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


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.

Depicting traffic lights on food packaging absolutely unscientific, says AIFPA on FSSAI’s draft food labelling norms

In a bid to enable consumers to make informed choices, the food safety regulator Food Safety and Standards Authority of India (FSSAI) has come out with draft labelling norms. These rules make it clear that packaged foods must have nutritional information on the front of the pack and food products with high sugar or fat should be colour coded.

FMCG companies are not happy about these rules and some industry sources say nearly 70 percent of packaged food products could be labelled “red” if these draft rules are implemented. CNBC-TV18 spoke with Subodh Jindal, president of All India Food Processors’ Association (AIFPA), Harish Bijoor, founder of Harish Bijoor Consults, Anil Talreja, partner at Deloitte India, and AK Tyagi, executive director at Haldiram Snacks, to discuss the draft norms and its impact if implemented.

Jindal said: “This issue has been continuing for many years and making the basis of salt, sugar and fat content to depict a traffic lighting is absolutely an unscientific way of doing something. How do you lay a parameter that consumption of salt, sugar, fat is such a big variable, it varies with age. A 5-year-old child has a different consumption level to an 18-year-old or to a 60-year-old. It also depends on lifestyle, it depends whether you are a sportsman or athlete, whether you are a sedentary person or you are in active person, it depends on your medical prognosis, it depends on so many other things, so how do you fix one parameter?”

Bijoor said: “This has taken a while coming because we are talking about amendments to the act of 2011. Out here what is being pointed out is that there are two or four items which are red flag items and the red flag items on health are calories, energy can be positive, energy calories can be negative, the second is saturated fat, the third is trans fat and the fourth is added sugar because that seems to be enemy number one and of course sodium per serve which, talking about India, is becoming the capital of some of the lifestyle diseases like diabetes and hypertension. So can we take a step back and do things differently?”

Bijoor added: “The point seems to be, what used to be in small print, is likely to be in big print. What used to be in big print, it is likely to be with logos and with visual icons. However, it should not complicate things, it should simplify because only 2 percent of people read packaging and that is a very small number.”

Talreja said: “On one hand this is a way of communicating awareness to the consumer. The government’s intention is to make the consumer aware of what the person is eating. On the other hand, we cannot have traffic lights which are one way. You have to also appreciate the fact that there are several health patterns, culture, weather conduciveness and that is one important determination factor before you come and just blow lights to an individual. One more important thing is how many percentage of the population really reads or looks at the information which is given in a very microscopic manner in a particular product? That is an important fact that needs to be communicated that before you change anything, recognise that how many people actually read before they eat.”

Tyagi said: “Considering the Indian food industry most of our items will come under the red category. If you take the example of milk and fruit juices even they come under the red category as fat content in the milk and sugar content in the juices is higher. So we cannot copy paste this rule from the outside, we have to consider the Indian consumer also and also see the taste habit of the Indian consumer. Milk and fruit juices are very healthy items but if we get these norms, it will come under the red category. In India lot of people are under malnutrition and lot of people are over-nutrition, therefore we have to give food for malnutrition as well as for the over-nutrition.”

Isro panel to study GSLV rocket glitch and recommend action after Chandryaan-2 mission aborted

India Moon Mission

The Indian Space Research Organisation (ISRO) has constituted a multidisciplinary expert committee to study the technical glitch in the GSLV-Mk III rocket that was to carry India’s moon mission spacecraft Chandrayaan-2, said an official.

“A committee with experts from multi-disciplines has been constituted. The committee will soon submit its report,” the official said.

According to him, the rocket is fully fueled up; and it has to be brought to normal condition first, and that there are set procedures for that to be done.

Officials who have been involved in the launch operations directly and indirectly have not got proper sleep for the past couple of days.

The ISRO officials to whom IANS spoke heaved a sigh of relief that the technical glitch was detected ahead of the rocket’s launch by saving the Rs 978 crore worth rocket and the spacecraft Chandrayaan-2.

IOC threatens to cut fuel supply to Air India

Air India

State-owned Air India’s flights services are likely to be hit partially as public sector oil marketing firm Indian Oil Corporation has threatened to cut fuel supply at some of the airports from Tuesday evening on non-payment of bills, according to a source.

The disinvestment-bound carrier, which is incurring Rs 15 crore loss per day, has huge dues towards oil companies and Airports Authority of India, among others.

“Indian Oil Corporation has threatened to stop fuel supply at certain airports such Patna, Pune, Chandigarh, Cochin, Visakhapatnam and Ranchi for non payment of dues from 4 pm Tuesday,” the source said.

