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.

Indian economy probably picked up in September quarter as hopes grow for vaccine

India’s economy is likely to have shown signs of a pick-up in the quarter to September after a record contraction the previous quarter and is expected to recover early next year on hopes of better consumer demand fed by progress on coronavirus vaccines.

Economists in a Reuters poll forecast gross domestic product in Asia’s third-largest economy to shrink 8.8 percent in the September quarter, after a contraction of 23.9 percent in the previous quarter, amounting to a technical recession. They also predict a contraction of 3 percent and growth of 0.5 percent in the December and March quarters respectively, with the economy shrinking 8.7 percent over the whole financial year for its worst performance in at least four decades.

Economists have marginally raised forecasts this month after a pick-up in consumer demand for autos, non-durables and rail freight during the festival season, as prospects grow for COVID-19 vaccines to be launched early next year.

Effective widespread distribution of vaccine could help speed economic recovery next year, said Shilan Shah, an India economist at Capital Economics in Singapore. ”In particular, monthly data on capital goods production suggests that investment has bounced back more sharply than we had thought likely,” he said in a note this week.

Despite improvement in the growth outlook, however, a recent surge in infections presents downside risks for the economy, said Shaktikanta Das, the governor of the Reserve Bank of India.

”We need to be watchful about the sustainability of demand after the festivals and a possible reassessment of market expectations surrounding the vaccine,” he said on Thursday.

India’s tally of infections has crossed 9.27 million to stand as the world’s second-highest after the United States, with more than 135,000 deaths in the south Asian nation.

As some states re-imposed curbs this week to fight a second-wave of infections, businesses feared the restrictions could slow the pace of recovery in the next two or three months, as well as heightening the risk of inflation.
Prime Minister Narendra Modi, whose party won elections this month in the eastern state of Bihar, expects the recent easing of farm and labour laws, along with tax incentives, to bolster manufacturing and lure more foreign investment.

But critics say the economy, which must grow at more than 8 percent a year to create jobs for millions of young people entering the workforce, faces a prolonged slowdown, thanks to a delay in resolving a banking crisis and inadequate stimulus measures.

”Even widespread vaccination would not restore India to economic health, as tepid fiscal support and a beleaguered banking sector will weigh on economic growth long after the virus is brought under control,” said Shah.

Sputnik V developers call on AstraZeneca to try combining vaccine with theirs

2nd study testing a COVID-19 antibody drug has a setback

Adding more colour to the race for a COVID-19 vaccine, developers of the Russian vaccine candidate Sputnik V called on AstraZeneca to experiment combining vaccines with theirs. The Russian vaccine developers in a tweet late on Thursday said AstraZeneca should try combining its experimental shot with the Russian Sputnik V to boost efficacy and combining vaccines may prove important for revaccinations.

Sputnik V’s comment came right after reports that AstraZeneca is likely to run an additional global trial to assess the efficacy of lower dosing regimen of its vaccine. Bloomberg News quoted AstraZeneca CEO Pascal Soriot as saying that it is looking to conduct an additional global trial instead of adding a trial arm to its ongoing trials in the US, after questions were raised over the results from its late-stage study.

Sputnik V said, “Current full dose AstraZeneca regimen resulted in 62% efficacy. If they go for a new clinical trial, we suggest trying a regimen of combining the AZ shot with the Sputnik V human adenoviral vector shot to boost efficacy. Combining vaccines may prove important for revaccinations.”

In an interim analysis of late-stage trials, AstraZeneca had reported 90% vaccine efficacy for a lower dosing regime and 62% for two full vaccine doses. It later admitted that lower dosing was not by design but an error in the trial, drawing strict criticism on the transparency of trial protocols and push for the company to attempt fresh trials.

Sputnik V had last week in its second interim report assessed 39 COVID-19 confirmed cases among trial participants and reported 95% efficacy 40 days after the first dose. However, most experts say it is a very small pool of confirmed cases to extrapolate vaccine efficacy results and Russia needs to wait for more cases to accrue to make an informed decision on efficacy.

This is Russian vaccine developers’ second call to AstraZeneca for combining vaccines. On November 23rd when AstraZeneca reported its interim analysis, Sputnik V developers had said, “Sputnik V is happy to share one of its two human adenoviral vectors with AstraZeneca to increase the efficacy of AstraZeneca vaccine. Using two different vectors for two vaccine shots will result in higher efficacy than using the same vector for two shots.”

“The possible reason for 62% efficacy of AstraZeneca’s full dose regiment is that immunity to chimpanzee adenoviral vector from the 1st shot makes 2nd shot not effective. Sputnik V addresses this issue by using two different human adenoviral vectors for two shots (92% efficacy),” it added.

