Dip in gold prices spurs demand on Akshya Tritiya
"Akshya Tritiya", considered an auspicious day for buying gold in India, saw healthy buying of the yellow metal this year as lower prices increased footfalls in traditional markets like Ahmedabad, Mumbai and Delhi.
Irrespective of market conditions, gold prices normally increases during the auspicious buying period of Akshya Tritiya. However, global developments this year have pushed down the prices, with the precious metal being almost 10 per cent cheaper this year as compared to the same period last year.
"On this day of Akshaya Tritiya, we are seeing healthy double-digit growth as compared to last year. We are looking at healthy gold and diamond jewellery sales in the next few hours till the end of the day's closing," said Sandeep Kulhalli, Sr. Vice President-Retail and Marketing, Tanishq.
Buyers were seen interested in light, fashionable and trendy items, said a jeweller in Ahmedabad. Gold with 24 carrot purity was priced at Rs 31,700 per 10 gram plus GST in Ahmedabad during the afternoon session. Gold with 22 carrot purity traded at Rs 31,100 per 10 gram plus GST.
"The festive sentiment amongst both trade and consumers appears to be stronger this year. A favourable price offers a good seasonal opportunity for wedding purchases, which underpin Indian jewellery demand. Various trade offers and promotions point towards an increase in demand for both jewellery as well as investment products like coins and bars," said Somasundaram P.R., Managing Director, India, World Gold Council.
"Although a nascent trend, digital gold buying platforms are quite upbeat at this time as they continue to grow at a fast rate, offering consumers the option of purchasing pure gold for as little as one rupee on their smartphone and at their convenience. In spite of the elections, all the indicators point towards a good buying season this Akshaya Tritiya in comparison to the previous year."
By late afternoon, at Multi Commodity Exchange (MCX), gold contract expiring in June was at Rs 31,562 per 10 gram, one rupee down from the last closing. In the international market, June expiring contract of gold on the comex was at $1,281.15 per ounce, $2.65 dollar per ounce down from the last session.
According to analysts, prices of the yellow metal are poised to rally amid rising uncertainties as the US President Donald Trump, despite repeated claims by the White House that trade talks with Beijing were progressing, said on Twitter last Sunday that he would increase tariffs on $200 billion of Chinese goods from 10 per cent to 25 per cent.
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    Homebuyers get rights equal to banks, FIs, to recover dues from bankrupt builder
    In a welcome move for homebuyers, the Union Cabinet has reportedly approved amendments to the Insolvency and Bankruptcy Code (IBC) allowing the status of financial creditors to homebuyers. This status means a homebuyer, who had paid money for buying property in a project that has been stalled by insolvency, will have equal rights with other creditors like banks and institutional lenders, making it easier for her to recover her money.
    "This is a great news for homebuyers," says Ramesh Nair, Chief Executive and Country Head, JLL India, adding, "Previously, if any realty firm went through bankruptcy, the priority of recovering dues from the project was first given to financial creditors such as banks and institutions, followed by operational creditors such as vendors and employees. Homebuyers were widely regarded as merely consumers and did not specifically fall under the liquidation claim waterfall, placing them at a disadvantageous position and exposing them to significant risk upon investment in under-construction projects."
    The Union Cabinet, during its previous discussion, had expressed concerns about homebuyers not being involved in the insolvency process like creditors and were also not allowed to initiate the insolvency process. The Cabinet went on to examine the peculiarity of the Indian real estate sector where the delay in completion of under construction apartments had become a common phenomenon. It recognised that amounts raised under homebuyer contracts are significant and contribute to the financing of construction of an asset in the future, thus categorising them as secured financial creditors.
    In the current financing landscape, majority delinquent real estate assets are either restructured or taken over by new sponsors and subsequently refinanced - especially when the project is structured as a special purpose vehicle. Therefore, it is only in cases where the developer is under extreme financial duress that financial institutions are likely to proceed under the IBC. 
    Following the Cabinet ordinance, homebuyers will share equal priority, in terms of default waterfall, with lenders, in case of bankruptcy-led liquidation. Accordingly, homebuyers will be part of the Committee of Creditors that approves a resolution plan and their voting rights will be in line with their advances or money paid to the builder or developer.
    India Ratings and Research (Ind-Ra), however, feels that the final contours of the code needs to be seen for smooth functioning of the committee, considering several homebuyers and voting rights. "This will strengthen home buyers' right and power in case of bankruptcy of the developer and any default in payment or planned schedule. It may strengthen real estate buyers' (end-customers) protection and boost the customer sentiment," it added.
    As operational creditors, homebuyers' interests are not fully optimised up till now, as opposed to other operational creditors in other business under the ambit of IBC. With the proposed revision, homebuyers will be equally treated with financial lenders in the liquidation proceeds of the defaulting builder. 
    However, Ind-Ra feels this could negatively impact lenders since recovery proceeds will now have another layer of distribution, which was not factored in at the time of origination of loan to the developer. This would effectively increase the realised haircuts for the financers. In other words, without changes in probability of default, loss given default (LGD) could increase for the financiers. 
    "On the contrary, home buyers could recover some portion of their dues in case the builder defaults as against the current scenario where buyers have to depend on the residual value after financial creditors are paid, which entails higher hair-cuts. We believe end-users' propensity to initiate case under the IBC would be much lower than investors', considering the end-use and emotional attachment with the property for the former," the ratings agency added.
    Echoing similar sentiments, Anuj Puri, Chairman - ANAROCK Property Consultants, says, it needs to be seen how the resolution mechanism for claiming the dues actually falls in place for the concerned homebuyers. He said, "In fact, to be truly relevant, the entire implementation process needs to be clarified to homebuyers. They need to know how exactly they will be represented in the creditors' committee - in other words, whether the National Company Law Tribunal (NCLT) will appoint a resolution professional to represent their rights and interests."
    "That said, this amendment will certainly go a considerable way in bringing more transparency into the overall funding of projects across the country. With homebuyers now getting the opportunity to claim their dues from builders, there is an even stronger burden on developers to deliver on time. We will now see builders become more cautious while taking funds from financial institutions and banks, as they would now also be accountable to homebuyers as well as the financial institutions if their business goes belly-up," Mr Puri added.
    Ind-Ra sees this move of granting creditor's status to homebuyers as positive for housing financiers over the long term. It says, "Besides home buyers, the ordinance will benefit housing financing companies' asset quality, especially developer-led originations, though with a lag. Housing finance companies, though not a direct beneficiary of the policy change, could get some comfort as buyers' (home loan taker) rights over a defaulting builder and cash flows on liquidation will enhance. Eventually, with increasing customer confidence there will be more takers for home loans, benefiting housing financiers."
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    Pandurang Karpe

