Ghazal Alagh, Co-founder of Mamaearth (Honasa Consumer Pvt Ltd), said that the startup ecosystem is evolving in favour of entrepreneurship…reports Asian Lite News
The development of digital public infrastructure (DPI) in India in the last decade has steered the growth of startups in the country, industry leaders said on Saturday.
Addressing FICCI’s annual general meeting and annual convention Sanjeev Bikhchandani, Founder of Info Edge India Ltd, said that research and development in India is currently in a better position than it was a decade ago, which has spurred a cluster of startup IPOs in the Delhi-NCR region.
“While there is no shortage of funding for early-stage startups, support from the government in providing potential client markets in sectors like defence-tech, drones are, however, pertinent since government is the main buyer,” he told the gathering.
Ghazal Alagh, Co-founder of Mamaearth (Honasa Consumer Pvt Ltd), said that the startup ecosystem is evolving in favour of entrepreneurship.
“The rising middle class in India has been a large enabler for consumer facing companies. State-level incubation centres, setup by the government, are a remarkable step to empower students to build their startup,” she said.
According to Rohit Bansal, Co-founder, Titan Capital and Ace Vector Group, measures such as providing a level-playing field between public and private companies in terms of taxation are essential to boost the startup ecosystem in the country.
Neel Mehta, Director and Co-founder, Asteria Aerospace Ltd, said that sectors such as defence, space, AI/ML and biotech, among others, are key beneficiaries of Deep Tech.
“Public awareness with reference to the use of drones has improved significantly in India over the last decade. The deeptech sector had also seen new-age job creation, and building on the right theme and ensuring proper execution can be the key for a startup’s success,” he noted.
NatWest, Lloyds, HSBC and Barclays experienced total outflows of about £78bn in the 12 months to June 2023…reports Asian Lite News
Deposits at the UK’s four biggest banks have fallen by close to £80bn over the past year, as retail and corporate customers look for better interest rates, households grapple with higher costs and mortgage holders pay off loans early.
NatWest, Lloyds, HSBC and Barclays experienced total outflows of about £78bn in the 12 months to June 2023, according to an analysis of corporate filings by the Financial Times. That is the largest drop over four quarters since June 2018, the most recent year for which data is available for all of the lenders.
While the “big four” still hold close to £240bn more in deposits than they did in 2019, rival lenders’ offer of higher interest rates is forcing them to improve their own deals.
“[Retail] customers are migrating from current accounts at the large incumbent banks into savings or fixed-term deposits at some smaller peers,” said Benjamin Toms, analyst at RBC Capital Markets, while “the significant driver in the corporate space is the search for yield from corporate Treasury departments”.
Smaller companies would also have repaid government-backed loans issued during the pandemic that had sat unused in their accounts, he said.
Toms added: “[Retail] customers have also been using surplus deposits to pay down debt, including both mortgages and credit cards, and generally manage their expenses as a result of a higher cost of living.”
Deposits began rising in the final quarter of 2019, jumping by nearly £80bn in the second quarter of 2020 as pandemic curbs hit spending. They peaked at more than £1.5tn in Q2 2022.
While smaller lenders benefited from the surge, deposits at the big four rose by 20 per cent in the four years to June, almost twice the average of Santander, Virgin Money UK, Metro Bank and TSB.
Holding larger deposits in a period of rising interest rates boosts banks’ net interest margins — the difference between what they offer depositors and what they charge for loans.
With interest rates at a 15-year high of 5.25 per cent, lenders have come under mounting pressure over their speed in passing on the benefits of higher interest rates to savers.
The House of Commons Treasury select committee last month accused the big four of “blatant profiteering” by “squeezing higher profits from their loyal savings customers”, while the Financial Conduct Authority last week set a deadline for banks to justify low interest rates or face penalties.
The FCA and the data watchdog also told lenders in July that they could communicate better savings rates to customers and follow data protection rules, after banks raised concerns over compliance.
High street banks have responded by improving rates on instant access accounts, which now range from 1-1.75 per cent compared with 0.7-1.35 per cent a month ago. But they still lag rivals such as JPMorgan’s Chase UK, which plans to increase its instant access savings rate to 4.1 per cent from next week.
One senior executive at a smaller bank said that while rising living costs had contributed to the roughly £78bn outflow, it had largely been driven by consumers withdrawing money to repay mortgages early, in order to defray potential costs from higher rates.
“I think some people are saying: ‘My mortgage is getting a bit expensive but I’ve got all this cash in my bank.’ So they’ll repay some or all of it, depending on how much money they have,” he said.
BoE data published last month showed that the “effective” interest rate — the actual interest rate paid — on outstanding mortgages increased by 0.1 percentage points in June to 2.92 per cent. The average 2-year tracker rate is now at 6.18 per cent.