AstraZeneca’s vaccine candidate is based on chimp adenovirus vector. Viruses that cause common cold in chimpanzees are genetically modified to insert Sars-Cov2 protein codes to stimulate an immune response in the human body when administered.

Sputnik V vaccine alternatively is based on human adenoviral vector. Human adenoviruses are similarly genetically modified with Sars-Cov2 spike protein codes to trigger an immune response in the body. The Russian vaccine uses two different strains of human adenoviruses (rAd26 and rAd5) for the first and second vaccination dose, to boost the effectiveness of the vaccine.

Johnson & Johnson’s single-dose vaccine under development is also based on an adenovirus vector. There are more than 13 vaccine candidates in late-stage human trials across the world.

AstraZeneca and Oxford University have partnered with Pune-based Serum Institute of India (SII) for the manufacturing of its coronavirus vaccine and the Indian partner is also conducting a bridge Phase 2/3 trial in India. Sputnik V has tied-up with Indian drug maker Dr Reddy’s Labs for a similar arrangement.

26/11 attacks: Maharashtra Governor gives laptops to kin of martyred cops

Maharashtra Governor Bhagat Singh Koshyari on Thursday presented laptops and mementoes to family members of policemen who laid down their lives while fighting terrorists who attacked Mumbai on November 26, 2008. The programme held at Raj Bhavan here was organised by the Jeevan Jyot Pratishthan to mark the 12th anniversary of the terror attack, an official statement said.

According to the statement, the governor said Mumbai and the country remained safe because of the supreme sacrifice made by policemen, jawans and NSG commandoes during the attack. Expressing his gratitude to the martyrs’ families, Koshyari said he hoped that children of the martyrs will progress in their chosen fields and make the country proud with their achievements.

On November 26, 2008, 10 Lashkar-e-Taiba terrorists from Pakistan arrived by sea route and opened fire, killing 166 people, including 18 security personnel, and injuring several others during the 60-hour siege. Nine terrorists were killed by the security forces including the NSG, the elite commando force of the nation. PTI ENM ARU ARU 11262126 NNNN.

Farmers protest: Air India offers free rescheduling of flights for affected passengers

Air India has said passengers affected due to traffic disruption on Thursday amid closure of the borders of the national capital region (NCR) will be allowed to reschedule their flights for free. People coming to the national capital from Haryana and Uttar Pradesh faced traffic snarls at several border crossings as the Delhi Police intensified vehicle checking in view of the ‘Delhi Chalo’ march by farmers from Punjab against the Centre’s farm laws.

“In view of traffic disruption in NCR region due to closure of Delhi borders, we are allowing no-show waiver & one free reschedule to passengers who couldn’t report for their flights,” Air India said on Twitter. “Waiver will be valid for flights scheduled out of Delhi airport only for 26th Nov ’20,” it added.

Senior police officials said heavy deployment was made on the Faridabad, Singhu and Gurgaon border crossings with Haryana and vehicle checking was intensified as a precautionary measure in view of the protest march. Farmers from Punjab were scheduled to reach Delhi through five highways connecting the city as part of their march.

Berlin plans six vast COVID-19 vaccination centres handling 4,000 people a day

Berlin is racing to open six mass vaccination centres capable of handling up to 4,000 people per day by mid-December, the project coordinator told Reuters on Thursday, as the city waits for authorities to approve the first vaccines.

An empty trade fair hall, two airport terminals, a concert arena, a velodrome and an ice rink will be turned into six vaccination centres where it plans to administer up to 900,000 shots against the coronavirus in the first three months.

Albrecht Broemme said plans envisage 3,000 to 4,000 people per day being ferried through each centre in the same way as shoppers are guided through IKEA stores in one direction.

“The biggest challenge will be succeeding in getting the right people at the right time at the right vaccination centre,” Broemme said on the sidelines of a fire drill at the city’s makeshift COVID-19 hospital in a trade fair hall.

Germany appears to be the furthest ahead of European nations in its planning for the daunting logistical and administrative challenge that could be just a few weeks away if the first vaccines gain approval.

Europe’s drug watchdog expects to receive the first application for conditional marketing approval for a COVID-19 vaccine “in the coming days”, it said on Thursday, the latest step towards making a shot available outside the United States. [L1N2IC0PC]

Broemme said Berlin is working on the assumption that around 80% of its doses in the first instance will come from Pfizer/BioNTech with the remaining 20% of the doses from AstraZeneca.

Health Minister Jens Spahn said Germany has secured around 300 million vaccine doses. Other German states have said vaccination centres will be ready from mid-December and mobile teams will inoculate the most vulnerable.

Elsewhere in Europe, preparations appear mixed.

In Spain, the government aims to vaccinate a substantial part of its population in the first half of 2021 and has opted to use trucks rather than centres to distribute the shots.

