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Aishwarya Raj Singh

Aishwarya Raj Singh
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Niti Aayog proposes digital banking licence for Neobanks

    By
    Aishwarya Raj Singh
    -

    Digital banking license will enable unregulated Neobanks to function as full-stack digital banks on upon meeting the specified parameters.

    Niti Aayog proposes digital banking licence for Neobanks

    As Niti Aayog proposed for digital banking license, it has created a stir among all neobank operators to seek further clarity on its recommendations and have urged the government to add provision for retail banking sector. The Niti Aayog suggestions are specifically meant to regulate digital banking for operators that are functioning under Reserve Bank of India (RBI).

    The Niti Aayog suggestions incorporate the surging neobanks fintechs that are working with partner banks and serving as a technology layer for customer acquisition and banking functionalities for those banks. Primarily these neobanks include start-ups such as Open, Jupiter, PeProp.Money, RazorpayX, Fi, Freo, and Niyo. Banking activities like deposits and lending independently are not possible in the absence of a banking license for Neobanks.

    A three-step process for Neobanks is suggested by the Niti Aayog to acquire a full-stack digital banking license and once the license has been acquired then these neobanks can offer multiple banking services to medium, small and micro enterprises (MSMEs). However, as most Neobanks are focused on retail (individual) customers, so this could be a major setback. 31st December is a deadline provided by the Niti Aayog to submit any comments on the discussion paper.

    The Irresistible Rise of Full Stack Developers

    As per Niti Aayog suggestion, these fintechs will be provided with a restricted digital business bank license first and then be allowed to operate in a regulatory sandbox. A sandbox is a kind of ecosystem that allows companies to operate, innovate and experiment in a highly monitored environment. Once the start-up meets all sorts of parameters such as minimum paid-up capital of Rs. 200 crores, it can achieve a full-stack digital business bank license.

    Divaker Bhalla, Founder of PeProp.Money said “This recommendation is a welcome step towards making the existing neobanks operators strengthen their grip into full-stack banking arena.”

    As per the RBI, Neobanks must be brought under the RBI regulations. Divaker Bhalla further added, “The proposed digital banking licence will facilitate the payment banks to rise above as a digital alternate to small finance banks (SFB).”

    What Will It Take for Payments Banks to Succeed?

    The guidelines for payments banks were announced in 2014 and received a lot of interest. However, it didn’t work at all and the reasons behind its failure was that payments banks weren’t allowed to lend and could only take deposits with the goal of enhancing financial inclusion. At present, Neobanks are serving the purpose by increasing banking access through the digital mode. Paytm is one of the fintech that has the RBI’s payments bank license.

    According to the new rule Switching your base rate home loan to MCLR can bring down the EMI

    By
    Aishwarya Raj Singh
    -

    According to the new rule Switching your base rate home loan to MCLR can bring down the EMI

    Home loans are the most widely recognized sort of loans required nowadays. Consistently individual either has a home loan or a car loan or so far as that is concerned some other loan. Our lives have begun spinning around the EMIs that are deducted each month from the bank accounts. An individual is thought of as fortunate and favored assuming they don’t convey any sort of loans on their names. So how do you get rid of these EMIs before the mentioned end date or maybe reduce the amount and thus the burden from your shoulders? Let us look at this aspect in detail since all of us are keen to do so.

    How do banks decide the Interest Rate?

    This is an extremely fascinating subject for each individual who has an loan or is intending to take one. Every bank has different interest rate which they charge to the customers. This is different as it is linked to the profits and losses that the banks earn. Prior home loans depended on the model of PLR which means Prime Lending Rate. In this model, banks could charge the customer a lower interest rate than that fixed by the bank which was not transparent enough. Therefore, this model was rejected and a base rate was fixed. In this model banks couldn’t give a rate lesser than that of the base rate. In this model, banks could not provide a rate lesser than that of the base rate. But with this model also followed a flaw where the banks never passed the benefits of a base rate reduction to all the customers which made no point in reducing the rates by the Reserve Bank of India. Therefore, a new model was created called as the Marginal Cost of Lending Rate (MCLR). This model suggests that when there is a change in the MCLR it would directly change the EMI of the loan and would benefit or increase the repayment amount.

