even casual mobile gamers. With GoodGamers users can build their own team for different sports, play with friends, enter tournaments and win real prize money. GoodGamer is the first Indian fantasy gaming company to offer several unique features like prop fantasy contests, player injury reports, player injury alerts, an AI based lineup optimizer, etc.
GoodGamer signed the bowlers Umesh Yadav and Kuldeep Yadav as the endorsers for the company. The cricketers have appeared in the ad campaigns of GoodGamers and were chosen by the company in order to gain access to cricket fans amongst India’s 350 million mobile gamers.
Nagpur Swachhata Mission
Swachh Bharat Abhiyan is one of the most popular countrywide campaign that was started by the Government of India and launched by the Prime Minister Narendra Modi in 2014. The main mission of Swachh Bharat Abhiyan is to eradicate open defecation, manual scavenging, bringing awareness and improving solid waste management.
The first phase of Swachh Bharat lasted till 2019 and focused on generating awareness regarding sanitation practices. While the second phase from 2020 to 2025 will focus on sustaining the open defecation free status and improving the management of solid and liquid waste. In the early years of his cricket career, Umesh Yadav became the face of the Nagpur Swachhata Mission.
The organisation signed Umesh Yadav to be the brand ambassador for the NMC’s cleanliness campaign. According to the deal the cricketers will join in the NMC’s activities under Swachh Bharat Abhiyan. Commenting on the association Umesh Yadav said that it is great to be part of a lovely campaign, as he is proud Nagpurian and so wants to motivate youngsters and other citizens to make our city clean.
Manyavar is one of the most popular and trusted ethnic fashion brands in India. The company was originally started by Ravi Modi in 1999 and was only focused on making men’s ethnic wear. The company is now known for wedding wear, festive wear and fusion wear for men women and children.
Manyavar currently has over 600 stores across in over 200 cities including more than 120 flagship stores and over 13 international stores in countries UAE and USA. It also has more than 4000 employees around the world. Manyavar has so far, many celebrity brand ambassador such as Virat Kohli, Anushka Sharma, Ranveer Singh, Alia Bhatt, Amitabh Bachchan, etc.
The company also signed Umesh Yadav as an endorser for the #Manyavarwalidiwaali campaign in 2018. The cricketer can be seen having a conversation with a kid on his plan for Diwali while wearing a Manyavar kurta.
Reserve Bank of India
Reserve Bank of India is the country central bank and the regulatory body under the Ministry of Finance. This bank is responsible for issuing and supplying the Indian Rupee and also regulating the Indian banking system. RBI promotes economic development and was originally started its operations in 1935 under the Reserve Bank of India Act. It then was nationalized after India got its independence in 1949.
RBI signed cricketers such as K.L. Rahul, Umesh Yadav, Shabaz Nadeem, Ishan Kishan, Deepak Hooda and Dhruv Shorey to endorse and spread awareness about topics like banking for senior citizen, savings account and also banking ombudsmen in 2019.
These ad campaigns featuring cricketers aims on educating people on messages such as basic savings bank accounts, steps to avoid falling prey to fictitious emails, ensuring safety in digital financial transactions, etc.
Umesh Yadav is one of the cricketers behind the many big victories that India has achieved in recent times. Because of his outstanding performances till date the bowler is also called as U Yadavi by his fans and friends. Bowlers is not a popular option for brand endorsements but with bowlers like Umesh Yadav have started endorsing big brands according to their preferences. In the coming times, many bowlers will be seen as the brand ambassadors of brands.
Frequently Asked Questions
Who is Umesh Yadav?
Umesh Yadav is a popular Indian cricketer that plays for teams such as Vidarbha cricket, Indian National team and Indian Premier League (IPL) teams.
What is the net worth of Umesh Yadav?
The net of Umesh Yadav is estimated to be over $8 million in 2021.
How much does Umesh Yadav charge for brand endorsements?
The cricketer is known to charge over Rs 20 to Rs 30 lakhs per endorsements deals.
What are the brands endorsed by Umesh Yadav?
The brands endorsed by Umesh Yadav so far are GoodGamer, Manyavar, Nagpur’s Swachhata mission, Reserve Bank of India (RBI).
If you’ve purchased something online, you may have observed the feature to buy now and pay later, that’s becoming increasingly common across e-commerce platforms. And you may have observed this feature in offline places as well, such as retails, and for several folks, this choice is very effective because usually, you’d have to save up until you could purchase that fancy new pricey item that you want to shop, no one intends to do that, notably if it’s on sale now and won’t be in a couple of months. We need things right now.
We wish to shop for them now and pay for them subsequently, and the typical approach was a form of credit or a credit card. However, obtaining a credit card in India is not always simple, and when you do, you’ll be hit with a slew of interest charges. You are mysteriously in debt, if you’re not cautious, that credit can take ages to pay off.
So, either you save for quarters or you go into debt, and that’s where buy now pay later comes in. The BNPL startups are capitalizing on the appeal of paying for stuff later, just like you’d with a credit card and aiming to make it convenient.
I stated earlier about snazzy new valuable stuff such as mobile phones, tablets, and televisions, but BNPL is now becoming accessible for daily necessities as well. Groceries, apparel, and even diner food Zomato and Swiggy are now providing BNPL as an alternative, and these types of BNPL use scenarios are probably a major root of rivalry right now for existing companies in the lending space, with the expected count of BNPL users in India reaching million by 2026.
By 2026, this will account for nearly 7% of Indians. Cardholders now contribute to just over 2% of India’s populace or 30 million, and it’s more than twice the average of BNPL users, which is between 10 and 15 million, and that number is burgeoning.
So, if you’ve not guessed, BNPL and credit cards are related in terms of the services they provide. Credit cards and buy now, pay later cards (BNPL) is a type of credit. This is a debt, not a credit card. You’re deriving funds from a 3rd person in both instances. It could be a BNPL firm, one of the financiers with which they have affiliated, or a credit card issuer, which is typically a bank. However, the issuance of credit cards and BNPL differs significantly.
So, if you’ve ever applied for a credit card in India, or if you already have one, you’ve most likely received a call or an email from a bank salesman congratulating you on your new card eligibility. Moreover, what’s happening here is that your contact details, that is linked to your identity, are now in circulation among most monetary organizations in India, as well as a few swindlers, but there’s a good chance that if you seek to get one of these cards, your request will be denied.
