The post DEMONETISATION 2. RBI: ₹2000 Will Not Be A Legal Tender After 30th September 2023. first appeared on Latest News, Breaking News, National News, World News, India News, Bollywood News, Business News, Politics News, Sports News, Entertainment News - CineBuster.

In 2017 #NathanAnderson started a short selling company, #Hindenburg, a #ForensicFinancialResearchCompany, which analyses equity, credit and derivatives of companies across the world. It focusses on a ‘#ManMadeDisaster’ in the companies. So far Hindenburg has exposed financial irregularities in 16 companies across world which includes financial irregularities in #Twitter. And now it has reported that #IndianBillionaire #GautamAdani’s conglomerate of companies have made profits by artificially inflating the share prices. A reputed organization called #HindenburgResearch has prepared a 33000 page report on the Adani Group.

One of the topmost Finance and #StockMarketAnalyst, #AjayRaigadkar, has revealed/assumed the steps taken by Adani group of Companies. With modesty he has stated that his report may have some lacunae. He states that initially a company floats an IPO. An #IPO means that at least 25% of your company’s shares are exchanged in the market and the value of that exchange determines the value of the entire company. In step 2, transfer the proceeds from the IPO to your or someone else’s company account in a country with low/zero interest rates like #Mauritius or #CaymanIslands. That is, the company pays nothing in the form of tax to the government.

Then in Step 3, the #TaxFreeMoney is Used in a Couple of Ways.

a) Create new companies in the same country and divert this money and buy IPO shares of own companies in India. Or

b) Give some of this money to the mutual fund companies of that country and ask them to invest only in particular companies. Normally mutual funds invest in at least 20-30 companies but these 5 funds have bought shares of Adani’s company only.
By this stage too many shares are bought by these fake companies. Artificial scarcity of Adani shares is created and then the share price automatically starts increasing. That rising price trend is created and once it happens and then traders also jump into this flowing trade.

Any trader has a fund that he will not sell any shares until the share price falls to a certain level, so in this stage the simple task of the Adani is to not let the share price fall below that certain price (below support). And once it happens the price of the share increases and keeps on increasing so the big guys like #LIC and #IndianMutualFunds also have to jump in this crowd. They have unlimited money, they keep buying the shares at whatever price they are available and then there is an explosion of the share prices. That’s how Adani shares grow 10-20+ times in a year. In this phase Adani does nothing to the share price because by now the trend is formed, the share price is increasing in the channel. At this time Adani then shows this inflated share price and starts taking loans by pledging the share, loans of lakhs of crores.

With this loan money he buys government companies, land ports, airports. He buys all the things he wants to sell and the stock market keeps increasing the price of the shares considering these things as a big win for the business. And then Adani, who could barely fit in India’s top 100, gets a place in the top 5 richest people in the world on the increased share price, on the government bank loan, on the strength of the shares taken by the government entity LIC at a very high price.

What next from here? Nothing can be predicted but it can happen here as it happened in almost all Scams in the world. Someone who is already rich will become richer, poor will become poorer, some banks who gave huge loan on pledge of shares will go bankrupt due to falling price of shares. In big banks like #SBI this will create #NPAs and to sink those NPAs #Petrol and #Diesel prices will be increased thus inflation going up.

Under #AatmanirbharBharatAdaniDefenceSystemsAndTechnologiesLtd (#ADSTL) said that it will acquire #MRO operator Air Works for an enterprise value of ₹400 crore. The company, in a statement, said it has signed definitive agreements to acquire #AirWorks, which has developed extensive operational capabilities within the country for key defence and aerospace platforms. Air works has a presence across 27 cities with six maintenance bays. Air Works and Boeing are currently undertaking heavy maintenance checks on three P-8I long-range maritime patrol and anti-submarine warfare aircraft operated by the Indian Navy at Air Works facility.

