CHENNAI l FRIDAY l FEBRUARY 07, 2020 l `5.00 l PAGES 52 l LATE CITY EDITION LONG-TERM REPURCHASE AGREEMENTS PROJECT LOANS FOR COMMERCIAL REAL ESTATE Repo is a repurchase pact between RBI and banks, which buy government securities from the central bank and sell at a slightly higher rate. The difference is the interest, known as repo rate. Usually, such buying and selling happens overnight, fortnight or slightly longer. So far, RBI’s longest repo has been 56 days. But beginning Feb 15, repos will be available for 1 and 3 years In a big relief to the distressed realty sector, RBI has given the nod to extend the timeline of delayed commercial projects. Banks can extend DCCO (date of commencement of commercial operations) of project loans by a year, without downgrading asset classification. This will help developers focus on completing their ventures and ease banks’ worry about the projects turning into NPA QUICKER CHEQUES CLEARANCE Come September, bank cheques clearances will get quicker. The Cheque Truncation System (CTS), currently operational in select cities, will be rolled out across the country by September. CTS eliminates the need to move physical instruments across bank branches; clearances will happen electronically through the clearing house reducing processing time 135 bps CUMULATIVE CUT IN REPO RATE BY RBI SINCE FEBRUARY 2019 CHENNAI ■ MADURAI ■ VIJAYAWADA ■ BENGALURU ■ KOCHI ■ HYDERABAD ■ VISAKHAPATNAM ■ COIMBATORE ■ KOZHIKODE ■ THIRUVANANTHAPURAM ■ BELAGAVI ■ BHUBANESWAR ■ SHIVAMOGGA ■ MANGALURU ■ TIRUPATI ■ TIRUCHY ■ TIRUNELVELI ■ SAMBALPUR ■ HUBBALLI ■ DHARMAPURI ■ KOTTAYAM ■ KANNUR ■ VILLUPURAM ■ KOLLAM ■ WARANGAL ■ TADEPALLIGUDEM ■ NAGAPATTINAM ■ THRISSUR ■ KALABURAGI Out-of-the-box RBI idea for cheaper loans without rate trim Keeps repo rate unchanged at 5.15% but lets banks hold money received from it for a much longer period, which could prod them to offer credit at lower interest S U N I T H A N AT T I @ Hyderabad INTEREST rates can be lowered without tinkering benchmark policy rates. RBI just showed us how. On Thursday it , sprang a surprise `1 lakh crore liquidity tool from its policy arsenal, which could prompt banks to reduce rates even though the six-member Monetary Policy Committee unanimously decided to hold repo rate unchanged at 5.15%. That job of lower interest rates will now be done through long-term repos, which offer cheaper capital to banks, can boost liquidity and lending, tame bond yields, and can also enable quicker monetary policy transmission. Introduced for the first time in India’s central banking history, long-term repos are Gov- ‘WON’T PRINT MONEY TO COVER FISCAL DEFICIT’ RBI has no plans to monetise the rising fiscal deficit by printing more currency, Governor Shaktikanta Das said. The government invoked an ‘escape clause’ under the Fiscal Responsibility and Budget Management Act, which allows it to relax fiscal deficit target by 50 bps Modi draws from Nehru to defend CAA, says Oppn stoking fear to create anarchy EXPRESS NEWS SERVICE @ New Delhi PRIME Minister Narendra Modi on Thursday dug deep into history to make his case for the Citizenship (Amendment) Act (CAA) while slamming the Opposition for stoking fear among Muslims, warning that refusal to accept laws enacted by Parliament could lead to anarchy . From Jawaharlal Nehru to Lal Bahadur Shastri, Modi quoted a nu m b e r o f Congress stalwarts to argue that the party was indulging in opportunism. Quoting from c o r re s p o n d e n c e b e t we e n Nehru and former Assam chief minister Gopinath Bardoloi, Modi said the former drew a clear distinction between Hindu refugees and Muslim migrants from East Pakistan. “Nehru wrote to the CM from his own party to explain that Hindu refugees and Muslim migrants needed to be treated differently Did Nehru want . a Hindu Rashtra?” he quipped. Referring to the Nehru-Liaquat pact, Modi asked why only religious minorities in Pakistan was mentioned in it. In the Rajya Sabha, Modi read out excerpts from the speeches of Shastri and Ram Manohar Lohia to stress that leaders across party lines wanted religious minorities of Pakistan treated with empathy He . alleged that the Opposition was spreading rumours because of their rout in the 2019 Lok Sabha elections, adding protests were being manufactured even for a normal administrative exercise like NPR and Census. P11 ernor Shaktikanta Das’ latest convention-defying tool and these are slightly different from your usual repo. A repo is nothing but a shortterm repurchase agreement between RBI and banks. Typically, banks buy gover nment securities from RBI at one rate and sell at a slightly higher rate. The difference then is the implicit interest, also known as the repo rate. Usually such buy, EXPRESS READ Main suspect in TNPSC exam scam surrenders Chennai: The main suspect in the TNPSC scam surrendered at the Saidapet magistrate court on Thursday. Investigations have revealed that S Jayakumar of Chennai was involved in tampering the answer sheets of around 42 candidates who appeared for the exams. The candidates had cleared Group-IIA exams in 2017 and are in govt jobs. | P3 WITH THIS ISSUE CHENNAI’S BEST WEEKEND GUIDE 52 PAGES, INCLUDING 32 OF INDULGE (TABLOID) ing and selling happens overnight, or fortnight or slightly longer. So far, RBI’s longest repo has been 56 days. But beginning February 15, long-term repos will be available for 1 and 3 years, and at the prevailing rate of 5.15%. It means, banks will have access to cheaper credit. How does it work? According to De puty Gover nor N S Vishwanathan, cur rently banks are borrowing overnight from RBI, but those funds, instead of reaching borrowers, were going back to the central bank via overnight reverse repo. In other words, banks aren’t lending. Now, with long-term repo, Vishwanathan believes, lending will be attractive as banks can borrow at cheaper rates from RBI. “It’ll bring down cost of funds for banks and will fa- cilitate better transmission within the current constraints of downward rigidity of deposit rates,” said Rajnish Kumar, Chairman, SBI. Das says the move was to ensure better monetary policy transmission. “We want to inject `1 lakh crore into the banking system that will enable banks to reduce their lending rates,” he said. Continued on: P17 `77 crore unaccounted cash seized by I-T from premises linked to film financier EXPRESS NEWS SERVICE @ Chennai UNACCOUNTED cash to the tune of `77 crore was seized by the Income Tax Department on Thursday, after two days of raids on Tamil film personalities. The money allegedly belongs to distributor and financier Anbu Chezhiyan. Sleuths estimate the concealment in the case to exceed `300 crore. Though actor Vijay was also raided by the sleuths, no cash or properties were seized from him. However, the department is The unaccounted cash which was seized during the raid | TWITTER scrutinising his investments in properties. Residences and offices of AGS Entertainment, producers of movie ‘Bigil’, Chezhiyan, and Vijay were raided for alleged tax evasion. On Wednesday, when Vijay was shooting in Neyveli for his upcoming movie ‘Master’, I-T officials entered the sets for questioning him on the alleged tax evasion. The shoot was subsequently called off. Vijay was taken to Chennai for inquiry and his residences in Saligramam and Panaiyur were raided. “The actor’s investment in immovable properties and remuneration received for ‘Bigil’ are being investigated. The movie was a hit and collected `300 crore,” the department said in a statement. P5
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