The labour and the finance ministry will carry out further deliberations over the issue.

The Union Budget proposal to reduce the contribution of women workers to the Employees’ Provident Fund Organisation (EPFO) has met with opposition from both sides of the establishment.

A Business Standard report quoted the Labour and Employment Ministry Secretary M Sathiyavathy saying there were apprehensions on both sides over the proposal, and they are yet to decide on the issue.

Trade unions argue that the move would not incentivise people to hire more women employees, hurting their social security savings of workers instead.

Employees and employers are mandated to contribute 12 percent of the monthly income towards the provident fund and pension schemes under the EPFO, along with an additional 0.5 percent towards the EPFO’s Employees’ Deposit linked Insurance (EDLI) Scheme and 0.65 percent as administrative charges for the maintenance of the EPFO accounts.

The central board of trustees also decided to lower the administrative charges for employers from 0.65 percent of the workers’ monthly income to 0.5 percent.

Finance Minister Arun Jaitley in his Budget speech had said contribution of women employees to the EPFO will be reduced to 8 per cent for the first three years without employers’ contribution being reduced. He had said the move will allow more women to get into the formal economy.

The labour and the finance ministry will carry out further deliberations over the issue.

Speaking at the UP Investor Summit here, he said the investment will be over and above the Rs 20,000 crore Jio has already invested in the state in rolling out high-speed 4G telecom venture.

Terming contribution to Uttar Pradesh’s development his patriotic duty, Reliance Industries chief Mukesh Ambani today promised investment of another Rs 10,000 crore through Jio in the next three years.

Speaking at the UP Investor Summit here, he said the investment will be over and above the Rs 20,000 crore Jio has already invested in the state in rolling out high-speed 4G telecom venture.

Ambani said India cannot rise to its full potential without the rise of 22 crore people of Uttar Pradesh.

He also vowed full support to the ‘Namami Gange’ project.

“I have a commitment…. the Clean Ganga Mission is gathering momentum …we at Reliance Foundation would deem it as our pious duty to contribute to the success of this mission and are ready to execute whatever part of the project is assigned to us,” he said in the presence of Prime Minister Narendra Modi.

Promising to be a reliable partner of the people and government of UP, Ambani said he has come to the state to assure that Jio’s digital revolution will make maximum contribution to UP’s development, and announced four commitments in this regard including investment of another Rs 10,000 crore by Jio in the next three years.

The RIL chief said he wanted every youth in the state to be a smart youth and for this Jio will make available over 2 crore phones in the state in the next two months on a priority basis.

“Jio has already created over 40 thousand direct and indirect jobs in UP. Along with other businesses of RIL , Jio will create over one lakh new and sustainable livelihood opportunities in the next three years,” Ambani said.

It will establish a Centre for the Fourth Industrial Revolution within the campus of a reputed university in UP, he said.

Besides, the prime rule of securing an e-way bill while ferrying goods worth more than Rs 50,000 within or outside a state through prior online registration of the consignment may be tweaked for the time being

GST’s e-way bill system, which promises to enable faster movement of goods through a seamless portal-driven payment system, may see the light of the day from March 7, after technical glitches aborted its mandatory full-fledged launch on February 1.

While National Informatics Centre (NIC), the government’s nodal IT procurement arm, wants to implement a foolproof e-way bill system from April 1, the finance ministry is pushing for an earlier rollout in its effort to prevent revenue leakages, a senior government official said .

“We want e-way bill to be implemented from March 7, but it depends on the preparedness of the implementing agency (NIC). NIC is more comfortable if the rollout happens in April,” the official said.

The e-way bill portal crashed on its launch day—February 1—triggering howls of criticism from traders and transporters as the movement of trucks criss-crossing on highways was severely affected.

The disruption forced the GST Council, the finance minister Arun Jaitley-headed body including officials from states and centre, to push back the compulsory generation of inter-state e-way bill.