Since Adani Group of Companies being under the cloud of suspicion, shouldn’t this defence related contract be cancelled? Also how safe it is to allow a single group of companies to cater to Nation’s defence? Reportedly drugs found at Adani port become talcum powder as well as one of the relatives of Mr Adani, Mr Vikram Kothari is embroiled in ₹5000 cr Scam.

#AdaniGroupOfCompanies, #Narendramodi, #PMModi, #RBI, #SEBI

The post Is ‘Adani Group of Companies’ A Threat To The Nation’s Safety? first appeared on Latest News, Breaking News, National News, World News, India News, Bollywood News, Business News, Politics News, Sports News, Entertainment News - CineBuster.

The RBI, in its reply to the SC, has estimated that a “forced” waiver of interest will hurt banks by as much as Rs 2 lakh crore (1% of GDP), which will have “huge consequences” for stability of the entire financial system.

RBI filed a reply, after the SC issued a notice seeking a reply from the regulator on a waiver of interest dues plea on the six-month moratorium announced by the central bank.

On March 27, RBI issued a circular asking financial institutions to allow customers a moratorium on loan installments that fall between March 1 and May 31. On May 22, RBI extended the moratorium for another three months, until August 31.

RBI argued that a “forced waiver is neither prudent nor appropriate”. The RBI cautioned that the waiver of interest may risk financial viability of banks, which in turn may put depositors in jeopardy.

The central bank reasoned that banks must remain sound and profitable to ensure safety of depositors and financial stability of the country. RBI argued that interest of loans is an important source of income for banks and to remain viable lenders need to sustain reasonable interest margins.

RBI further clarified that the borrowing or a loan is in the nature of a commercial contract between the lender and borrowers, and that the interest rate reflects the same. The central bank also argued that the benefits of an interest waiver, enjoyed by borrowers, would entail a cost which must not be transferred to banks.

The banking regulator asserted that the petitioner had erroneously construed the moratorium as a waiver, whereas it was a deferment of existing and current liabilities.

RBI assured that the regulator was alive to the constraints caused by the lockdown and that was the reason behind extension of the moratorium to six months, ending on August 31 instead of May 31. The apex bank also submitted that it had allowed corporate companies to repay accumulated interest, after August 31, as a funded interest term loan until Mar 2021.

The RBI, importantly, has clarified that availing benefits under the scheme is entirely as per the lenders’ policies. The RBI reply clarifies that discretion regarding eligibility of customers, on-boarding of customers and manner of interest recovery has been left to the banks and financial institutions.

The post Banks Will Suffer A Losses Of Rs 2 Trillion If Interest During Moratorium Is Waived: RBI Reply To Supreme Court. first appeared on Latest News, Breaking News, National News, World News, India News, Bollywood News, Business News, Politics News, Sports News, Entertainment News - CineBuster.

He also hit out at Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman, urging them to rethink the Rs 20 lakh crore relief package that “has fiscal stimulus of less than 1 per cent of GDP”. The government has described the package as being worth 10 per cent of the GDP.

“Governor Shaktikanta Das says demand has collapsed, growth in 2020-21 headed toward negative territory. Why is he then infusing more liquidity? He should bluntly tell the government ‘Do your duty, take fiscal measures’,” the veteran Congress leader said.

“Even after RBI’s statement, is the PMO or Nirmala Sitharaman lauding themselves for a package that has fiscal stimulus of less than 1 per cent of GDP?” he asked.

Governor @DasShaktikanta says demand has collapsed, growth in 2020-21 headed toward negative territory. Why is he then infusing more liquidity?

He should bluntly tell the government ‘Do your duty, take fiscal measures’.

— P. Chidambaram (@PChidambaram_IN) May 23, 2020
The former Finance Minister’s comments came a day after the RBI said GDP could contract further than it has this year and “is estimated to remain in negative territory” in the next.

On Friday, RBI Governor Shaktikanta Das – in his first address since Finance Minister Nirmala Sitharaman revealed details of the government’s Rs 20 lakh crore stimulus – announced a 40 basis point reduction in the repo rate, dropping it from 4.4 per cent to 4 per cent.

