Wednesday 31 August 2016

India Infrastructure Update - Operational Metro Systems ( August 2016 )

Urban transportation infrastructure in India needs big investment and a massive upgradation. It is estimated by various studies that 60% of Indians will be living in urban areas by 2050. After the success of Delhi Metro, lots of Indian cities are exploring the option to implement metro rail project across the country. As per Ministry of Urban Development (MoUD), about 316 kilometres of Metro rail is under operation and more than 500 kms of Metro rail is under construction across the country. This includes metro/mono rail systems promoted by state governments and private bodies under their own arrangements. It is important to note that urban transport is a state subject. Thus, the planning, execution and development of urban transport facilities are done by the states and union territories.

Smart Cities which are under execution of MoUD are incomplete with metro rail systems. China has 20 metro rail systems under operations and additionally investing trillions of Chinese Renminbi on bullet trains and maglev. India's first mono-rail ( Phase 1 ) is operational in Mumbai and final phase is expected to be completed by December 2016. Meanwhile, MoUD and National Highways Authority of India gave final approval to Metrino Pods system in Gurugram. As India mulls innovation in public transport, transport analyst are aware of the fact that Metro is the only viable option for India looking as population and financial constraints.

Metro Systems operational in India 

Delhi Metro

Operational: 213 km | Under Construction: 136 km | Proposed: 105.93 km

Delhi metro The Indian Capitalist
Brown Line - Janakpuri West - Botanical Garden will use Hyundai Rotem Driverless train
The 65.1 km Phase 1 was completed in 2006 while the 124.93 km km Phase 2 was completed in 2011. Currently the 159.327  km Phase 3 is under construction of which 23 kms has become operational. The rest 136 km of lines will open in sections one after the other from 2016 – 2018. Phase 4’s initial new lines & extensions have been finalised and construction is expected to begin in 2018. Within the next 3 years, more routes are expected to be added to Phase 4.

Kolkata Metro

Operational: 28.14 km | Under Construction: 63.39 km  | Approved/On Hold: 32.48 km

Kolkata Metro The Indian Capitalist
AC variant of Kolkata Metro coach manufactured by ICF, Ministry of Railways. Kolkata Metro has also ordered 14 new trains from CNR Dalian, China. 
Construction for it started in 1972 and a small 3.40 km section between Esplanade and Netaji Bhavan opened in October 1984, making it the first metro system in the country. Between 1984 and 1995, more sections opened up bringing its total length to 16.45 km. Kolkata metro was extended by 10.94 km to New Garia station which is also known as Kavi Subhash station.

Mumbai Metro

Operational: 11.4 km | Under Construction: 0 km | Approved: 68.2 km | Proposed: 77.3 km

Mumbai Metro The Indian Capitalist
Western Expressway Bridge in Andheri
OperationalVersova – Andheri – Ghatkopar – 11.4 km
Executed & operated by a JV of Reliance Infra (69%), MMRDA (26%) & Veolia Transport (5%)

Approved ( Construction to begin in September/ October 2016)

- Colaba – BKC – SEEPZ –  33.5 km
To be executed & operated by Mumbai Metro Rail Corporation Ltd – GOI (50%) & GoMH (50%)

- Dahisar – DN Nagar – 18.2 km
This line is part of the larger 40 km line between Dahisar & Mankhurd. To be executed by the Delhi Metro Rail Corporation

- Dahisar (E) – Andheri (E) – 16.5 km
This line is part of the larger 24 km line between Dahisar (E) & Bandra (E). To be executed by the Mumbai Metropolitan Region Development Authority.

Namma Metro ( Bengaluru )

Operational: 30.3 km | Under Construction: 27.1 km | Approved: 59.32 km | Proposed: 102 km

Bangalore Metro The Indian Capitalist
Cubbon Park Metro Station on Namma Metro's underground stretch
Construction for the first phase started in April 2007 following which the Baiyyappanahalli – MG Road  section of the Purple line opened in 2011. The 42.3 km Phase 1 is expected to be completed in 2017. After Phase 2 is completed in 2024 (est), the metro network will become 114.4 km long.

Rapid Metro ( Gurugram )

Operational: 5.1 km | Under Construction: 7 km

Gurgaon Metro The Indian Capitalist

In Phase 1 of the project which opened on November 14 2013, a 5.1 km line was built to link the Delhi Metro’s Sikanderpur station (Yellow line) with the business district of DLF Cybercity. As part of Phase 2, this line is currently being extended by 7 km on Golf Course Extension Road and is expected to be completed in 2018.

Chennai Metro

Operational: 10 km | Under Construction:  35.1 km | Approved: 9 km | Proposed: 132 km

Chennai Metro The Indian Capitalist

Construction for the first phase started in April 2009 following which the Koyambedu – Alandur section of the Blue line opened in June 2015. The 45.1 km Phase 1 is expected to be completed in 2019. A further extension of the Blue line as part of Phase 1 to Wimco Nagar is expected to be completed by 2020. Phase 2 of the project is currently in the proposal stage and in its latest avatar has been proposed to be 123 km long.

