Why we are obsessed with money

What a way to exist!

For most of us, practically the whole day all we are thinking is about money and more specifically how to have more money!

As if money was the only thing in life. Unfortunately for most of us, circumstances just do not permit any other thought!

We are running behind money most of the time which is almost akin to have become obsessed with money. Everything that we are doing in life is centred around money.

Unfortunately, this is because we need money for anything and everything that we do. There’s nothing wrong and what are you doing, however the problem is that over time, it becomes a compulsive habit to keep earning more.

That’s where the danger is. The problem is that there is a point where from we chase money as an addiction, we chase money because we like to do so. If we did not chase money we would not know what to chase now because we get out identity from money and the amount of money we have.

Another thing is that right from childhood we are always taught and our minds are conditioned that everything that we are doing is going to be for the sake of earning money.

There is no one who told you that money is just a means, and then there is something greater in life to achieve. Some examples are legacy; building something, charity; to giving something / helping someone, passion; pursuing something and living; simply to enjoy life and your money

We have got addicted to this and how!

There are three reasons for this:

First, we are what we do. It is the human behaviour. I know I should exercise and I don’t. I know I should eat healthy and I don’t. I know I should spend time with my kids and I don’t. I know that, yes, money isn’t going to make me happy and I still keep trying to make money.

We live by the laws of inertia, in a pattern which is hard to break. But we have to break it. For ourselves and for the sake of people and reasons for which we are chasing money.

Secondly, we need signals of progress. Money is a measure of how far you have progressed in life. The more the money you have the more you can make sure your progress. It’s simply the logic of evolution. People need validation of their success. Bigger house, bigger car, branded goods and list goes on.

Thirdly, it’s the easy way out. It’s only human to avoid difficult things. Important things are very difficult to measure.  Have I been a good father or husband? Have I groomed my child well?  Such things take years to measure and we still don’t have answers.

So, should we not be focused on creating money for ourselves?

I’m not saying that. Definitely create. Take care of yourself for sure!! Use it to the maximum to make yourself happy!!! You need a certain amount and beyond that is extra.

The definition of their certain amount is naturally different from one person to another. If that extra is going to happen easily, without stress and without your involvement, then its fine. Basically don’t kill yourself for that extra. Be Smart.

Kartik Jhaveri is an expert at planning money, life and aspirations. He is a certified financial planner, wealth manager and financial freedom coach.

How the RBI actually helps you

RBI

Most of us in Mumbai, see this huge structure called the Reserve Bank of India and wonder what it really does. It’s also a tourist attraction!! It has so many other offices and again one wonders why they need to have so many offices. I’m going to try and highlight a very interesting part of RBI’s work and how it helps us directly on a day-to-day basis.

The RBI does a review of the monetary policy of the country at frequent intervals during the year. So how does the monetary policy help us investors to take smart decisions?

Monetary policy is a tool by which the RBI decides to raise interest rates or reduce interest rates or keep them steady.

In our country, as we’re an oil importing nation, this decision is very closely linked to Oil. Oil to a large extent contributes to inflation. We all know what happens when inflation keeps rising. We in India unfortunately do not see too much of inflation falling and things becoming cheaper.

Oil is Not Well

So when oil prices rise i.e. we see a rise in crude oil prices almost instantly we can expect rising food prices. This is because there is going to be a rising cost pressure for manufacturing & services. This rise obviously gets passed onto the retail consumers.

When this happens RBI adopts a hawkish stance, tries to pull money out of the system by raising interest rates. Now when interest rates rise no one seems to be interested in borrowing. This immediately puts a brakes on money circulation.  Less money chasing goods decreases the demand for money. This way it controls inflation.

There is yet another tool that the RBI has and that is known as the CRR or the cash reserve ratio.  This ratio in simple words means the amount of cash that the bank must maintain with the RBI as the percentage of the total assets. So when this increases banks are forced to park more with the RBI and this is also a way to control inflation.

On the other hand when things look dull, when there is a recession of sorts, the RBI comes to the rescue and gets into action to kickstart growth in the country. It does this by lowering the interest rates. This we all will understand quite easily because we see a direct benefit of this happening. We see a fall of interest outgo in our EMI’s for the home loan that we are carrying. New loans become cheaper.

Individuals are motivated to go out and make purchases, whether it is for a washing machine or a piece of real estate. Businesses are motivated to go out and borrow to buy more machinery, to expand capacity, to hire more staff and manpower and basically do everything that will add to the growth of business.

Economic growth results as a result of all this. It is also during this time that stock market rises, we see a rally in stock prices and mutual fund NAV’s jumping higher and higher each day. There is prosperity all around.

