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Infosys to LTIMindtree: IT Stocks Climb on Fed Relief
Economy, Market News, Markets - May 2, 2020

SEBI demands info on unlisted bonds

SEBI demands info on unlisted bonds

The SEBI has asked the mutual fund industry to share information pertaining to the holdings in unlisted bonds. These are securities which cannot be traded in the Indian bond market. This is due to the corona virus outbreak which has froze the entire bond market, It has made the fund managers unable to sell or pledge their funds.

 

Data to be submitted to SEBI:

SEBI has asked the mutual fund industry to provide details regarding the assets under management of holding unlisted NCD schemes. Adding to it, the details of investments in unlisted bonds and the share in such bonds.

 

Extending the deadline:

SEBI has directed the mutual fund industry to decrease the investment in unlisted NCDs to 15% by the end of March and to 10% by the end of June 2020. Looking into the current scenario of the mutual fund industry, SEBI has increased the deadline by 6 months. In the month of October, the mutual fund industry was prohibited from investing in unlisted bonds by SEBI. This led to illiquidity of unlisted commercial papers and unlisted NCDs in securities.

 

Shut down of 6 debt funds by Franklin Templeton:

Recently, Franklin Templeton shut down 6 debt funds which comprised nearly 32% of the total value of unlisted papers. SEBI has asked the Association of Mutual Funds in India to give the details regarding the total portfolio’s investment breakup in such unlisted NCD schemes. It must include the residual maturity of listed and unlisted bonds and the details regarding other listed securities.

An industry person said to the media that some of the listed bonds are illiquid in the current market. SEBI will probably scrutinize the level of risk and stress the system if the redemption continues. These are particularly related to the mid sized companies with unlisted NCDs. It is because the terms and conditions are not easily available for such unlisted papers.

 

Friday’s deadline:

The deadline given by the SEBI to fund houses was Friday. A source said to the media that Friday was a bank holiday and the stock exchanges were closed. Hence, they didn’t expect an email from SEBI asking for the data. Many funds have been redeemed leading to an increase in the bond yields. Many mutual fund industries have asked banks to avail loans to increase the liquidity position. The fund industries would generally take an overdraft facility from banks to meet their cash flow needs.

 

Losses borne by AMCs when funds are borrowed:

A fund manager said that whenever the mutual fund schemes borrow, they have to pay interest to the extent of average portfolio yield. Mostly the borrowings are higher than portfolio yields and the difference is to be borne by the Asset Management Company. 20% of its AUM can be borrowed by the mutual fund schemes.

 

 

 

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Peerless Group to Exit Insurance Distribution and Double-Down on Hospitals
Business - May 2, 2020

IT firms to reduce subcontractors to control costs

IT firms to reduce subcontractors to control costs

Over the past few weeks, the COVID-19 pandemic has emerged as a significant and global challenge creating worldwide disruption. In order to combat this crisis and maintain the health of businesses, Indian IT Companies are planning partial self satiation by reducing their dependency on sub contractors. Believably, this will aid them in cost curtailing, since it becomes difficult to bear fall in businesses due to Covid -19 pandemic. According to Mr Debashis Chatterjee, CEO of Mindtree Ltd, which is an Indian multinational IT and Outsourcing Co., subcontracting costs shall fall in the coming months. TCS Wipro and Infosys agrees to the same.

Recently Mr. Chatterjee mentioned that in the coming quarters, the firm based in Bengaluru will continue reducing their subcontracting costs. Research says subcontracting alone makes up around 10-15% of the total employee cost. This was not the scenario few years back. Sub contracting expenses hiked in recent years because IT companies wanted new age technically skilled team. They did not bother their in house talent for the same. According to data, in the last fiscal year, TCS paid subcontracting cost that comprised of 13% of total employee cost. Similarly Wipro, Infosys and Mindtree shelled out around 22%, 12% and 11% respectively. Total employee cost is sum total of internal employees costs and subcontracting costs.

 

 

What are IT companies like TCS, Wipro, Infosys, Mindtree planning then?

It seems Covid-19 urges IT companies to get self sufficient and get their staff skilled. Milind Lakkad, Global Head Human Resources at TCS told media that they will try and lower their dependency on contractors. This step is taken to control cost. For meeting this goal, they look forward to build talent within the organization. They will go for hiring in a limited manner in hunt of specific skills. On similar lines, Wipro’s Chief Head, Human Resources Saurab Govil informs that they are screening the entire supply chain of employees, including hiring and subcontractors.