Irrespective of what the sales representative told you, acquiring a credit card in India is seldom as simple as the sales representative makes it seem. You must be beyond a certain age, you must meet an income cap, which implies you must have a career with a decent payslip, and you must most likely have a high credit rating, which makes it incredibly tricky for novel applicants into India’s lending market, folks residing in remote areas who may not even have a proven credit file, and same goes for freshmen who have just begun.
They’re steering clear of defaulters. Folks they believe pose an undue risk. Essentially, they maintain their NPAs minimal by upping the ante for their clients. But once you’re a client and obtain a credit card, the hardships and obstacles do not end there so you have to pay for your credit card.
Some credit cards charge a yearly fee only to own the card, close to a membership, but those that don’t typically cost exorbitant interest and a slew of other fees for stuff like exceeding your credit line, reimbursing your minimum deposit late, and cash withdrawals from your credit card to your bank. When you add up all of these obstacles to entry and client pain points, it’s no shock that many Indians dislike credit cards.
Brands such as Slice, Zest money, Simpl, Lazypay, and Uni are limiting the barriers that credit card companies have raised. In India, almost anyone can BNPL; all you have to do is offer information such as your PAN and Aadhar number. Rather than focusing on credit scores, these BNPL companies are using their algorithms to identify how much loan you must be awarded based on your previous transactions and site, once you’ve been a BNPL client for a while and are in good condition and have billed your loans, they’ll also boost your spending limit.
Another element to take into account is the timeframe. Card issuers anticipate that you will decide when to pay off your loans. They offer you a monthly minimum payment that you should return to them, principal and interest, but again, it is up to you to pay back the loan, and many struggles with that freedom. They reimburse the bare minimum without creating much of a hole in the principal, which is the original loan value before interest costs.
With BNPL, credit payout is spread out over a set period, typically a month or two, using a process named as EMIs. If you pay these monthly installments, your BNPL loans will be paid off after a set period. Is this to say that the BNPL plans are interest-free? Both yes and no. It depends on the console and BNPL firm from whom you are accruing.
The longer the loan term, the larger the interest rate. If you choose a short-term BNPL tenure, such as 15 – 45 days, you will most likely avoid paying any interest if you pay back on time. You’ve essentially just spread out a fee that would’ve been made immediately over a period of several weeks. However, if you choose a longer time frame of 3 months to a year, your interest rate could range between 10 and thirty percent, based on a range of factors. However, this is made upfront so that BNPL clients are cognizant of deferring fees for a longer time.
Card issuers, on the other hand, allow you to dig yourself a big trench. One credit transaction here, another there, and you’re unexpectedly trying to cope with minimum payouts, while your loans continue to increase as interest compounds. So, BNPL appears to be the clear victor here, correct? Isn’t it a type of loaning relevant and personalized?
That’s the story that BNPL fintechs want you to believe. But let’s look closely at how these companies work.
Let’s begin with the final consumer, who is acquiring a product now and paying later from a vendor who is an offline vendor, such as a shop owner, or a virtual vendor, such as a D2C firm or an eCommerce storefront. Then there’s the BNPL supplier, who is responsible for supplying the tech here. They examine the final consumer using sophisticated algorithms and decide how much to lend them, but this credit isn’t flowing from their wallets, at least not most of the time. Rather, these BNPL businesses have teamed with lenders, either nonbanking financial firms or full-fledged banks.
So, here we have a true overview of the consumer, vendor, BNPL mediator, and bank or NBFC. Often the BNPL vendor is an NBFC, and that’s just one of their many product lines, and they’re often a Fintech firm, such as Paytm, which offers BNPL, and often the BNPL company is also a vendor, such as Flipkart or Amazon, which have their specialized BNPL solutions.
So the concern is, how do BNPL firms earn money? There are a couple of income streams.
The first one arises from vendors such as card issuers and point-of-sale (POS) providers. BNPL firms charge margins ranging from 2 to 8% of the original cost. The vendor is fine with it as they see the chance to network with the BNPL supplier. For starters, they experience a rise in conversions and an average deal worth because clients who previously could not afford high-ticket items in their shop or marketplace can now do so. So, partnering with the BNPL firm facilitates vendors with more clients who spend thousands, and the best feature is that they don’t bear any of the risks.
The BNPL firm earns on behalf of a client. As a result, the monthly EMIs buyer pays do not benefit the vendor. The vendor has been fully paid; rather, the final consumer pays the EMIs to the BNPL firm, which accepts all of the peril.
And what if the end-users are unable to meet their monthly EMIs? Since many BNPL firms charge late fees, this is where the 2nd income stream comes in. As per bank bazaar, these fees vary from 2 to 8 % of the foremost loan balance, or they can be a fixed fee ranging from 0 to 750 INR.
To try to get these debtors to pay up, it’s almost like a punishment. It’s worth mentioning that some BNPL companies don’t cost extra payments and instead prefer to start slowly to avoid defaulters. They initially give an amount owed that they can easily lose, and if the client repays them, their line of credit is gradually increased. If a payout is late, the user’s ability to repeat procuring items through that BNPL site is revoked, and the user’s credit rating suffers as well.
Challenges Faced by BNPL Clients and Customers
The industry is facing a lot of issues. Many BNPL clients still have no idea what a credit rating is. They are unaware that avoiding paying off their BNPL dues on time will permanently harm their fiscal identity. They have no prior loaning experience. They haven’t been a client of a lender, and that’s where we soon run into troubles because, as I previously stated, BNPL companies make it extremely simple to obtain a loan. Even for those with no previous fiscal expertise and little financial self-control.
Sadly, some folks can spiral out of control. Without realizing it, they are overspending than they can manage to cover later. Of course, BNPL parties are aware of this, and they argue that it’s early in the season. Because debt users in India are low, they don’t have huge data to deal with, so they’re developing concepts.
They are steadily accruing a ton of information on first-time Indian debtors, and as they derive insights, they are reworking their equations, working with first-time debtors by starting with small loan confines and then providing larger loans to reliable debtors and identifying unreliable ones.
