The bankers said they were assessing the impact of this crisis and that it was possible to extend the terms of these borrowers on a case-by-case basis, although there was no discussion about this at the Association. Indian banks (IBA). According to the standardized IBA format, student loans up to ₹4 lakh do not need collateral but loans up to ₹7.5 lakh can be obtained with collateral in the form of a suitable third party guarantee. Loans for studies above ₹7.5 lakh require tangible collateral and in any case co-obligation of parents is necessary. The bankers said that while there is a possibility of future defaults if these students cannot complete their courses and find jobs, the guarantee would strengthen the recovery.

“We are evaluating our exposure to students in Ukraine. Since these loans are disbursed in installments, the impact will also depend on when they can continue the rest of their studies,” said a private sector banker on condition of anonymity.

Banks have outstanding student loans ₹63,057 crore in January, down 2.4% from a year earlier, RBI data showed. However, a breakdown of the share of these expenditures intended for students abroad was not available.

The brother of a student stuck in Ukraine alongside other Indian students told Mint he plans to discuss the matter with lenders. Aman Mishra said his family took a ₹Loan of 45 lakh for his sister’s education from State Bank of India (SBI). “Every year we have to show receipts to the bank for the loan. My sister is in her second year of medical school and we took out a five-year loan. Right now the goal is to get her back,” Mishra said. On March 4, her sister was in Poland and is expected to return to Gorakhpur in the next few days.

Mint reported on March 1 that Ukraine is a popular destination among Indian students pursuing medical and engineering studies. There were 19,000 Indian students in Ukraine before the evacuations began, according to university admissions platform LeverageEdu. According to LeverageEdu, students mainly choose Ukraine because these courses are significantly cheaper than a private college in India.

The fees for an MBBS degree in Ukraine are ₹15-20 lakh against ₹80 lakh – ₹1 crore here. True, experts said that some parents finance the education of children out of pocket. Also, although not required, students are encouraged to purchase student loan insurance.

“Most of those who have taken out loans also opt for insurance,” said Akshay Chaturvedi, Founder and Managing Director of LeverageEdu. Chaturvedi said that the focus should be on the future of these students and that it would be helpful if universities in other countries agreed “Banks should give some relief, and it is doubtful that they will claim dues account given the circumstances,” he said.

Meanwhile, expressing concern over the future of medical students who returned from Ukraine, the Indian Medical Association has recommended that they be admitted to Indian medical colleges as a one-off measure, PTI reported. March 4.

K. Srinivasan, head of the public awareness institution’s education loan task force, said banks have never been keen on sanctioning loans to students traveling to countries like the United States. Russia and Ukraine. “Lenders prefer popular Western countries because they offer a kind of assurance that students would be easily employable later,” Srinivasan said.

Individuals’ access to central bank IOUs may not be a big problem in countries with well-capitalized financial systems. But this is a major advantage in India. As researcher Bhargavi Zaveri observes, depositors at 21 Indian lenders have been prevented from withdrawing their funds due to banking difficulties in recent years: “A CBDC…will mitigate the risk of losses Indian depositors face when dealing with commercial banks. “

Consumers may find electronic rupee as a safer alternative to bank deposits, which underpins ₹76 trillion real-time annual payments through apps such as Walmart’s PhonePe, Alphabet’s Google Pay and Paytm. But there is also the risk. If e-money becomes popular and RBI imposes no limits on the amount that can be stored in mobile wallets, weaker banks may find it difficult to keep low-cost deposits. And even if they lose that cushion, lenders may be reluctant to shed their loan assets and sacrifice profits. Their less liquid balance sheets could make them vulnerable to bank runs.

All economies are aware of this threat to financial stability. Yet advanced countries are also worried about the decline in the use of banknotes, especially after covid. As shopping moves online, the basis of trust in demand deposits, which they convert to cash at face value, can be reduced to a theoretical construct. An electronic currency could keep the notion of convertibility rooted in daily reality.

In India, however, there is no such urgency as the money is far from dying. Banknotes make up around 15% of the money supply, compared to 1% in Sweden. Still, the Riksbank is in no rush to adopt a CBDC. After five years of weighing options, the Swedish monetary authority has yet to make a final decision on whether or not to issue an electronic krona.

The US Fed is seeking public input on whether to offer a formal tender to compete with private stablecoins that rely on the dollar as the world’s most popular unit of account. A digital euro is under investigation for 24 months. If all goes well, the European Central Bank could offer it by 2025. Japan could postpone a call to 2026.