Narrating media on how huge chunk their billable are the sub contractors bills, he mentions they stand around 10-11%. The company is planning to replace them with their existing workforce. Infosys CFO Nilanjan Roy, reconfirms that according to him subcontracting will pave way towards cost optimization. Further adding he says their strategic cost optimization in automation, pyramid rationalization and also sub contracting shall not terminate and will continue. He believes the company’s strong clientele relationships and talented engine shall together enable them face this economic turbulence.

 

 

What Xpheno has to say?

Xpheno, a Specialist Staffing Solutions Company which is into offering IT Staffing, Engineering Services, Sales Staffing and Direct Hire says, IT companies are resorting to various ways to curtail their cost, by either planning to reduce the number of contractors, or expecting rate cuts from the sub contractors. While other companies are asking sub contractors to provide deferred payment options, mentions Kamal Karanth, co-founder of Xpheno.

 

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Volatility for Hindustan Unilever to continue

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The biggest Downfall of Nvidia in the market history
Business, Market News, Markets - May 1, 2020

Volatility for Hindustan Unilever to continue

Volatility for Hindustan Unilever to continue

India’s largest fast-moving consumer goods company announced its Q4 results on April 30. The company witnessed a downfall in volume by 7% in this quarter. The performance has been affected by the effects of Covid-19 since the second half of March. As per the Q4 result, Profit Before Tax (PBT) decreased by 10.6% and Net Profit decreased by 1.2%. The revenue of the company decreased by 9.4% to Rs 9.011 crore. The EBIDTA margin decreased by 160 basis points and growth decreased by 7%.

 

Impact on performance due to COVID-19:

The spread of COVID-19 affected the company from mid-march. This decline is due to the lock-down all across the world to control the spread of the COVID-19 pandemic. This has impacted the demand and supply chain. Beauty and personal care contributes 42% of sales, which is down by 14%. Other categories like homecare and food & refreshments are both down by 4% and 7% respectively. Only a part of the health and refreshment is a client base which includes tea and coffee. Even the recently purchased diet portfolio of the firm, comprising of Horlicks and Boost, does not count as a market base.

Other elements affecting stock prices are currency and crude oil price fluctuations. According to Sanjiv Metha, Chairman and Managing Director stated the human influence of the pandemic is unclear and they are completely committed to collaborating with the government to ensure that we solve the crisis. Instability in input expenses and currency will increment, with liquidity constrains prone to keep on developing. As indicated by HUL, it is hard to guess the market growth. The organization is currently running at around 70% of the normative standard and is planning to increase this in the coming days.

 

Strategies to improve efficiency:

Strategies to increase productivity are reduction in non-essential spending, Capex optimization, inventory management, credit allocation, emphasis on receivables, investment stability, etc. HUL has increased production in main categories such as sanitizers and handwashes. They are now working with shorter preparation cycles, improving the supply chain and increasing efficiency.

 

About the stock:

HUL has a Market cap of Rs.5,15,708 crore. The stock’s last traded price was Rs.2,195 and was 1.65% low. HUL’s 52 weeks low is 1656 and 52 weeks high is 2,614. The stock is likely to be corrected due to its overvaluation and extension of lockdown in the highly affected areas. This is disturbing for financial specialists, proposing that market request can not bounce back long after the lockout has finished.

 

 

 

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Equity Right
Currency, Markets - May 1, 2020

Drawbacks of Cryptocurrency Exchanges

Drawbacks of Cryptocurrency Exchanges

 

What is a Cryptocurrency?

The word Cryptocurrency is originated from two distinct words i.e. Crypto which refers to Data encryption and Currency which refers to Medium of exchange. Cryptocurrency exists only in digital form and it is intangible. Cryptocurrency can be termed as an alternative to hard cash and plastic money, which we use in daily life for making payments.

 

Does Indian Government support the legality of Cryptocurrency?

In 2018, Reserve Bank of India (RBI) notified a complete ban on purchase and sale of Cryptocurrency in India. Subsequently, petitions have been filled by various Association in Supreme Court of India staring at the legality of Cryptocurrency. In early March 2020, Supreme Court of India lifted the ban on Cryptocurrency in India. Thus, Cryptocurrency is NOT legal in India, only trading is legal. However, Indian government clearly stated that Cryptocurrency cannot be termed as legal tender.