    Switch Base Rate

    The base rate is the least that a bank can offer to a borrower for their home loan. This implies that assuming the EMI is at a X amount it can’t be decreased at any given point of time. But if you switch your base rate to MCLR then you would be move, to a new and better interest rate which would reduce the EMI amount. There is an fee that banks charge to the borrower for changing from the base rate to MCLR. This is straightforwardly proportional to your principal amount which is remarkable with the bank. It is a X percent of the amount that you need to pay to the bank and get your home loan changed over into a MCLR. This will benefit you further if the MCLR reduces in the long run. But it also has a negative effect in case if the MCLR increases. This will increase your Interest rate and thereby your EMI as well. It is a gamble buy at the current market scenario you are saving some amount from your EMI which is the need of the hour for every borrower.

    Banks Role

    Banks play a significant part in saving your EMI or reducing it to a lower amount. However, banks don’t take a functioning part in doing as such. As a customer, you should to know every change in the economy that the RBI does and act accordingly to reduce your EMI on home loans. You can change from a base rate to a MCLR by visiting the bank and making the necessary changes. This is because the MCLR is dependent on the marginal cost of funds and cash reserve ratio and operating cost which are periodically changed for the betterment of the economy.

    Since the new rule of MCLR being effective from first April 2016, the new loansd are given under the MCLR. However, the old loans should be moved to the MCLR from the base rate. This should be possible by paying a charge of 0.50% in addition to support charge on the exceptional amount which will be lesser than the rate that the borrower is currently paying. In this way, feel free to get your EMI reduced by changing from the base rate home loan to MCLR.

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    German Central Bank Cautions of Exaggerated Property Costs With The Problem Spreading

    By
    Aishwarya Raj Singh
    -

    Germany’s central bank warned Thursday about skewed valuations in the housing market, calling it a “specific vulnerability” as property prices continue to soar.

    German-central-bank

    Claudia Buch, vice-president at the Bundesbank said, “We have basically seen all indicators-prices, credit-those indicators kept increasing in Germany and you don’t really see a big effect of the pandemic.”

    Talking to CNBC’s Karen Tso, she added that her team at the Bundesbank has come up with estimates of about 10% to 30% for price deviations from their fundamentals.

    “What’s a bit of a new development is that these overvaluations are also more widespread, so they are outside of the big cities … [and] almost 90% of the households expect prices to keep increasing,” she said.

    The latest financial stability review by the Bundesbank also noted Thursday that German lenders should build up capital buffers to address these potential issues in the housing market.

    There are concerns that with overvaluation in the sector, banks are not estimating the true value of collateral correctly, and are therefore more exposed to future price adjustments.

    The German central bank said in the report, “Financial stability would be at risk if destabilizing developments were to take hold in the property market, whereby rising credit volumes and prices were to coincide with a deterioration in borrowers’ debt sustainability.”

    Chinese Real Estate Developer Kaisa’s Share Pop 20% After Debt Restructuring Plan

    By
    Aishwarya Raj Singh
    -

    On Thursday the Chinese real estate developer Kaisa announced for paying back investors, temporarily alleviating concerns about a default as China’s property sector continues to face pressure.

    Chinese Real Estate Developer Kaisa's Share Pop 20% After Debt Restructuring Plan

    Kaisa’s Hong Kong-listed shares popped 20% in the market open, before paring some gains to close 13.86% higher. It was the first day of trading after a nearly three-week halt. The developer had suspended trading after missing a payment on a wealth management product earlier this month.

    “Repayment measures have been implemented” for about 1.1 billion yuan ($171.9 million) of the wealth management products, Kaisa said in a filing with the Hong Kong stock exchange. The developer said it’s in negotiations about repayment of the remaining 396.6 million yuan in wealth management products.

    Separately, Kaisa said it would restructure offshore debt payments due in December by offering investors new bonds worth $380 million that are now due in 2023. The original U.S. dollar-denominated bonds were worth $400 million.

    As per the French investment bank Natixis, Kaisa is the second-largest issuer of U.S. dollar-denominated offshore high-yield bonds among Chinese developers. Evergrande, the world’s most indebted real estate developer, ranks first.

    As of the first half of this year, Kaisa had crossed two of China’s three “red lines” for real estate developers that the government outlined, according to Natixis.

    Kaisa said on Thursday, “Persistent tightening governmental policy, multiple credit events and deteriorating consumer sentiment have resulted in temporary shut-down of various refinancing venues for the sector and put enormous pressure on our short-term liquidity.”