    2 years ago

    Really this action by Govt. should have taken long back. Now it is ok Home buyers interest is safeguarded ......

    RBI to allow money transfer between e-wallets and banks through UPI

    The Reserve Bank of India (RBI) has decided to allow interoperability between e-wallets and banks through unified payment interface (UPI). This will allow customers to transfer money between e-wallet and bank accounts through UPI, in a phased manner. The central bank also tightened know-you-customer (KYC) norms for e-wallets, mandating the service providers to comply with full KYC within 12 months of opening account of a customer.


    RBI says its Master Direction lays down eligibility criteria and conditions of operation for payment system operators involved in the issuance of semi-closed and open system prepaid payment instruments (PPIs) in the country. Banks are permitted to issue semi-closed and open system PPI, while non-bank entities are allowed to issue only semi-closed PPI, after necessary permission from RBI. Additionally, non-bank entities, seeking authorisation from RBI are required to have a minimum net-worth of Rs5 crore.


    Navin Surya, Chairman, Payments Council of India (PCI) says, "This is third edition of reform in PPI, first one came with allowing non-banks to participate in regulated payment systems, second one came which allowed domestic remittance from PPIs to Bank Accounts. This third edition is laying foundation for PPI to become interoperable with all existing payment instruments and in par of acceptance of debit and credit cards in phases manner. This would ensure that PPIs contribution to digital payments from current share of less than 10% can move to 30-40% over the next five years."


    Asking PPI issuers to comply with KYC norms for customers, RBI has directed them to maintain a log of all transactions undertaken through PPI for at least 10 years. PPI issuers will also have to file the Suspicious Transaction Reports (STRs) to Financial Intelligence Unit-India (FIU-IND).


    As per the guidelines, PPIs are allowed to be loaded or reloaded by cash, by debit to a bank account, by credit and debit cards, and other PPIs. "Electronic loading or reloading of PPIs shall be through above payment instruments issued only by regulated entities in India and shall be in Indian rupees only. Cash loading to PPIs shall be limited to Rs50,000 per month subject to overall limit of the PPI. The PPIs may be issued as cards, wallets, and any such form or instrument which can be used to access the PPI and to use the amount therein. PPIs in the form of paper vouchers will no longer be issued from the date of this Master Direction except for meal paper vouchers where separate timeline has been indicated," RBI says.


    As per RBI, any person can open an e-wallet through mobile number verified with one time pin (OTP) and a self-declaration of name and unique identification number of any of the officially valid documents.Officially valid document (OVD) as per RBI means passport, the driving licence, permanent account number (PAN) Card, Voter's ID Card issued by the Election Commission of India, job card issued by NREGA duly signed by an officer of the State Government, letter issued by the Unique Identification Authority of India (UIDAI) containing details of name, address and Aadhaar number. 


    E-wallets with minimum KYC can be loaded or used with a limit of Rs10,000 in a month, with a overall cap of Rs1 lakh per year. These PPIs can be used only for shopping of goods or payment of services and not for fund transfer to bank accounts or other e-wallet/s. These e-wallets are mandated to become fully KYC compliant within 12 months, RBI says.


    For fully KYC compliant e-wallets, the limit is Rs1 lakh per month and funds can be transferred to pre-registered beneficiaries.


    Bhavik Vasa, Chief Growth Officer, ItzCash Ebix, thinks the RBI should have provided more clarity on some downward revisions like limiting minimum KYC PPI to Rs10,000. "As an industry we would like to seek clarity with the regulator and understand better on reasons for a few downward revisions and limits, like minimum KYC PPI limit of Rs10,000 and also gift cards, which are non-cash out instruments and cash loading of PPI limit. These may limit our fight against physical cash in the economy, especially when we can buy gold up to Rs2 lakh with cash in our country," he says.

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    Mahesh S Bhatt

    3 years ago

    So some control in E Currency is getting in place!!Still Consumer redressal norms to happen & protection against e Wallet Hacks??Good Mahesh Bhatt

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