While the system for both inter and intra-state bill generation was supposed to be ready on January 16, the Council had decided that states could choose their own timings for implementation of the document for intra-state movement of goods on any date before June 1, 2018.

On February 1, the portal collapsed as it wasn’t ready to handle the large volumes of inter as well as intra-state bills that were being generated at the time.

“The portal was capable to generating only 500 bills per minute, which was way too small a capacity as compared with the traffic on the day of launch. NIC has been asked to increase its capacity to at least a few thousands so that the system doesn’t collapse again,” the official said.

The Centre has now asked states to rollout intra-state bill in a staggered manner so that it does not put immense pressure on the portal as the government’s priority is smooth and steady implementation.

Besides, the prime rule of securing an e-way bill while ferrying goods worth more than Rs 50,000 within or outside a state through prior online registration of the consignment may be tweaked, for the time being, the official said.

To generate an e-way bill, the supplier and transporter will have to upload details on the GST Network portal, after which a unique e-way bill number (EBN) will be made available to the supplier, the recipient and the transporter on the common portal.

“The idea is to declutter the portal will less number of bills and reduce the load as much as possible,” the official added.

For instance, a single transporter may have five different consignments worth more than Rs 50,0000. Yet, that transporter had to generate five separate bills despite the value of a single consignment being less than half a lakh rupee.

The responsibility of developing an e-way bill system was given to NIC in September and it was decided by the GST Council on October 6 that the e-way bill should be made compulsory beginning April 1, 2018.

However, the Council met via video conference on December 16 and decided to make the rollout of all-India electronic-way bill compulsory from February 1–two months ahead of the earlier plan to mainly plug revenue leakages.

The lenders will meet on Tuesday to decide on appointments and the future course of action, the report said.

Aircel will soon file for bankruptcy at the National Company Law Tribunal (NCLT), according to a report in The Economic Times. The telecom company, which has a Rs 15,500 crore debt, has dissolved its board.

Aircel had earlier proposed a cash infusion but did not go ahead with the plan, a source told the newspaper. The company declined to comment on the development.

State Bank of India, the head of the group of lenders, didn’t respond to queries.

A source told the newspaper Economic Times that the decision was triggered by the Reserve Bank of India scrapping all debt revamp schemes in favour of the Insolvency and Bankruptcy Code.

Banks cannot restructure Aircel without provisioning for its debt since the company has not made payments since September. The application to the NCLT will be submitted within a few days.

The lenders are scheduled to meet on Tuesday to decide on appointments and the future course of action, the report said.

Earlier this month, Idea Cellular had suspended interconnect services with Aircel over non-payment of dues.

Aircel, owned by Malaysian company Maxis, has been in debt since its failed merger with  Reliance Communications‘ wireless business. The merger had failed due to regulatory hurdles and the Supreme Court preventing sale of Aircel’s spectrum.

American Tower Corp and GTL Infrastructure last month moved the  Delhi High Court to block Aircel’s strategic debt restructuring.

Last month, Economic Times reported that Aircel had entered into a strategic debt restructuring programme after lenders agreed to convert debt into equity.

It is a messaging system, and does not hold money or manage accounts

As the over Rs 11,000-crore Punjab National Bank fraud unfolds, the underlying technology that enabled the money transfer has been in the limelight.

Here is a look at some of the underlying technologies that enable such cross border money transfers.

SWIFT

SWIFT stands for the Society for Worldwide Interbank Financial Telecommunications, a messaging system used by banks the world over to send information and instructions in an encrypted format through a secure channel.

It is a messaging system, and does not hold money or manage accounts.

Modifying an Investopedia example, this is how it works:

Suppose a customer of say, a State Bank of India branch in New Delhi wants to send money to her friend who has an account at a Citibank branch in London.

The person in New Delhi needs to provide the SBI branch with his friend’s account number and Citibank’s unique SWIFT code for its London branch. SBI will send a payment transfer SWIFT message to the Citibank branch over the secure SWIFT network.

Once Citibank receives the SWIFT message about the incoming payment, it will clear and credit the money to the London friend’s account.