Jaipur Metro

Operational: 9.63 km (Phase 1A) | Under Construction: 2.35 km (Phase 1B) | Proposed: 23.099 km

Jaipur Metro The Indian Capitalist

Construction for its 9.63 km Pink line under Phase 1A started in 2011 and became operational in June 2015. Construction on Phase 1B, a 2.35 km extension of the Pink line, started in January 2014 and is expected to be operational in 2018. Phase 2 of the project includes a new Orange line which will connect the heart of the city with the Airport and onward to the Sitapura Industrial Area. This line is planned to be built on the Public-Private Partnership (PPP) model and is yet to be approved.

Information Source -

- Chaitanya Kulkarni

Friday 26 August 2016

#UPI - India's fintech achievement

UPI India fintech achievement

United Payments Interface ( UPI ) is unique payment solution which empowers a recipient to initiate payment request from a smartphone. UPI is India's biggest banking achievement as real time money sending and receiving at such a large scale has not been attempted anywhere in the world. UPI is the gift to #DigitalIndia by National Payment Corporation of India (NPCI), the umbrella organisation for payments in India. NPCI has been featured in 5 brands that made in big in 2016 for their contribution to RuPay and United Payments Interface. NPCI says that UPI is now live and is available for the customers of 21 banks. State Bank of India is expected to launch their UPI app next month.

UPI offers instant, online bank payments, and is seen as a major change to the Indian financial sector. It enables banks to provide real-time payments through QR code enabled addresses and offers device fingerprinting for additional security. It also provides an option for scheduling push and pull transactions for various purposes like sharing bills among peers. One can use UPI app instead of paying cash on delivery on receipt of product from online shopping websites and can pay for miscellaneous expenses like paying utility bills, over the counter payments, barcode (scan and pay) based payments, donations, school fees and other such unique and innovative use cases.

United Payment Interface would be a big boost for fin-tech startups. Bengaluru based Ultra Cash are trying to implement a cash-less society at petrol pumps, mobile recharge centres and cafes through NFC based payments. UltraCash's team were successful in writing code to integrate their mobile payment platform with UPI. It would enable consumers to easily pay retail merchants from their phone. But their innovation does not need an internet connection. UltraCash's technology securely transfers payment data from one device to another, using sound waves with frequencies inaudible to humans.

UPI is currently available only on Android devices. To its optimum use, NPCI plans to introduce the same on other platforms including iOS, Windows and Indus OS. NPCI decided that only banks with 1,000 pilot customers, 5,000 transactions and a success rate of around 80% would be permitted to go live. It says such a threshold criteria helped the banks to refine their systems and procedure.

The inclusion of UPI with upcoming payment banks would enable cash-less society. Startups or big business would prefer digital payment over cash for accountability purposes. In future, we can use UPI for Cash on Delivery. It will be helpful for paying your Ola bills. Digital payments will bring down costs and thus we can see heavy discount on amount paid using UPI instead of cash. India has achieved what developed countries couldn't think of. With Jan Dhan, Aadhaar and Mobile (JAM), India has the most sophisticated payment system in the world.

- Chaitanya Kulkarni ( )

Tuesday 23 August 2016

The 5 must-have Insurance Policies for SMEs

SME Insurance

Small Medium Enterprises play a crucial role in development of Indian economy. It employs 40% of India's work-force. According to DIPP statistics, India's SME sector manufactures over 7,000 products ranging from traditional to high-tech in both domestic and international markets. And with the surge in e-commerce business, it is slated to grow exponentially over the next five years. Despite all these promising numbers, India's MSME sector still remains the most challenging one's to operate.

Red tape, limiting regulations, dearth of finance, inadequate infrastructure, family run management and unskilled labour are the major reasons that hamper SME growth. Insurance is not just a legal mandate but a necessity for this sector. Adequate coverage can minimise internal and external risks of business enterprise. Sure, a majority of low-margin profit SMEs think of insurance as a burden but they themselves do not claim to be calamity proof.

For an SME, insurance is important because it provides protection against unforeseen eventualities; empowers the business; manages or reduce cost of unplanned risks; and enhances consistency and momentum of the business. Small businesses usually don’t have that kind of saving fund that can be diverted to resurrecting the business in case of an eventuality. This makes it all the more important for them to have an insurance plan. SMEs see a lot of business ups and downs and an insurance cover can provide them adequate financial support when the need arises.

The 5 must-have Insurance policies for SMEs

1. Employee Liability Insurance - Any employee including contractual workers are included in employee group insurance scheme. The policy covers statutory liability of an employer for death, bodily injuries or occupational diseases arising during the employment. A cover of Rs. 2 lakh rupees or more is an industry standard to cover all the hospital charges in Tier 1 cities. As a part of employee welfare, some business enterprises have tie-ups with nearby city hospitals where the family members of employees get free treatments.