To put it another way, they’re laying the foundations for enlightening the fiscal reliability of a sizable undiscovered segment of India’s populace. It’s like a public good, or so they’d describe it.
Customers, particularly those who are not tech or monetarily savvy, are uninterested in these concepts. This bird’s-eye view means nothing to them. When they seek themselves suddenly in a sea of loans, they fear, curious how a relatively harmless buy now pay later forum got them there and how no one will offer them a loan to pay off their other line of credit since their credit rating, which users didn’t realize they had, has now turned red. They may lose hope of coming out of the financial mess.
This, of course, will not cause BNPL entities to slow down. At least not without the government’s help. Indeed, as more capital is poured into buy-now-pay-later businesses, the situation is only heating up. To stay viable, BNPL firms must connect with more prospective customers, either by entering untapped communities in remote areas or by poaching clients from rivals by giving them even simpler loans.
You can now adhere to BNPL from 4 or 5 multiple devices and collect up to one lacs with surprisingly fewer formalities and no payslips. There are even reports of BNPL firms failing to perform precise KYC or credit bureau checks. They’re expanding so quickly that they can’t extend their due diligence, and there have been reports of failures not being disclosed to credit bureaus.
To be honest, matters in India’s BNPL space are currently out of regulation. Unapproved credit institutions are springing up in the lack of sufficient regulations. For instance, in early 2021, an influx of Chinese lenders apps harassed and humiliated clients into repaying loans at exorbitant daily escalating interest rates by using user information and phone authorization.
The RBI discovered that of 1100 lenders apps in India, 600 were illegal, while these 600 unauthorized apps aren’t all BNPL apps, they are a manifestation of a bigger issue in the loaning space in India right now. Financiers and loan mediators are throwing caution to the wind in favour of expansion at any cost.
RBI Working Group Report on Digital Lending
The RBI’s online lending working group is developing innovative forms for safer business exchanges. Although the online lending market grew 12x between 2017 and 2020, the RBI did not govern several of the new businesses, according to the latest study.
Typically, these companies and apps collaborate with banks and NBFCs to assist. As a result, prompt loans are becoming available at the expense of higher risk. It has also led to client excessive debt, legislative arbitrage, and high costs.
The report reveals such flaws while also offering a great structure for the industry. The study’s pertinent points are explained below to provide a clear grasp of the proposition.
Differentiation among LSPs and BSLs
Loan Service Providers (LSPs) and Balance Sheet Lenders (BSLs) are separate entities (BSLs). LSPs are apps that offer clients borrowing choices. They don’t get to be explicitly controlled, so they must collaborate only with governed financiers that can offer the assistance.
BSLs, on either hand, lend money and stably claim credit threats. They always are governed. This difference enables LSPs to handle the front-end expertise, whereas BSLs handle compliances and threats.
Ban On FLDG
An FLDG tool, or Ban On FLDG First Loss Default Guarantee, enables ungoverned companies to give credit to borrowers and claim credit risk. The study advised against using a trojan horse entry.
Many fresh lenders face difficulties because their systems are based on shadow lending. This part entails neo-banking and Defi (decentralized finance) concepts for a modal test. Innately, the study guides that only governed agencies should be allowed to take credit risk.
Supervisory arbitrage must be eliminated
The study recommends classifying all credit lines as credit instruments and eliminating supervisory arbitrage. Eg: most BNPL providers treat this feature as a purchase rather than a loan, and thus lack adequate KYC computation. They are unrelated to the credit bureau.
Client Protection
In some cases, the fees and rates are as large as 100%. The working group suggests a few steps to safeguard consumers from such practices. These are some of the suggestions:
Use a proper APR for all interest and fees.
STCC – must conform to relevant standards to avoid exorbitant fee rates.
Limit high-risk, very short-term debts with no tranches.
Recapitalization and over-indebtedness should be limited.
Insurers must also make sure that the LSPs associated treat debtors fairly, particularly in collection practices. To verify trusting clients and a healthy ecosphere, all forcible actions are avoided.
Data Security
The info is owned by the customer, not the institution. All critical loaning situations require clients’ assent to use their data. This includes any e-commerce system that supports customer info to make underwriting choices. This improves data safeguards while retaining customer trust.
SRO And DIGITA
The study recommends that the RBI establish a Self-Regulatory Organization (SRO) to regulate operations and set guidelines. It also suggests developing DIGITA (Digital Trust of India Agency). DIGITA will meet the basic specifications for verification of conformance. Companies that have not been accepted by DIGITA will be considered non-compliant.
What Should Customers Be Wary of When Using BNPL Apps?
To begin, consumers must ensure that the app they are installing is from a licensed lender. If a firm does not have an RBI license, it must simply define under whose license it is selling products. Before installing, look into who is releasing the app, visit the site, and ensure it is a well-established and certified Indian corporation.
Second, if the firm is licensed, see if it explicitly shows this on its webpage, along with the RBI regulations that it adheres to, such as the grievance handling framework and interest rates. Furthermore, never install apps that request contact info because they are used for duress.
Third, while most BNPLs assert no charges or nil interest, you must learn the real loan amount. Even if firms claim zero percent, they are required to disclose their IRR – Internal Rate of Return – so buyers must ensure that the firm or app discloses all these for their safety.
Conclusion
BNPL is a valuable tool, but it should not be used for every acquisition a buyer intends to make or for daily purchases, as this would be over-leveraging oneself.
However, when handled efficiently and sensibly, the fact that rather than trying to make all of the payouts now or using a credit card to purchase, you are simply getting an option to acquire an item for nearly the same cost and drill down into 4-5 payouts is an effective device to have.
This is the benefit that BNPL firms provide, and it is the reason for the rapid acceptance because clients realize and require it. Buy Now Pay Later is an ideal, smooth payment system with vigilance on the part of the users and accountability on the part of the financiers.
FAQs
What are the risks of BNPL?
BNPL companies do not charge interest but charge high late fees which many consumers fail to pay and are later mounted in huge debt.
Is BNPL regulated?
No, Buy Now Pay Later companies are not regulated in India which has resulted in their growth and scams.
What is a BNPL company?
Buy Now Pay Later companies are companies that allow consumers to purchase the product and pay later in small installments.