India’s rushed maturity appears to be at least partly a response to cryptocurrencies, though it’s hard to see how an e-rupee can wean the public off the get-rich-quick lure of a class. of speculative assets. Another reason to hurry may be a desire to leave China, which at the start of November had some 140 million people registered with its e-CNY. But China doesn’t have a national rollout date, and Alipay and WeChat Pay retain their grip on digital payments. Furthermore, Beijing’s intention to promote a dollar rival in cross-border trade and finance will only become clear after the appearance of the digital yuan in Hong Kong.

Any role for a digital rupee in India’s fast-growing online economy is unclear. Unlike perfectly anonymous cash, most CBDCs will be designed so that central banks can track spending. However, transactions made with them may not be visible to payment apps, and fintech companies may lose access to some mined data for cheap loans to those without collateral. As for earnings, [it could eliminate the need of an] costly network of correspondent banks for the settlement of cross-border payments. For Indians working abroad, sending money home will become easier and cheaper. This would mean savings for the world’s largest recipient of remittances, although it could be achieved even without a digital rupee, through a global network like the Nexus project proposed by the Bank for International Settlements.

A digital rupee might just be a bargain. On the one hand, it may not be a bad idea for the monetary authority to use technology to warn bank management that they need to stop taking depositors for granted. Yet that lesson is probably best administered after lenders put covid-related stress on their balance sheets behind them.

Also, RBI needs to do their homework. Technology, blockchain or otherwise, will have to balance the often conflicting goals of speed, scalability, auditability, security, and privacy, which the Fed is trying to achieve through its Project Hamilton. Given India’s still vast digital divide, a protocol for offline use needs to be developed. Rushing into implementation of what should ideally be a multi-year project can involve unnecessary risk.

Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services

This story was published from a news feed with no text edits. Only the title has been changed.

Traditionally, the remittance process involved an offline transfer, with the investor having to go to the bank and then go through the physical process of sending the funds. While some banks are now offering online LRS, remittances can still take between three and five business days, with a high foreign exchange margin and interbank transfer fees.

The partnership with FlyRemit aims to make global investing transparent, accessible and convenient.

There will be very competitive exchange rates with fees as low as 0.5-1% by Kristal.AI compared to the industry standard of 2-3%.

According to the company, until now, customers who transfer their money internationally have to pay a flat fee of ₹1,000 to ₹2,000, while Kristal.AI has no fixed fees.

Additionally, investors can make multiple trades in a day, without having to open a new bank account.

Commenting on the development, Vineeth Narasimhan, CTO and Co-Founder of Kristal.AI, said, “We set ourselves three goals to transform the remittance experience: an end-to-end digital experience, completing the transfer funds in 1 minute and offer highly competitive exchange rates.We have found the right solution with FlyRemit and together we are happy to offer a fully digital, fast and competitively priced solution to our partners and investors. “

Kristal.AI offers Indian and foreign investors the opportunity to diversify their investments in global assets. It reached a major milestone by having acquired more than $400 million in assets under management in December 2021. The platform has seen five times greater annual growth in its assets under management since its launch in 2016 in Singapore and has grown associated with more than 75 family offices and partners.

Abdul Hadi Sheikh, CEO and Co-Founder of FlyRemit, said, “Working in the RBI sandbox for cross-border remittances, FlyRemit has made the global remittance process frictionless. Our 100% digital KYC process and up to 50% savings compared to traditional money transfers via banks is a game-changer for the market.”

The 2022 Income Tax (First Amendment) Rules, released on Friday, establish the formula for calculating the income of a fund created by the investment division of an offshore banking unit, which is eligible for income tax. tax exemption.

It includes income from the transfer of a fixed asset to a recognized stock exchange located in an international financial services center (IFSC) and when the consideration for this transaction is paid in convertible currencies. It also includes income from disposal of securities other than shares of an Indian resident company. Income from securities held by these funds issued by non-resident entities and any income from a securitization trust chargeable under the heading “business or professional profits and gains” are also exempt from tax.

The new rules will apply from April 1, 2022. Offshore banking units are entities created by domestic or foreign banks within the IFSC. The government has granted concessions to units of India’s first IFSC based in Ahmedabad to develop the city as a global financial center like Singapore or London. The idea is to help build a robust financial services industry in India and capture some of the financial services market that India has lost to other hubs around the world.

The new rules also set conditions for benefiting from the tax relief. Qualifying investment divisions of offshore banking units will be required to maintain separate accounts, have them audited and file an annual return.

Rajendran, whose term was only due to end on December 8 of this year, shortened his term to March 31.

