Current IPO: RBL BANK

RBL Bank Incorporated in 1943 as a regional bank in Maharashtra, RBL Bank Ltd is a Mumbai India based private sector bank offering range of banking products and services to large corporations, SMEs, agricultural customers, retail customers and development banking & financial inclusion (low income) customers.

As of March 31, 2015, RBL had 183 branches and 348 ATMs spread across 13 Indian states serving over 1.3 million customers.

#RBL acquired certain Indian businesses of the Royal Bank of Scotland (RBS), including the RBS’s business banking, credit card and mortgage portfolio businesses, in 2014.

RBL’s business segments consist of corporate and institutional banking, commercial banking, branch and business banking, agribusiness banking, development banking and financial inclusion and treasury and financial markets operations.

RBL’s Competitive Strengths:

  1. Client focused approach to business resulting in growing brand recognition
    2. Robust multi-channel distribution system
    3. Partnerships that expand reach in rural markets
    4. Growing net interest and non-interest income
    5. Risk management and balance sheet focus
    6. Modern and scalable information technology systems infrastructure
    7. Focus on operational quality and scalability

Company Promoters:

RBL is a professionally managed company and does not have an identifiable promoter in terms of the SEBI Regulations and the Companies Act, 2013. Consequently, it has no ‘promoter group’ nor any ‘group companies’ in terms of the SEBI Regulations.

 

Company Financials:

Particulars For the year/period ended (in Rs. Million)
31-Mar-16 31-Mar-15 31-Mar-14 31-Mar-13 31-Mar-12
Total Assets 271,036.49 181,970.77 129,622.74 72,072.67
Total Revenue 23,564.94 16,125.88 10,057.61 5,322.16
Profit After Tax (PAT) 2,084.51 928.88 925.28 657.43

Objects of the Issue:

The public issue comprises a fresh Issue and an offer for sale by the selling shareholders.

  1. The Offer for Sale

RBL Bank will not receive any proceeds from the Offer for Sale.

  1. The Fresh Issue

The proceeds from the fresh issue will be utilised towards the following objects:

  1. Augment capital base to meet Bank’s future capital requirements ;
    B. Enhance their visibility and brand name among existing and potential customers.;
    C. General corporate purposes.

Issue Detail:

»»  Issue Open: Aug 19, 2016 – Aug 23, 2016
»»  Issue Type: Book Built Issue IPO
»»  Issue Size:
›  Fresh Issue of [.] Equity Shares of Rs 10 aggregating up to Rs 832.50 Cr
›  Offer for Sale of 16,909,628 Equity Shares of Rs 10 aggregating up to Rs [.] Cr
»»  Face Value: Rs 10 Per Equity Share
»»  Issue Price: Rs. 224 – Rs. 225 Per Equity Share
»»  Market Lot: 65 Shares
»»  Minimum Order Quantity: 65 Shares
»»  Listing At: BSE, NSE

Company Contact Information

RBL Bank Ltd
RBL Bank Ltd,
1 st Lane, Shahupuri,
Kolhapur – 416 001
Phone: +91 231 6650 214
Fax: +91 231 2657 386
Email: ipo@rblbank.com
Website: http://www.rblbank.com

RBL Bank IPO Prospectus

INDIA moves to GST: Exit for CST, VAT..Entry for CGST, SGST & IGST.

The Goods and Services tax is the biggest indirect tax reform since 1947 and it has potential to lead the economic integration of India. This Monsoon session of Parliament might succeed in passing the GST Bill.

We hoped the GST Bill will be functional by April 1 this year, but it’s still stuck in the Rajya Sabha where the ruling government has no majority.

If the GST Bill is passed, there will be only one centralised tax that and will replace plethora of indirect taxes currently imposed. The GST Bill was proposed to streamline the process of taxation and to make it easier and more effective.

Finance Minister Arun Jaitley met with state finance ministers in Kolkata, and said that ‘virtually all states’ except Tamil Nadu have backed the proposed GST Bill. He urged PM Modi to meet Tamil Nadu CM Jayalalithaa and convince her to extend support for the bill.