Critical Role

As you can see that the central bank of the country has a very very important role to play.  If it makes a mistake, things can go really wrong.  Imagine like the USA or Japan if our interest rates were very low; everyone would run to borrow, they would borrow more than they require because it would be cheap and easy to borrow. And that is very individuals would run into what is known as the debt trap, because someday you’ll have to pay back.

Each day the central bank attempts to make sure that everything in our country remains stable and financially there’s nothing that goes wrong dramatically.

Kartik Jhaveri is an expert at planning money, life and aspirations. He is a Certified Financial Planner, Wealth Manager & Financial Freedom Coach.

The year of the bond, once again!

We are not talking of James Bond, we are talking of investment bonds.

We are in a situation where the fixed deposit rates are at a general low and there is a lot of discontent among depositors of fixed deposits.

Whenever we see a situation like this, one way or the other, the bond markets come to the rescue. It comes to the rescue of smart depositors, who are agile to move their money from fixed deposits to bond funds.

Let’s understand what is happening and why.

What Exactly is Happening in the Bond Markets?

It is likely that in this year, investors of bond funds will make handsome gains. Bond prices may rise and there may be capital gains. Investors of bond funds not only earn the rate of interest, but also earn capital gains. So that way, they make more than the return they would make on fixed deposits. The returns could be a high single digit or sometimes as high as double digits.

Over three years, this will become practically tax free or the tax would be a very small amount. So, basically, I am thinking that a rally will happen in the bond market. There are three main reasons for this — reduction in government borrowing (which is favourable), recovery of trading losses (which is favourable) and no change in monetary policy (which is neutral).

A word of caution, however, that such bond market investments are also subject to bond-market volatility and should be considered ideally with the help of a financial expert.

Before proceeding further, let us, therefore, quickly explain a bond, bond fund and bond market. We need to do this because few people understand the bond markets and even fewer invest in the bond markets.

Bond is nothing, but a commercial transaction where the borrower is issuing a bond to the lender and the lender will earn a certain rate of interest. When interest rates fall, everyone becomes interested in owning that bond.

As a result, the demand for the bond increases, the price of the bond increases and the bondholder makes capital gains.

A bond fund is a fund where ordinary investors pool in their money and a fund manager buys them a portfolio of bonds.

Moving onto the Reasons For a Rally in Bond Funds…

Now, the fundamental reason for a rally is reduction in interest rates as it stimulates economy and growth.

Firstly, the government is a massive borrower of funds. So a reduction in government borrowing reduces the demand for money in the economy. As a result, prices of bonds rise and this contributes to capital gains for bond holders.

Secondly, the Reserve Bank of India (RBI) recently announced that the commercial banks and RBI, which are the largest lenders to the government, will have another year to offset losses they have incurred on account of buying government bonds in the past. This action will lead to a rise in the price of bonds and this contributes to capital gains for bond holders.

Lastly, on one side due to the rise in oil prices, there is more inflation and thus more money is needed for circulation in the economy. On the other side, many government bonds are maturing, which will provide money supply. So, it is likely that we see a neutralising effect and thus RBI will take no action. This inaction here will support capital gains as explained above. Hence, this year might be a year of good gains for the bond investors.

Kartik Jhaveri is an expert at planning money, life and aspirations. He is a Certified Financial Planner, Wealth Manager & Financial Freedom Coach.

Five new financial goals for you this summer

I am going to try and explain to you why the summer holidays of April and May are great months to get a lot of things started, financially speaking.

This time period in a way resets the financial clock. You also have the option to hit the reset button on everything you have done so far; financially speaking of course and hope to do better things better than you did last year.

Let’s look at some of the new and unusual things to do in April.

  • Make a learning budget

Learn something about money or anything you like. The best way to make money is to learn something about money. Just like if you wanted to learn cooking you will get into the cooking class. If you wanted to learn swimming you would enrol in the swimming class. If you find learning about money is too daunting task than learn something which is close at to your heart or related to your work. If you learn something new, there’s a possibility that you will use your new ideas to generate new income and in turn that will generate new wealth for you.  So make a budget, enrol somewhere and spend that budget. How about a % of your annual income? Spend it for sure!

  • Plan a unique holiday 

When you’re by yourself and without your mobile phone you will have the opportunity to think! When you have time to think, suddenly good ideas will come to your mind.  You may think this is silly but you can be sure that you will be amazed if your drivers experiment just once. So it might be a good idea to go for a holiday just by yourself. If you find that too intimidating, join a group of strangers. You can combine that with the adventures experience if you like.  Be extra careful if you’re going with your special buddies. Do this only if they are going to be in a position to help you discuss your idea and make it bigger. They must play the role of complimenting your thoughts. So make a schedule to do this holiday and obviously make a budget to make it happen. Think & create new ways of making wealth.