“This is to inform you that the board of directors of the bank, at its meeting on January 8, 2022, considered and accepted CVR Rajendran’s request to take early retirement from his post, to take care of his health. under the advice of his doctors, ”says the bank.

Following the resignation, the board of directors decided to set up an independent executive search committee to identify a successor.

“The Board has decided to set up a search committee to identify and assess internal or external candidates for the position of Chief Executive Officer and CEO. It was decided to use an independent executive search firm in this regard, “the statement said.

Rajendran was appointed head of CSB Bank in 2016 after the Reserve Bank of India authorized billionaire Prem Watsa, owned by Fairfax Holdings, to take a 51% stake in the bank, formerly known as Catholic Syrian Bank.

During his tenure, the bank saw a capital injection worth ??1,208 crores of FIH Mauritius Investments Ltd (a subsidiary of Fairfax India Holdings Corporation). The bank also raised ??500 crore from an initial public offering that was 87 times oversubscribed.

Prior to his current role, Rajendran served as the CEO of the Association of Mutual Funds in India. He has held other key positions such as Chairman and Managing Director of Andhra Bank and Executive Director of Bank of Maharashtra.

The CSB is in the midst of a row between management and employees over the non-implementation of the salary review. While CSB Bank has told its unions that it will implement the pay deal reached between the Association of Indian Banks (IBA) and the unions, it has not given its consent to IBA to negotiate with the unions in her name.

Under Rajendran’s leadership, CSB Bank returned to profitability in the first quarter of fiscal 2020, after suffering losses for many consecutive quarters. In the second quarter of fiscal 2022, the bank announced a 2% jump in net income to ??118.57 crore in the second quarter ended in September. The Kerala-based private sector lender reported a net profit of ??68.90 crore in the corresponding quarter of the previous fiscal year.

A single bench judge, Judge Amit Bansal, said in his 21-page order that “there is no indication that the arbitral tribunal denied the parties equal opportunities or that the tribunal did not accept the arguments of the parties. companies of the Future group ”.

This means that the Singapore International Arbitration Center (SIAC) will be the adjudicating authority. SIAC is expected to begin the hearing in the case on Wednesday. Until January 7, he will hear expert witnesses on Amazon’s arbitration plea seeking damages and a pause on the deal with the Reliance group led by Mukesh Ambani. Amazon had alleged breaches of contract by the Future Group because its agreement with Future Coupons Pvt Ltd in 2019 prevented the Future Group from entering into a deal with Reliance Group.

On January 8, SIAC will hear pleadings from Future Group in which the company headed by Kishore Biyani seeks to overturn the arbitration proceedings, as the Indian Competition Commission (ICC) has suspended the 2019 between American mass retailers and Future Coupons.

The order follows a request for termination filed by Future Group in the Delhi court requesting the annulment of the arbitration proceedings initiated by Amazon in the SIAC. In the plea, Future Group further stated that SIAC, instead of hearing expert witnesses, should have heard the group’s arguments on the annulment first.

Delhi’s high court heard the case and reserved its order on Monday. Prior to the verdict, Future Retail stock rose 3.6% to close at ??51.80 on NSE.

In the order, Judge Bansal further added the mere imposition of strict time limits or the refusal by the arbitral tribunal of requests for adjournment, or the order in which the arbitral tribunal assesses the parties’ requests, cannot be used to argue that the arbitral tribunal’s orders are “perverse” or “inherent lack of jurisdiction”.

On Monday, Rohatgi, a senior lawyer for Future Coupons, asked the High Court to force the court to overturn the proceedings, calling them “futile” and “moot.”

This litigation originated in an order of the Observatory of Competition issued on December 17 by which it suspended its approval on the 2019 Future Coupon agreement with Amazon. Pending the presentation of new documents by February 17, the transaction is suspended, CCI also imposed a fine of ??202 crore on Amazon for “twisting and removing” key details when it sought approval in 2019.

The Future Group then seized the Singapore arbitral tribunal on December 23, asking it to close the arbitration proceedings between Amazon and itself.

SIAC had said it would hear Future Coupon’s termination request after hearing the whole case on January 8.

The court said it would take Future Coupon’s concerns into consideration when making its decision.

Sameer Jain, Managing Partner, PSL Advocates and Solicitors is of the opinion that although the ICC has withdrawn the approval, the order did not reach its finality and Amazon has recourse against it.