PM Modi met Jayalalithaa yesterday for the first time post her election win. Tamil Nadu CM is of the opinion that in its present form, the GST Bill will affect the autonomy of the TN government

GST the game changer: GST will be a game changing reform for Indian economy by developing a common Indian market and reducing the cascading effect of tax on the cost of goods and services. It will impact the Tax Structure, Tax Incidence, Tax Computation, Tax Payment, Compliance, Credit Utilization and Reporting leading to a complete overhaul of the current indirect tax system.

GST will have a far reaching impact on almost all the aspects of the business operations in the country, for instance, pricing of products and services; supply chain optimization; IT, accounting and tax compliance systems.

GST would bring in significant change in doing business in India. Advocacy for best practices, gearing up for changes in processes, training teams and developing IT systems for being GST compliant are the key areas to be assessed.

What is the function of this Bill?

As Finance Minister Arun Jaitley puts it, the GST bill will lead to the economic integration of India.

The main function of the GST is to transform India into a uniform market by breaking the current fiscal barrier between states. Thus the GST will facilitate a uniform tax levied on goods and services across the country.

Currently, the indirect tax system in India is complicated with overlapping taxes levied by the Centre and the State separately.

Framework of the GST will replace indirect taxes

The GST will have a ‘dual’ structure, which means it will have two components- the Central GST and the State #GST. They will both have separate powers to legislate and administer their respective taxes. Thus equally empowering both.

Taxes such as excise duty, service, central sales tax, VAT ( value added tax), entry tax or octroi will all be subsumed by the GST under a single umbrella.

With passing of the GST bill, we can expect a climate of improved tax compliance.

Thus, the GST will basically have only three kinds of taxes, Central, State and another called the integrated GST to tackle inter-state transactions.

When is the proposed GST set to start functioning and what are the hurdles?

The GST regime is intended to be functional from 1st April, 2016.

The first mention of the bill was in 2009 when the previous UPA government opened a discussion on it. They were successful in introducing the bill but failed to get it passed.

On December 17, 2014, the NDA government made slight changes to it and redefined it in the Lok Sabha. The bill got cleared on May 6 this year.

However the current challenge facing the bill is that it needs two-third majority of both houses and 50 percent of the state assemblies will have to ratify it.

The bill is now stuck in the Rajya Sabha, because the current government does not hold a majority here.

The role of the opposition

The Congress demands for reforms in key areas of the GST has been stalling the process of passing the bill.

Three main concerns of the Congress over the bill are:

-one per cent additional tax as goods move across states.
-the constitutional cap of 18 per cent and an independent dispute redressal mechanism.
-the party has maintained that the government was ignoring the concerns raised by the party on the legislation.

The impact and relevance of the GST bill

According to Finance Minister Arun Jaitlety the GST will be instrumental in helping the GDP of India to grow by 2 percent.

The GST also offers a solution to the multinationals as it breaks down the indirect tax structure into one single tax payable by the companies.

Although the states have feared loss of fiscal powers, the Constitutional amendment bill has promised to solve this by giving compensation packages for three years for any kind of revenue loss.

The bill has proposed to have GST council wherein all union and state minister in charge of finance will be on a equal footing. It will also have a Dispute Settlement authority to mitigate the tensions between the centre and state smoothly.

One main contention for the state in the GST is the inclusion of petroleum products. The current consensus on this is that the states will continue to levy sales tax/VAT on these with the exception of imports and inter-state trade.

Salient Features of proposed INDIAN GST System:

  • The power to make laws in respect of supplies in the course of inter-State trade or commerce will be vested only in the Union government. States will have the right to levy GST on intra-State transactions including on services.
  • Centre will levy IGST on inter-State supply of goods and services. Import of goods will be subject to basic customs duty and IGST.
  • GST defined as any tax on supply of goods and services other than on alcohol for human consumption.
  • Central taxes like, Central Excise duty, Additional Excise duty, Service tax, Additional Custom duty and Special Additional duty and State level taxes like, VAT or sales tax, Central Sales tax, Entertainment tax, Entry tax, Purchase tax, Luxury tax and Octroi will subsume in GST.
  • Petroleum and petroleum products i.e. crude, high speed diesel, motor spirit, aviation turbine fuel and natural gas   shall be subject to the GST on a date to be notified by the GST Council.
  • 1% origin based additional tax to be levied on inter-State supply of goods will be non-creditable in GST chain. The revenue from this tax is to be assigned to the Origin State. This tax is proposed to be levied for initial two years or such period as recommended by the GST Council.
  • Provision for removing imposition of entry tax / Octroi across India.
  • Entertainment tax, imposed by States on movie, theatre, etc will be subsumed in GST, but taxes on entertainment at panchayat, municipality or district level to continue.
  • GST may be levied on the sale of newspapers and advertisements and this would give the government’s access to substantial incremental revenues.
  • Stamp duties, typically imposed on legal agreements by the state, will continue to be levied by the States.
  • Administration of GST will be the responsibility of the GST Council, which will be the apex policy making body for GST. Members of GST Council comprised of the Central and State ministers in charge of the finance portfolio.

Understanding of GST

  • GST is a value added tax, levied at all points in the supply chain with credit allowed for any tax paid on inputs acquired for use in making the supply. It would apply to both goods and services in a comprehensive manner with exemptions restricted to a minimum.
  • In keeping with the federal structure of India, it is proposed that GST be levied concurrently by the Centre (CGST) and the States (SGST). It is expected that the base and other essential design features would be common between CGST and SGST, across SGSTs for the individual States. Both CGST and SGST would be levied on the basis of the destination principle. Thus, exports would be zero-rated, and imports would attract the tax in the same manner as domestic goods and services. Inter-State supplies within India would attract an Integrated GST (aggregate of CGST and the SGST of the destination State).
  • In addition to the IGST, in respect of supply of goods, an additional tax of up to 1% has been proposed to be levied by the Centre. The revenue from this tax is to be assigned to the origin states. This tax is proposed to be levied for initial two years or such longer period as recommended by the GST Council.

ey-goods-and-services-tax-gst

Benefits of GST

GST has been envisaged as a more efficient tax system, neutral in its application and distributionally attractive. The advantages of GST are:

  • Wider tax base, necessary for lowering the tax rates and eliminating classification disputes
  • Elimination of multiplicity of taxes and their cascading effects
  • Rationalization of tax structure and simplification of compliance procedures
  • Harmonization of center and State tax administrations, which would reduce duplication and compliance costs
  • Automation of compliance procedures to reduce errors and increase efficiency

Destination principle

The GST structure would follow the destination principle. Accordingly, imports would be subject to GST, while exports would be zero-rated. In the case of inter-State transactions within India, the State tax would apply in the State of destination as opposed to that of origin.

Taxes to be subsumed

GST would replace most indirect taxes currently in place such as:

Central Taxes State Taxes
·         Central Excise Duty [including additional excise duties, excise duty under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955]

·         Service tax

·         Additional Customs Duty (CVD)

·         Special Additional Duty of Customs (SAD)

·         Central Sales Tax ( levied by the Centre and collected by the States)

Central surcharges and cesses ( relating to supply of goods and services)

·         Value Added Tax

·         Octroi and Entry Tax

·         Purchase Tax

·         Luxury Tax

·         Taxes on lottery, betting & gambling

·         State cesses and surcharges

·         Entertainment tax (other than the tax levied by the local bodies)

Central Sales Tax ( levied by the Centre and collected by the States)

Current IPO: L&T Infotech-for Long term Investors

Current IPO:L&T Infotech

L&T Infotech Incorporated in 1996, Larsen & Toubro Infotech, a subsidiary of Larsen & Toubro Ltd is Mumbai, India based IT Solutions & Services Company. L&T Infotech is ranked 6th largest IT company in India in terms of export revenues and among top 20 IT service provider in the world.

L&T Infotech offers an extensive range of IT services in diverse industries around the world. The services offered by L&T Infotech include application development, maintenance and outsourcing, enterprise solutions, infrastructure management services, testing, digital solutions and platform-based solutions.

L&T Infotech is promoted by Larsen & Toubro Limited, a leading Indian conglomerate in engineering, construction, manufacturing, finance and technology. For L&T Infotech, the percentage of its revenue from North America, Europe, Asia Pacific and the rest of the world amounted to 68.6%, 17.9%, 2.4% and 6.9%, for Financial Year 2015.