In the eventuality of the oil firm implementing its notice to Air India, there will not be fuel available to flights operating out of these airports and may impact operations as well, the source added.

In view of the IoC notice, the airline has asked its flight crew and dispatchers that they “must carry fuel for next sector or alternative re-routing to be planned to maximise the payload, until situation is normalised,” as per the source.

The national carrier is reportedly expected to post its highest-ever loss of over Rs 7,600 crore in the previous fiscal on account of low fleet utilisation and high fuel prices, among others.

Assam floods: Death toll rises to 13, 43 lakh people affected, relief operations underway

Assam floods

The death toll in floods and landslides in Assam has risen to 15 with four more deaths reported on Monday from Goalpara, Morigaon, Nagaon and Hailankandi districts. By the time the last reports came in, 13 people had died in the second wave of floods, and two others in landslides triggered by heavy rainfall. Nearly 43 lakh people have been affected in floods across 30 districts — almost 10 lakh people have been affected in Barpeta district alone.

According to the Assam State Disaster Management Authority (ASDMA), a total of 4,157 villages under 113 revenue circles have been submerged by the steadily increasing level of the Brahmaputra river and its tributaries.

In the midst of heavy floods, there was also some dramatic rescues. State health officials helped a woman deliver a baby on a country boat at Bokakhat in Assam’s Golaghat district. Accredited Social Health Activist (ASHA) worker Manju Chetry helped the mother deliver a baby boy weighing 3.4 kilograms.

Assam floods

“They were on their way from the village to the wellness centre here, but realized that it would be late by the time they reach. So, with the help of a community health officer under Bokakhat BPHC and an ASHA worker, a successful delivery was conducted on the boat itself. Later, both mother and child were referred to the Bokakhat Sub-Divisional Civil Hospital. They are doing well,” said deputy commissioner of Golaghat, Dhiren Hazarika.

Heavy rains led to washed out roads in several places. In Dhubri, people who have settled near the railway lines were seen carrying tin sheets and plastics to build temporary shelters on the railway tracks. Several of them made an abandoned truck their temporary base to escape floods.

“Things are in bad shape, we are taking shelter in the railway tracks. We saw a train approaching in the morning,” said one of the flood victims.

Along the Indo-Bangla border in Dhubri, some of the Border Security Force (BSF) outposts and a Sashastra Seema Bal (SSB) camp have been inundated by flood waters of the Kushiyara river, making it difficult for the personnel on duty. Despite all hurdles, SSB personnel were seen standing guard in almost 2 feet deep water.

The ASDMA report on Monday stated that 83,180 people are taking shelter in 183 relief camps across 26 districts. As many as 311 relief distribution centres have been stocked with rice, pulses, salt, mustard oil, wheat bran supplies, besides baby food, tarpaulin, cattle feed, sanitary napkins and other essentials for flood-affected people.

Assam floods

Seventeen animal deaths have been reported from national parks and wildlife sanctuaries in the past 48 hours. According to officials, more than 90 percent of Kaziranga National Park and 158 of the 199 anti-poaching camps are submerged in water. Even as time cards have been issued, eight hog deer and one Sambar were killed by speeding vehicles, while 14 animals have been rescued by forest officials and Centre for Wildlife Rehabilitation and Conservation (CWRC) members with the help of locals.

The Brahmaputra and its tributaries are flowing above the danger level in several places. Teams of the National Disaster Response Force (NDRF) and State Disaster Response Force (SDRF), assisted by the civil administration, are engaged in rescue and relief operations in the flood-affected areas. Around 380 boats have been deployed for rescue work, and 15,583 people have been evacuated to safety so far. The Indian Army has also been assisting SDRF and civil administration in rescue operations.

Donald Trump weighs ousting commerce secretary Wilbur Ross, says report

US President Donald Trump has told aides and allies that he is considering removing Commerce Secretary Wilbur Ross after a Supreme Court defeat on adding a citizenship question to the census, NBC News reported on Monday.

Trump retreated on Thursday from adding a contentious question on citizenship to the 2020 census, but insisted he was not giving up his fight to count how many noncitizens are in the country and ordered government agencies to mine their databases.

Although Trump has previously been frustrated with Ross, in particular over some failed trade negotiations, the 81-year-old commerce secretary has so far kept his job. Since late last year other media outlets have reported at different times that Trump was considering replacing Ross.

The Commerce Department said in a statement Monday that Ross was currently overseeing the department’s response to Hurricane Barry and noted that he had joinedTrump on his trip to Wisconsin and Ohio on Friday.