Core banking:

A core banking system is a software that supports the daily transactions and accounts within a bank internally. It lets customers perform basic transactions from any member branch office of the bank.

Punjab National Bank uses a core banking software product called Finacle, developed by Infosys Ltd, which provides services across consumer banking, corporate banking, trade finance, customer analytics, wealth management etc. Different banks use different components of Finacle or any other software for their banking needs.

The Nirav Modi puzzle

In this case, jeweller Nirav Modi’s group companies managed to get a Letter of Undertaking from the Punjab National Bank’s Brady House branch in Mumbai. LoUs are issued by one bank to branches of other banks, based on which foreign branches offer loans or credit to buyers. This was routed to the foreign bank branches through the SWIFT system.

While PNB and experts have said the person or persons colluding with Modi’s companies managed to bypass the core banking software asked experts whether this is at all possible.

“It is quite possible to bypass the core banking system, because SWIFT is like any other payment system, like a NEFT or RTGS, and how the two are connected depends entirely on the bank,” said an official with a private sector bank, who did not wish to be named.

Prof Rahul De, Chairperson at the Centre for Software & Information Technology Management at the Indian Institute of Management, Bangalore also said SWIFT and core banking are two separate systems, but SWIFT is under the control of bank managers and follows the broad guidelines of exchange laid out by the Reserve Bank of India.

“If you transfer money from the foreign branch of a bank, it does not get to your account automatically,” he said, adding that “some amount of manual intervention is required for approving and clearing the transaction before the money gets transferred to your account. That is where some fraud has been conducted.”

However, it is not that there is absolutely no point where SWIFT and core banking join hands.

According to an expert in cybercrime and banking systems who did not wish to be named, most banks follow a routine of monthly reconciliation between SWIFT and core banking transactions.

The LoU has to be entered into the core banking system as credit, and not just when the foreign bank branch claims that money.

“This process is normally automated, but the person involved in the bank branch in the fraud went behind the system to ensure that the entry was either not made or they reconciled one LoU by offsetting it with another LoU to some other bank’s branch,” he explained.

In any case, all experts  spoke to agreed the fraud, staggering as it is, is a case of exploiting a gap in the existing system, and more a crime using technology than cybercrime itself.

Both the models, which were on display at the Auto Expo 2018, could be in showrooms by the second half of 2019.

Tata Motors will roll out electrified versions of the Tiago and Tigor for the retail market as it begins a shift towards smart mobility, a top company official told.

Both the models, which were on display at the Auto Expo 2018, could be in showrooms by the second half of 2019. “We have successfully developed the electric versions of the Tiago and Tigor and both will be on sale in some months,” said Guenter Butschek, managing director, Tata Motors.

Tiago (powered by petrol and diesel engines) has been the best-selling car for the company since its launch in 2016. A few hundred units of the Tigor sedan have been dispatched to its first buyer Energy Efficiency Services (EESL).

The Tiago will have a certified full charge range of 130 kms and a maximum speed of 100 km/hr. As per details provided by the company, the electric Tiago will sport a 3-phase AC induction motor that will generate peak power of 30kw@4500rpm.

From the specifications provided, it is clear that the company has altered the electric motor output from what it had showcased last September in the UK. This version of the Tiago had a range of just 100 kms but a top speed of 135 km/hr.

The new electric Tiago will take about 90 minutes on a fast charger and about 6 hours through a normal charging method for 80 percent charge(from zero). The Tigor, which is supplied to EESL, has similar powertrain specifications as the Tiago.

Despite not having even one fully electric car on the road as yet Tata Motors won the order to supply 10,000 electric cars to EESL after it emerged at the lowest bidder in a national tender floated by EESL. The company is in the process of supplying the initial lot of 350 cars to EESL.

Tata Motors is also working actively for finding an electric solution for the struggling car Nano. The Mumbai-based company has partnered with Coimbatore-based Jayem Automotives for producing electric versions of the mini car where it will supply body shells (gliders) to Jayem.