The company is coming out with a maiden public offer of 17500000 equity share of Re. 1 each via book building route for listing benefits. The price band for the offer is Rs. 705 – Rs. 710. Thus the company hopes to mobilize Rs. 1233.75 cr. to Rs. 1242.50 cr. based on lower and upper price band. The company is offering a special discount t of Rs. 10 per share to retail investors. The offer constitutes 10.30 per cent of the post offer paid up equity capital of the company. Minimum application is to be made for 20 shares and in multiples thereon, thereafter. Issue opens for subscription on 11.07.16 and will close on 13.07.16. Post allotment, shares will be listed on BSE and NSE. BRLMs’ to the offer are Citigroup Global Markets India Pvt Ltd, Kotak Mahindra Capital Co. Ltd and ICICI Securities Ltd. Link Intime India Pvt Ltd is the registrar to the issue. Since this IPO is made as offer for sale, its paid up equity remains same at Rs. 16.98 crore. Average cost per share of promoters is Rs. 8.33.

Competitive strengths of the company are as following:

  1. Strong domain focus enabling Business-to-IT Connect
  2. Strong parentage and brand equity of our Promoter
  3. Established long-term relationships with our clients
  4. Extensive portfolio of IT services and solutions
  5. Focus on emerging technologies
  6. Track record of established processes and executing large, end-to-end, mission critical projects
  7. Strong management culture
  8. Conducive work environment to attract and retain talent

Company Promoters:

The Promoter of the Company is Larsen & Toubro Limited. L&T currently holds 161,250,000 Equity Shares, equivalent to 94.96% of the pre-Offer issued, subscribed and paid-up Equity Share capital of L&T Infotech.

Company Financials:

Particulars For the year/period ended (in Rs. Million)
  31-Mar-16 31-Mar-15 31-Mar-14 31-Mar-13 31-Mar-12
Total Assets 32,380.30 29,068.71 25,058.09 21,893.69 19,814.75
Total Revenue 59,081.26 48,331.83 45,628.48 36,301.56 29,685.54
Profit After Tax (PAT) 9,381.31 7,735.97 9,032.57 5,599.83 4,059.27

Objects of the Issue:

The objects of the offer are to:

  1. Achieve the benefits of listing the Equity Shares on the Stock Exchanges; and
  2. Carry out the sale of up to 17,500,000 Equity Shares by the Selling Shareholder.

Issue Detail:

  • Issue Open: Jul 11, 2016 – Jul 13, 2016
  • Issue Type: Book Built Issue IPO
  • Issue Size:17,500,000 Equity Shares of Rs 1 aggregating up to Rs 1,400.00 Cr

› Fresh Issue of 0 Equity Shares of Rs 1 aggregating up to Rs [.] Cr

›  Offer for Sale of 17,500,000 Equity Shares of Rs 1 aggregating up to Rs [.] Cr

 

  • Face Value: Rs 1 Per Equity Share
  • Issue Price: Rs. 705 – Rs. 710 Per Equity Share
  • Market Lot: 20 Shares
  • Minimum Order Quantity: 20 Shares
  • Listing At: BSE, NSE

Rs 10 Discount to Retail Individual Bidders

L&T Infotech Ltd offers discount of Rs 10 to all eligible Retail Individual Bidders.

Strengths

Strong parent and brand equity of the promoter. The company benefits from the strong domain expertise, understanding and experience of the L&T group in verticals such as hydrocarbons, heavy engineering, oil and gas, automotive, aerospace etc, which assists LTIL in developing and delivering IT services and solutions that benefit clients in these verticals and differentiates the company from its competitors.

L&T Infotech’s constant currency dollar revenue growth in FY 2016 stood at 13.8%. The company has been delivering resilient growth in the face of a sharp decline in revenues from the energy & processes vertical, where IT spending was hit by the dramatic fall in crude prices. The share of this vertical has fallen from 22% in FY 2014 to 12.7% in FY 2016. This headwind was mitigated by strong growth in large accounts (including the top client) within BFSI, retail, CPG &pharma and auto & aerospace verticals.