Ross “will continue to work on behalf of the American people and the President’s America First agenda,” the department said.

However, NBC reported early Monday that Trump has been making calls to “allies outside the White House about replacing Ross.”

The White House declined to comment on Monday. Trump is set to have a Cabinet meeting on Tuesday.

Late on Friday, Trump said he disagreed with the findings of a Commerce Department investigation that found uranium imports threaten to impair US national security and instead ordered a 90-day review by federal agencies, saying “a fuller analysis of national security considerations with respect to the entire nuclear fuel supply chain is necessary.”

IL&FS signs binding term sheet with lenders of 3 entities

Crisis hit Infrastructure Leasing & Financial Services (IL&FS) has entered into an agreement with secured lenders of three group entities.

These pacts are a part of the group’s resolution process, and have helped these companies move from the “amber” to the “green” category.

Affordable housing will account for nearly half of our total loan book in 4 years, says Mahindra Rural Housing Finance


Mahindra Rural Housing Finance, a subsidiary of Mahindra and Mahindra Financial Services Ltd, was set up in 2007 to cater to the demand for home finance in rural markets. Between 2012 and 2019, the company has grown at a compound annual growth rate (CAGR) of nearly  50 percent, according to Anuj Mehra, the managing director of Mahindra Rural Housing Finance.

In an interview with CNBCTV18.com, Mehra spoke about the growing demand for rural housing in India and the segment’s key challenges. Edited excerpts:

What is the demand for rural housing finance in India? How do you see this segment growing for your company?

Rural housing finance is a very big opportunity. KPMG has estimated that by 2022 the housing shortage in rural India is likely to be between 63 million and 65 million units. That poses a huge opportunity for rural housing finance.

Between 2012 and 2019, we have grown at a CAGR of close to 50 percent. Currently, we are present in roughly 90,000 villages and have served 1 million customers. Considering that our parent, MMFSL, is already present in approximately 4.5 lakh villages and the country has more than 6 lakh villages, I don’t see any reason why we should not continue to grow apace.

You have entered the affordable housing segment. How do you see this business shaping up?

The affordable housing sector currently accounts for 17 percent of our loan book. We expect loans for affordable housing to account for nearly half of our total loan book in the next four to five years. Affordable housing has the potential to grow faster because it is on a relatively lower base and a bigger ticket size.

According to KPMG, urban India is likely to have a housing shortfall of 44 million-48 million housing units by 2022. An overwhelming majority of this shortfall will be in the EWS (economically weaker section) and LIG (lower income group) categories. That is the profile we are seeking to address through the affordable housing finance initiative.

This market is an adjacency for our rural housing finance business and a logical strategic direction.

How do you look at the 2019 Union Budget and its emphasis on rural housing?

More than the specifics, it is heartening to see that the government is focused on solving the challenges of rural housing and, by extension, rural housing finance.

A lot of work has already been done by the government in the area of providing (rural) housing — this budget takes this focus forward.

Tell us about your partnership with central and state governments on the Pradhan Mantri Awas Yojana (Housing for All by 2022).

The company is involved in two kinds of initiatives under the PMAY. The first is financing customers to help them buy houses built by the government under the PMAY. We have tie-ups with state governments, municipalities etc for this. The second initiative is the interest subsidy schemes offered by the government under the PMAY. Under this, after extending home loans to (eligible) customers, we claim an interest subsidy from the government through the National Housing Bank (NHB). The subsidy amount, when received, is credited to the account of the customer. I would like to add here that the subsidy scheme is extremely well thought out and appropriately designed.

Tell us about the new technology innovations which can drive the adoption of financial products among masses.

I don’t think we need to wait for the next technological innovation for financial inclusion. The building blocks are already in place. The ever growing reach of the internet, penetration of smartphones, no frill bank accounts and Aadhaar for KYC — we need to leverage these. The government even provides us with the means of “last mile connectivity”. There are more than 300,000 village level entrepreneurs who, under the aegis of the government’s “common service centres” provide all kinds of services to villagers.

Use of Aadhaar for electronic verification (biometric based) should be permitted (with the requisite processes to protect privacy concerns etc). This will make it easier, faster and cheaper to onboard customers.

What is your company’s strategy to trigger inclusive growth?