  • Make a prediction and make it happen

Be brave. Let’s aim to grow and multiply net worth by 50% by the time you come to the end of this financial year. This is not a joke and it is easier than you can imagine.  I’m speaking about NETWORTH and I’m not talking about return on investment. If your networth is Rs. 100 today, all I’m saying is that let’s aim to make this a 150 by the end of this year. This networth comprises of all your savings till date. This can be achieved by simply saving aggressively every month for the next twelve months. Just put this into a recurring deposit or liquid fund so you don’t spend it.  We just have to prove to ourselves that this is possible. Where and how we will invest this money will think about that later.

  • Eliminate a negative belief 

I want to give you an exercise here. Write down all your negative beliefs you have about money and wealth. Most people are not able to achieve the desired level of wealth because they think about wealth negatively. So even if you are earning a good amount of income you will never see yourself becoming wealthy. Examples are money causes problems, money causes a fight, managing money is complicated etc. Then for each negative thought, you have written down the positives i.e. the opposite for a few months. Soon negatively biased feelings will evaporate.

  • Make a new investment; something you have not done before

Again here you do not have to be a financial expert. The idea is to learn something new. There are hundreds of investment options. Our objective here is to learn something new. Talk to your advisor and seek his or her guidance. Just a word of caution here; don’t do anything which is speculative or is something that you just can’t understand. Do what do find easy you understand and do that then.

Kartik Jhaveri is an expert at planning money, life and aspirations. He is a Certified Financial Planner, Wealth Manager & Financial Freedom Coach.

Seeking financial freedom? The time is NOW!

John Lewis famously remarked, “If not now, then when? If not us, then who?” This is so appropriate in the current financial world that we live in.

That statement will leave to rest every other argument that is conservative and against the idea of wealth creation. We are often faced with the situation where there is no option but to create wealth. Read on to know why!

Interest rates are painfully low. For all those diehard fans of guaranteed investment returns, there’s hardly any place to go to. Thinking of fixed deposits? Feeling happy with 7%? And fully taxable? That period is over. Period.

That doctrine of investing into pure fixed deposits and similar instruments is unfortunately standing challenged. There is no option but to sprinkle it with a combination of a little something that will add to the returns earned from fixed income type of securities. In fact this category of investors are in a way, best placed in terms of the current tax laws.

They can earn about 9-10% with minimal or near zero tax over about five years and more. Starting to generate rate of return above the inflation level of 7% is starting to create wealth. So there it is; there is no option but to move in the direction of creating wealth.

For more evolved investors, who invest in equities and who and still sitting on the sidelines tend to run out of patience every now and then. They are sometimes waiting for the right time, sometimes waiting for correction, sometimes waiting for valuation and sometimes waiting for just nothing. Sometimes, just too busy to take action!

I totally understand not wanting to lose hard-earned money. But if the money does not move it will stagnate. That’s the problem with money.

Hit the Ground Running

Inaction and inactivity kills it. Makes it costly to hold. Makes us lose opportunities, sometimes small and sometimes significant. I know of many people including my dad, who just kept investing into equities and holding forever. No doubt they were hugely (big HUGELY) better off then the people in the same time zone. I think they could have done far better with some smart lessons on asset allocation. This is because if they compare the growth rate of their holding over a period of 20 or maybe 30 years the compounded rate of return earned is often not impressive.

It is just marginally better or a few percentage points above the fixed deposit rate. Hence the need for asset allocation, which simply put is not to have all eggs in one basket at any given point in time. These sections of investors anyways create wealth, and, asset allocation is the tool that ensures that the process of wealth creation continues uninterrupted. So again there it is; even for this section there is not option but to start enhancing their wealth creation activities, else returns will continue to remain forever mediocre.

Then there are skeptics and there is nothing much for skeptics of everything, except that they need a serious dose of financial education. Perhaps what if needed is a proof of concept and for that, which better country to live in other than India where financial transparency in investments is so high that I sometimes feel, it comes from another planet.

 Your Money Needs Action

Today, there is a whole lot of variety to choose from and we have never been more spoilt for choice. But the most important thing in all this is to understand that your money needs action. It needs activity and for that the time is now!

And furthermore, if you asked me this question 10 years ago; I would have said that, the Time is NOW. If you ask this question 10 years hence, I will still say the Time is NOW. Any time is the right time to start the process of creating wealth. All that is important is that you take your first step; then continue it all the way with zeal and determination… till you have the level of wealth that you desire. And if you accumulate more than you need, still do it and share it with the world.

If you want your financial freedom; then the Time is NOW!

Kartik Jhaveri is an expert at planning money, life and aspirations. He is a Certified Financial Planner, Wealth Manager and Financial Freedom Coach.