The company’s track record of delivering an extensive range of solutions using global delivery model, demonstrable industry, and technology expertise, and sensitivity to its clients’ feedback, has helped it to forge strong relationships with major clients and helps in deriving repeat orders.

With only around 2% exposure to the UK market, LTIL would be least impacted by any near-term growth volatility caused by Brexit.

Digital services revenue, which is an emerging stream of service, witnessed more than 30% CAGR in FY 2013-16 and now contributes around 11% of its total revenues as compared to only around 5% 4 years back.

Weaknesses

In FY 2016 and 2015, around 69.0% and 68.6%, respectively, of LTIL’s revenue from continuing operations were derived from its North America segment. Any economic uncertainty or adverse change in laws/regulations in the USA can adversely affect its fortunes.

For FY 2016, the largest client accounted for around 14.9% of total revenues and top 10 largest clients accounted for around 53% of total revenues. The company has about 17 clients who generated above US$ 10 million in revenue, 10 clients who generated above US$ 20 million in revenue and 3 clients who generated above USD 50 million in revenue. Loss of major client or pricing pressure exerted by its top clients or any significant ramp downs by major clients could affect the business and profitability of the company.

Challenges in relation to immigration may affect L&T Infotech’s ability to compete for, and provide services to, clients in the United States and/or other countries, partly because it may be required to hire locals instead of using its existing workforce, which could result in lower profit margins, delays in, or losses of, client engagements and otherwise adversely affects its ability to meet its growth, revenue, and profit projections.

LTIL’s wage costs in India have historically been lower than wage costs in the United States and Europe for comparably skilled employees, and this has been one of its competitive advantages. Wage increases in India may diminish competitive advantage against companies located in the United States and Europe and may reduce the profit margins.

The company has a negligible presence in healthcare domain space and no presence in enterprise resource development (ERD) and engineering services, which are being handled by LTTSL.

The group has anther major company LTTSL in the IT services space, which may lead to a conflict of interest. For the year ended March 2016, LTTSL reported net sales of Rs 2969.40 crore, up by 15% with PAT of Rs 434.20 crore, up by 38%.

Like any other exporter, the company is also exposed to forex volatility and the uncertain global economic environment.

 Conclusion:

L&T Infotech company and its performance are good.but issuing high premium price, it’s preferable for long-term investors.

 

 

Source : capitaline database

 

Brexit:Britain’s time to be or not to be?

A referendum is being held on Thursday, 23 June to decide whether Britain should leave or remain in the European Union. This article is designed to be an easy-to-understand guide – and a chance to ask other questions, a selection of which we’ll be answering at the bottom of the page.

What is a referendum?

A referendum is basically a vote in which everyone (or nearly everyone) of voting age can take part, normally giving a “Yes” or “No” answer to a question. Whichever side gets more than half of all votes cast is considered to have won.

Why is a referendum being held?

1604976Prime Minister David Cameron promised to hold one if he won the 2015 general election, in response to growing calls from his own Conservative MPs and the UK Independence Party (UKIP), who argued that Britain had not had a say since 1975, when it voted to stay inthe EU in a referendum.The EU has changed a lot since then, gaining more control over our daily lives, they argued. Mr Cameron said: “It is time for the British people to have their say. It is time to settle this European question in British politics.”

What is ‘Brexit’?

Brexit is an abbreviation of “British exit” that mirrors the term Grexit. It refers to the possibility that Britain will withdraw from the European Union. The country will hold an in-out referendum on its EU membership on June 23.

When is the EU referendum? 

The in/out referendum on Britain’s membership of the EU will take place on Thursday June 23.

Prime Minsister David Cameron announced the date after he secured a deal with other European leaders at a crunch summit in February.

The Government decided to hold the vote before the start of the summer migration crisis, which could stir up more Eurosceptic feeling among the British public.

Economic views on Brexit?

Supporters of #Brexit argue that EU countries have every incentive keep trading with the UK, which is a large importer of goods and services.

But there is uncertainty over what would happen if the UK leaves the EU and needs to develop new trade agreements with the rest of the world.

Europhiles are concerned that foreign companies would be less likely to invest here and could move their headquarters elsewhere if Britain loses access to the single market.