2. Standard Fire and Special Perils policy - The insurance company will indemnify the insured due to loss because of fire which may be caused by natural fire, combustion, lightning, riots and natural disasters. Building, plant and machinery, furniture, business related goods are covered in these policies. Fire policy is an annual policy. The cost of fire insurance is calculated on the area of business activity. Fire exits, fire fighting drills, fire safety equipments reduce the risk of calamity and thus reduce the premium price. Fire photographs or newspaper article on fire acts as a legal proof for the claim.

3. Burglary Policy - Theft of physical products or copyrighted digital product is covered under burglary policy. Policies issued to business premises cover stock-in-trade, money in transit, goods in trust or on commission, fixtures and fittings, tools of trade such as typewriters, calculators and other similar property and cash and currency notes in locked safe against the risk of burglary and house-breaking. Burglary insurance can be essential for technology based startups as cyber crimes such as hacking, skimming and cloning can be covered in cyber security insurance.

4. Machinery breakdown policy - When the production of a factory grinds to a halt because of breakdown, it can result in huge losses. Especially when delivery schedules are tight and the penalties are strict. The policy broadly covers loss due to all kinds of accidental, electrical and mechanical breakdowns as a result of internal and external causes. Loss in freight charges due to mechanical breakdown is also covered.

5. Special Contingency Policy - This is an add-on insurance which covers against floods, earthquake, tsunami etc. Special contingency provides cover against external as well as internal risks. Loss to business due to strike, riots is add-on. The rate of premium varies from 1% to 2% of property to be covered.

- Chaitanya Kulkarni ( )

Monday 22 August 2016

iNVESTSHIELD - Fight the uncertainity of life

Canara HSBC Oriental Bank of Commerce have recently launched a new ULIP plan 'iNVESTSHIELD' that is designed to protect the needs of today and tomorrow. A Unit Linked Insurance Plan is basically a combination of insurance and investment. The investments you do will be divided into two parts, a part of insurance and other one is mutual funds which consists of equity, debt and money market schemes.

iNVESTSHIELD is an exclusive online linked plan designed for customers  who wants things done at ease on their mobile phones or laptops. Online exclusive plans give hassle free buying experience and are inexpensive as they exclude the cost incurred by the agent. iNVESTSHIELD is a feature rich plan with USP being 'Premium Funding' option. In case of unfortunate event, premium funding option entitles immediate payout higher than sum assured or 105% of premium paid. The insurance company will fund the remaining premium for the remaining policy and the fund value will be paid on maturity.

iNVESTSHIELD plan gives dual results, wealth accumulation plus protection. The customer has the choice of switching between funds which helps you to avoid the market movements and safeguards your funds as policy nears maturity. The policy is best suited for young parents as the policy premium is paid by the company till maturity in case of any unfortunate event. has listed down the benefits of Canara HSBC Oriental Bank of Commerce iNVESTSHIELD ULIP plan.

  • Flexibility to customise the plan as per one's need.
  • Zero premium allocation charge throughout the premium payment term of the policy.
  • Loyalty Additions for additional allocation of units to boost  the retirement fund.
  • Choice of Investment Funds ranging from 0% to 100% equity exposure, to match one's risk appetite.
  • Premium waiver benefit option which helps the parents to plan a secure future for their children.
  • Safety Switch Option enables one to move  funds systematically to a relatively low risk Liquid Fund to avoid market movements in the last four policy years.
  • Liquidity through partial withdrawals to help meet unplanned financial needs.
  • Tax benefits on premium paid and benefit received during Policy term under Section 80C and Section 10(10D), as per the Income Tax Act, 1961, subject to change in amendments. is of a view that iNVESTSHIELD plan by Canara HSBC Oriental Bank of Commerce has a lot to offer to netizens. You can buy this plan here.

- Chaitanya Kulkarni

Friday 19 August 2016

#IPO - RBL Bank plans to raise Rs. 1,200 crore

Incorporated in 1943 as a regional bank in Maharashtra, RBL Bank Ltd is a Kolhapur 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, 2016, RBL had 197 branches and 362 ATMs spread across 16 Indian states serving over 1.9 million customers.Information in this paragraph is taken from, India's No. 1 IPO Investment Portal. 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.Discuss this IPO on, the most active IPO discussion forum.

RBL's Competitive Strengths:
  • Client focused approach to business resulting in growing brand recognition 
  • Robust multi-channel distribution system
  • Partnerships that expand reach in rural markets
  • Growing net interest and non-interest income
  • Risk management and balance sheet focus
  • Modern and scalable information technology systems infrastructure
  • Focus on operational quality and scalability.
RBL Bank Financial

RBL has won the award for best mid-sized bank from last 4 years. It has invested heavily on new technology, manpower and office spaces. The key object of the issue is to inject capital in more branches and ATM network and comply with BASEL III and RBI norms. is of opinion that investors should subscribe looking 5 years perspective. We may see a repeat of YES Bank growth story.