    The company said, “Despite our efforts to reduce our interest-bearing debt in response to government regulations, the current sharp downturn in the financing environment has limited our funding sources to address the upcoming maturities.”

    Income Tax Raid On Two Delhi Real Estate Groups, ₹ 10 Crore Cash Seized

    By
    Aishwarya Raj Singh
    -

    The Income Tax Department led search procedure on two real estate bunches situated in Delhi-NCR in regards to a claim that was a case of large-scale tax evasion.

    Income Tax Raid On Two Delhi Real Estate Groups, ₹ 10 Crore Cash Seized

    On Wednesday, The Central Board of Direct Taxes (CBDT) said that they seized unaccounted cash of Rs 10 crore. As per the CBDT, the search operations took place on November 17. The evidence gathered so far has given an idea to the CBDT that the undisclosed income could be at least more than Rs 400 crore and the CBDT said that these real estate firms were big entities in the field of construction of commercial and residential projects. The IT department was also able to confiscate various incriminating evidence in the form of digital and physical data, ANI reported.

    The CBDT said, “On preliminary analysis of such data, it has been found that these groups are receiving part of the sale consideration in cash against the sale of flats and such cash is not recorded in the books of accounts. Thus, there is large-scale tax evasion, and due tax on such income has not been offered.” The search team has found evidence pointing to the fact that the unaccounted income earned is pushed into the business through non-descript and non-functional shell entities which are run by professional entry providers or employees/associates of the group working as directors.

    IT Department: They were using charitable organizations to evade taxes

    As per the ANI report, the IT department further said, “One of the groups has also been found to be using a network of charitable organizations engaged in educational activities, purportedly for the purpose of tax evasion and financing its real estate business.” The evidence has also been seized showing proof that the books of accounts maintained and produced before tax authorities were doctored by ‘reversal of payables’, ‘diminution of investment’ and ‘bad debts written- off’. It said, “Instances of the non-genuine claim of expenses by way of bogus purchases by connected parties from non-existent suppliers have also come to notice. Evidence of cash payments made to various parties towards securing land deals and other contracts, and making various unaccounted expenses in real estate activities have been unearthed.” The IT department is currently further investigating the matter.

    Rs 2,000 crores to be invested by Brigade Group in Chennai

    By
    Aishwarya Raj Singh
    -

    “Brigade will continue to focus on the South Indian market and is aiming to increase the contribution of Chennai and Hyderabad markets in its overall portfolio.”

    Rs 2,000 crores to be invested by Brigade Group in Chennai

    Brigade Group, a Bengaluru-based property developer has disclosed that over the next three to five years in Chennai it would invest about ₹2,000 crores to expand an additional one million square feet each in residential and commercial areas.

    Hrishikesh Nair, COO, Chennai Operations, Brigade Enterprises Ltd. said, “Brigade will continue to focus on the South Indian market and is aiming to increase the contribution of Chennai and Hyderabad markets in its overall portfolio.”

    “This investment will be in residential, commercial, hospitality, and retail verticals of the group,” he said in a statement.

    According to Mr. Nair, in Chennai Brigade Group has established and developed 2 million sq. ft. of commercial space till now.

    They are aiming to finalize one million square feet in residential and commercial spaces additionally at an investment of nearly ₹2,000 crores in the next 3-5 years in the city for which it had already recognized land zones.

    The developer also announced the launch of another amazing project Zenith Tower of Brigade Residences located at the World Trade Centre, Chennai. This is Brigade’s second residential tower project after Astra, which was displayed in 2019.

    30% of pre-launch booking for zenith has already been received by Brigade. Zenith will include 148 units along with 3 bhk homes and 4 bhk penthouses. Also, the new building will be of 26 floors.

    He said, “The demand in the premium residential market in Chennai has witnessed a sharp increase, with a change in the demographics where younger couples are looking to invest in residences.”

    Brigade Enterprises posted, in the second quarter a 73% gain in sales value at ₹831 crores consecutively, with net area sales of 1.3 million sq. feet.

    As Per The Reports, More Families To Be Displaced By Noida Airport’s Second Phase

    By
    Aishwarya Raj Singh
    -

    A social impact assessment (SIA) report prepared by Gautam Buddha University has revealed that more families are likely to be displaced by the second phase of the Noida airport project than the first.