 

Mechanism of how the Cryptocurrency is traded:

The entire trading of Cryptocurrency is done virtually on various online platforms. People can buy and sell Cryptocurrency virtually by using centralized or decentralized exchanges.

 

Centralized Vs Decentralized Exchanges:

Centralized Exchanges refers to the exchanges which is operated by a recognized exchange. They are similar to well organized Financial market. All the transactions of the Cryptocurrency are carried by the recognized exchange with no hassle borne by traders. All the private data /keys are in the custody of the exchanges. Centralized Exchanges provide users with decent UI and an extra two step authentication safety feature ensuring the maximum security of their account. The major disadvantage of these exchanges are if they get hacked, traders will slack all the money invested in Cryptocurrency.

 

List of some well-known Centralized Exchanges:

 

  • Binance

 

  • Bittrex

 

  • Bitfinex

 

  • Coinbase

 

  • Kraken

 

Decentralized Exchanges doesn’t control the private keys. Users have the complete authority and control on their trades, funds and private keys. Everything is managed by the users itself, giving them the maximum transparency and flexibility. Although, Decentralized Exchanges have their own disadvantages like poor UI, low liquidity and doesn’t deal with huge amount of transaction. Trading on Decentralized exchanges is a tedious task with many steps to perform before the trade executes. In Decentralized exchanges every transaction has to be signed by you.

 

List of some well-known Decentralized Exchanges:

 

  • WavesDex

 

  • Bancor Protocol

 

  • Kyber Network

 

  • EtherDelta

 

  • AirSwap

 

Drawbacks of Cryptocurrency Exchanges:

As the complete trading of Cryptocurrency is carried digitally, cybersecurity issues are the major concerns while trading the Cryptocurrency. Exchanges have all your private data like email-id, personal details, details about all the transactions and IP address. There is high risk of the website getting hacked and losing the invested money. Such incidents occurred in 2019 when personal data was stolen and huge amount of funds were demanded by hackers.

World’s well-know centralized exchange, Binance was robbed by 7,000 Bitcoins from their online platform. Binance is famous for its security and innovative products. Beside all this, hackers committed the offense. Later, the loss suffered by the customers were borne by the company but this shows how risky it is to deal with Cryptocurrency.

 

Overcoming Centralized & Decentralized Exchanges Drawbacks:

Alternative for Centralized & Decentralized Exchanges can be the platforms where instant Cryptocurrencies are exchanged without any compulsion of registration and submission of all your personal details.

In the market, ChangeNow is a platform which provides the similar service as mentioned above. ChangeNOW is a non-custodial crypto swap which does not demand any kind of government proof ID, address proof, contact number or email ID. In this platform, users do not need to verify themselves. In simple words, ChangeNow is just a swapping tool. All the major Cryptocurrency is available for trade in this trading platform. This tool can be used by anyone in the world. The platform claims they use an automated risk management system to check all transactions. This can help to gain the trust of traders.

Nonetheless, this cannot be picked as an ideal platform to trade Cryptocurrency. Even this platform has its own set of drawbacks. The major drawback is this platform is a bit high-priced as compared to other. In a nutshell, the trader should keep all the advantages and disadvantages of all the trading platforms available and choose wisely, whichever fits all their needs flawlessly.

 

 

 

 

 

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Giva Raises Fresh Capital to Strengthen Jewelry Business, Valued at ₹3,950 Crore
Business, Economy - May 1, 2020

New FDI rules not for Taiwan inflows

New FDI rules not for Taiwan inflows

In a developing country like India, the existence of Foreign Direct Investment (FDI) is requisite for the growth of economy. Total Foreign Direct Investment in India from year 2000-2019 is US $658,893 million. In the wake of the Covid-19 outbreak, many cosmopolitan investor’s are trying to gain an undue advantage by acquiring Indian companies. To keep a tight rein on this, the government announced new FDI rules.

 

New norms by Indian Government on FDI:

The new rules announced by Indian government stated that there will be a comprehensive look over in any acquisition or takeover executed in India on Indian Companies. Once the government approves and sanctions, then only the further process can be implemented. This new norms of FDI will be pertinent for all the countries sharing boundaries with India viz. Bhutan, China, and others. Government officials noted the new norms announced by FDI will not be relevant for Taiwan. Smooth flow of operation between Taiwan and India will be continued with no barriers.