The central bank also found that households withdrew a net £8.4bn from instant-access “sight” accounts offering interest in June, while they put a net £6.6bn into more competitive, longer-term fixed rate products, which are more costly to banks as the margin is smaller.
Katie Murray, NatWest’s chief financial officer, said at the bank’s half-year results in July that a “greater move to interest-bearing assets”, and competition in mortgages, was behind its cut to its net interest margin guidance.
Goal to ‘level up’ fails
The UK is headed for five years of lost economic growth as the government fails in its goal to “level-up” the country’s regions and reduce inequality, an influential think tank says.
Gross domestic output is unlikely to return to its pre-pandemic level before 2024, according to forecasts from the London-based National Institute of Economic and Social Research.
While output across the country will be lackluster, NIESR said, some regions will feel a sharper pinch. In London, it expects real wages will grow by up to 7% in the five years from the end of 2019 — but in the West Midlands, home to Britain’s third-largest city Birmingham, NIESR is projecting a 5% drop in inflation-adjusted pay.
Prime Minister Liz Truss visits the Empire State Building while attending the United Nations General Assembly in New York . Picture by Andrew Parsons / No 10 Downing Street
A spokesperson for banking lobby group UK Finance said the mortgage market was competitive, adding that lenders used a range of criteria to determine pricing…reports Asian Lite News
Having hiked mortgage rates after political turmoil drove up the cost of borrowing, British banks are now cutting home loan prices, albeit slowly, as markets calm since Liz Truss’s government collapsed and Rishi Sunak took power.
Market chaos unleashed by Truss’s vast unfunded tax-cutting plans in late September led lenders to withdraw around 1,700 mortgage products in the space of a week, before reintroducing them at rates 1-2 percentage points higher.
But as markets have stabilised and borrowing costs have fallen, the trickle of mortgage rate cuts has lagged behind.
Several key interest rate swaps – products that lenders use to lock in future rates before pricing fixed-rate mortgages – have fallen by between 1.3 and 1.4 percentage points from their Truss-administration peak, Refinitiv data shows.
By contrast, average rates on two-year and five-year fixed-rate mortgages have fallen just 0.16 percentage points, Moneyfacts data shows.
“Lenders are able to get away with not passing cheaper rates on to mortgage customers, aided by the failure of Britain’s over-concentrated banking system to function like a competitive market,” said Simon Youel, head of policy and advocacy at Positive Money, which campaigns for a fairer financial system.
A spokesperson for banking lobby group UK Finance said the mortgage market was competitive, adding that lenders used a range of criteria to determine pricing.
Housing experts say further price drops should follow based on the market shift since Truss and her team’s departure.
Mortgage brokers say fixed-rate mortgage rates typically lag changes in swap rates, a trend which could be exacerbated this time as lenders focus on reintroducing products. The number of fixed-rate offerings is still down nearly a quarter from pre-Truss levels, according to Moneyfacts.
Lenders are under pressure to show they are treating customers fairly in the cost of living crisis, and have already faced criticism from consumer groups for not passing enough Bank of England rate rises to savers.
They also face the threat of a potential tax raid from Sunak’s government as it looks to plug a gap in the country’s finances.
Britain’s housing market has boomed since the initial impact of the COVID-19 pandemic, but squeezed household budgets exacerbated by more costly home loans looks set to plunge it into a downturn.
The country’s largest mortgage lender Lloyds, owner of the Halifax brand, said on Thursday it expected a mortgage market slowdown next year, and for house prices to drop 8%.
After years of cheap borrowing, mortgage prices had been climbing this year as the Bank of England ratcheted up benchmark rates. But this accelerated after Truss’s finance minister Kwasi Kwarteng laid out a disastrous “mini budget” on Sept. 23.
The average rate on a two-year fixed rate mortgage leapt as high as 6.65% by Oct. 20, Moneyfacts data shows, whereas prior to the budget it was 4.74%. Opposition politicians labeled the jump a “Truss premium” on mortgages.
The average two-year rate has since edged down 0.16 percentage points to 6.49% as of Thursday. Five-year mortgage rates have followed a similar pattern, Moneyfacts data shows.
Gitanjali Gems topped the list of 25 wilful defaulters followed by Era Infra Engineering, Concast Steel and Power, REI Agro Ltd and ABG Shipyard Ltd…reports Asian Lite News
A recent Parliament reply disclosed that scheduled commercial banks have written off loans worth about Rs 10 lakh crore in the last five financial years.
According to a reply by the Finance Ministry, during 2021-22, the write-off amount came down to Rs 1,57,096 crore compared to Rs 2,02,781 crore in 2020-21.