The Reserve Bank of India has announced a considerable number of changes in regards to the financial and non-financial transactions related to the ATMs in the country. The Central Bank has provided the permission for the banks to increases the charges from their customers. Let’s look at the latest Financial service Fees and charges revised by RBI.
A banking charge will be applicable from 1 January 2022 where the bank customers will have to pay an amount of INR 21 if they exceed the monthly limits of the withdrawal from the ATM. The ATM charges which were in existence were around INR 20 per customer if they exceed the monthly limits of the free transactions provided by the bank.
On 10 June 2021, the Reserve Bank of India has provided the permission for the banks to increase the charges regarding cash and non-cash Automated Teller Machine for exceeding the number of free financial transactions available on a monthly basis from next year i.e., 2022.
Interchange Fee charged by the Banks Revised by RBI
The circular contained the information regarding the interchange fee charged by the Banks for the ATM transactions. The interchange fee for the ATM transactions is increased from INR 15 to INR 17 for each financial transaction and the interchange fee for the non-financial transactions is increased from INR 5 to INR 6, which will be effective August 1, 2021.
An interchange fee is paid by the banks to the operator of the ATM when a customer makes a transaction at an ATM that does not belong to the card-issuing bank.
The Interchange fee has been revised by the RBI from INR 20 to INR 21 if the customers exceed the monthly limits of the withdrawal from the ATM.
RBI added that the customers will continue to enjoy the benefits of free 5 transactions every month which will be inclusive of financial and non financial transactions. The free transactions will be available every month through the ATMs of the banks with which they have an account.
The customers will also be eligible to do transactions in the ATMs of other banks with a limit of 3 free transactions in the metro cities and in the non-metro cities the customers will be eligible for 5 free transactions from the ATMs of another bank.
RBI conveyed in a statement that in order to compensate the banks for the higher fee charges for interchange and due to the general increase in the costs, the Reserve Bank of India has allowed the Banks to increase the charges on ATM transactions to INR 21.
Number of ATM’s in India
Reason for the increase in the charges by RBI
The Reserve Bank of India has conveyed that the reasons for letting banks increase the fee and charges for the transactions were mainly due to the increase in the cost towards the maintenance of the ATMs and also the increase in the cost for the deployment of the ATMs.
The maintenance cost incurred by the banks and the white label ATM providers is considered to have the necessity to balance the expectations of the stakeholders of the financial institutions as well as providing a convenience to the customers.
The committee which decided on the ATM charges was established by the Reserve Bank of India back in the year 2019 in the month of June. The committee was set up under the chairmanship of VG Kannan who was the chairman of the Indian Banks’ association. The main aim for the setting up of the committee was to review the entire range of the ATM charges.
The recommendations of the committee were announced to the public by the Reserve Bank of India in the year 202o in the month of July and the recommendation was to use the population as a metric in order to measure the calculations for the ATM charges.
The Reserve Bank of India had also conveyed that the recommendations from the panel were examined in detail.
List of Financial Charges revised by the RBI
From January 1 2022, Customers will be charged INR 21 per ATM transaction after exhausting limit of free transactions which a customer is eligible to conduct from other banks’ ATMs. The interchange fee is hiked from the existing INR 20 to INR 21 per transaction.
The interchange fee for the ATM transactions for the Banks is increased from INR 15 to INR 17 for each financial transaction and for the non-financial transactions is increased from INR 5 to INR 6, which will be effective August 1, 2021.
Conclusion
The last change in the interchange fee in regards to the transactions of the ATMs was in the year 2012 and the charges that were paid by the customers were revised in the year August 2014. There has been a lot of time since there was a change in the charges on the customers regarding the use of ATMs and the transaction fees.
FAQ
Why has RBI revised Cash withdrawal charges?
The Reserve Bank of India has conveyed that the reasons for letting banks increase the fee and charges for the transactions were mainly due to the increase in the cost towards the maintenance of the ATMs and also the increase in the cost for the deployment of the ATMs.
What are the revised charges by RBI?
Customers will be charged INR 21 per ATM transaction after exhausting limit of free transactions and The interchange fee for the ATM transactions for the Banks is increased from INR 15 to INR 17 for each financial transaction and for the non-financial transactions is increased from INR 5 to INR 6.
What is interchange fee ATM?
An interchange fee is paid by the banks to the operator of the ATM when a customer makes a transaction at an ATM that does not belong to the card-issuing bank.
The Reserve Bank of India has been reducing the circulation of 2000 rupee notes in the country. The country has seen a drop of 27% of its 2000 notes from circulation. Let’s look at why the RBI has stopped the fresh stock of 2000 notes and pulled out notes worth 57 crores in the FY21.
The number of Rs 2000 notes in the Indian economy has been reduced in the year 2021 from its peak in 2017-18. In the year 2017-18 the number of notes circulated in the Indian economy was around 33,630 lakh and in March 2021 it has reduced to 24,510 lakhs.
In the peak, the value of Rs 2000 notes is expected to be around INR 6.72 lakhs which has dropped to 4.90 lakhs in March 2021. The number of 2000 notes that are removed from the market is around 9,120 lakhs and has a value of around INR 1.82 lakh crore.
Why has RBI stopped Fresh supply of INR 2000 notes?
The latest annual report which was published by the RBI doesn’t convey any news about the missing notes. However, it is to be noted that the RBI has stopped producing the Rs 2000 notes as the notes are not coming back to the banks.
These high value notes are not available for people in the ATMs as well. It is estimated that the Rs 2000 notes are majorly hoarded in the form of black money as they have high value and require lesser space compared to a bundle of Rs 500 notes.
The estimated amount of black money which experts had predicted not to come back to the system during demonetization was around 4-5 lakh crores.
There is a growth of 10-12% for the money which is being circulated in the country from the past few years. The RBI has increased the circulation of other low valued denomination notes such as Rs 500 and Rs 200 in the market.
The annual report of the RBI has conveyed that the circulation of notes in the country has seen an increase of around 16.8 % and 7.2 % in the year 2020-21 when compared to the increase of around 14.7 % and 6.6 % in the year 2019-20.
In terms of value, the share of Rs 500 and Rs 200 notes in the country during the year 31 March 2020 was around 83.4 % and has increased to around 85.7 % in the total market value of bank notes in circulation for the year 31 March 2021.