 

India – Taiwan Relationship:

Major chunk of money invested by Taiwan in India exists in sectors like Infrastructure and Energy. India and Taiwan have established a robust economic relation since decades. Approximately 100 Taiwanese companies are doing business in India. The relation between India and Taiwan was established in 1995, since then we hold a powerful relationship with Taiwan. The big question arises, Can’t Taiwan is easily influenced by China with their decisions on Foreign Direct Investment?. Media reports noted that in coming weeks government may clear all the queries on new FDI norms.

 

 

Amazon Pay Later introduced in India

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IREDA Bonds Gain Tax Benefits to Promote Green Energy
Economy, Equities - May 1, 2020

Government may issue tax-free bonds

Government may issue tax-free bonds

Over the past weeks, the COVID-19 pandemic has emerged as a significant global challenge inducing turmoil in the economies. This outbreak is having a severe impact on people, economy and business. Countries are battling and taking every possible measure to combat the spread of corona virus. One of which is the lock down strategy. Lock down is the last resort and has actually helped to save lives. Along with this, it has invited a huge fiscal gap. This fiscal gap will broaden itself once the lock down is lifted. Lock down has hit the earning and spending cycle at an individual level, which will greatly impact future tax collections.

 

Government to raise funds:

Government plans to raise short term funds to fulfill temporary need. They plan to raise this money from the RBI through ways and means advances (WMA). Finance ministry suggested the issue of tax-free bonds. Under this, they plan to raise Rs 10,000 crore by giving multiple installments to ensure its success.. However, Rs 10,000 crore may not be sufficient enough for the anticipated immediate expenses.

It is yet under discussion, as to whether bonds should be sold by a direct public issue or issued via a public sector company. Historically, tax free bonds was sold by National Thermal Power Corporation Limited (NTPC), Rural Electrification Corporation (REC) and Power Finance Corporation (PFC). Further, discussions as to how many number of installments should be provided and other terms and conditions are in process. As per the prevailing marginal tax rates, calculation shows that 5.5%, 10-year tax free sovereign instrument will effectively cost 7.7%.

 

Good news for the retail investors:

Looking at the current scenario, if these bonds are kept open for retail savers and corporations, they will willingly opt for parking their hard earned money into these bonds. After the news of Franklin Templeton freezing 6 of their plans, investors have fear carved in their minds with respect to safe keeping and growth of their capital.

Government will issue these tax free bonds to raise funds for specific purposes. Generally, the funds are raised from debt market by the Central government in the form of weekly securities auctioned by the Central bank. In contrast to last FY target of Rs 4.74 lakh crore, borrowing target of FY21 is marked at a net amount of Rs 5.11 lakh crore.

If retail investors get a chance to participate, this scenario will be the first of its kind and create history. Issuing tax-free bonds to retail savers and corporations will provide them a window of safer investment. At the same time, raising money through these government instruments will over populate the market and increase rates. The CARE estimates reveal that until today, the lock down would have sucked a huge chunk of Rs 1 lakh crore of GST monthly collections.

 

 

Gold set for best month in 4 years

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Safe Havens in 2025: Gold, Yen and Alternatives in a Volatile Year
Commodities, Economy, Market News, Markets - May 1, 2020

Gold set for best month in 4 years

Gold set for best month in 4 years

On 30th April, the gold prices had a surge, en routing to its best month in the last 4 years. This is because of the increase in expectations about the monetary ease provided by the central banks and the continuous stress over the global recession which increased the demand. Spot gold showed a surge of 0.2% at $1,713.75 per ounce by. The US gold futures showed an increase of 1.1% to $1,732.10 per ounce.

 

How the gold prices surged?

Eugen Weinberg, the Commerzbank analyst stated the immense monetary support received at the movement is helping gold. Regardless of the increasing risk appetite, the gold prices stayed above $1700 ounce even though it has faced pressure from the equity markets. Carlo Alberto De Casa, Kashif analyst of Activtrades said to the media that the investors will remain confident about quick solutions for the coronavirus. The central banks will be forced to print a large amount of money leading to hyperinflation in such economic turmoil.

 

Interest rates:

United States Federal Reserve preserved the interest rates and it should be left unchanged for sometime. The unexpected monetary influence provided by both the European Central Bank and the Federal Reserve will probably increase the demand for gold in the future.

Over the last six weeks, the European Central Bank left the interest rates unchanged after revealing various stimulus measures including a plan to buy 1.1 trillion euros worth of debt this year. The Federal Reserve kept the interest rates near zero on April 29. They also promised to extend the emergency series of measures needed to help the battered and bruised economy.