- Chaitanya Kulkarni

#MakeInIndia - Why Manufacturing matters the most?

India's economy has taken a significant stride in past two decade. It is now time to build on the economic gains and tackle the barriers to growth. India needs to generate more jobs for its bustling youth and create economic opportunity for all. India's GDP has seen a dominance from service sector. BFSI and IT have been the respected jobs in India. India's manufacturing contribution is low at 17% as of 2014 to GDP. To reverse the situation, India is planning to build prosperity corridors along its highways, rail lines and sea ports. Economic corridor development entails constructing world class infrastructure typically aligned to major transport system; connecting smart cities and industrial zones.

3,115 cars of General Motors and 3,093 Volkswagen cars were exported to Mexico in a single ship from Mumbai port.

The government of India announced National Manufacturing Policy with the objective of increasing Manufacturing to GDP share to 25% and creating 100 million jobs by 2022. PM Modi launched Make In India campaign in 2014 in aim of wooing global manufacturing companies. The Make In India initiative comprises of 25 industries which range from defence to small cars. Attention is being given to Ease Of Doing Business ranking. The government is successful in passing labour reforms, GST, Insurance Bill, Coal Mines and Mineral bill. Investments by FDI has been increased in all sectors except single brand retail. To spread the benefit of economic growth to 126 billion Indians, India must further develop the manufacturing sector.

10 Things to Know about Manufacturing in India

1. India is the world's third largest economy and has emerged as a global growth engine. India is also the fastest growing major economy with the GDP growth rate of 7.6% in FY16.

2. India's service sector has been the driver of country's economic growth, and is a major contributor to India's GDP. India is a major exporter of information technology, business outsourcing and software expertise, thanks to its smart engineers.

3. Services are the most dynamic aspect to Indian economy but the sector employs less than one third of India's population.

4. While services have been booming in Asia, manufacturing has lagged. India’s manufacturing makes up around 17% of gross domestic product, compared to Malaysia at 24% and Thailand at 33%.

5. India’s manufacturing sector is hamstrung by poor roads and unreliable power supplies; burdensome regulations, limited access to land and credit, and a lack of a workers skilled in high-end manufacturing.

6. To spread the benefits of economic growth to the poor, India must further develop the manufacturing sector. India is seeking to increase manufacturing’s share of gross domestic product to 25% and create 100 million jobs within a decade by simplifying regulations, improving infrastructure and providing other incentives.

7. The government is also promoting the Make in India initiative, which seeks to encourage global firms to set up manufacturing bases in India by offering tax incentives and simplified regulations.

8. The Delhi Mumbai Industrial Corridor is the world's largest infrastructure project. The governments hopes that such industrial corridor will contribute more than 25% to India's GDP. The DMIC project will have 2 power plants, 24 smart cities, 23 industrial hubs, 2 ports and six lane expressway of 1,500 km connecting Mumbai to Delhi. JICA has assured a funding of $4.5 billion.

9. The government also plans to build Mumbai - Bengaluru, Bengaluru - Chennai, Chennai - Vizag, Kolkata - Amritsar economic corridors. Work on DMIC has been started and other corridors are in executing stage.

10. A healthy manufacturing economy requires good roads, electricity and logistics facility. India plans to build 1,000 km in current year. India will also build 6 new mega ports under the Sagarmala project. The total investment in Sagarmala project is expected to be Rs 5 lakh crores.

- Chaitanya Kulkarni

Thursday 18 August 2016

China's leap into Quantum Communications

In a cloud of smoke, China's QUESS satellite soared into the dark sky. Quantum Experiment at Space Scale ( QUESS ), nicknamed Micius after a Chinese philosopher, lifted off from Jiuquan Satellite Launch Centre near the Gobi desert. The satellite is designed to test the limits of quantum communication, an avenue of scientific endeavour that would mean hack-proof communications.

Quantum encryption is secured against any kind of computing power because information is encoded in quantum particles is changed as soon as it is measured. Making the information impossible to clone. China's QUESS satellite is a big breakthrough in the field of cyber security. In simple encryption, the message sent by one party to another can be easily hacked and read by different parties. Stealing state secrets and defence secrets from governments is the top aim of cyber hackers. The information which they decode is valuable to the enemy country which can result to competitive advantage for the country.

The satellite's two year mission will be to develop hack-proof quantum communication, allowing users to send messages securely faster than the speed of light. Technically, nothing is hacked-proof but entangled protons will change in state if they are tampered with, allowing the users to know whether it is hacked or not. The success in the mission would also mean the birth of quantum internet. Physicists expect quantum internet to be faster than Li-Fi.

Micius is an experiment to explore something unknown. It might not work at all. But if it does, it might unlock potential for something Star Trek fans have dreamed of. QUESS have the potential to enable physical teleportation. A faster than light communication would allow us to explore our universe and even other universes.