Even after RBI’s statement, is the @PMOIndia or @nsitharaman lauding themselves for a package that has fiscal stimulus of less than 1% of GDP?

RSS should be ashamed of how the government has dragged the economy into negative growth territory.

— P. Chidambaram (@PChidambaram_IN) May 23, 2020
The reduction, coupled with an extension of moratorium on loan repayments till August, is expected to infuse liquidity into an economy struggling to create demand.

P Chidambaram has been among the most vocal critics of the government’s Rs 20 lakh crore fiscal stimulus package, arguing that it “has left several sections high and dry”.

“…a fiscal stimulus of Rs 1,86,650 crore amounting to barely 0.91 per cent of GDP will be totally inadequate given the gravity of the economic crisis and the dire situation in which people find themselves,” he said in a statement released this week.

Mr Chidambaram had previously questioned facets of the package, including pointing out that two measures related to agriculture and allied activities were part of last year’s Expenditure Budget and another on collateral-free loans for MSMEs was in apparent contradiction of a statement by Union Minister Nitin Gadkari.

Amid claims the relief package doesn’t amount to Rs 20 lakh crore, the government, this week, shared a break-up of the the sums involved that, according to its calculations, amount to Rs 20,97,053 crore.

In his tweets Mr Chidambaram also took a swipe at the RSS after a pan-India worker’s group affiliated to group, regarded as the ideological mentor of the ruling BJP, criticised the government over policy announcements seen as leading to privatisation and job cuts.

“RSS should be ashamed of how the government has dragged the economy into negative growth territory,” the former Finance Minister tweeted.

The post “RBI Must Bluntly Tell Government, Do Your Duty” Says P Chidambaram first appeared on Latest News, Breaking News, National News, World News, India News, Bollywood News, Business News, Politics News, Sports News, Entertainment News - CineBuster.

“The financial position of the bank is highly adverse and unsustainable. There is no concrete revival plan or proposal for merger with another bank. Credible commitment towards revival from the management is not visible,” the RBI said in a statement.

The RBI said the bank is not in a position to pay its present or future depositors and is in violation of regulatory norms for minimum capital requirement.

“The affairs of the bank were and are being conducted in a manner detrimental to the public interest and interest of the depositors and that the general character of the management of the bank is prejudicial to the interest of depositors as also public interest,” RBI said.

“The bank’s efforts for revival have been far from adequate though the bank has been given ample time and opportunity and dispensations. No merger proposal has been received in respect of the bank. Thus, in all likelihood, public interest would be adversely affected if the bank were allowed to carry on its business any further,” the central bank added.

With the cancellation of licence and commencement of liquidation proceedings, the process of paying the depositors of The CKP Co-operative Bank as per the DICGC Act, 1961 will be set in motion, the Reserve Bank said.

Accordingly, on liquidation, every depositor is entitled to repayment of his/her deposits up to a monetary ceiling of Rs 5 lakh from the DICGC.

The post RBI Cancels CKP Co-operative Bank’s Licence; Depositors To Get Upto Rs 5 Lakh first appeared on Latest News, Breaking News, National News, World News, India News, Bollywood News, Business News, Politics News, Sports News, Entertainment News - CineBuster.

A “write-off” is an accounting term used to denote assets whose value becomes zero. Written-off loans refer to debt that has been factored as a loss even though the lender may continue attempts to recover it.

Fugitive diamantaire Mehul Choksi’s company Gitanjali Gems tops the list of these defaulters with Rs 5,492 crore. Choksi’s other firms Gili India and Nakshatra Brands also have loans of Rs 1,447 and Rs 1,109 crore respectively written off.

He is followed by REI Agro with Rs 4,314 crore and Winsome Diamonds with Rs 4,076 crore.