In the first quarter, the US economy contracted at its shortest pace since the Great Recession. In the second quarter, it is likely to show a more sharper contraction. The Bullion showed an increase of more than 9% in the last month. It is boosted by several stimulus measures from the central banks to handle damage caused from the corona virus outbreak. The unchanged lower interest rates will reduce the alternative cost of holding non yielding gold. It is always considered as a risk against inflation and canker currency.

 

 

Amazon Pay Later introduced in India

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Decentro Secures ₹30 Crore to Power Fintech Innovation
Business, Market News, Markets - May 1, 2020

Amazon Pay Later introduced in India

Amazon Pay Later introduced in India

In the era of digitalization, consumers prefer to use the finest services provided by various e-commerce platforms. In this chase, all major e-commerce platforms try to offer preeminent services to their customers, which helps them to establish their brand name in this competitive market. On 26th March 2020, Amazon launched their new service “Amazon Pay Later” with some remarkable features. It will ease the buying pattern of customers.

 

What is “Amazon Pay Later”?

Amazon Pay Later is a credit providing mechanism, which ensures that customers can buy the products now and pay the price in future within a stipulated time period. Purpose of launching this service is to provide the customer a hassle free mode to get instant credit without submitting countless documents which an usual credit giver demands.

 

Products can be purchased using Amazon Pay Later?

Customers can purchase daily essentials, home appliances, electronic gadgets, groceries and many more. Besides that, they can pay all the bills, recharge and top up their Dth and other services too. Amazon Pay Later prohibits some items which includes jewelry, bullion i.e. Gold and silver and Amazon pay gift card. Customers can only purchase the products provided by Amazon in their country. Products by overseas merchants are prohibited.

 

How to register?

The registration process is an easy-going task which hardly takes 2 minutes. They provid two options to the customers. They can go with existing KYC or OTP (One-Time Password) based e-KYC. In both the methods customer just need to follow the steps and registration will be completed within minutes.

 

Features of Amazon Pay Later:

If a customer buys a product and chooses a tenure of 1 month, the product price range should be in between ₹1 – ₹10,000. They can buy the product and pay the price in the succeeding month. If a customer purchases a product and chooses a tenure of 3 months, the product price range should be in between ₹3,000 – ₹30,000, They can also choose a tenure of 6 months. For this, the product price range should be in between ₹6,000 – ₹60,000. They can buy the product and pay the EMI in succeeding 3 and 6 months, respectively.

If a customer wishes to choose a tenure of 9 and 12 months, the minimum and maximum amount should be ₹9,000. They can buy the product and pay the EMI in succeeding 9 & 12 months. The rate of interest is very nominal ranging from 1.5% to 2% in all scenarios excluding the tenure of 1 month which is absolutely free.

 

Reliability and loopholes:

Amazon has tied up with reputed NBFC, CapFloat Financial Services Private Limited (Capital float) for ensuring smooth conduct of business. Although with all these amazing features, Amazon Pay Later has some drawbacks. As per the RBI norms, credit up to ₹60,000 p.a can be granted to any individual with eKYC. The major drawback is, if a customer purchased any product and later cancelled or returned it, the amount of the product will be considered while calculating the limit i.e. ₹60,000 irrespective of procurement of the product by customer.

 

 

Microsoft completes 5 year deal with Coca-Cola

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Equity Right
Business, Market News, Markets - May 1, 2020

Microsoft completes 5 year deal with Coca-Cola

Microsoft completes 5 year deal with Coca-Cola

The Washington based tech giant, Microsoft Corporation cracks a five year deal with Atlanta based beverage giant Coca-Cola Company. Microsoft Corp will supply business software to the former company. Apart from this, Microsoft Corporation will also provide tools for customer service agents and its Teams chat app to Coca-Cola Co. Describing their agreement as a strategic partnership, the size of the deal is kept unknown by the companies. But the said deal shall be inclusive of the suit of Microsoft Tools which is Dynamics 365. To enhance your knowledge, Microsoft’s Dynamics 365 is the tool which directly competes with the Salesforce.com Incorporation.