Investor Neil Woodford, the founder of Woodford Investment Management, described pro-European claims that the economy would be damaged as “bohus”.

Mr Woodford said: “I think it’s a nil-sum game frankly, whether we stay or whether we leave.”

If #Britain leaves the EU, it will no longer have to contribute billions of pounds a year towards the #EuropeanUnion’s budget.

In March Brexit campaigners slammed a Confederation of British Industry (CBI) report that claimed that leaving the EU would cause a £100billion “shock” to the UK economy.

The Treasury has been accused of “doom and gloom” after predicting that a Brexit would cost households £4,300 a year by 3030, leaving Britain worse off for decades.

Who will be able to vote?

British, Irish and Commonwealth citizens who live in the UK, along with Britons who have lived abroad for less than 15 years, will be able to vote on June 23.

As with other elections in Britain, only people aged 18 and over will be allowed to cast their vote in the nationwide referendum.

But unlike the general election, members of the House of Lords and Commonwealth citizens in Gibraltar will also be eligible to vote.

What happens if the U.K. leaves the E.U.?

Advocates of Brexit say that being outside the E.U. would boost the British economy by placing fewer regulations on consumers, employers and the environment. It also would give the country more freedom to establish its own economic and political policies.

The E.U. is the largest British trade partner, and those who oppose Brexit argue it would result in higher costs for goods and services. The departure from the E.U. would mean Britain could no longer benefit from being part of a single economic market and the trade benefits it brings, an argument that deputy national security adviser Ben Rhodes made to reporters last week.

“We believe that the U.K. has benefited from the single market,” he said. “That is good for the British economy and that, in turn, is good for the United States economy, because we benefit from that relationship with both the U.K., but also the European Union broadly.”

Many Brexit campaigners also say leaving will lower immigration, a priority for some, because the U.K. will no longer be bound by E.U. policies and could tighten its laws.

Seven leaders have warned of the risk to global economy if Britain votes to leave the European Union in a referendum next month.

The UK leaving the European Union would “reverse the trend towards greater global trade and investment, and the jobs they create, and is a further serious risk to growth,” leaders said in a joint declaration at the G7 meeting in Japan.

The warning was listed together with concerns about terrorism, the refugee crisis and geopolitical conflicts as a potential threat of a “non-economic origin”.

Prime Minister David Cameron’s campaign has focused on the danger to growth and jobs of choosing to leave the 28-nation bloc in the 23 June vote.

Angela Merkel, the German Chancellor said the EU Referendum was not a major topic of discussion at the summit but there was a consensus that leaders wanted the UK to stay in.

“It was no subject here. But there was the signal that all who sat here want Britain to stay part of the EU,” she said.

“But the decision is up to the British voters,” she added.

The G7 statement follows comments from Bank of England Governor Mark Carney that the event could cause a sharp collapse in the value of the pound.

IMF’s managing director Christine Lagarde warned the effect of Brexit on the British economy ranged from “pretty bad to very,very bad”.

Speaking to the press at the conclusion of the G7 talks on Friday, David Cameron said the UK should “listen to our friends” on the issue of EU membership.

“The question is not: are we a great country? The question is how do we do best. And it is not just me saying that there are economic risks from Britain leaving the EU – it is now a pretty large consensus that includes people of impeccable independence and academic standing,” David Cameron said.

But some voters have recently blamed UK politicians for not knowing how to vote.

A member of the audience participating in the first major debate on the European Union Referendum blamed “insults” and “deflections” from politicians for not knowing how to cast his vote.

The 21-year-old from the audience said: “I just want to say to you all: here we are again. Once again we’ve got deflections, insults, petty name calling… Do you actually believe your own campaigns?”

Greeted with applause and laughter, he added: “What are we supposed to do? I do not have a problem admitting I have no idea what to and I blame you lot entirely for that.”

 

 

P2P Lending: Spreading from America to Argentina

Finding different sources of investment is picking up as a phenomena across the Globe along with India. With limited venture funds and resource capital available, individuals are being compelled to seek out different avenues of funding such as peer-to-peer lending (P2P lending) for their educational, personal, functional purposes.