    As Per The Reports, More Families To Be Displaced By Noida Airport's Second Phase

    As per the report, vetted by the multidisciplinary expert appraisal committee on Saturday, also said that a fewer number of agricultural plots would be taken over for the second phase. Explaining why more families would need to be displaced, an official pointed out that many houses and other such structures had come up on the plots over the past couple of years.

    Vivek Mishra, the nodal officer of the SIA team said, “As a result, more people will get impacted this time. Villagers have been extremely vocal about their demands in the second phase. They want a better deal than what was offered to the affected population three years ago. We have included their concerns in the report for consideration.”

    Additional district magistrate (land acquisition) Balram Singh said the key demands of the villagers had been, in turn, forwarded to the government for further action. “We have learnt a lot from the first phase. This time, we will take steps in advance to bridge the gaps that resulted in inconvenience for the villagers,” he added.

    As against 13,000-odd people who were impacted in the first phase, the airport’s expansion will hit a population of 16,158. Of them, 11,998 will have to be given the status of “project affected people”. A majority of the remaining ones are either under the age of 18 or not permanent residents of the area or do not own any land.

    Quoting from the records, an official said the administration would have to take over 1,987 agricultural plots this time and bring down 2,998 permanent structure. While conducting surveys in the six villages where land would be acquired (Birampur, Dayanatpur, Ranhera, Kureb, Karauli Bangar and Mundhera), the SIA team had pointed out that a number of these structures had been built over the past two years. An official said, “Maybe, they were constructed to claim the benefits that would be offered under the rehabilitation and resettlement scheme. We have brought this to the notice of the acquisition agency.”

    The villagers, however, have been unanimous in their demand for a higher compensation. A majority of them have been asking for Rs 9,200 for a sqmt. As the Yamuna Expressway Industrial Development Authority is acquiring land at the rate of about Rs 2,300 a sqmt, the villagers are demanding four times the amount under provisions of the Land Acquisition Act, 2013.

    Although the final amount will be decided by the district administration, sources said the SIA team had recommended a revision of the circle rate in Jewar subdivision, saying that it had remained unchanged for the past 5-6 years.

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    Real Property Builders In NCR Take Measures To Scale Back Air Pollution

    By
    Aishwarya Raj Singh
    -

    Real Estate companies executing large projects in the National Capital Region are taking measures like using prefabricated building materials, erecting high wind-breaking walls, creating dust-absorbing and sound-absorbing barriers, and installing anti-smog guns to reduce pollution and ensure that work is not delayed even if there is a ban on construction.

    Real Property Builders In NCR Take Measures To Scale Back Air Pollution

    In some cases, the construction of floors, walls, and other structures is taking place at a remote site and being assembled at various Delhi sites.

    Tata Projects, which is executing the new parliament building project, is using prefabricated blocks constructed kilometers away-the stonework is being completed about 600 km away while the bamboo flooring is coming in from Northeast India.

    An official said, “On site, it’s more like joining Lego blocks. Hence, there is currently no polluting activity on site.”

    Om Monday, the commission for air quality management has lifted the ban on construction activity in NCR, after shutting it down for a week. However, companies have been asked to follow environmentally friendly measures to reduce pollution at project sites.

    Builders are using various ways to reduce pollution.

    Santosh Agarwal, CFO and Executive Director, Alpha Corp said, “To minimize the air pollution levels, we sprinkle water at regular intervals around the construction sites and adjacent areas to mitigate dust. We also get most of our construction supplies like UG pipe, pavers and other materials in ready-to-fit condition from various vendors who do the final touch ups in their closed warehouses to minimize the release of harmful pollutants in the atmosphere.”

    Experts say using pre-cast material can also help reduce cost by up to 30%.

    Paul Wallett, regional director for construction technology company Trimble in the Middle East and India region said, “Cutting-edge tech solutions allow further optimization of the prefabrication process, which means faster completion of all construction projects at significantly lower costs.”

    NCRTC, which is executing the Delhi–Ghaziabad–Meerut RRTS corridor, has also adopted similar measures.

    Punnet Vats, NCRTC chief PRO said, “NCRTC is extensively using pre-cast technology in RRTS construction, wherein segments of huge structures (stations/viaduct/tunnels) are casted in the RRTS casting yards in a controlled environment. This strategic decision of limiting construction activities at the sites also leads to systematic handling and processing of raw materials, such as cement and sand, resulting in no pollution.”