The car will then be fitted with an electric powertrain unit by Jayem. Though there has not been any commercial launch of this car yet it could be targeted at the commercial buyer who wishes to run the car under aggregators such as Ola and Uber.

Butschek has already mentioned that the two new concept vehicles showcased at Auto Expo 2018 – 45X and H5X – have been designed and developed to accommodate electric powertrains in the future.

Rivals Maruti Suzuki, Hyundai and Renault have promised to launch electric cars in India before 2020. Renault is even exploring the launch of an electric version of Kwid, currently in development stage in China.

Synchronised trades are pre-planned trades, done with a motive which could either be genuine or dubious.

The Supreme Court on Thursday upheld an adjudication order by SEBI in a 2007 case, penalising a group of investors and brokers for punching in synchronized trades in illiquid Nifty options, solely for the purpose of tax evasion by creating artificial profits/losses.

This order could have a bearing on other cases where SEBI granted relief to investors who have transacted on the stock exchange platform with the intention of either suppressing their tax liability or converting black money into legitimate income. These trades were done in connivance with brokers who help generate fake long term capital gains which used to be tax free till last month, or generate fake short-term losses which could then be offset again short term profits.

Synchronised trades are pre-planned trades, done with a motive which could either be genuine or dubious.

The Securities Appellate Tribunal had overruled the adjudication order against the above mentioned entities through a series of orders in 2009 and 2010, saying there was nothing illegal about synchronised trades, as long as they did not distort price discovery and affect other investors. SEBI then appealed the SAT ruling in the Supreme Court.

“The impugned transactions are manipulative/deceptive device to create a desired loss and/or profit,” the Supreme Court order said.

“Such synchronised trading is violative of transparent norms of trading in securities. If the findings of SAT are to be sustained, it would have serious repercussions undermining the integrity of the market and the impugned order of SAT is liable to be set aside,” the order said.

According to sources, SEBI so far has given relief to 68,000 entities suspected of evading taxes/laundering money through transactions in dubious stocks in the cash segment. Last year, the regulator had told the Income Tax Department that going after tax evaders was outside the purview of its powers. SEBI could only take action where it had proof of stock prices being manipulated and other investors being affected as a result of the manipulation.

Dubious companies would issue shares which would be subscribed to by investors wanting to show fake long term capital gains. Through circular trading between related entities of the company promoter, the price of the stock would be inflated. A year later the investor would sell the shares to promoter entities at the inflated price, and show the profit as long term capital gains. However, the ‘profit’ would be returned to the promoter in either cash or through another set of fake transactions—not necessarily through the stock exchange platform.

SEBI found it hard to pin charges of tax evasion because it had no way of proving that these offline cash transactions had happened, and in many cases, found it tough to prove even stock manipulation.

Still, there were another 15,000 cases of synchronised trades in illiquid options contracts where the regulator had given relief to the entities involved. Synchronised deals are relatively easier to prove as being manipulative, even if does not hurt other investors.

Strangely, SEBI has taken action against 59 entities, through an interim order slapping trading restrictions and freezing their demat accounts.

Some of the entities at the receiving end of this order demand that action should be taken against all 15,000 entities which have done synchronised trades.

Interestingly, the Supreme Court has not mentioned the tax evasion angle in its judgement, while making it clear that the synchronized trades did affect the integrity of the market.

“No grounds have been raised in the show cause notice alleging that the impugned fictitious transactions have been entered into with a view to avoid payment of tax and was an act of tax planning. Adjudicating officer also has not gone into this aspect. Hence, I am not inclined to go into this aspect, whether the impugned transactions were intended to reduce the brunt of taxation and an act of tax planning,” the Supreme Court ruling said.

A source in the Income Tax department, who prepared the report on tax evasion through misuse of long term capital gains, “There has been massive tax evasion through fake LTCG. However, SEBI has given a clean chit to almost every entity. This makes it difficult for us to sustain such cases in courts. It is not just high networth individuals and big businessmen who were misusing LTCG; many senior bureaucrats have used the stock exchange platform to convert their ill-gotten wealth into legitimate income.”