What is Crowd Funding and Peer to Peer Lending?
Crowd Funding:
CrowdFunding generally refers to a method of funding a project or venture through small amounts of money raised from a large number of people, typically through a portal acting as an intermediary. There are numerous forms of crowd-funding: some are charitable donations that provide intangible benefits but no financial returns; others, such as equity crowd funding would fall within the domain of financial markets.

Man money.
Peer-To-Peer Lending (P2P Lending):
P2P lending ( or P2Pl or P2P financing or P2P borrowing) is a form of crowd-funding used to raise loans which are paid back with interest. It can be defined as the use of an online platform that matches lenders with borrowers in order to provide unsecured loans.
Few points to keep in mind:

  • Interest rate may be set by the platform or by mutual agreement between the borrower and the lender
  • Charges(Fees) are paid to the platform by both the lender as well as the borrower.
  • The basic functions that the web portal carries out are that of a service provider and on a broader perspective include the following:
    * Provide a platform for lenders and borrowers to meet;
    * Basic information about borrowers and lenders;
    * Providing ancillary services for the financial transaction and carrying out operational activities ancillary to financial arrangement.
    * The platform can provide services pertaining to loans for facilitating the lending transactions but does not subsume the role of the borrower or the lender in any of the transactions.

According to the data by Peer to Peer Finance Association (P2PFA), the cumulative lending through P2P worldwide has grown from £2.2 million in 2012 to £4.4 billion in 2015.

P2P Lending- Global Market Size
According to data released by P2PFA, the cumulative lending through P2P platforms globally, at the end of Q4 of 2015, has reached 4.4 billion GBP1. Lending through P2P has grown dramatically from 2.2 million GBP in 2012 to 4.4 billion GBP in 2015.

Untitled

Regulatory Practices
P2P lending is approached differently by regulators in different jurisdictions, treated as banking by some jurisdictions and as an intermediary in some others, while some jurisdictions like Israel and Japan have prohibited it altogether. Across the globe, P2P lending is regulated in FIVE different ways as outlined below:

 

Regulatory Regime Description Countries Currently Using the Regime
Exempt market/ Unregulated through lack of definition In these jurisdictions, either the regulation has classified P2P lending as an exempt market or there is a lack of definition in legislation. However, in some cases, there is regulation designed to protect borrowers and that mainly involves rules already in place to protect the borrower from unfair interest rates, unfair credit provision and false advertising. #China, #Ecuador , #Egypt, #SouthKorea, #Tunisia
Intermediary Regulation This regulates P2P lending platforms as an intermediary. It usually requires registration as an intermediary, and other regulatory requirements depending on the jurisdiction. Generally, there are regulations that establish the prerequisites for the platforms to register in order to access the market. Other rules and requirements determine how the platform should conduct its business (for example, the licensing needed to provide credit and/or financial services). #Australia, #Argentina, #Canada (#Ontario), #NewZealand, #UnitedKingdom
Banking Regulation This regulates P2P lending platforms as banks due to their credit intermediation functions and is therefore regulated as banks. As such, the platforms must obtain a banking licence; fulfil disclosure requirements and other such regulations. #France, #Germany, #Italy
US Model There are two levels of regulation, Federal regulation through the Securities and Exchange Commission (SEC) and State level, where platforms have to apply on a state-by-state basis. One level below the federal requirements is state regulation. Some states outright ban the practice of P2P lending (e.g. Texas). Other states place limits on the type of investors using the platforms to lend (e.g. California). In addition, if a platform wishes to operate across multiple state boundaries, it must apply to each state separately. #UnitedState ofAmerica                (#USA)
Prohibited P2P lending is banned under legislation. #Israel, #Japan

US Comapnies in P2PL:
Many online lending companies have launched in the United States, but only two are purely peer to peer. Only two connect everyday investors to borrowers: Lending Club and Prosper. Additional platforms will launch in the future, but for now these are the sole two

KIVA,Lend Academy,StreetShares, ApplePieCapital,Orchard,P2PLending expert,Lending Memo,Crowd fund Insider, Funding Circle, PeerCube, PeerTrader, BlueVestment, nsrinvestment, LendingRobot, Peer Lending Server, Interest RadarLending Club , Prosper Funding,Lending Alpha.