 

Microsoft’s technology:

Business operations of Coca-Cola Co. will be conducted on cloud platform of Microsoft. The name of the cloud platform that Microsoft will extend to Coca Cola Co. is “Azure”. In the past, Coca-Cola Company has availed Amazon and Salesforce’s cloud technology and business software. Now they are building a new relation with Microsoft for the similar services. As the lock-down prevails and majority of Coke’s workforce is working from home, they are using Microsoft 365 Live Events for large-scale video presentations.

Microsoft has a solid grip in general-purpose business software. General purpose business software includes E-mails and word processing applications. These are widely used by the employees working in Customer service and Sales. The VP of Microsoft’s business applications group, James Phillips gave an interview. He informed Reuters that they shall be providing Coca-Cola Company with Microsoft’s technology. It will enable their smooth working. Their technology shall empower Coca-Cola Company to get answers to their unanswered queries. By use of Artificial intelligence (AI), Coca-Cola Company will be able to fetch relevant data for the same.

 

How Microsoft will help Coca-Cola?

During the first half of his interview, Phillips mentions that Coke is willing to have a systematic internal programme in place for the employees. A programme that will enable the employees of their company to get one stop quick answers at a glance. Coke wants to eliminate the time consuming process that employees undergo every time they want to get answers to repetitive questions. For example, to know how and where to go to apply for vacation time, where they should go to have a look at their last payroll slip, which educational programme they can pursue to enhance their skills and many such questions.

In a statement, Senior VP of Coca-Cola Mr. Barry Simpson said that Microsoft Corporation will help Coke to get rid of some of its redundant and fragmented Systems. Lastly, Microsoft’s Phillips added, Coke plans its customer service department to be equipped with a system in hand which will aid them in providing quick solutions to the questions raised at the customer end. Its beverage maker’s customers majorly include grocers and big retailers. It is expected of Microsoft to have an increase in its post revenue of $33.9 billion for the quarter, from $30.6 billion last year, and its earnings per share (EPS) climbing up to 1.28 from 1.14 which was a year back.

 

 

Mutual fund industry in crisis due to pandemic

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India's Insurance Sector Booms Amid Rising Demand
Economy, Market News, Markets - April 30, 2020

Mutual fund industry in crisis due to pandemic

Mutual fund industry in crisis due to pandemic

The COVID-19 pandemic has hit nearly all sectors of businesses, people, economy, trade and the financial system worldwide. Mutual fund industry  has been adversely affected due to corona virus. All mutual fund investors have incurred huge losses in NAVs, specially those investing into categories of equity related mutual fund schemes.

Nearly 20 categories of mutual funds viz. energy funds, International funds, banking funds, large cap funds, mid cap funds, dividend yield funds, PSU funds, infrastructure funds, etc. are some of the mutual fund schemes that have faced losses tremendously in the last month. The energy sector saw a downfall of 20.08% in the last month. It was followed by the International funds category which dipped to 20.07%. The banking sector funds also had a downfall not only because of the corona virus threat but also because of the non performing assets crisis. The gold funds category is the only sector which has given positive returns in the last month.

 

Winding of 6 mutual fund schemes by Franklin Templeton:

Franklin Templeton, the leading global investment management company announced the winding up of 6 mutual fund schemes on 23rd April, 2020. 

Fear of Investors:

All these issues have led to fear in the minds of investors making them pull out Rs. 9,000 crores out of the credit risk mutual fund schemes. As per the data collected by Pulse Labs, the asset under management of these mutual funds have dropped by 19%.

A lot of tension can be seen in the credit risk fund category because of the redemption and unavailability of liquid underlying assets. The HDFC credit risk fund has the highest loss in comparison with other credit risk funds. The asset under management of the credit risk funds show the tremendous depth in comparison to the last month.

Lakshmi Iyer, chief investment officer of debt, Kotak Mutual Funds said to the media that without even considering the quality of the portfolio, investors have started redeeming the money from the funds. One of the ICICI Prudential spokesperson said to the media that the company assures the portfolio is well differentiated on the asset side and liability side.

 

RBI’s help:

RBI has recently announced rupees 50,000 crore special liquidity funds for Mutual Funds. This was announced after the winding up of 6 mutual fund schemes by Franklin Templeton. It is a measure taken by RBI to calm down the investors and reduce their panic by providing a guarantee of having adequate liquidity to meet the redemption. These funds can be borrowed by the companies from banks at a repo rate of 4.4% for 90 days. The Targeted Long Term Repo Operations is to help several financial services companies to manage their cash flow problems amid COVID-19 outbreak.

 

 

Industry bodies urge government to create funds for startups

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