    The track slabs are being constructed at a factory where casting of structures is being done in a controlled environment for mitigating pollution.

    Companies say construction work is being done within barricaded zones of adequate height and thorough cleanliness is being maintained on these sites.

    Top 9 Listed Developers See 57% YoY Growth In Sales Booking Revenue In H1 FY22

    By
    Aishwarya Raj Singh
    -

    According to Anarock Property Consultants, India’s top nine listed real estate developers continued to reap rewards from the surge in demand for branded homes during the pandemic.

    Top 9 Listed Developers See 57% YoY Growth In Sales Booking Revenue In H1 FY22

    As per Anarock report, these developers reported a 57% annual growth in their revenue from residential bookings at Rs 14,883 crore in the first half of fiscal year 2022. That’s inspite of the second Covid-19 wave wreaking economic havoc in the first quarter ended June.

    Godrej Properties Ltd. recorded the highest sales booking revenue in the first half, followed by Macrotech Developers Ltd. and Prestige Estates Projects Ltd.

    According to Anarock, factors that drove sales of the top developers include:

    • Increased preference for branded homes
    • Reconfigured supply pipelines
    • Low home loan interest rates
    • Homebuyers’ desire to avoid construction-related risks

    According to Anuj Puri, chairman of Anarock Group, the developers sold 18.46 million square feet of housing space during the first half. That’s a growth of 39% over a year earlier and is also higher than 17.2 million in the pre-Covid period of April-September.

    Puri said, “Less than a decade ago, a largely speculator-driven housing market saw unnatural demand chasing the wrong kind of supply. Today, these players are unleashing right-priced, right-sized supply clearly aimed at organic end-user demand.”

    Puri attributed it to intensive market research before pressing the “commit” button and is one of the most notable features of the “reinvented Indian housing market”.

    Key Highlights:

    • During the first half of FY22, the residential market’s second-quarter performance was significantly better than the first.
    • Residential activity fared slightly better during the second wave of the pandemic than in the first.
    • The top nine listed players collectively sold homes worth Rs 10,669 crore in Q2, 89% growth over Q1.
    • The total area sold rose 83% sequentially to 13.47 million sqft in Q2.
    • As for the first quarter of FY22 when the second pandemic wave was at its worst, these companies sold about 4.99 million sqft, down from 5.9 million sqft a year ago.

    While area sold in the first quarter fell 15% over a year earlier, booking revenue rose 10% at Rs 4,214 crore. That may indicate higher sales in the mid and premium categories.

    Revenue from Real Estate Tax To Be 3 Times Higher In 2021, South Korea

    By
    Aishwarya Raj Singh
    -

    A revision to South Korea’s real estate holding tax law will help the government collect 5.7 trillion won ($4.8 billion) in such taxes in 2021, the finance ministry said on Monday, a three-fold increase compared to 2020.

    Revenue from Real Estate Tax To Be 3 Times Higher In 2021, South Korea

    Last year the government revised the law in increasing the holding tax rate for homeowners, as part of efforts to cool the country’s red-hot real estate market. The changes took effect this year.

    Since President Moon Jae-in took office in 2017, his government has rolled out dozens of loan curbs and tax measures which have done little to cool the property market.

    The average price of an apartment in the capital city Seoul has roughly doubled since 2016 to 1.18 billion won as of August, Kookmin Bank data showed.

    Park, who is among the 947,000 people or 2% of South Korea’s 52 million population subject to the tax increase this year, said he owes 6.3 times as much taxes on his real estate holdings in 2021 compared to 2020 due to the tax increase.

    Park, who asked to be identified only by his last name due to the sensitivity of the issue, said the tax increase will not have the desired effect of forcing him to sell one of his multiple properties.

    Under the changes, the holding tax rate that owners of multiple properties have to pay per year was raised to as much as 6% from 3.2% previously.

    Park said, “The capital gains tax is also so expensive I can’t sell one even if I wanted to.”

    “The government is shifting its responsibility over home price increase, the result of its policy failure, to us.”

    The finance ministry said only a small portion of property owners face a tougher tax burden due to the policy aimed at stabilizing the housing market.

    Others, however, said they are not bothered as the tax only applies to those who own some of the highest valued homes in the country.

    One Twitter user wrote, “I wish I were rich enough to pay for the real estate holding tax,”

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