Breaking News - 18th August 2023

FINANCIAL NEWS 18TH AUGUST 2023 

1.Global Fintech Festival 2023 aims to aid startups bag $10 mn in funding:

The organizers of the Global Fintech Festival (GFF) have announced that they want to help new and small financial technology (fintech) companies raise more than $10 million during the upcoming event. This money will be provided to startups that are just beginning their journey and need financial support. However, larger companies that are already in a more advanced stage of development won't be included in this funding goal. These bigger companies will still have the opportunity to talk to potential investors during the three-day GFF event, which begins on September 5th. 

2.Give fixed rate option on EMI-based loans while resetting rates:

The RBI (Reserve Bank of India) has given instructions to banks that people who are repaying their loans in monthly installments (EMIs) can now choose to either have a fixed interest rate or extend the time period for repaying the loan. This is being done to help borrowers avoid a situation where their loan balance keeps increasing, which can happen when interest rates go up. 

3.Infra debt fund NBFCs must have net owned fund of at least Rs 300 cr:

Infrastructure Debt Fund-Non-Banking Financial Companies (IDF-NBFCs) will now need to have a minimum amount of their own money (called net owned fund) of at least Rs 300 crore, according to the updated rules from the Reserve Bank, which were released on Friday. 

These new rules are set to make sure that infrastructure finance companies have a good amount of their own funds and financial stability to support their activities and manage risks effectively. 

4.RBI allows infra debt funds to raise money via foreign loan route:

The Reserve Bank of India (RBI) announced on Friday that it's now allowing infrastructure finance companies (IDF-NBFCs) to gather money from foreign loans, along with the option to issue bonds as they did before. 

The RBI looked at the rules and made changes to make them work better together for financing projects in the infrastructure sector. This means that these companies can now choose between getting funds from foreign loans or by selling bonds to support projects like building roads, bridges, and other important facilities. 

5.Provide borrowers option to switch to fixed interest rates: RBI to banks:

When people borrow money, their interest rates can change over time. But with this new rule, if someone has a loan where the interest rate can change and they're worried that their payments might increase a lot, they can decide to switch to a fixed interest rate instead. This can help them avoid unexpected increases in their monthly payments. The RBI made this decision because they received complaints from borrowers who were facing longer loan repayment times or higher monthly payments due to increasing interest rates, and these changes were made without proper communication or agreement with the borrowers. 

6.Coal India down 2%; stock trades ex-dividend today:

Shares of Coal India fell 2% on Friday as the stock traded ex-dividend today. Coal India shares fell as much as 2.17 per cent at 227.25 on the NSE at 1.28 pm. The central public sector undertaking (CPSU) announced a final dividend of ₹4 per equity share during the Q4 and annual earnings announcement in May 2023. 

7.Private debt market in India set to grow more, says Standard Chartered:

More and more big investment companies from around the world are starting to create funds in India that provide loans to businesses. They are doing this because there is a lack of available money for lending, which happened after a problem in India's financial industry called the shadow banking crisis caused a lot of worry. 

8.India needs major reforms in food supply management:

These changes will make things work better and help businesses produce more efficiently. This will also lead to prices staying steady for things you buy, like groceries, and make sure that farmers get paid fairly for their products. 

9.FTSE withdraws decision to remove Jio Financial from global indices:

After BSE and the National Stock Exchange (NSE) of India said that they would start trading shares of Jio Financial on Monday, a new decision has been made. Jio Financial's shares will be included in a global index called FTSE All-World. The company will keep the same number of shares available for trading, which is about 6.77 billion shares. Also, the index mentioned that Jio Financial's shares will have a certain importance when investors decide where to put their money, and this importance is about 49.66%. 

10.RBI bars banks from levying penal interest, allows them to impose ‘reasonable’ penal charges:

Starting from January 1, 2024, banks and other lenders won't be allowed to charge extra interest as a penalty, according to a new rule from the Reserve Bank of India (RBI). This rule is mentioned in a document called 'Fair Lending Practice-Penal Charges in Loan Accounts'. In simple terms, if you have a loan from a bank, they can't add extra interest as punishment from that date onward.