- Chaitanya Kulkarni

Thursday 11 August 2016

Why India's SMEs lack innovation?

India is ranked 81 out of 141 in Global Innovation Index, which reflects to low innovation capacity of its private sector and Small Medium Enterprises (SME). Government of India classify SME to Micro, Small and Medium Enterprises (MSME). According to Ministry of MSME, India's 49 million registered MSME employed 111 million people in 2014 contributing around 37% to India's GDP. According to National Innovation Survey, 34% of the sample size found to be innovative. Majority of the firms were buying new machines to improve quality by reducing costs.

What makes startups different than MSME? India has the second largest startup ecosystem in the world. India's startup are creating pathbreaking solutions in the field of robotics, payment banks, transportation etc. A startup is a searching for answers it will sell, the customer it will serve and the way it will earn money by delivering value. Whereas, a SME is independently owned business run for profit for local markets. SME owner do not dominate the space they operate in. SMEs generally lack in financial capacity and the staff to undertake structured and sophisticated R&D. Most of the SME are operating in the existing product rather than making a new product. Startups raise funding on the basis of R&D but it found that banks and NBFC do not fund SMEs for innovation. A sales approach would never lead India's SME to holistic R&D.

Barriers to Innovation in Indian SME

To improve the innovation performance of Indian SMEs, it is important to understand key barriers in the innovation space. The barriers to innovation are classified into six categories: people, finance, information, government policies and infrastructure. is of opinion that the Indian market is mature to accept innovative products. Chinese cheap electronic rule the markets in Mumbai because of its innovation and cheap price.

People and skills

Development and implementation of innovative products demand skilled labour. The need for specialised skills in the form of scientists, technicians and engineers is more apparent in case of R&D. Highly educated students from India's IIT and IIM wish to be entrepreneurs. If not, they want to play a crucial role in MNCs. SMEs are no have option left but to employ non-skilled labour at low salaries. Small Startup encourage get skilled labour by giving out a small portion of company's share. In SMEs, there is distinction between owner and employees. The situation demands more targeted capacity building programs on internal management. There needs to be a system where SMEs have access to pool of skilled labour for conducting specific work.


The approach of banks towards SME needs to change. Most Credit Manager see the balance sheet of the SMEs and then decide whether to fund them or not. The future plans or innovation capacity of the firm is neglected. The MUDRA scheme launched by PM Modi has a dedicated fund for innovative SMEs. Startups and SME should be rated on innovation. Flipkart, India's largest e-commerce company is in losses since the launch year, but yet Kotak Mahindra Bank has given a loan of Rs 500 crores to them. Innovative products are accepted by the market than sales-pitched products. There is an urgent requirement of change in perspective of lending institutions. #StartUpIndia and MUDRA schemes will enable quick funding for R&D focused organisations.

Information as a barrier

Timely access to valuable information is critical for SMEs to gain strategic advantage in pursuing innovation. The information barrier refers to access to information on technology and markets. SME also lack information regarding government policies which support innovation. Many SME in India are unaware of the schemes run by National Small Industries Corporation (NSIC) and SIDBI. Branding of key scheme into a national campaign is much required. Modi's #StartUpIndia and MUDRA consists of old dish in a brand new platter.

Government Policies

The perception of government as a barrier rather than a facilitator for SMEs is serious issues. India is ranked at 130th globally in World's Bank 'Ease of Doing Business' survey. The low rank perceives the burdensome environment in which these SMEs operate. Modi promises least government participation in compliance. He also announced the three year inspection and tax breaks for newly founded MSMEs. The perception of most MSME owners in changing but it will still take some more years for holistic results.


It is unlikely for an SME to invest in laboratories and testing facilities. Government and Incubators need to invest more by building new research parks in key manufacturing zones. Most young startups use research parks built in there educational campuses. Lack of research zones is the main reason why India leads in technological startups rather than scientific, defence related companies.

Download the full report here.

- Chaitanya Kulkarni

Wednesday 10 August 2016

5 Ways to Ease Correspondent Banking

Correspondent Banking enables banks to access financial services in different jurisdiction and provide cross border payment services which adds to international trade and financial inclusion. Correspondent Banking can be a risky business if compliance is not followed. To avoid huge penalties and repetitional damage, banks avoid dealing with clients with low volume or clients operating from risky areas. Different countries have different outlook over risky or war related products. Some examples, in a consortium with world's leading banks, India's State Bank of India has been shamed by local media for funding a company in US for manufacturing cluster bombs. 

HSBC Bank and Duetsche Bank's brand image were maligned by international media for enquiry in CFT (Combating the Financing of Terrorism) rules. Steven Vincent, a freelancing journalist has filed a multi million dollar lawsuit against HSBC, Credit Suisse, RBS, Barclays and Standard Chartered for Iran transactions. French Bank Credit Lyonnais has also been accused for providing services to Hamas affiliated group in France. Similarly, Bank of China has been accused of money laundering for Hamas and Palestinian Islamic Jihad in 2008. A CFT case comes with bad image for brands and a potential loss in share value.