The process of home construction in rural areas is different from the urban. [In rural areas] people follow a piece-meal approach. When money from a harvest comes in, a certain portion of the house is built, the next season enables the next step of home construction, and so on. There have been customers who have built a house over six years. This is where we stepped in. We told them “instead of building your dream home over time, complete it in one go and repay us over the years”. This is why we speak about our loans as being ‘home completion’ loans. In nine out of 10 cases people in rural areas take loans for incremental construction of their home; there is very little buying or selling that happens.

Also, with regards to modification, we believe that there exists a lot of need, especially in rural areas, to undertake small repairs (roof, walls, etc.). In addition, sanitation is an important need that is now being taken seriously across the nation. These are areas where our loans make a difference. We undertook an impact assessment study with BCTA (Business Call to Action, a UN affiliated organization) to understand the impact that we, as a business, create on communities as a whole. Our study reaffirmed the fact that our customers visit the doctor less often than the village average and also believe in the need for improved sanitation. It is vital, as a business serving rural India, to ‘do well by doing good’ and our home improvement loans are a step in this direction.

There are two major barriers that deter an underserved customer to approach a financial institution for a loan. First, the fear of being rejected, and second, the inconvenience with regards to excessive documentation.

Owing to these barriers, villagers end up spending a significant portion of their income paying high interest to local moneylenders.

Our processes were therefore devised to help tackle these issues. We hand-hold with respect to documentation. We try to build trust with communities and lastly, we reach out to customers, going to their doorstep rather than waiting for them to come to us for a loan.

What are the key challenges in the rural housing market?

Our challenges fall into four broad categories:

Customer acquisition: There are no channel partners (like builders or DSAs) who can help identify customers for a rural HFC [housing finance company]. Mass media also plays a limited role in this product category. As a result the entire customer acquisition process has to be handled in-house. Typically we begin the sourcing process by holding a meeting of villagers at a central location in the village. There, our team members explain our loan products, the requirements and the process. Customers evincing interest are then met separately and the process taken forward.

Evaluation: Each loan has to be evaluated from the perspectives of credit–worthiness, legal (title to property) and technical appropriateness. Customers in rural India have limited banking habits and no credit history. Thus, credit evaluation is difficult. Over the last few years we have credited a rich database of crops grown in each area that we operate in, the likely input costs to grow that crop and the yield per acre of the crop. Using market price data, we can therefore estimate what a customer’s income is likely to be. In addition, we have estimates of likely wages for various profiles.

Product design: Because of the type of customer we serve, we had to reconfigure the basic product. For example, unlike a typical monthly EMI, we allow for quarterly and half-yearly EMIs, linked to crop cycles to facilitate easy repayments.

Customer servicing: Servicing the customer base is the biggest challenge. To give some statistics, for a book size of around Rs 6,500 crore, we have more than 950,000 customers across 80,000 villages being served by 9,000 team members. Most of our customers make cash repayments of small amounts. Thus, the team has to meet the same customer repeatedly to collect the EMIs. Even today, despite the increasing penetration of the internet, customers prefer to meet and discuss issues personally with our team members. This necessitates a large team to cater to the customers.

Retailers cash in on Amazon’s ‘free marketing’ on Prime Day


Amazon.com Inc’s Prime Day is now a major marketing opportunity and shopping event in the annual calendar for other US retail companies, rivaling the Thanksgiving holiday’s Black Friday as a driver of sales.

Walmart Inc, Target Corp and eBay Inc all run their own special promotions to coincide with the annual sale, which this year Amazon has stretched to two days.

Target announced deal days which will run on the same days as Prime Day – July 15 and 16. Walmart offered promotions from July 14th-17th, while eBay announced a July 15 “crash sale.”

“As the awareness of this shopping moment continues to build, we see this as a great opportunity to showcase our competitive advantage on price and inventory,” an eBay spokesperson said.

Amazon’s break-neck pace of growth, which has seen increasing numbers of shoppers ordering online instead of going to brick-and-mortar stores, is pushing other retailers to respond as they seek to remain competitive.

“There is this enormous halo effect to Prime Day,” said Jaysen Gillespie, head of analytics and data science at ads firm Criteo, adding that non-Amazon retailers should experience large increases both in traffic to their websites and in sales.

“The rest of the industry is taking advantage of the free marketing that Jeff Bezos is providing, and they should really send him a thank you card saying, ‘Hey, thanks for the awareness marketing – we’ll take care of the conversion and close the deal now on our websites.'”

Some retailers also flaunted no membership fees.

Customers have to join Amazon Prime to get discounts during the 48-hour event. US members of the club pay $119 per year for benefits including one-day shipping, and they tend to buy more goods, more often from the Seattle-based retailer.