The Rs 500 notes had a total volume has seen an of around 31.1 % as of 31 March 2021, when compared to the previous year of 25.4 %. The INR 10 denomination bank notes have seen a downfall in their total value which had a share of 23.6 % as of 31 March 2021 when compared to the previous year’s value of 26.2 %.
However, it is to be noted that the RBI has increased the production of INR 500 denomination notes and is trying to replace them with INR 2000 notes. In terms of the volume, Rs 500 recorded the highest volume which was followed by INR 10 notes for the year 2021.
Conclusion
The Rs 2000 notes’ main purpose was to ease the shortage of money supply during the demonetization and now the supply has reached a position where the central bank has become uncomfortable as the higher value note will be easier to hoard.
FAQ
Are 2000 rupee notes going to be banned?
No, RBI has announced that they will not issue a fresh supply of 2000 notes but there is no official notice by RBI of it getting banned.
Why 2000 Rs note is not issued by RBI?
As per the reports it is estimated that the Rs 2000 notes are majorly hoarded in the form of black money as they have high value and require lesser space compared to a bundle of Rs 500 notes.
Which note is going to ban?
Recently, a report claimed that the central bank was planning to ban ₹5, ₹10, and ₹100 notes.
The Reserve Bank of India on 5 April 2021 had announced it has reopened the one-time loan restructuring programme for individual borrowers. Let’s look at what exactly is loan restructuring and the details of the loan restructuring programme reopened by RBI.
Loan restructuring is a feature that will allow the banks to change or modify the terms and conditions of the loan provided to an individual when they are facing a financial crisis. Banks do these in order to avoid classifying the loans as Non-performing assets and to avoid declaring the borrower as a defaulter.
If the customer will be classified as a defaulter, then the bank will have to keep aside the loan amount which will reduce the profits of the bank.
The restructuring programme may be done by the bank in different ways such as changing the interest rate, repayment period, extending the time, changing the installment amounts, etc.
RBI restructuring programme
RBI Restructuring Programme
The RBI had re-opened a one-time restructuring programme under which the bank will be able to let their borrowers to reschedule the payments they need to make or to extend the moratorium period to a maximum of two years.
This moratorium will not be like the last year’s blanket moratorium. The banks will have an option to choose or pick the borrowers who will be eligible to be part of the restructuring programme and based on the bank’s internal appraisal the period of the moratorium will vary.
Types of Loans included in this restructuring programme
Some of the types of loans included in this restructuring programme would include credit card receivables, consumer durables, personal loans and auto loans. The banks also can include a resolution plans for loans such as educational loans, home loans and loans given for the investment in financial assets.
Eligibility
The eligibility criteria for the loan restructuring programme are that the loan account should be classified according to the standards which means that there shouldn’t be any default or pending payments on the installments as of 31 March 2021.
For the individuals who had opted for a loan restructuring programme under the scheme will be provided some relief as well. The RBI has given the freedom for the banks to modify the plans and the moratorium period by 2 years.
The banks will be allowed to reschedule the payments which can be through reducing EMI payment amount which will extend the time period. The banks have also been provided with an option where they can convert interest accrued or the interest which should be accrued into another credit facility.
According to the assessment of the borrower’s income streams the bank will be able to provide a moratorium for a certain period of time. The RBI had conveyed in a notification that there will be no permission provided for compromise settlements.
If the banks are planning to grant the moratorium then it would be for a maximum of 2 years and the moratorium will come into force immediately upon the resolution of the plan.
FAQ
What does RBI mean in banking?
The Reserve Bank of India (RBI) is the central bank of India.
Why is RBI called Bankers Bank?
In India, Reserve Bank Of India is known as the banker’s bank because it acts as a bank for all the commercial banks in India.
Is RBI Public or private?
Reserve Bank is fully owned by the Government of India.
Conclusion
The economic activities in various parts of the countries have come to a stand still as there has been an implementation of the lockdown. Most of the individuals have lost their income streams where the others would have lost their jobs. This will make it harder to repay their loans and this initiative from RBI will reduce the losses of the banks and the financial stress of the individuals.
On 23 April 2021, the Reserve Bank of India had barred American Express and Diners Club International Limited from onboarding new customers to their platform. The ban is expected to come into effect from May 1. Let’s look at why both the payment system operators American Express and Diners Club International Limited were banned by RBI from adding new customers.
The Reserve Bank of India had initiated a ban for the payment system operators from onboarding new customers into their network as they were not able to follow the norms with the data storage put forth by the RBI.
The Reserve Bank of India in a statement said that both the entities have been found to be non-compliant in respect to the directions on storage of data of the payment systems. The RBI has added that the action towards both the entities was taken based on the powers which are under Section 17 of the PSS Act.
American Express Banking Corp and Diners Club International Ltd are payment system operators in the country who has the authorization to operate card networks in India under PSS Act (Payment and Settlement Systems Act), 2007.
American Express Banking Corp is a multinational company that focuses on financial services. It is located in New York, the United States. The company was founded in the year 1850. American Express is considered to be the 23rd most valuable brand in the world according to the Forbes 2017 list.
Some of the products offered by the company are Charge Cards, Traveler’s cheque, Credit Cards, corporate banking, etc. In India according to a report by Financial Express, American Express has a market share of around 2.53 % of the total market with around 15.6 lakh credit cards outstanding.
Diners Club International Ltd
Diners Club International is also known as DCI is a charge card company. It is a finance-based company that has its headquarters in the United States. The company was founded in the year 1950. Diner Club International was the first payment card company in the world.
The company is owned by Discover Financial Services. Some of the products of Diner Club International are charge cards and credit cards. In India, Diners Club International distributes its cards exclusively through HDFC Bank and the exact number of active users is unknown.
Why did RBI restricted American Express, Diners Club from adding more customers
In the year 2018, in a notification, the Reserve Bank of India had noticed that all the payment system providers did not stored the data of the payments in the country. The notification said that there was a significant growth witnessed by India in the payment ecosystem and such systems depend completely on technology.
The notification added that such an ecosystem has a necessity for a continuous measure of safety and security that were best in class.
The Reserve Bank of India had then directed all the system providers to ensure that the entire data which are related to payment systems should be stored in a system that is only in India.