India's Reserve Bank of India has fined 3 Indian Banks for flouting Anti-money laundering (AML) rules. The reason cited by RBI press release states ''weaknesses and failures in internal control mechanisms in respect to certain AML provisions such as monitoring of transactions, timely reporting to foreign investment units and assigning of Unique Customer Identification Code." Bank of Baroda, Punjab National Bank and HDFC Bank was fined for Rs 5 crores,  Rs 3 crores and Rs 2 crore respectively.

5 Ways to Ease Correspondent Banking Costs

Committee of Payments and Market Infrastructure, Bank of International Settlement has released a paper which guides central banks and correspondent banking participants on Model Correspondent Bank.

1. Use of KYC utilities

The use of Know Your Customer by respondent and correspondent bank which consists of up-to-date information and accurate information should be used in general to reduce the burden of compliance. The standardised format may be approved by ISO. Central Banks as an apex organisation play an important role in making changes which add to efficiency and reducing cost of due diligence.

2. Use of Legal Entity Identifier

In perspective to India, banks have been made mandatory by RBI to use Permanent Account Number (PAN) as valid legal proof for higher transactions. Aadhaar Enabled Bank Accounts (AEBA) have additional safety with valid fingerprints and eye scans. Several economists and regulatory bodies have lauded India's effort for OTP enabled banking from Re. 1 transactions. India has the most sophisticated payment network in the world ready for the Payments Banks and United Payment Interface. Use of sophisticated softwares like Finacle, SAP, Oracle is recommended.

3. Information sharing initiatives

The work conducted by various authorities related to AML and CFT is praiseworthy. The Financial Action Task Force and Basel Committee on Banking Supervision AML/CFT Experts Group are invited to further explore ways to tackle obstacles related to information sharing. Respondent and Correspondent Bank should use best market practices.

4. Payment Messages

It is recommended that banks decide individually which payment message method suits them individually. Payments messages in India do not contain data like passwords, profile passwords, birthdate. FATF and AMLEG are advised to create a model format for payment messages.

5. Use of the LEI as additional information in payment messages.

Correspondent banking services are an essential component of the global payment system, especially for cross-border transactions. There seems to be a variety of reasons for the general decline in correspondent banking relationships reported by many stakeholders. Often cited by correspondent banks as reasons for this decline are compliance with AML/CFT regulations, an increased perception of risk and some uncertainties on the potential impact of non-compliance. 

The measures recommended would alleviate costs. The exit of various banks from correspondent banking is of concern. The measures would help to decrease red flags related to due diligence and compliance.

- Chaitanya Kulkarni ( )
Keep Reading! 

GSTN - Building the World's Largest Tax System

India's Loksabha and RajyaSabha has passed Constitution Amendment Bill ( 122nd ) in bid to welcome Goods and Service Tax in India. It was a stepping stone for India's biggest tax reform since independence. GST will replace indirect taxes like excise, VAT, entertainment tax, luxury tax etc. A stronger and efficient GST requires software which is able to handle large complex data. GST would need the best of technology from the IT capital of the world. The team of technology specialists and tax experts are already are working on a robust  country-wide information system under GSTN.

Goods and Service Tax Network (GSTN) is Section 25, non-government, private limited company. GSTN was setup as a non-government not for profit private limited company in 2013 to create robust IT backbone to enable real time tax payee registrations, filing returns, handling of invoices, executing inter state tax settlements etc. The services will be available to all stakeholders such as central tax departments, state tax departments, banks, Central Board for Excise and Customs, RBI and taxpayers. The Government of India holds 24.5% equity, all states and union territories hold 24.5% and other non-government financial institutions namely NSE, HDFC, HDFC Bank, ICICI Bank and LIC Housing holds 51% equity in GSTN. The role of non-government financial institutions as a decision making power is unclear.

GSTN had called an application for Request For Proposal (RFP) from major IT firms in India to develop IT infrastructure in physical and software form. India's second largest IT firm, Infosys has won the contract worth Rs. 1,380 crores to develop GST Network, beating its rivals TCS, Wipro and Tech Mahindra. GSTN would be placing the order for hardware which required to build the platform. The hardware will be imported and then installed and then checked whether it is ready to run the software. The software is expected to be ready by October and the inclusion from software to hardware would take another 2 months. The Beta of GSTN would be running by February, 2017. New registrations of tax payers on the GSTN system will begin from the implementation day. GSTN is also working with 19 states for creating front-end.

Migration of existing taxpayers of VAT which number about more than 65 lakh and about 20 lakh of service tax payers and about 3-4 lakh of central excise taxpayers - their migration starts sometime in October and it will go on until February. - Chairman, GSTN

Building the world's largest and most complex tax system in few months is a herculean task. GSTN would help in PAN-based registration of traders, besides filing of tax returns and payment system. In other words, the portal itself will be a one stop for filing and processing of all taxes for almost 65 to 70 lakh tax-payers in the country and is being designed by a specialised design unit of Infosys.