It now remains to be seen if SEBI will reopen the cases relating to synchronised trades in illiquid options contracts.

Banks are also compelled to raise deposit rates so they can attract more funds. Typically, a deposit rate hike is followed by a rise in lending rate too

Interest rates on your loans are set to rise. While the Reserve Bank made no change in the monetary policy rate on Wednesday, the hawkish tone has set the ball rolling for banks.

To lead the way is HDFC Bank which raised lending rates by 10 basis points (bps) even as RBI paused on the key interest rates on Wednesday.

A basis point is one hundredth of a percentage point.

HDFC bank, country’s second largest private lender by assets and largest bank by market capitalisation,  has raised MCLR for six months, one year and two years to 8.00 percent, 8.20 percent and 8.30 percent, respectively.

Other private banks including Axis Bank, Kotak Mahindra,Induslnd and Yes Bankalso raised their MCLR by 5 -10 bps each.

The marginal cost of funds based lending rate (MCLR) refers to the minimum interest rate of a bank below which it cannot lend.

It is determined on the basis of cost of funds of banks.

Paresh Sukthankar, deputy managing director at HDFC Bank, had said last month after the bank’s third-quarter results that interest rates were set for a rise.

He had said, “Given, in particular, liquidity conditions and the fact that even at the system level loan growth for the first time now is outpacing deposit growth quite sharply, I think if anything, either rates will be in for a bit of a pause or if these liquidity conditions remain the way they are, there could be some upward pressure on both the deposit and lending rates.”

Although state-run Bank of Baroda (BoB) reduced its marginal cost of funds-based lending rates (MCLR) for tenures under one-year by 10-25 basis points, its one-year MCLR rate of the bank continues to be at 8.30 percent, to which most home loan rates are linked.

Deposit rates rise

Banks are also compelled to raise deposit rates so they can attract more funds. Typically, a deposit rate hike is followed by a rise in lending rate too.

Banks began by raising their bulk deposit rates, with SBI making the first move in November 2017. Between November 29 and January 30, the rate on one-year deposits of over Rs 1 crore at SBI has jumped by 200 bps to 6.25 percent.

RBI proposes, SBI disposes

Since January 2015, RBI has cut base rates by 200 bps against which the reduction by banks has been much lesser.

The banking regulator has, on several occasions, pulled up lenders for their “arbitrariness” in calculation lending rates keeping them high and flagged concerns over weaker monetary transmission.

This has forced some banks including State Bank of India to cut base rates as well. However, base rates continue to remain substantially higher than the MCLR.

For SBI, the one-year MCLR stands at 7.95  percent while the base rate still lingers at 8.65 percent (difference of 70 bps) despite the 30 bps cut made in January.

Chanda Kochhar, CEO and MD of ICICI Bank also recently said that the reduction in the interest rate cycle has stopped now.

For further pass through of policy rates to existing borrowers on base rate (loans taken before April 2016), RBI has asked banks to link the base rate with the MCLR from April 1, 2018 in order to bring the base rates at par with MCLR.This will ensure quicker transmission of the RBI policy rates.

Analysts say that about 30-40 percent of the system’s loans are still linked to base rate.

Even though one-year MCLR is stable for now, the rates are only likely to rise from here.

Stung by heavy provisions towards the NPAs and tepid credit growth along with capital requirements towards liquidity ratios and meeting Basel III norms, banks are facing a hard time with higher costs.

Bond yields

Additionally, higher inflation is also hurting the government bond prices whose benchmark 10-year yields moved up more than 100 bps since July last year. Banks, which are the biggest buyers of the debt, booked treasury losses for the third quarter and may face some trouble going ahead.

Since the second half of 2017, yields have moved up by 114 bps, in a period of about 7 months.