Italy expects to have vaccinated most Italians by next September and is due to set out detailed plans on Dec. 2. France has said it could start administering shots as soon as the end of the year and will unveil its strategy next week.

Britain plans to roll out vaccines using a mixture of centres and doctors’ practices and is aiming to have enough shots to have some sort of normality after Easter.

In contrast, Hungary and Bulgaria are not expecting to receive their first shipments until Spring.

Berlin’s vaccination centres will be open seven days a week and on public holidays from 0900 to 1900, Broemme said, with the aim of completing the first phase within three months. After that people will get shots at doctors’ practices and pharmacies.

Those aged over 75 and healthcare workers are expected to be first-in-line, the city’s health senator said last week.

One challenge will be finding enough staff to operate the centres, which will need medical professionals, stewards and security guards. EasyJet has offered some of its first-aid trained staff, a spokesman said.

Broemme expects each person to spend around one hour in the centre. People will be monitored for side effects for around 30 minutes after receiving a shot amid strict social-distancing and hygiene standards.

Lakshmi Vilas Bank writes off bonds worth Rs 318 crore ahead of merger with DBS Bank

A day ahead of its merger with the Indian arm of Singapore-based DBS Bank, the debt-ridden Lakshmi Vilas Bank (LVB) on Thursday has written off bonds worth Rs 318.20 crore as per the existing provisions.

As per the effective date of merger notified by the Reserve Bank of India (RBI) on Wednesday, LVB will lose its identity on Friday as it amalgamates with DBS Bank India Ltd.

The RBI, vide their letter on Thursday, has advised the need to fully write down the Series VIII, Series IX and Series X Basel-III complaint tier-2 bonds before the amalgamation comes into effect from the appointed date (November 27), LVB said in one of its last communications to stock exchanges.

“If the relevant authorities decide to reconstitute the bank or amalgamate the bank with any other bank under the Section 45 of the Banking Regulation Act, such a bank shall be deemed as non-viable and both the pre-specified trigger and the trigger at the point of the point of non-viability for write-down of bonds shall be activated.

“Accordingly, the bonds shall be written off before amalgamation or reconstitution in accordance with applicable rules,” according to the terms of the information memorandum of the respective Basel-III Tier-2 bonds issued by the bank.

In the light of above provision, such Basel-III Tier-2 bonds would need to be fully written down before amalgamation of the bank comes into effect, LVB said quoting Thursday’s letter from the RBI.

On Wednesday, the RBI notified the effective date of merger of November 27 soon after the union cabinet headed by Prime Minister Narendra Modi approved the Scheme of Amalgamation of LVB with DBS Bank India Ltd (DBIL).

The RBI had superseded LVB’s board on November 17 after the private sector lender was placed under a 30-day moratorium restricting cash withdrawals at Rs 25,000 per depositor.

The RBI simultaneously placed in public domain a draft scheme of amalgamation of LVB with DBIL. Started by a group of seven businessmen of Karur in Tamil Nadu under the leadership of V S N Ramalinga Chettiar in 1926, LVB has 566 branches and 973 ATMs spread across 19 states and Union Territories.

With non-performing assets (NPAs) soaring, the bank was put under the prompt corrective action framework of the Reserve Bank of India (RBI) in September 2019. LVB is the second private sector bank after Yes Bank that has run into rough weather this year.

In March, capital-starved Yes Bank was placed under a moratorium. The government rescued Yes Bank by asking State Bank of India (SBI) to infuse Rs 7,250 crore and take 45 per cent stake in the lender.

IITs, NITs to begin offering engineering courses in mother tongue from next year: Govt

The Indian Institutes of Technology (IITs) and the National Institutes of Technology (NITs) will start offering engineering courses in mother tongue from next academic year, according to Education Ministry officials. The decision was taken at a high-level review meeting chaired by Union Education Minister Ramesh Pokhriyal on Thursday.

“A seminal decision was made to start technical education, especially engineering courses, imparting education in mother tongue (and this) will be opened from next academic year. A few IITs and NITs are being shortlisted for the same,” a senior ministry official said.

In the meeting, it was also decided that the National Testing Agency (NTA) will come out with the syllabus for competitive examinations after assessing the existing scenario of school education boards. “The University Grants Commission has also been directed to ensure all scholarships, fellowships are disbursed in time and to start a helpline for the same and address all grievances of the students immediately,” the official said. The NTA had last month announced its decision to conduct the JEE (Main) in nine regional languages, apart from Hindi and English from 2021.

However, the IITs are yet to take up the matter so far on whether the JEE (Advanced) will also be offered in regional language. The need to assess the school education scenario before coming out with syllabus arises because many boards, including national boards like CBSE and CISCE, have rationalised their exam syllabus due to the COVID-19 situation and subsequent academic loss due to schools being closed since March.