Today, not all taxes in India are paid in electronic form. After GST, all taxes whether big or small will be have to be paid in electronic form. Smaller tax payers are not aware of the existing system and they consult their CA for the same. GSTN is in talks with various IT firms to develop simple multi-lingual mobile application that would enable small tax payers to file returns easily.

GSTN is surely the organisation for national importance. The simplicity and efficiency of the software would add to 'Ease of Doing Business'. All the stakeholders including SME taxpayers should be given training under the Financial Literacy program. A mobile app for easier returns is encouraging and but we should also you other platforms like Youtube, TwitterSeva and Email Ticket raising which appeal the masses. As CGST and IGST pass in coming winter session, the role of GSTN as implementing and customer service body would be more clear.

- Chaitanya Kulkarni ( )

Monday 8 August 2016

#TICVacations - Thiruvananthapuram : Pristine beaches, Coffee house and Malayalam film

At the last phase of my Tamil Nadu solo trip, I went to Cape Comorin which last tip of India. Kanyakumari is  a pilgrimage spot for Hindus. A rock memorial is built in the honour of Swami Vivekananda. The ferry service is provided by the port authorities and is expensive compared to Kerala. The high point for my Kanyakumari trip was North Indian food. It was a relief for my taste buds since I was craving for a Paneer dish. Thiruvalluvar statue which was shut during my visit is a 133 feet statue made up of rock in the middle of the sea. Thiruvalluvar was a writer ( Blogger of the old times ) and the greatest poet of South India. I was enchanted to see a statue of a writer in a place where gods are larger than life.

Lighthouse Beach, Kovalam

After a 5 hour super cheap bus ride, I finally arrived at Thiruvananthapuram which is the capital of Kerala state. I had booked a bunk at Vedanta Wake Up - Central Station which located near to the main bus stand and railway station. You can find it on the MakeMyTrip app. This was cheapest stay in India. I paid just Rs. 133 ( $2.20 USD ) for a day (it had air condition!). I prefer not to travel outside the city for the first day; just to observe the lifestyle, economy and transportations. My day got better with a Mahaboli; a sweet roti with gram and jaggery filling. People from Maharashtra and Goa call it Puranapoli and this special dish is only made on auspicious occasions like Holi and Pola. 

Mahaboli ( Malayalam ) aka Puranpoli (Marathi)
Liquor was banned for some time before the elections by UDF ( local party alliance with Indian National Congress ). But the Malayalis people didn't accept the decision and voted for LDF ( Left Democratic Front ). Malayalis (Kerela peeps) are considered to be the highest consumers of beer and whiskey in India. The local drink palm wine is also sold under the license of excise department. Liquor is inexpensive but one has to queue up outside the government owned liquor stores. Needless to was a long queue. 180ml whiskey costs Rs. 80 and beer 650ml is priced at Rs. 70. Magizchi!

After having a time of my life with my roomies, Kovalam was on my list. Kovalam is beach town in Thiruvananthapuram district. It is 18 kms from my hostel in Thampanoor. KURTC provides AC bus to Kovalam beach from East Fort. The Volvo 8400 AC buses are very well maintained and provide cheap and superior transportation to tourist spots in Kerala. The AC bus costed me Rs. 32 and ordinary buses are available every 10 minutes in mere Rs 15.

#TICVacations - Create Adventures for Yourself

Kovalam features three spectacular crescent beaches. The most popular and largest beach is the Lighthouse beach. There's a promenade where one can just chill :) . The black sand is soft and there were no signs of pollution. Do not miss the sunset here. I visited Kovalam during off season. I am sure this place would give great vibes in December. Buses back to Trivandrum ply till 9pm. If you plan to have lots of shots get super drunk, there is always a option of private transport.

Me before getting sweaty at Varkala Beach
Varkala, you must have heard a lot from this place. Varkala is perfect hostelling getaway in Kerala. I recommend Shiva Garden and Homestay for great hostel atmosphere. Papanasham beach is one of the best beaches in India. Papanasham in Malayalam means 'dip into the water and wash away your sins'. The view and the sunset was scenic and took me to Nirvana.  I started a conversation with a loyal Kerala Blasters fan. After few minutes, I was playing beach football with the local people. The sand makes it difficult to run and I couldn't match up with the local heroes. 
Stairway to Heaven
Varkala beach is adjoined to a mountain. Led Zeppelin's stairway to heaven proved to be a perfect song for the climb. The hide and seek between monsoon cloud and the sun helped me to click a perfect shot. The approaching dark cloud was message to pack up. KURTC AC buses are available from Temple chowk. It was pleasure to see heavy rain after 9 days. Bus conductor of KURTC was courteous to offer me an entry into his bus one hour before its schedule. Within 10 minutes, the main chowk was flooded with mud water coming from the hills. KURTC AC Volvo costs Rs. 96 for a 4 hour ride to Thiruvananthapuram.