According to Soumya Kanti Ghosh, chief economic adviser to SBI said in a report, “We believe that currently the 10-year G-sec yield in India are at elevated levels and not in sync with macro fundamentals.”

Needless to say, such high yields push up government borrowing costs and are surely inimical to monetary policy transmissions, as this will put upward pressure on bank MCLR rates, he added.

Amazon’s stock was down 1.14 percent, bringing its market capitalization to $690.4 billion, while software maker Microsoft’s 1.83 percent fall depressed its market capitalization to $690.3 billion.

Amazon.com Inc on Wednesday was on the verge of ending the day with a stock market value higher than Microsoft Corp’s for the first time, as the online shopping behemoth weathered the recent turmoil on Wall Street.

Amazon’s stock was down 1.14 percent, bringing its market capitalization to $690.4 billion, while software maker Microsoft’s 1.83 percent fall depressed its market capitalization to $690.3 billion.

Bolstered by blockbuster quarterly results, Amazon’s stock gained 3.8 percent over the three sessions ended Tuesday, even as Wall Street struggled through a rout that has raised fears that a nine-year bull market may be ending.

Microsoft lost about 3.1 percent over the three sessions ended Tuesday.

Amazon’s market cap at points on Wednesday during intraday trade already topped that of Microsoft, but it has never closed at a higher value.

Amazon’s explosive growth in retail and cloud computing has sent its shares 77 percent higher over the past year, outpacing Microsoft’s 42 percent rise.

Apple Inc’s $819 billion market capitalization remains Wall Street’s largest, followed by Alphabet Inc , the parent of Google, at $736 billion.

India has four terminals to receive liquefied natural gas (LNG) and imports around 20 million tonnes of the super-chilled fuel a year. But over the next seven year the government plans to build another 11 terminals, said Narendra Taneja, spokesman for the ruling Bharatiya Janata Party (BJP).

India’s push to more than double the share natural gas has in its energy mix to 15 percent by 2022 will require a huge increase in imports and the construction of more LNG terminals, a government official said on Wednesday.

India has four terminals to receive liquefied natural gas (LNG) and imports around 20 million tonnes of the super-chilled fuel a year. But over the next seven year the government plans to build another 11 terminals, said Narendra Taneja, spokesman for the ruling Bharatiya Janata Party (BJP).

That would raise India’s LNG import capacity to more than 70 million tonnes per year in the coming seven years, in what would be one of the fastest gas import expansions since China embarked on its huge gasification programme last year.

India would eventually require even more than 15 terminals to meet its demand, Taneja said, speaking at an industry conference in Bali, Indonesia.

“India is looking at LNG in a very strategic manner. Once we get into it, we are talking about 15 terminals but it will be many more as the need is going to be there,” he said.

India has stated it plans to raise the share of natural gas in its energy mix to 15 percent by 2022 from about 6.5 percent now, he said.

The 70 million-tonnes-a-year target a few years later would mean Indian would need to import more than China took last year via both pipelines and tankers, and it would put India close to what top importer Japan currently buys.

India plans to electrify millions of households that still burn wood for light, heat and cooking. Like China, it also plans to reduce its heavy reliance on thermal coal, a bigger polluter than gas.

Taneja said the gas would also be needed to provide power to electric vehicles, which India plans to account for all new car sales by 2030.

India is also pushing for more scooters and motorcycles to run on compressed natural gas (CNG), with pilot schemes recently launched in major cities including New Delhi and Mumbai.

Beyond LNG, India is looking to access untapped domestic gas reserves off its east coast.

As part of its drive to reduce pollution by increasing natural gas use, Taneja said the government was encouraging Indian railway companies and LNG importers to look at fuelling trains by LNG instead of diesel.

India also wants to become a hub for supplying ships that run on LNG, with plans to build more facilities like a fuelling station at Kochi port, Taneja said.

LNG as a shipping fuel is being pushed by International Maritime Organization (IMO) rules that come into effect by 2020 and require the use of cleaner fuels.