Young Turks: Here’s the success story of venture fund Aspada

Venture fund Aspada was co-founded by Kartik Srivatsa and Thomas Hyland in 2012 and has made 17 investments so far across Fin-tech, agriculture, health and edu-tech startups.

Young Turks takes a look at their investment thesis, their differentiated VC model and meet three of their portfolio companies – Capital Float that underwrites unsecured loans to startups and SMEs; Dunzo, a hyper local concierge and delivery player that is also Google’s first direct startup investment in India; WayCool, a Chennai-based agriculture-tech startup.

Govt amends rules for physical verification of cos’ registered addresses

The government has amended rules to ensure a transparent process for the physical verification of companies’ registered addresses, including by way of having the presence of independent witnesses and clicking a photograph of the registered office at the time of the verification.

The rules under the Companies Act, 2014, have been amended by the corporate affairs ministry and will come into effect once notified in the Official Gazette.

Under Section 12 of the Act, a Registrar of Companies (RoC) can do a physical verification of a company’s registered office if he or she has a reasonable cause to believe that the company concerned is not carrying out business in a proper manner. Now, the process for such physical verifications has been put in place under the Act.

Also Read: Except TCS and Infosys, big IT stocks far from peaks — how soon they may join the party

The physical verification will be done in the presence of two independent witnesses of the locality in which the company’s registered office is situated. If required, the assistance of the local police will be also sought, according to the ministry.

To check the documents’ authenticity, the same should be cross verified with the “copies of supporting documents of such address collected during the said physical verification, duly authenticated from the occupant of the property where the said registered office is situated”, the ministry said.

The registrar will also have to take a photograph of the company’s registered office during the physical verification. Once the verification is done, a detailed report with various information, including location details and photographs, will be prepared.

The amended rules provide for a foolproof and transparent process for physical verification of the registered address of a company, an official said. In case, the company’s registered office is found to be not capable of receiving and acknowledging all communications and notices, the registrar concerned will send a notice to the company and all its directors seeking information.

Also Read: Adani Power to acquire DB Power’s Chhattisgarh thermal power plant

Further action, including the decision on removing the name of the company concerned from the official records, will be initiated depending on the response from the company. The ministry has amended the Companies (Incorporation) Rules, 2014.

On July 18, the ministry informed the Lok Sabha that a total of 1,12,509 companies have been struck off from official records in a little over three years.

These companies have been struck off under Section 248 (1) of the Companies Act during the period from April 1, 2019, to July 12, 2022. This section allows the Registrar of Companies (RoC) to strike off companies.

Out of the total 1,12,509 companies, the maximum number was in Delhi at 19,464. It is followed by Maharashtra (16,023 companies), Uttar Pradesh (12,823), West Bengal (11,044) and Tamil Nadu (6,989), among other states, the ministry had said.

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Uni Cards suspends services of two products following RBI directive

Prepaid payment card player Uni Cards on Friday said it has suspended services of its two products following the RBI directive in June, prohibiting offering credit lines to customers.

The company said it has made the decision to pause onboardings in light of the RBI guideline released on June 20, 2022, that prohibited loading of prepaid payment instruments (PPIs) via credit lines.

“We have decided to proactively suspend card services on our products – the Uni Pay 1/3rd Card and the Uni Pay 1/2 Card. This process will begin in phases for our customers starting today and will be concluded by Monday, 22nd August 2020…, we are always committed to being compliant and want to be on the right side of the regulations,” Uni Cards said in a statement.

Also Read: Mahindra Group may buy General Motors’ Talegaon plant in Maharashtra

The Reserve Bank had asked the non-bank prepaid payment instrument (PPI) issuers to stop providing credit lines on PPI cards and directed them to stop the practice immediately.

Asserting that Uni Cards catered to urgent needs of customers such as fee payments, medical bills and emergencies, Uni Cards said it has ensured that every one of its customers will have access to their credit line through Uni Cash. This is a product built to transfer credit lines directly to the bank account instantly, it added.

“Given so many of our customers rely on their Uni Cards for everyday needs, we are extending a zero-charge partial limit on Uni Cash till 21st September 2022,” it said further.

Uni Pay 1/3rd Card is the company’s subsidiary product. However, the company said it has some other innovative products in the pipeline to be launched later this month. It allows the users to pay their monthly spending in three installments over three months without extra charges.

Also Read: Sebi allows AIFs and VCFs to invest in overseas investee companies but with riders

“Due to the latest RBI guidelines on digital lending, we are proactively suspending our card services in phases by Monday. Bearing the fact in mind that the Uni Cards is used for urgent needs like fee payments, medical bills and emergencies, we have ensured that every one of our customers will have access to their credit line through Uni Cash,” Nitin Gupta, founder & CEO, Uni Cards, said.