Rotomac Global Private Limited owes Rs 2,850 crore which have been written off followed by Kudos Chemie Ltd with Rs 2,326 crore, Ruchi Soya Industries Limited, now owned by Yoga guru Ramdev’s Patanjali, with Rs 2,212 crore and Zoom Developers Pvt Ltd with Rs 2,012 crore.

Vijay Mallya’s Kingfisher Airlines figures in the list at number 9, with outstanding of Rs 1,943 crore which have been written off by the banks.

Forever Precious Jewellery and Diamonds Private Limited has loans of Rs 1,962 crore written off while Deccan Chronicle Holdings Limited have Rs 1,915 crore written off loans.

REI Agro of Jhunjhunwala brothers is already being investigated by the Enforcement Directorate or ED. The Central Bureau of Investigation (CBI) and ED are also probing alleged frauds by the owners of Winsome Diamonds.

Vikram Kothari’s Rotomac is the fourth in the list. He and his son Rahul Kothari were arrested by the CBI in 2018.

The list was cited by the Congress on Tuesday to attack the government. Party leader Rahul Gandhi accused the government of “hiding” the names because they included “friends” of the ruling BJP.

“I asked a simple question in parliament – tell me the names of 50 biggest bank scammers. Finance Minister refused to reply. Now RBI has put names of Nirav Modi, Mehul Choksi and other BJP friends in the list. This is why they hid the truth from parliament,” Mr Gandhi tweeted in Hindi along with a video.

संसद में मैंने एक सीधा सा प्रश्न पूछा था- मुझे देश के 50 सबसे बड़े बैंक चोरों के नाम बताइए।

वित्तमंत्री ने जवाब देने से मना कर दिया।

अब RBI ने नीरव मोदी, मेहुल चोकसी सहित भाजपा के ‘मित्रों’ के नाम बैंक चोरों की लिस्ट में डाले हैं।

इसीलिए संसद में इस सच को छुपाया गया। pic.twitter.com/xVAkxrxyVM

— Rahul Gandhi (@RahulGandhi) April 28, 2020

In his application, RTI activist Saket Gokhale had sought the list of defaulters as on February 16, but the RBI said the requested information is not available. The RBI also said the data was provided by banks and that information on borrowers abroad is exempted from public disclosure.

This is why Finance Minister @nsitharaman tried to escape from a straight & clear question asked by Rahul Gandhi.

Sadly – the truth can never stay hidden too long.

Massive kudos to RG for calling the govt’s bluff way back in March!

PS: Here’s the list if anyone missed it https://t.co/OA4moYdTYz pic.twitter.com/JsaoBewhBT

— Saket Gokhale (@SaketGokhale) April 28, 2020

The Indian banking system is reeling under over 10 lakh crore in bad debt, according to news agency Reuters, that has been brought into sharp focus after a number of incidents of billionaires fleeing the country to escape prosecution in recent years and disastrous financial crises at high-profile institutions.

The post Mehul Choksi Tops RBI List Of Defaulters Who Owe Nearly Rs 70,000 Crore first appeared on Latest News, Breaking News, National News, World News, India News, Bollywood News, Business News, Politics News, Sports News, Entertainment News - CineBuster.

RBI has made a crpytic statement that has been read something like: You don’t have to pay EMIs for three months.

This is a misconception. RBI said nothing of the sort. Firstly, if you are planning to not pay up your loan or credit card bill, there will be consequences and in credit cards, very hefty consequences. Now, let’s go to the heart of the matter.

What do you mean? Didn’t RBI say no EMI for three months?
No. They didn’t say that at all.

What have they said?

The official line is:

In respect of all term loans (including agricultural term loans, retail and crop loans), all commercial banks (including regional rural banks, small finance banks and local area banks), co-operative banks, all-India Financial Institutions, and NBFCs (including housing finance companies) (“lending institutions”) are permitted to grant a moratorium of three months on payment of all instalments1 falling due between March 1, 2020 and May 31, 2020. The repayment schedule for such loans as also the residual tenor, will be shifted across the board by three months after the moratorium period. Interest shall continue to accrue on the outstanding portion of the term loans during the moratorium period.