“The request was rightly rejected and reflects the current position of the law. It is agreed that the arbitration agreement is separable from the main agreement and can therefore be performed independently. If the substance of the agreement is in violation of the law, it’s up to the court to determine, ”Jain said.

Manmeet Singh, partner at Mohit Saraf and Partners, said the court refused to interfere in court decisions because expert witness hearing and termination dates were already set.

“The tribunal, after reviewing the case, concluded that the tribunal gave equal opportunity to both parties. SIAC is the competent judicial authority to decide whether the arbitration should be continued or terminated,” Singh said.

A favorable SIAC verdict is crucial for Future Group as its flagship company Future Retail Ltd has already defaulted ??3,495 crore in contributions payable as of December 31 and its debt securities have been downgraded to D. By extension, the agreement between Future and Reliance Group will be drawn in the arm for Future Retail lenders, notably Union Bank of India, Bank of India, Bank of Baroda, State Bank of India, Indian Bank, Central Bank, Axis Bank and IDBI Bank. The future owes to these banks ??6,278 crores. These banks are in the process of seeking an exemption from the Reserve Bank of India (RBI) to qualify Future Retail as a non-performing account (NPA), Mint reported on January 4.

“The sales of non-strategic assets planned as part of the debt restructuring process have not borne fruit. The banks are wondering if they would like to take control of the process and push it. However, discussions are still at a preliminary stage, “said the person quoted above, on condition of anonymity.

Future Retail lenders include Union Bank of India, Bank of India, Bank of Baroda, State Bank of India, Indian Bank, Central Bank, Axis Bank and IDBI Bank.

According to data from Care Ratings, the company owes banks ??6,278 crores. The Future group owes around $ 3 billion in loans on a global basis. The moratorium on loan repayments ended on September 30 and if the company did not pay its contributions by the end of December, it would be classified as in default on January 1 and would ultimately be classified as non-performing.

“Even if the company did not repay this month, the banks would still have 90 days before the loans became non-performing,” the person said.

Reuters reported on December 8 that Italy’s Generali was in talks to increase its stake in two Indian insurance companies, with its local partner, Future group, seeking to withdraw from the deal.

Generali wants to increase its stake to 74% in life and non-life insurance companies, from 49%, according to the report.

Lenders, meanwhile, are hoping that the recent Indian Competition Commission (ICC) decision to suspend Amazon’s 2019 deal with Future Coupons Ltd, a unit of the group, will pave the way for Future’s deal. Retail with Reliance Retail.

On December 17, the competition watchdog suspended Amazon’s purchase of a 49% stake in Future Coupons and ordered a fine of ??202 crore for allegedly not being candid about the actual scope and purpose of the agreement.

In August 2019, Amazon had purchased the 49% stake in Future Coupons, which owns 7.3% of the capital of Future Retail through convertible warrants, with the right to purchase the flagship product Future Retail after 3 to 10 years.

“This deal with Future Coupons was the premise of Amazon’s legal battle. We have to wait for the final verdict. Unless there are more legal delays, the Future-Reliance deal could now be finalized within next few months, and repayments would be forthcoming, ”said the person quoted above.

A spokesperson for Future Retail did not immediately respond to questions.

Amazon opposed the Future Group’s deal with Reliance Retail Ventures Ltd, citing a violation of its investment agreement with the group that prohibited it from selling its assets to other entities.

A feud over the assets of the Future Group between two of the world’s richest men, Mukesh Ambani of Reliance Industries Ltd and Jeff Bezos of Amazon, has prompted lenders to scramble to collect their loans to the Indian conglomerate.

Last August, Reliance Retail, a unit of Reliance Industries, agreed to purchase the retail assets of the Future Group on the basis of a discount sale for ??24,713 crores.

The cash-strapped Future Group is trying to speed up the deal with Reliance Industries to pay off creditors and save the Big Bazaar retail chain from possible collapse.

The Ministry of Finance will finalize the last round of capital injection for PSBs early next year and review the requirements of each bank, especially the weaker ones that are still on BCPs or have recently been phased out. they added.

PSOs were asked to provide their own funds requirements after the finalization of the accounts for the third quarter of FY22. Based on the requirements, the Ministry of Finance will decide the amount of capital for each bank.

The budget for fiscal year 22 had allocated ??20,000 crore for the recapitalization of the banks, but a large part remains to be disbursed. It should be released in the fourth quarter. Allocations for bank recapitalization may not be a priority in the budget for fiscal year 23 and lenders may be encouraged to tap the markets as the government believes that the financial health of PSBs shows signs of improvement. and that they are able to raise funds from the market, officials said.