The data which are stored should include the full end-to-end transaction details, information, carried, collected, and processed as part of the message or payment instruction. This was mentioned by RBI in its notification.
If there is any foreign transaction, those data can be stored in the foreign country if it is required. The compliances with the new rules were supposed to be followed by the system providers within 6 months and they had to report the same to the Reserve Bank of India.
In addition to this, they were also required to submit a report which should be approved by the board a System Audit Report (SAR). It should be conducted by the CERT-In empanelled auditor within the time duration that is specified.
The ban of American Express Banking Corp and Diners Club International Ltd by RBI is because they have failed to follow the statement given by RBI in regards to storing the data which was issued two years ago.
In India, American Express offers a full range of travel, financial and network service products.
What type of credit card is Diners Club?
Diners Club is an International Credit Card.
Who owns RBI?
RBI has been fully owned by the Government of India since its nationalisation in 1949.
Conclusion
The ban on both the entities would not affect the existing customers. The Reserve Bank of India had clarified in a statement that the ban will have no impact on the customers of both the companies.
Indian startups may become the new eye candy for foreign investors as RBI and SEBI come together allowing them to enlist themselves in foreign jurisdiction. The tech ecosystem is flourishing at a steady pace in India. This pace might get some acceleration if Indian startups decide to approach funding by enlisting themselves outside India.
However, until recently, SEBI, the stock market watchdog, had certain compliances which made listing on foreign exchanges a troublesome task.
Under the current rules, Indian companies are allowed to issue only specific currencies such as depository receipts on foreign stock exchanges- that too only if you are a company enlisted in India. This is about to change as the government along with SEBI and RBI has now allowed Indian conglomerates to enlist themselves abroad.
In the Companies (Amendment) bill 2020 passed by Rajya Sabha in September last year, it seeks to amend Sec 23 of Companies Act 2013, which prescribes the manner in which private and public companies may issue securities.
Earlier, the companies who preferred enlisting themselves on foreign stock exchanges were compelled to do so with several restrictions laid out by SEBI. With the amendment coming into force, not only existing Indian companies but newbies too can enlist themselves under foreign stock exchanges. The center along with SEBI and RBI are working on a framework to bring this into practice.
Companies that are Seeking Foreign Stock Exchanges
Infosys, the Indian tech giant became the first company to get listed on a foreign stock exchange when it enlisted itself on NASDAQ (National Association of Securities Dealers Automated Quotations) on March 11, 1999. Post Infosys, a number of Indian companies decided to join the league including ICICI, HDFC Bank, Wipro and travel tech company MakeMyTrip.com.
Along with NASDAQ, there are other exchanges overseas that are trying to grab the attention of Indian companies. Amongst the top ones are NYSE, Tokyo Stock Exchange, London Stock Exchange who are trying to meet Indian firms and lure them into enlisting themselves on these platforms.
India has more than 30 unicorns such as OLA, Byju’s, Swiggy and Paytm who could be beneficiaries of this government initiative. While this is being applauded and celebrated, UK based Bay Capital announces Pre IPO investment in India’s largest insurance aggregator, PolicyBazar.com.
Siddharth Mehta, founder and chief information officer of Bay Capital, said, “We are excited to partner with the excellent management team of PB Fintech, which is transforming the way insurance is bought in India. Customer centricity has been the heart of their proposition and has helped them become the platform of choice for customers.”
Indian startup ecosystem has now been exposed to a vast capital market which was in oblivion before the announcement. Of course, there are companies who have taken the road to foreign stock exchanges but notably it took Indian companies 30 long years to finally go abroad.
SEBI has been a tenacious watchdog and companies have struggled to move out of their regional boundaries. With the changes prompted by the center, Indian companies, especially startups are doing the happy dance since a vast capital market has been exposed to them.
Key benefits of listing Overseas
Wider Investor base
Listing overseas will expose Indian companies to a larger pool of investors broadening their investor base.
Soared Valuations
More investors along with an understanding of global influence, raised cap for funding.
Overseas listing has put companies like Wipro, HDFC Bank, ICICI on the global map and will do the same for companies that are considering this move. No pros for any decision exist without their cons. Economic experts fear that Indian companies may face tax complications in a market regulated by foreign law makers. Dual listing may bring concerns over co-existing in foreign waters and on the home ground.
Native Concerns
Internet entrepreneur Sanjeev Bikhchandani says an estimated Rs 17 trillion of market cap has been transferred abroad after young Indian Startups were forced to shift their company domicile overseas by foreign investors promising the funds they need for growth.
Shades of the East India Company type of situation here – Indian market, Indian customers, Indian developers, Indian workforce. However 100% foreign ownership, foreign investors. IP and data transferred overseas. Transfer pricing issues foggy. https://t.co/gANDVZOceS
There is a fear shared by many economic well wishers that listing overseas would be giving up a part of the ecosystem which is full of potential and may drive the aspiring Indian entrepreneur away from his/her roots.
FAQ
Which country has the most number of Startups?
United states is the country which has the most number of Startups.
Can Indian companies list overseas?
Ministry of Finance, Government of India announced that Indian companies would now be allowed to list their shares directly in foreign stock exchanges.
Is dual listing allowed in India?
The Indian government has decided not to mandate secondary listing for domestic firms which choose to list on overseas stock exchanges.
Conclusion
Indian ecosystem is a hidden treasure which is about to get explored by the global market. Several startups have been meaning to raise funds through ICOs (Initial Coin Offering) which is through crypto funding.
Apparently, we are running out of investors in India and foreign involvement is seeking an approval at large. While this may be a great opportunity for upcoming companies, there will always be dismay of profits flowing out of the country.
Listing overseas calls upon a bundle of opportunities for Indian companies to have a global footprint. It not only will enable India to aspire for a spot in the global marketplace but also will take Indian ecosystem towards becoming a global superpower.
The crypto ecosystem has been doing news rounds ever since the RBI proposed a ban on using or trading or holding Crypto currency in 2018. It was all cloudy for the crypto investors until recently when the Supreme court in 2020 quashed the ban on trading on virtual currencies.
RBI has been reluctant to let the crypto currencies co-exist in the Indian economic system. Crypto currency is a booming sector and has put so many miners on the map.
So why is RBI not allowing crypto trade in India? Will it ever oblige? How is crypto business coming along in India? We answer all these questions in this post. Read on to find out more.