It means a few things:

Banks have the right (but not the obligation) to allow a moratorium of three months. Means your bank may not allow it, but my bank may. This applies to term loans (in a subnote, they include credit card dues but that’s a bad idea, we’ll discuss later). This will include home loans, personal loans, car loans, educational loans etc. – anything that has a fixed term. It does not include overdraft accounts, unless that is given as a working capital loan, where they can defer collection of interest for three months.
Interest will continue to accrue. Meaning, you’ll pay interest on the outstanding loan.

Wait. You mean there’s no waiver of interest? How does that work?
Consider this. You have a home loan of Rs. 50 lakh at 8.5% interest for 10 years. The EMI is Rs. 62,000 (approximately).

You have to pay the first installment in April, but you choose to take the moratorium. This means the principal of Rs. 50 lakh attracts interest at 8.5%/12 = Rs. 35,000. So your loan amount at the end of April is Rs. 50,35,000.

You don’t pay in May. Interest applies on the FULL amount of 50.35 lakh now, so it’s a little closer to Rs. 36,000 in May. The total outstanding becomes Rs. 50.71 lakh. After three months, your new principal is Rs. 51.07 lakh. Effectively you’ll have about Rs. 1 lakh in extra interest to be paid to the bank.

The loan stretches three more months at the end, but this Rs. 1.07 lakh extra is additional so either you have to increase the EMI, or something else.

What something else?
After three months, you can pay this Rs. 1.07 lakh to the bank and start back from 50 lakh. Or, you can request the bank to cut your loan interest rate – a cut by 0.5% to 8%, but retaining the same EMI after three months is good enough to cover your payment over the remaining period of the loan.

But wait, I don’t want to pay extra interest. That’s nonsense.
That’s why I say this: Pay if you can afford to. Don’t pay interest for some RBI statement.

Even if your bank doesn’t take your money, does not cash in the ECS mandate, or doesn’t use your cheque, you should pay it up. Only if you can’t afford it because of cash flow issues, should you consider not paying.

What if I want it and the bank’s not giving me a moratorium?
SBI has already said they’ll offer it by default to their customers.

Talk to them. They might listen if they are a good bank. If not, you risk them taking your house (in case of a home loan). On personal loans, you can request them to delay but in the shorter term loans, you basically pay so much more on this extra interest that it’s not worth it.

Either way, you can’t force the bank to do this. The RBI has left it to the bank to decide. But at least they have said the criteria to give such a moratorium needs to be objective (not subjective) so if you meet the rules, you will be given the extension.

There’s no relief here!
It’s a cash flow relief. Not an interest waiver. Interest waivers have to be given by the government, not the RBI. And the government doesn’t seem to have the money. The relief is that in case you take the moratorium you will not get reported to CIBIL as a defaulter. Useful to get more loans or for your credit history. In other circumstances, if you had trouble paying and asked for the same extension, you would be a “restructured loan” or worse, a “non performing asset” – and that will hurt both the bank and you. The bank has to put more capital against your loan for having restructured it, and you might find it difficult to get loans since a restructure is equivalent to a bad mark on your credit score.

What about Credit Cards?
If you think you can avoid paying this month’s credit card bill, think again.
Credit cards charge a horrendous 36%+ interest per year. A skipped credit card bill means such interest will accrue. Even if there is a moratorium. Then, things get worse. Every subsequent purchase on the credit card will get charged interest from day 1! There is no interest free period once you have any outstanding bill unpaid after the due date.

And then, even worse. Credit cards have notoriously high fees and penalties for late payments. While the RBI has allowed a moratorium it says nothing about waiving such fees or penalties. Even that gets added to your bill.

Finally, the killer. Credit card interest gets charged an additional 18% GST.

In short, don’t do it. Do not revolve a credit card bill even if RBI shouts moratorium from the rooftops.