Questions to the Ministry of Finance remained unanswered until going to press.

Banks’ capital requirements will be reviewed in the next quarter, before infusing money to meet regulatory needs. Particular attention will be paid to requests from weak banks emerging from the PCA to ensure that they can further strengthen their finances and start expanding their lending services, they added.

In September, RBI removed UCO Bank and Indian Overseas Bank from the PCA framework following improvements in various parameters and a written commitment that public lenders would meet minimum capital standards. Now only the Central Bank of India remains subject to the PCA, which is triggered when lenders violate certain regulatory requirements such as return on assets, minimum capital and amount of non-performing assets.

The capital needs of banks could be prioritized when announcing the next round of capital injection. The recapitalization should help lenders move faster in strengthening their finances.

Out of ??20,000 crore allocated to five public sector banks under the PCA in fiscal year 22, ??11,500 crore was paid to three banks: UCO Bank, Indian Overseas Bank and Central Bank of India.

The government has infused over ??3.15 trillion in PSBs over the 11 years to 2018-19. In FY20, ??70,000 crore was injected to help PSBs provide credit to industry and help the economy revive.

Indian banks have so far raised more than ??37,000 crore by issuing additional level I bonds (AT1) during fiscal year 22. Call options for AT1 bonds with a value of ??28,430 crore is due in FY 22, addressing concerns about rollovers and capital ratios.

In addition, PSB’s net profit jumped to ??14,012 crore in the first quarter, and increased further to ??17,132 crore during the quarter ended September.

The combined profit for the first half of the current financial year is close to the total profit realized in financial year 21, when the PSBs had raised ??58,697 crore, the highest amount raised during a financial year.

The PSO capital adequacy ratio (CAR) increased to 14.3% at end-June 2021, while the provision coverage ratio reached an eight-year high of 84%. Most of the non-productive assets of PSOs are now properly provisioned.

Even the NPAs have gone from ??678,317 crore on March 31, 2020, at ??616,616 crore as of March 31, 2021, based on provisional data. On an aggregate basis, public banks recorded a profit of ??31,816 crore, the highest in five years, despite the economy shrinking 7.3% in 2020-21 due to the covid-19 pandemic.

Although the pandemic marred the growth of the shared living industry in 2020, it has already seen an upturn this year. The coliving segment is expected to have 4,50,000 beds mostly run by organized operators by 2024, up from 2,10,000 beds by the end of 2021, Colliers said in a note titled “The Future of Coliving in India.” .

“With the situation improving rapidly, the industry has recovered significantly and appears to be more optimistic. The main factor contributing to recovery is the increasing rate of vaccination. The unemployment rate fell to 7% in November 2021, a gradual decline from 11.84% in May 2021. Additionally, amid the pandemic, hiring by IT companies accelerated, followed by robust industry performance that will only add to demand. for coliving over the next few quarters, ”said Ramesh Nair, CEO, India & MD, Market Development, Asia, Colliers.

The concept of a “shared economy” was put to the test during the height of the pandemic. Factors such as uncertain economic conditions leading to the loss of jobs, working from home and the displacement of the migrant population to their respective home towns as a result of the covid-19 epidemic brought an immediate end to the evolution of the cohabitation sector.

Between December 2020 and March 2021, the occupancy rate in most cohabitation facilities crossed the 45-50% mark as the market improved and from 60-70% in the fourth quarter of 2021. However, the second wave turned out to be a drag from the second quarter, as the occupancy rate fell sharply.

The cohabitation segment is also expected to experience an upturn in occupancy in 2022 with factors such as the increase in the workforce, migration to urban centers for jobs, the shared living sector not organized and growing student population increasingly seeking the modern organized cohabitation model.

“Coliving has great long-term potential in the subways. However, the current market scenario presented an opportunity to consolidate and reconfigure the market. While many players left the company because they could not endure the financial stress of the previous year, others took the opportunity to strengthen their position through strategic acquisitions and expansion into prime locations. in metropolitan cities, ”said Subhankar Mitra, Managing Director, Services Advisor, Colliers India.

Many investors are already actively researching options in the market to create flexible cohabitation facilities. The profitability of a higher yield compared to a traditionally rented house has resulted in an influx of new players every year where this trend is expected to continue over the next several years. Coliving offers attractive returns; 2 to 4 times higher than the traditional residential yield of 2 to 3%.

However, coliving in India is still in its infancy and operators are constantly updating their metrics. The pandemic has again pushed operators to the drawing boards to reinvent their strategy in order to offer an attractive and safe housing solution.