With a free partial limit enabled, the customers will not face any disruptions while using their funds, he added.

World Mosquito Day on August 20: Key things to know

Blood-sucking mosquitoes may be tiny in size but they cause a lot of deaths worldwide every year. These parasites are responsible for transmitting fatal diseases like malaria and dengue.

The discovery that mosquitoes transmit malaria was made in 1897 by Sir Ronald Ross, a British army surgeon working in India. To honour his life-saving work, World Mosquito Day is observed every year on August 20. Ronald’s discovery helped us understand the disease, come up with preventive measures and finally find treatment methods. He was given the Nobel Prize for Physiology or Medicine in 1902.

Ross started World Mosquito Day himself to ensure that the world acknowledges the link between mosquitoes and malaria infection. This day still assumes significance as even though preventive measures and medical treatments have become more effective, we have still not been able to find a vaccine against this dreadful disease.

Malaria is caused by parasites that enter your body through the bite of an infected mosquito. People suffering from malaria complain of symptoms like fatigue, fever, night sweats, shivering, or sweating. In serious cases, the disease also leads to diarrhoea, nausea, vomiting, and fast heart rate, among others.

The estimated number of malaria deaths stood at 6,27 000 across the world in 2020, according to the World Health Organisation. Among the total malaria deaths, the most number of casualties were recorded in Africa, where the health infrastructure isn’t robust. Similarly, an estimated 390 million dengue infections occur around the world, resulting in up to 36,000 deaths each year, according to the World Mosquito Program.

How to observe World Mosquito Day?

Among the best ways to observe World Malaria Day is to donate to organisations working to fight against malaria outbreaks or raise funds for them. You may also read about malaria and educate the lesser fortunate about the ways to protect themselves from the disease. Besides, you can participate in cleanliness drives as unhygienic places with stagnant water serve as the perfect breeding ground for mosquitoes.

Adani Power to acquire DB Power’s Chhattisgarh thermal power plant

Adani Power

Adani Power Ltd, India’s largest private thermal power producer, said on August 19 it is acquiring DB Power Ltd’s thermal power plant in Chhattisgarh’s Janjgir Champa district for Rs 7,017 crore.

DB Power owns and operates a 2×600 MW thermal power plant in Chhattisgarh, which had a turnover of Rs 3,488 crore for FY 2021-22. The acquisition of DB Power will help Adani Power expand its offerings and operations in the thermal power sector in the state of Chhattisgarh.

DB Power has long- and medium-term power purchase agreements (PPAs) for 923.5 MW of its capacity, backed by fuel supply agreements with Coal India Ltd, and has been operating its facilities profitably, the company said.

Also Read: Mahindra Group may buy General Motors’ Talegaon plant in Maharashtra

“100 percent of the total issued, subscribed and paid-up equity share capital and preference share capital of DPPL. DPPL shall hold 100 percent of the total issued, subscribed, and paid-up equity share capital of DB Power on the closing date,” Adani Power said in an exchange filing.

“The initial term of the MoU shall be till completion of the acquisition on October 31, 2022, which may be extended by mutual agreement,” it added.

The proposed transaction is subject to receipt of approval from the Competition Commission of India (CCI) and any other approvals as may be identified following the due diligence exercise to be conducted with respect to DPPL and DB Power.

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DB Power is engaged in the business of establishing, operating, and maintaining thermal power generating stations. DB Power was incorporated on October 12, 2006, within the jurisdiction of the Registrar of Companies, Gwalior. The turnover of DB Power during last three financial years have been Rs 3,488 crore (for FY 2021-22); Rs 2,930 crore (for FY 2020-21) and Rs 3,126 crore (for FY 2019-20), respectively.

Diliigent Power Private Ltd (DPPL) is the holding company of DB Power and has a turnover of Rs 0.19 crore for FY 2021-22. DPPL was incorporated on May 13, 2010, within the jurisdiction of the Office of the Registrar of Companies, Gwalior, Madhya Pradesh.

Foreign exchange reserves fall to $570.74 billion in week ended August 12: RBI

fiscal deficit, union budget, budget 2022

The country’s foreign exchange reserves fell USD 2.238 billion to USD 570.74 billion in the week ended August 12, according to the Reserve Bank of India (RBI) data.

In the previous week ended August 5, the foreign exchange reserves declined USD 897 million to USD 572.978 billion.

The fall in the reserves in the reporting week ended August 12 was on account a decline in the Foreign Currency Assets (FCA), a major component of the overall reserves, according to the Weekly Statistical Supplement released by RBI on Friday.

Also read: Foreign exchange reserves fall to $572.978 billion in week ended August 5: RBI

FCA declined USD 2.652 billion to USD 506.994 billion, the data showed.