(Convert it to a personal loan, if you’re in trouble. )

So I can do this on a credit card anyway – pay the minimum and revolve the rest. What relief is this?

Not much, agreed. But at least this will not reflect badly on your credit history. Otherwise credit card users don’t get anything else.

Can I take a loan and take a moratorium on it?
Good try. But no. Because the moratorium will only apply to loans that existed on March 1. Now, unless you have a time machine… If I had a time machine I wouldn’t need a loan. Such smart thinking is why I’m proud of you.

Anyways, is there any reason to use the moratorium on any kind of loan?
There is. Say you’re a business with a term loan of say Rs. 1 cr. of which you were paying back with say 5 lakh a month on EMI.

The business has no income because you have used the money to buy raw material, but building the product is on hold due to the lockdown. Your customers are okay – they are happy to pay you once you can deliver, so you know you’ll get the money – say the money was supposed to be Rs. 15 lakh per month.

You can then hold off on the EMI for three months. After three months, you should have restarted work, and you’ll get the payments of Rs. 15 lakh a month and keep paying Rs. 5 lakh a month back to the bank as a loan.

However, the moratorium would have cost you roughly Rs. 300,000+ (3 lakh+) assuming a 12% interest rate. You can pay that extra cost for getting allowed a delay. And it also means your credit score is not hurt, even though your business is.

I’m furious. This is not what most other people are saying. I thought no EMI meant…. A moratorium means this no matter when it’s said. Educational loans are like that – don’t pay while you’re studying (but interest will accrue) and start paying back after you get a job. The idea of a moratorium isn’t to give you an interest free period, it’s to help with cash flow. A student won’t have income, so asking him to pay while getting educated is a little silly, so he gets a moratorium until he gets a job.

Plus, remember, if the bank had to waive interest, then it wouldn’t pay any interest on its deposits either. But that is not acceptable to us that our fixed deposits earn no interest. So you can’t have a one-sided argument – so the banks will not waive interest.

We know there’s a lot of misconceptions about this rule. It may still require further clarification from the RBI.

(The author is CEO of Capitalmind, a SEBI registered portfolio manager)

The post RBI’s EMI Misconception: Is Modi Government Taking Care Of People? Pay If You Can, Because It Is Not Exactly Relief first appeared on Latest News, Breaking News, National News, World News, India News, Bollywood News, Business News, Politics News, Sports News, Entertainment News - CineBuster.

The post Sachin Sawant Says PM Modi And Amit Shah Were Worried Only About Gujarat And Not The Whole Country On Gujarat Firm Withdrew ₹265 Crore A Day Before RBI Imposed Moratorium On Yes Bank first appeared on Latest News, Breaking News, National News, World News, India News, Bollywood News, Business News, Politics News, Sports News, Entertainment News - CineBuster.

The post The Gujarat’s Vadodara Smart City Development Company Withdrew Rs 265 Crore hours before RBI Moratorium On Yes Bank first appeared on Latest News, Breaking News, National News, World News, India News, Bollywood News, Business News, Politics News, Sports News, Entertainment News - CineBuster.

The central agency had arrested Rana Kapoor around 3am on Sunday under the Prevention of Money Laundering Act (PMLA) related to Dewan Housing Finance Corporation Ltd (DHFL). Before that, he was questioned for hours.

ED had taken the Yes Bank founder to the Ballard Pier office in south Mumbai on Saturday morning for questioning.

Kapoor’s house was also raided by the agency on Friday night, a day after the Reserve Bank of India (RBI) put Yes Bank under a moratorium and capped withdrawals for its depositors at Rs 50,000 till April 3

The post Crisis-Hit Yes Bank’s Founder Rana Kapoor Sent To Enforcement Directorate’s Custody Till March 11 By A Special Holiday Court In Mumbai On Sunday, Hours After His Arrest first appeared on Latest News, Breaking News, National News, World News, India News, Bollywood News, Business News, Politics News, Sports News, Entertainment News - CineBuster.