The mid-summer shopping event is estimated to bring in $5.8 billion in sales this year for Amazon globally, compared to $3.9 billion last year, according to Coresight Research. Amazon does not disclose figures for revenue generated during Prime Day shopping events.

Chinese e-commerce giant Alibaba Group reported sales of $30.8 billion during its 24-hour online retail frenzy Singles’ Day in 2018.

Last year, when Prime Day lasted 36 hours and faced technical glitches, online shoppers bought more than 100 million products worldwide, at the time recording the largest daily sales for Amazon’s own brand of Echo smart speakers, while the Fire TV Stick with Alexa Voice Remote and Echo Dot were the best-selling devices.

Other top-selling products around the world were table salt in India, Coke Zero and Kleenex tissues in Singapore and electric toothbrushes in China.

Pop star Lady Gaga announced a line of beauty products exclusively for sale on Amazon last week, which is available for pre-order during the promotional event.

“It’s Christmas in July,” said Tom Caporaso, chief executive of loyalty platform Clarus Commerce, citing company research that shows roughly 50% of consumers say they search other retailers to find the best price on Prime Day.

“That’s telling you that consumers are definitely in the buying mode but are not 100% loyal to Amazon,” he said.

To coincide with Prime Day, more than 2,000 workers at seven Amazon sites across Germany went on strike over pay and conditions for logistics workers for at least two days, labor union Verdi said on Monday.

Similar protests are planned across the United States and Europe.

At an Amazon warehouse in Shakopee, Minneapolis, workers said they would stage a six-hour strike to demand improved work conditions. Employees are also calling on the company to do more to combat climate change and cut alleged business dealings with the United States Immigration and Customs Enforcement (ICE).

An Amazon spokesman addressing the German strike told Reuters the company was a fair and responsible employer even without having a collective agreement in place.

“In our fulfillment centers, our wages are at the upper end of what is paid in comparable jobs,” he said.

Amazon did not immediately respond to further requests for comment.

As Amazon kicks off Prime Day extravaganza, staff goes on strike

Amazon WholeFoods

Amazon employees went on strike at seven locations in Germany on Monday, demanding better wages as the online retail giant launched its two-day global shopping discount extravaganza called Prime Day.

Workers in Germany walked out in the early hours Monday morning, with Orhan Akman, a spokesman for labour union Verdi, telling AFP: “We expect a good turnout”.

“Amazon offers these discounts to customers at the expense of its own employees’ salaries and by fleeing collective bargaining,” he charged.

Amazon had insisted in advance that Monday’s strike will not affect deliveries to customers.

The strike action coincided with Amazon’s announcement on Monday that it would create another 1,000 jobs in Poland as it opens a new logistics depot in the country’s southwest near the German and Czech borders.

The US giant said it will offer new employees in Poland “a competitive salary of 20 zloty ($5.82) per hour gross”.

In Germany, Amazon employees start with a minimum wage of 10.78 euros per hour before tax, according to management figures, and after 24 months’ employment, they draw an average monthly salary reaching 2,397 euros before deductions.

The online retail giant has faced several rounds of walkouts by workers seeking better conditions.

In 2018, industrial action reached a new height as around 50 strikes were organised around Europe and, in a rare show of cross-border solidarity, some were coordinated to hit simultaneously in several countries.

In April, Amazon trade union representatives from 15 countries met in Berlin to co-ordinate their efforts.

On Monday, Amazon employees at the two distribution centres in Bad Hersfeld, as well as sites in Werne, Rheinberg, Leipzig, Graben and Koblenz, went on strike under the motto: “No more discounts on our incomes”.

Meanwhile in the United States, employees at Amazon’s warehouse in Minnesota also walked out for the first six hours of Prime Day to highlight their wage demands, according to local media reports.

Verdi argues that money for better wages is “available” as in the first quarter of this year alone Amazon posted record profits of 3.2 billion euros ($3.6 billion).

However, Amazon rejects the trade union’s demands and sees no need for collective agreements.

United Airlines extends suspension of Delhi, Mumbai flights to October 26

 United Airlines Holdings Inc said on Monday it was extending the suspension of its flights from the United States to Delhi and Mumbai in India until October 26, citing continued restriction of Pakistani airspace.

Pakistan closed its airspace in February after a suicide attack by a Pakistan-based militant group in Indian-controlled Kashmir led to aerial bombing missions on each other’s soil.

“We are contacting our customers to provide this update and assisting those who may need to make other travel arrangements, including rebooking on other airlines or offering full refunds,” United Airlines said in a statement.