Expressed in dollar terms, FCA includes the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves. Gold reserves surged USD 305 million to USD 40.618 billion.

The Special Drawing Rights (SDRs) increased USD 102 million to USD 18.133 billion. The country’s reserve position with IMF also rose by USD 7 million to USD 4.994 billion in the reporting week, as per the data.

Also read: Inflation still uncomfortably high: RBI Guv Shaktikanta Das

Explained: Why these 6 states were allowed to trade power after the ban?

After the Centre barred 12 states and one Union Territory from buying or selling electricity at the spot market, six states — Andhra Pradesh, Maharashtra, Jharkhand, Bihar, Manipur, and Chhattisgarh — were permitted to trade after they cleared their pending dues.

On August 18, the national grid operator Power System Operation Corporation (POSOCO) asked the three power exchanges in India — Indian Energy Exchange (IEX), Power Exchange India Limited (PXIL) and Hindustan Power Exchange (HPX) — to restrict 27 discoms across the 12 states and one UT from trading on their platforms on account of non-payment of outstanding dues.

The list included states such as Andhra Pradesh, Telangana, Tamil Nadu, Karnataka, Jharkhand, Bihar, Madhya Pradesh, Chhattisgarh, Maharashtra, Rajasthan, Manipur, Mizoram and the Union territory Jammu and Kashmir.

Also read: Draft Electricity (Amendment) Bill proposes automatic monthly change in power tariff based on fuel cost

Together, they owe about Rs 5,100 crore in current dues to power generators. Additionally, power distribution companies (discoms) have more than Rs 1 lakh crore of accumulated dues, which are being settled as per a plan formulated by the Centre, The Economic Times reported.

Later in the night, the six states claimed to have no outstanding or disputed matters and were allowed to trade.

Who paid and how much?

Andhra Pradesh cleared dues of Rs 412.69 crore, Maharashtra paid Rs 381.66 crore, Jharkhand Rs 214.47 crore, Bihar Rs 173.50 crore, Manipur Rs 29.94 crore and Chhattisgarh cleared dues of Rs 27.49 crore

The remaining seven states are also trying to clear their dues. Among these states, Tamil Nadu owes Rs 926.16 crore, Rajasthan Rs 500.66 crore, J&K has a pending bill of Rs 434.81 crore, Karnataka Rs 355.20 crore, Madhya Pradesh Rs 229.11 crore and Mizoram’s dues stand at Rs 17.23 crore.

The outstanding amounts of these states are mostly arrears, Rajib K. Mishra, Director-Marketing and Business Development and CMD, PTC India, told CNBC TV18.

What is the LPS?

In a letter sent to the three exchanges, POSOCO said it had taken the decision in view of the outstandings of these utilities as per the information available on the PRAAPTI portal. PRAAPTI is the abbreviation for Payment Ratification And Analysis in Power Procurement for Bringing Transparency in Invoicing of Generators.

The action was taken under the Electricity (Late Payment Surcharge and Related Matters) Rules, 2022 that was notified in June. The Late Payment Surcharge (LPS) refers to the charges paid by a discom to a generating company or electricity trader for the delay in payment of monthly charges beyond the due date.

Also read: Power Ministry withdraws imported coal blending order on gencos

This is the first time the national grid operator has invoked the rule to penalise discoms by disallowing them to trade power in order to bring payment discipline in the power sector.

According to the rules, discoms will have to shell out a late payment surcharge (LPS) on the outstanding amount within a month of the due date of payment. Subsequently, the rate of LPS for successive months of default will increase 0.5 percent for every month of delay.

If the discoms delay beyond 75 days, the states can be penalised.

If the default continues beyond three-and-a-half months, the Centre can impose a complete ban on buying short-term power from the spot market, followed by regulation of medium- and long-term power supply.

Telangana move

The Telangana power utility plans to move contempt proceedings in the high court. Telangana has accumulated dues of Rs 1,380.96 crore.

Also read: Centre tells states to take steps to become self-reliant on coal production

In an order in April, the High Court of Telangana allowed the state’s discoms and the Telangana State Power Coordination Committee (TSPCC) “to operate through the power exchanges as well as secure power through open access without any hindrance, pending disposal of our writ petition,” The Hindu quoted a top official of the utility as saying.

The official requested the Centre to not take any further action restricting Telangana utilities from trading power through the exchange.

Akasa Air expects to operate more than 150 weekly flights by September-end

Akasa Air, which commenced services on the Bengaluru-Mumbai route on Friday, expects to operate more than 150 weekly flights by the end of September.