In 2018, RBI issued a circular to take down crypto currencies from the Indian virtual trade. The Internet Mobile Association Industry- a non profit organization and a group of corporations dealing in crypto exchange platforms stood up against this circular in the Supreme court.
RBI, in a Financial Stability report, defined virtual currency as unregulated digital money which is controlled and issued by its developers and accepted by a specific community. RBI exercised its power to ban private digital currencies and their trade/circulation through any financial institution in India.
However, in March 2020, this circular was quashed by the Supreme court saying that though RBI has the authority to regulate virtual currencies, it was disproportionate to impose prohibition on trading of crypto and therefore, ultra vires the constitution.
According to the survey of Unique Identification Authority of India (UIDAI), the government has issued over 122 crore Aadhar cards as of March 2020. That means it has covered 90% of the population and out of 110 crore bank accounts in India, 96 crore are linked to Aadhar.
This could be one of the reasons for banning crypto since it is rumored that RBI wants to launch a digital currency of its own and is sparing the competition. The said digital currency is to be called Lakshmi-named after the Goddess of wealth.
RBI has been pretty stringent with its ban on crypto. According to the “Banning of crypto currency and regulation of official digital currency bill 2019” , the draft sentences 10 years of prison to anyone who mines, circulates or holds private digital currencies. This sentence surpasses the 7 years of imprisonment for money laundering.
The Supreme Court’s decree paved way for some relief as it states that virtual currencies are not legal tender but tradable commodities and lacks precise definition and the RBI circular has disproportionately invaded the investors’ rights.
Crypto, especially Bitcoin seems to have come around with the retail investors in India. More than 5 million Indians have invested in Bitcoin.
Crypto is not just being used as exchange in restaurants, shopping, payments and insurance but has now become a prominent source of funding for start ups in India. Start ups are longingly looking at Initial Coin Offering (ICO) as fund raising options. But the situation is contemplating since the ban was announced.
Almost 30 to 40 start up companies from India have tried to pursue the ICOs. The ban has caused these companies to choose foreign jurisdiction and have raised funding from foreign investors.
The ban could bring uncertainty among the retail investors in India.
Nischal Shetty (CEO, WazirX) said – “Criminalizing digital tokens could destabilize existing businesses eroding the wealth of millions”
Crypto startups are developing slowly and steadily because of the regulatory reforms in India. Though India has been gaining exposure on the global front, the traditional methodology of the government seems to hold back a few areas such as the crypto economy. Despite this, there are a few Crypto startups which are propelling and being recognized.
CoinDCX
The Mumbai based startup provides users with various crypto based financial products. Users can buy and sell more than 100 coins instantly with INR.
Nuo
Nuo is a decentralized finance (DeFi) application that converges sellers and borrowers through smart contracts. Nuo network has also launched a new digital banking platform called Juno, which is built on top of Ethereum and depends on Nuo protocol for Nuo banking services.
WazirX
WazirX is the leading crypto exchange platform in India at present. It was the first exchange in India to introduce a native token called the WazirX token (WRX) which has resulted in significant growth of engagement on the platform.
Crypto companies WazirX and CoinDCX along with several others are running a hashtag campaign #IndiaWantsCrypto on twitter to raise awareness about the bill and its consequences. The campaign has already found support from several start-up founders and angel investors such as Sahil Lavingia, Rajiv Mantri and Balaji Srinivasan.
Crypto Ban – Opinions
The sovereign insists on not having private crypto currencies in the Indian ecosystem since it considers crypto as something that is foreign and threatens security of its citizens. Finance Secretary Ajay Bhushan Pandey in an interview said that crypto currency is unconstitutional as it is produced outside India and cannot be treated as currency but a commodity.
Although the government might not completely impose a ban on crypto, the law intends to create a facilitative framework under the guidance of RBI, exceptions will be provided to promote the underlying technology of crypto currency and its uses. However, many of the retail investors think differently.
Ex CTO of Coinbase and General Partner at Andreessen Horowitz, Balaji Srinivasan, an entrepreneur and an investor, believes that crypto ban is as bad as internet ban. In an interview he said that eventually in the coming years India will have to accept crypto as it already co existing in other countries as an alternative currency. India has great potential not just in terms of selling but also producing which makes it a strong contender amongst the developing nations.
Crypto Ban – FAQs
Why did RBI ban Cryptocurrency?
It is rumored that RBI wants to launch a digital currency of its own and is sparing the competition. The said digital currency is to be calledLakshmi-named after the Goddess of wealth.
What is Crypto Ban?
In 2018, RBI issued a circular to take down crypto currencies from the Indian virtual trade. According to the “Banning of crypto currency and regulation of official digital currency bill 2019” , the draft sentences 10 years of prison to anyone who mines, circulates or holds private digital currencies. This sentence surpasses the 7 years of imprisonment for money laundering.
What is #IndianWantsCrypto campaign?
Crypto companies WazirX and CoinDCX along with several others are running a hashtag campaign #IndiaWantsCrypto on twitter to raise awareness about the Crypto Ban bill and its consequences
Which are the major crypto startups in India?
Coin DCX, NUO, WazirX are some of the major crypto startups in India
PMC bank became the talk of the town when it issued an EoI (expression of interest) in order to identify suitable equity investors/group of investors to take over management control and revival of its current state. The EoI was issued in November 2020 and has to be submitted to the RBI by December 15.
The Scam
PMC has been under regulatory restrictions since RBI found irregularities in its financial operations and hiding and facilitating loans to Housing Development Infrastructure Limited (HDIL). Rs. 6200 crore have been exposed to HDIL in this matter. In 2019, Economic Offences Wing (Eow) of the Mumbai police, arrested PMC’s former managing director Joy Thomas in connection with the fraud. The promoters of HDIL, Rakesh Wadhawan and Sarang Wadhawan, too have been arrested and are currently in jail, facing money laundering charges.
RBI found financial irregularities in its transactions and imposed regulatory restrictions
PMC’s total deposits sum up close to Rs 10,800 crore, advances up to Rs 4500 crore, and gross non performing assets of Rs 3500 crore as on 31st March 2020. The bank has a share capital of Rs 293 crore but registered a loss of Rs 6800 crore during the year 2019-20. It has a negative net worth of Rs 5800 crore.