Covaxin’s phase-3 trials commences in Ahmedabad hospital

The phase-3 clinical trials of Bharat Biotech’s COVID-19 vaccine began at Sola civil hospital in Gujarat’s Ahmedabad city on Thursday, officials of the state-run hospital said.

On the first day, five healthy volunteers, including a woman, were given the first dose of the vaccine at the hospital. Its second dose will be given after 28 days, said Principal Investigator, Sola Civil, Dr Parul Bhatt.

“In the first phase, we have planned to cover 1,000 healthy volunteers. They must be in the age group of 18 to 60 and with no history of coronavirus infection. Anyone who fulfils the criteria can approach us and enroll as a volunteer,” she added.

Covaxin is being developed by the Hyderabad-based firm Bharat Biotech in collaboration with the Indian Council of Medical Research (ICMR).

She said that doctors at the hospital engaged in the clinical trial exercise will remain in touch with the volunteers over phone to monitor their health condition after the vaccine is administered. Volunteers will be called at the hospital at regular intervals for follow-up procedures and tests, including blood test and oxygen level, Bhatt said.

“This whole exercise will continue for 12 months. We will also give a contact number to the volunteers in case they need any urgent intervention. The hospital will provide necessary treatment in case of any complication,” she added.

BharatPe eyes $5 billion annualised transaction value from PoS business in FY21

Financial technology major BharatPe on Thursday said it has grown to $2 billion (Rs 14,766 crore) in annualised transaction value in just three months after the launch, and aims to further increase this to $5 billion (about Rs 36,916 crore) by the end of the fiscal.

The point of sale (PoS) business now contributes to 25 percent of the annualised transaction value, according to a statement.

Currently, the company offers this product in 10 cities of the country and plans to ramp it up to 40 cities by the end of the current financial year, it said. It has set a target of $5 billion in annualised transaction value from the PoS business by the end of FY21, BharatPe added.

BharatSwipe, the PoS machine from BharatPe, was launched in the second half of 2020. It is a first zero rental card machine that offers the merchants the option for zero transaction charges, and allows the merchants to accept payments from a range of credit and debit cards.

“In just about a quarter, our PoS business is now one-fourth of our annualised transaction value…our average daily active merchants on PoS are much higher than the industry average. “We will be aggressively focusing on building this business as we expand to newer markets,” BharatPe Group president Suhail Sameer said.

He added that BharatPe currently has close to 35,000 machines in the market and is targeting deployment of about one lakh POS machines by the end of the current fiscal.

“Also, we have recently launched cash advance loans based on the merchant’s PoS transaction data and initial data looks very promising. We will be scaling this up in the coming months,” he said.

Peter Kerkar of Cox & Kings arrested by ED in money laundering case

The Enforcement Directorate has arrested travel firm Cox and Kings’ promoter Peter Kerkar in an alleged money laundering case, as per reports.

In October, the ED had arrested Cox & Kings Group CFO Anil Khandelwal and internal auditor of Naresh Jain, under sections of the Prevention of Money Laundering Act (PMLA), in connection with the Yes Bank case.

An ED official said: “During investigation in the money laundering case, it has surfaced that Yes Bank has total outstanding of Rs 3,642 crore in respect of Cox & Kings Group of Companies (CKG).”

“Further investigation revealed that CKG forged its consolidated financials by manipulating the balance sheets of overseas subsidiaries. In addition, some board resolutions submitted to banks for sanctioning the loans were also found to be forged,” he said.

The ED official also said that during investigation, it was also revealed that the loan sanction from Yes Bank was driven by then CMD Rana Kapoor and was given bypassing the norms.

The ED gathered the evidences regarding clear instruction of Kapoor to the concerned bank officials to get the said loan continued and not to make efforts to recover it, the official said.

“Investigation also revealed that during financial years 2015 to 2019, sales of Rs 3,908 crore were made to 15 non-existent/fictitious customers,” he said, adding that majority of collections shown in ledgers from Ezeego (another group entity of CKG) was not found in the bank statements.

The official also said that there are 15 fictitious high-value debtors reflected in the books of accounts.

“Another 147 sets of customers also appeared to be suspicious and non-existent. Cox & Kings Ltd (CKL) has diverted Rs 1,100 crore to another stressed company without any approval of the board which has no business relationship with the company,” he said.

“During the whole process, Khandelwal and Jain acquired the mortgaged property amounting to Rs 63 crore in their owned business entity — Reward Business Solutions, without paying a penny from their pocket.”

Investigation further revealed that Khandelwal and Jain purchased various immovable properties from the funds diverted from CKG.

“Further investigation revealed that from Ezeego, Rs 150 crore were diverted to Redkite Capital Private Ltd which was promoted by family members of Khandelwal, CFO of CKL, and Jain, internal auditor of CKL,” the official said.