The airline started operations on August 7 and now flies on three routes — Mumbai-Ahmedabad, Bengaluru-Kochi and Bengaluru-Mumbai. For now, the airline will operate two flights daily in each direction on the Bengaluru-Mumbai route.

“Further expanding its operations on the Bengaluru-Mumbai route, the airline will commence one additional daily flight from August 30, 2022, and another from September 19, 2022,” it said in a release.

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It will also start a new route connecting Bengaluru with Chennai from September 10. According to the carrier, it expects to cross 150 weekly flights by end of September.

Akasa Air has already announced flights for six routes across five cities — Mumbai, Ahmedabad, Kochi, Bengaluru and Chennai. Currently, the carrier has three planes and the third one was received on August 16.

It plans to add one new aircraft every two weeks and its fleet size will be 18 aircraft by the end of March 2023.

Over the next four years, the airline will add 54 additional aircraft, taking its total fleet size to 72 planes.

Also read: IndiGo, SpiceJet fall while Jet Airways gains after DGCA’s domestic flight data

On August 17, days after the passing away of Akasa Air’s key investor Rakesh Jhunjhunwala, the airline’s CEO Vinay Dube said the carrier is well-capitalised and its growth is secure with the financial means to place an order for more planes.

“Thanks in no small part to Jhunjhunwala, for which we will always be grateful, Akasa Air is a well-capitalised airline with the financial means to induct 72 aircraft over the next five years,” Dube said.

“In fact, our financial platform is strong enough to allow Akasa to place an aircraft order in the next 18 months that will be significantly larger than our first. In simple terms, our growth is secure,” he added.

Also read: As Akasa takes to the skies, promoter Rakesh Jhunjhunwala says its frugality will keep it competitive

CarterX eyes expansion of passenger baggage transport service to 15 airports in 5 years

Passenger baggage transport service company CarterX aims to expand its footprint across 15 airports over the next five years, Harsha Vardhan, CEO & Co-Founder, CarterX told CNBC-TV18 in an interview.

“We plan to take our services further to five more airports by 2023 and aim to expand our presence to 15 airports over the next five years,” Harsha Vardhan said.

The company currently provides services for transporting passenger baggage via 24×7 counters at the airports of Delhi, Mumbai, Hyderabad and Bengaluru. CarterX has tie-ups with Indian airlines such as IndiGo, Vistara, AirAsia India and SpiceJet.

Also read: IndiGo, SpiceJet fall while Jet Airways gains after DGCA’s domestic flight data

Customers flying with these airlines avail CarterX’s luggage transfer assistance via services known as 6EBagPort (IndiGo), Vista GateToGate (Vistara), LuggageAssist (AirAsia India) and FlyPorter (SpiceJet).

“We are in the process of on-boarding two more airlines,” Harsha Vardhan said.

CarterX was launched in 2017 and has assisted more than 100,000 travellers so far. So far, the company has secured two rounds of funding in 2019 and 2021 through Mumbai Angels Network and Venture Catalysts respectively in seed funding and is raising its pre-series A round currently.

While airport luggage transfer assistance is a significantly new market in India, the company is betting on it on the basis of the potential in Indian aviation market and newer airports coming up across India.

Also read: India’s air passenger traffic dips more than 7% in July over last month

“Barring premium travellers who had experienced this luxury and privilege of moving around hands-free, for decades, the majority of travellers held the mindset that their bags and suitcases were their responsibility,” Harsha Vardhan said.

“CarterX wishes to push the wall further and continue to offer unique baggage-transfer services that can help travellers make the most of their travel plans without fretting over their luggage,” he added.

The company aims to further capture about 33 percent of the market share over the next five years in the passenger baggage transport service category.

Also read: Explained: What are the supersonic jets that American Airlines is betting on?

APY vs APR in DeFi: The workings & differences explained

If you’ve been looking into decentralised finance (DeFi), you have probably come across the terms APY and APR. These terms are used to denote the type of returns applicable on funds deposited in a DeFi protocol. While the two acronyms sound pretty similar, they have slight differences that can have a substantial impact your returns. Let’s look at how APY and APR work and understand the differences between the two.

Understanding APR

APR stands for annual percentage rate and refers to the interest you receive for locking up your tokens in a DeFi protocol. It is calculated as simple interest and represented as a percentage of the principal amount.

For instance, if you provide 100 tokens to a liquidity pool at an APR of 10 percent, you will receive 10 tokens as interest at the end of one year. It’s easy to understand and even easier to calculate; just multiply the APR with the deposited amount, and you get the returns applicable.

Understanding APY

For instance, if you lock up 100 tokens in a DeFi lending protocol at an APY of 10 percent, the interest is added (compounded) to your principal amount at regular intervals. This ensures that interest is calculated on an increased amount every time, resulting in a larger payout at the end of the deposit term.