Source:rbi

 

BRICS GDP: Crisis of Confidence?

BRICS GDP in 2016 is nearing a crisis of Confidence from the earlier heydays of 2012 with #Brazil #Russia #India #China #SouthAfrica showing signs of tiredness

Gross Domestic Product (GDP) is the broadest quantitative measure of a nation’s total economic activity. More specifically, GDP represents the monetary of all goods and services produced within a nation’s geographic borders over a specified period of time.

The Equation used to calculate GDP is as follows:

GDP= Consumption+Government Expenditures+Investments+Exports-Imports

Why it’s Important

When GDP declines for two consecutive quarters or more, by definition the economy is in a recession. Meanwhile, when GDP grows too quickly and fears of inflation arise, the Reserve Bank often attempts to stimulate the economy by raising interest rates.

Binoculars.

Global Growth & Forecast

Global growth, currently estimated at 3.1 % in 2015, is projected at 3.4 percent in 2016 and 3.6 percent in 2017. The pickup in global activity is projected to be more gradual than October 2015 as per  World Economic Outlook (WEO), especially in emerging market and developing economies.

Risks to the global outlook remain tilted to the downside and relate to ongoing adjustments in the global economy: a generalized slowdown in emerging market economies, China’s rebalancing, lower commodity prices, and the gradual exit from extraordinarily accommodative monetary conditions in the United States. If these key challenges are not successfully managed, global growth could be derailed.

 

BRICS NATION’S GDP

BRAZIL: There is a phenomenal increase in the size of GDP over past decade in Brazilian economy from $ 892 bn in 2005 to $ 2.39 tn in 2013 with service sector output @70% in 2013. This concludes that Brazilian economy is driven by the service sector.

RUSSIA: Based on data from World Bank it can be easily said that Russian economy is service sector driven economy as the service sector shares 59.78 % of GDP which is 5% increase when compared  to output from 2005 while other sectors like Agriculture and Manufacturing decreased by approxmatly 20%. The size of the economy also decreased by 79% when compared to 2005. Total size of GDP at $ 1.34 tn in 2013.

INDIA: As we all know that India is a developing economy, it was once an Agricultural economy where Agricultural sector was a major contributor to GDP. Now as the world became a global market, India too started contributing to it with new found strength in service sector. It soon became a service economy with contributing 51% of GDP in the year 2013. However, there is an increase in 123% in GDP size while a decrease in growth rate by 26% when compared to 2005 growth rate.

CHINA: Chinese economy is a faster-growing economy with most of its strength in Manufacturing and service sector contributing 31% and 47% of GDP respectively. Its GDP size increased  by 3 times over the past decade. However, like Indian economic growth rate, Chinese economy also decreased from 11.35% in 2005 to 7.68 in 2013 total decrease of 32%.

BRICS REACH 30 PERCENT OF GLOBAL GDP

The share of BRICS countries in global GDP has reached 30 percent as per Russian Minister of Economic Development- Alexei Ulyukayev, who said at the Meeting of the BRICS Trade Ministers in Moscow. Trade between the BRICS countries in 2014 was up more than 70 percent to USD 291 billion, he pointed out.

Our countries accounted for over 17 percent of global trade, 13 percent of the global services market and 45 percent of the world’s Agricultural output in 2014 “Mr Ulyukayev noted, adding that the combined GDP of the BRICS countries surged from USD 10 trillion in 2001 to USD 32.5 trillion in 2014.

gdpgr

 

GDP ANNUAL GROWTH RATE(%) FROM 2005-2014
COUNTRIES 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
BRAZIL 3.1 4 6 5 -0.2 7.6 3.9 1.8 2.7 0.1
CHINA 11.4 12.7 14.2 9.6 9.2 10.6 9.5 7.8 7.7 7.4
INDIA 9.3 9.3 9.8 3.9 8.5 10.3 6.6 5.1 6.9 7.4
RUSSIA 6.4 8.5 8.2 5.2 -7.8 4.5 4.3 3.4 1.3 0.6
SOUTH AFRICA 5.3 5.6 5.4 3.2 -1.5 3 3.2 2.2 2.2 1.5

Source:worldbank data