As per the written reply by Minister of State for Finance, Bhagwat K. Karad in Rajya Sabha, during 2019-20, the write-off was worth Rs 2,34,170 crore, down from Rs 2,36,265 crore, the highest in five years recorded in 2018-19. During 2017-18, the write-off by banks stood at Rs 1,61,328 crore.
In all, bank loans to the tune of Rs 9,91,640 crore have been written off in the last five years — 2017-18 to 2021-22.
He also said that “scheduled commercial banks (SCBs) and all Indian financial institutions report certain credit information of all borrowers having aggregate credit exposure of Rs 5 crore and above to RBI under its Central Repository of Information on Large Credits database.
As per the data, the highest number of 2,840 wilful defaulters reported during 2020-21 was followed by 2,700 in 2021-22. The number of wilful defaulters stood at 2,207 at the end of March 2019 that rose to 2,469 in 2019-20.
Gitanjali Gems topped the list of 25 wilful defaulters followed by Era Infra Engineering, Concast Steel and Power, REI Agro Ltd and ABG Shipyard Ltd.
Similarly, Mehul Choksi’s company Gitanjali Gems owes banks a whopping Rs 7,110 crore while Era Infra Engineering owes Rs 5,879 crore and Concast Steel and Power Ltd Rs 4,107 crore.
Call for restructuring of loans
The Karnataka Registered Unaided Private Schools Management Association (RUPSA) has requested Union Finance Minister Niramala Sitharaman to consider restructuring of loans availed by private unaided schools in the state during Covid pandemic.
“For 2 years, private schools have been struggling to balance their financial commitments. Public statements given by politicians and Education Department officials to gain brownie points have further jeopardised our situation,” RUPSA President Lokesh Talikatte said in the letter sent to the Union Finance Ministry.
“The aftermath of this is that private schools are not able to receive fees dues from the parents. Thus we are not able to repay our loan installments and service interest on loans. Our dues are piling up and we are in debt trap,” he added.
Nirmala Sitharaman
Adding insult to injury, expenses like increased electric bills, building tax, and fire safety expenses have further aggravated the situation, he said.
“In the past two and half years, around two and a half thousand schools have either closed or are at the verge of closing. If the situation continues, many more private schools will close and thousands of employees depending on these schools will be jobless,” Talikatte warned.
“Therefore, in this critical situation, we need your (Sitharaman) intervention. Please order for restructuring of loans availed by private schools from nationalised banks, scheduled banks, NBFCs, co-operative banks etc. We need a moratorium of one year at least. Your favorable decision in this regard will be immensely helpful in uplifting the education system. We request you to consider our request at the earliest,” he said.
Talikatte said that the pandemic has shattered the economic situation of many sectors in the world, and the worst affected is the education sector because the children have not only lost their two and half years learning but also have gone under depression. This is very difficult to deal with and compensate for, he noted.
He contended that private unaided schools are shouldering the responsibilities of the state government in improving the education system. “Madam, our contribution is, though not more but definitely equivalent to government efforts,” he said.
For the second consecutive year, Qatar’s QNB Group tops the list with $300.3 billion in total assets…reports Asian Lite News
Forbes Middle East has unveiled its ranking of the Middle East’s Top 30 Banks 2022, recognizing the region’s most resilient banking heavyweights that have emerged strong from the pandemic crisis. To construct the list, Forbes Middle East compiled data from listed stock exchanges in the Arab world and ranked companies based on sales, profits, assets, and market value.
As of June 28, 2022, the 30 banks had a total market value of $586.6 billion and assets worth $2.5 trillion. Gulf banks dominate this year’s ranking, with 25 out of the 30 based in the GCC. Saudi Arabia and the UAE are the most represented countries on the list, with 10 and seven banks, respectively. Qatar follows with four banks, while Morocco has three.
For the second consecutive year, Qatar’s QNB Group tops the list with $300.3 billion in total assets. The UAE’s FAB, Saudi’s Al Rajhi Bank, and Saudi National Bank follow in a three-way tie for second place. UAE-based Emirates NBD rounds up the top five. Combined, these five amassed $16.8 billion in 2021 profits, constituting 49% of the aggregate profits of the 30 banks on the list.
Top 5 Banks In The Middle East 2022
1 | QNB Group Country: Qatar Group CEO: Abdulla Mubarak Al-Khalifa
2 | First Abu Dhabi Bank (FAB) Country: UAE Group CEO: Hana Al Rostamani
3 | Saudi National Bank (SNB) Country: Saudi Arabia Group CEO and MD: Saeed Al-Ghamdi
4 | Al Rajhi Bank Country: Saudi Arabia CEO: Waleed Abdullah Ali Al-Mogbel
5 | Emirates NBD Country: UAE Group CEO: Shayne Nelson