The formula for APY is (1 + R/N) N – 1, where ‘r’ is the interest rate and ‘n’ is the number of compounding frequencies in a year.

Understanding the difference

APY works on the power of compounding. It keeps adding the interest earned to the principal amount on a quarterly, monthly, weekly, or daily basis. You do not enjoy this feature with APR, which can significantly affect the return amount over time.

Also Read: Adobe CEO explains opportunities in the metaverse

Assume you deposit 10,000 TRX into a DeFi protocol. The platform provides you with a 20 percent APR in return for the liquidity you provide. Therefore, after one year, you will receive 12,000 TRX.

However, if the platform offers you an APY of 20 percent, compounded monthly, you will get 12,193 TRX at the end of one year. That is 193 TRX more in interest earned simply by adding the effect of compounding. This amount would be even more if the interest is compounded daily, adding up to 12,213 TRX.

APY offers a considerably higher interest payout in just a single year compared to APR. This compounding effect can make an even bigger difference in the long run. It’s the reason why Albert Einstein referred to compound interest as the 8th wonder of the world.

Conclusion

As someone in the crypto arena trying to yield or stake their digital assets for more income, it is important to know whether the advertised percentage of return/interest is APY or APR. The fact is that a lower APY can fetch better returns than a higher APR, especially in the long run. Also, it is essential to check whether the advertised APY is compounded monthly, weekly or daily. This can again make a vast difference in the total returns provided.

After CBI raids, ED may launch money laundering probe into Delhi Excise Policy

Fintech cos, NBFCs funded by Chinese money generated Rs 950-crore slush funds in India: ED

The Enforcement Directorate (ED) may initiate a money laundering investigation over the framing and execution of the AAP government’s excise policy, official sources said on Friday after the CBI raided Delhi Deputy Chief Minister Manish Sisodia and others in the matter.

The federal agency is understood to be examining details of the CBI case, involvement of various government officials and private individuals and the possible trail of illegal money generated in the process before it files a formal case under the criminal sections of the Prevention of Money Laundering Act (PMLA).

The Central Bureau of Investigation (CBI) Friday raided the Delhi residence of Sisodia, 50, that of IAS officer and former Delhi excise commissioner Arava Gopi Krishna and 19 other locations across seven states and Union Territories.

Also read: Excise policy case: CBI conducts raids in 7 states, 21 locations in Delhi-NCR

The raid happened after it registered an FIR to investigate alleged irregularities in the formulation and execution of the Delhi Excise Policy brought out in November last year. The policy was scrapped by the Delhi government in July.

Sisodia holds multiple portfolios in the Chief Minister Arvind Kejriwal-led Delhi government including that of excise and education. The scheme came under the scanner after Delhi Lt Governor V K Saxena last month recommended a CBI probe into alleged irregularities in the implementation of the Excise Policy 2021-22.

He also suspended 11 excise officials in the matter. Sisodia too demanded a CBI probe into the alleged irregularities in the policy.

The CBI inquiry was recommended based on the Delhi chief secretary’s report filed in July showing prima facie violations of the GNCTD Act 1991, Transaction of Business Rules (ToBR)-1993, Delhi Excise Act-2009 and Delhi Excise Rules-2010, officials said.

The ED, during its probe, will analyse if individuals and companies who were involved in the policy making and related entities generated any “proceeds of crime under the definition of PMLA” and if there was any possible creation of illegal or benami assets, sources said.

Also read: Delhi liquor stores rush to sell stock as old policy makes a comeback | Explained

The agency has powers to attach such assets and question, arrest and prosecute those who indulge in the offence of money laundering.

According to officials, the chief secretary’s report had shown prima facie violations, including “deliberate and gross procedural lapses,” to provide post-tender “undue benefits to liquor licensees” through the policy.

It is alleged that undue financial favours were extended to liquor licensees after the tenders were awarded, causing loss to the exchequer. The excise department gave a waiver of Rs 144.36 crore to the licensees on the tendered licence fee on the excuse of COVID-19, sources claimed.

They added it also refunded the earnest money of Rs 30 crore to the lowest bidder for the licence of the airport zone when it failed to obtain a no-objection certificate (NOC) from airport authorities.

“It was in gross violation of rule 48(11)(b) of the Delhi Excise Rules, 2010, which clearly stipulates that the successful bidder must complete all formalities for the grant of the licence, failing which all deposits made by him shall stand forfeited to the government,” a source said.

The Excise Policy 2021-22, formulated on the basis of an expert committee report, was implemented from November 17 last year and retail licences were issued under it to private bidders for 849 vends across the city, divided into 32 zones.

Also read: Delhi’s AAP government reverts to old liquor regime amid protests and probes