The Revival
In a letter to the bank’s customers and stakeholders, RBI appointed administrator A K Dixit said that the bank has already rolled out various steps in order to recover from its current state. Recovery of bad debts, cutting costs and expenses, rationalizing several branches are a few of the steps taken on the revival front. Essential IT systems are being retained, staff expenses are being kept under a strict check and various means are being found to console the stakeholders and especially the depositors.
RBI kept a strict check on its costs and expenses
The administration stated that the bank is currently rolling out Rs 1 Lakh to all its depositors. Other than that, hardship payments of Rs 5 lakh are being made to those with Critical or life-threatening ailments like Cancer, Covid-19, ailments related to heart, kidney etc.
A particular development has been observed during the revival process that 20 percent of the bank’s nine lakh customers haven’t withdrawn the entire sum of Rs 1 lakh. It looks like a silver lining in the days of doom as there are a few customers that believe that the bank is going to make it through this mess.
Required Investment
Potential investors have proposed to convert PMC bank into a small financing bank but first, it will have to meet the regulations and an approval by the RBI. The administration is reviewing several options of investments for bringing the bank back to life.
RBI is looking for potential investors for the bank’s revival
Currently, with a negative net worth, the bank will need Rs 5800 crore to bring back the net worth to zero and another 1000 crore to maintain the adequacy ratio of 9 percent to restart the business.
Further proceedings
Administrator will weigh pros and cons for each investor and give recommendations to RBI
Initially, four entities had shown interest in investing but only three entities have submitted their interest in the revival of PMC so far. Mumbai based Surindar Mohan Arora (Ideal Group) is understood to have submitted the LoI (letter of intent). Identities of other entities have not yet been ascertained. The last date for submitting the LoI was December 15 2020. An extension has been granted and the investors have been given February 1, 2021 as the final date to submit their final offer. The RBI administrator A K Dixit will be studying the plus and minuses of all the Letters of intent. After their recommendations, RBI will take a call on which entity is suitable for taking over the management control and commencing day to day operations of the bank.
The RBI recently announced that the retail investors would soon be able to open Gilt accounts. Government securities would now be made available to retail investors with the introduction of a new platform called the “Retail Direct”. RBI believes that this is a game changer for the economy as retail investors will now access to G-sec in a rather more hassle free process.
Who is a Retail Investor?
Retail investors are individuals or small investors who trade with smaller amounts in the equity market. Their investments are generally smaller as compared to institutional investors, which results in them having to pay higher commissions or fees to the brokers.
A retail investor is an individual or entity trading with smaller amounts in the market
Government bonds or securities in the UK , India and several other commonwealth countries are called Gilts. They are equivalent to the US Treasury bonds in their respective countries. Gilts consist of government bonds, securities and treasury bills. These securities are rated high in their returns (when held for a long time) and low risk as compared to other equity options. So far, only institutional investors were having direct access to government securities. They can be held in physical forms and dematerialized forms.
As RBI announces the introduction of gilt accounts for retail investors, one might note that these government securities are already available for the retail market. Retail investors have access to G-sec through non-competitive bidding on primary auctions through aggregators. Some of the retail investors have chosen Gilt funds to make investments in government securities. The stock exchanges are allowed to reroute the primary purchases and also allow a specific retail segment in the secondary market. Here’s how you can invest in government securities:
The eligible retail investors have to participate in a non-competitive bidding (NCB) at RBI through an aggregator or a facilitator.
The National Stock Exchange (NSE) acts as one of the aggregators and places a collective single bid at the RBI.
Retail investors can place their bids through a registered member of NSE or using the NSE goBID web platform or mobile app.
After placing bids, securities are credited to the account of the registered member of the NSE and then transferred to the Retail investors’ demat account.
The process of investing in government securities as a retail investor can be hectic and time consuming. To simplify this process RBI is launching the “Retail Direct” platform as it aims to simplify the process and attract more retail investors. While there are other ways to invest in government securities, none of them are as seamless, simply operational and efficient.
This will be the first time retail investors will be having direct access to the government securities through a platform owned by the government of India and the RBI. Retail investors will be able to set up a gilt account through RBI’s digital platform e-Kuber. e-Kuber is the core banking solution used by RBI for huge transactions and services. Once the account is set up, the investor can bid through NDS-Om. It is a screen based anonymous order matching system for trading in government securities owned by RBI. Currently, it is open to entities maintaining an SGL account (large financial institutions such as banks, mutual funds, insurers etc.) with RBI.
The government of India is coming up with various solutions to control its economic narrative. As it plans to curb expenses and reduce capital expenditure, it is trying to expand its fund raising potential in the Indian Market as the market itself is enormous. The recent example of this was the IPO launched by the Indian Railway Financial Commission (IFRC) in January 2021, which will be raising funds to finance various projects laid out by the Ministry of Railways.
Benefits for Retailers
Government securities are high in returns with practically zero risk. They have been by far the safest option in terms of tenure and interest. This platform makes it workable for investors looking for alternative solutions for better returns on their long term investments. Retail investors already investing in government securities through alternative routes can now invest directly through this platform in a less complicated and efficient manner. It will save all the hassle that a retail investor has to go through to buy government securities.
Direct access to guilt account will attract more retail investors
The government has taken several measures in the past for engaging more retail investment by introducing bids through non competitive bidding. Allowing direct access to retail investors into government securities seems like a smart move to increase the inflow of retail investment. “This will broaden the investor base and provide retail investors with enhanced access to participate in the government securities market. This is a major structural reform placing India among select few countries which have similar facilities,” RBI Governor Shaktikanta Das said while announcing the monetary policy on Friday.
The G-sec market is broadening its base by opening up to Retail investors
The G-Secs market has witnessed significant changes during the past decade. Introduction of an electronic screen-based trading system, dematerialized holding, straight through processing, establishment of the Clearing Corporation of India Ltd. (CCIL) as the Central Counter Party (CCP) for guaranteed settlement, new instruments, and changes in the legal environment are some of the major aspects that have contributed to the rapid development of the G-Sec market. Along with its new initiative and good old major players, we’re now here to observe how the retail behavior brings a change in its due course.
PV Vyshnavi