Cold Coffee and Masala Dosai at Indian Coffee House, Trivandrum
I strongly recommend my readers to visit the Indian Coffee House for brunch. Indian Coffee House is a chain of restaurants managed by Workers' Association in Kerala. They are locally famous for a delicious and affordable food. The Indian Coffee House in Trivandrum is a unique building with a spiral seating. The waiters are dressed elegantly with the local headwear. Masala Dosa with Uzzhunu vadai, Cold Coffee and Ghee Roast is my personal favourite. Sharjah juice made up of bananas, horlicks and vanilla ice-cream is highly recommended.

I totally missed out of Tamil movies in Tamil Nadu. To avoid the same mistake again, I booked a ticket for Malayalam movie Anuraga Karikkin Vellam in Aries Plex 4K near Thampanoor. There were no subtitles in the movie. I frankly feel that regional movies in India are better than bollywood. The film revolves around a policemen father who spots a ex-girlfriend on his duty. He tries to contact her but accidentally contact his son's girlfriend Elizabeth. Yeah! As a prank, Eliza continues to talk with Biju( policemen) to tease her boyfriend. Soon, the prank is over but rather than been ashamed Biju uses the skills to improve relations with his wife, and they happily live after. Happy ending!

- Chaitanya Kulkarni ( )

The era of cheap SmartTV is already here

Idiot box.. as it was known in the early 60's. Middle class americans and european were amazed by this little square box. Sitting whole day in front of TV in sofa recliner was considered as swag. Sure, it was the most turnaround event in the history of technology as masses were preferring video over audio. Some critiques and economist went too far, blaming television for the end of American growth story. TV is a social tool that allows conversation; something that allows you to laugh, cry and immense yourself in the intrigue and see the wonders of the worlds sitting at home. Modern TV is a fusion of computer and TV. Does it make a TV smart?

SmartTV term was introduced by Samsung. The accurate term for today's 'SmartTV' would be connected TV. Connected TV allows videos, radio and other functions possible on TV through Wi-Fi. The open web isn't the good experience for consumers as the open web wasn't designed for 80 inch televisions. Most of the ConnectedTVs use linux or android system today. ConnectedTV enables to stream a video from laptop or mobile to your TV without loosing any pixelations.

Modern Connected TV are more than just streaming connect. They come high end quad core processors and RAM. There are a hell lot of cool features like voice recognition and hand gesture. But I am still not convinced for spending lakhs for this not so smart TVs. You can connect laptop screen to most LCD and LED TV by HDMI cables. Most TV companies today provide HDMI cable for free or you can buy the same for Rs. 200. The smarter option for converting your LED TV into a ConnectedTV is using Chromecast or Teewe. is of opinion that smartTV isn't ready yet. A smartTV would require a high speed internet connection with the download speed of minimum 20Mbps and upload speed of 5Mbps to view 4K content of your choice.

Sony, LG and Samsung have selling wide range of 'SmartTV' in India. Make sure you buy a TV which plays newer x265 codec with mkv and m4v file. has listed down top 5 by random order cheap ConnectedTV. Selection criteria - HD 1080p, 65 inch LED TV.

- VU 55inch Full HD Smart LED TV - Rs. 51,990
- LG Full HD Smart LED TV - Rs. 97,000
- LeTV SuperTV 4K 55inch - Rs. 95,000
- Sony Bravia 55inch 1080p Smart TV - Rs. 1,10,000
- Toshiba 55inch Android LED TV - Rs. 85,000

- Chaitanya Kulkarni ( )

Friday 5 August 2016

World Bank issues Rupee denominated sustainable bond

World Bank has issued two new sustainable bonds in INR and Chinese Renminbi. World Bank, which is also known as International Bank for Reconstruction and Development is AAA (Moodys/S&P) rated. INR denominated bond was issued for retail investors in Italy.  Sustainable bonds are designed to achieve financial objectives with social and environmental goals. It is the first time that World Bank is issuing INR and CNY denominated bonds for investors in Italy. These sustainable bonds will be listed on EuroMOT of Borsa Italiana for Italian Stock Exchange.  Both sustainable bonds have been listed on 22nd July.

French banking giant BNP Paribas acted as a liquidity provider for World Bank issued CNY and INR denominated sustainable bonds. Liquidity Providers are trading members that act as a market maker by providing liquidity. A liquidity provider connects many brokers and trader for increasing the investment in the market. Liquidity providers enhance stock exchanges by providing security against volatility.

World Bank sustainable bonds will adhere to Post 2015 Sustainable Development Goals. The goals will lead to betterment of mankind and provide holistic environment for growth.

The CNY-denominated sustainable development bond pays a yearly coupon of 2.50% in EUR every year. At maturity investors are entitled to the repayment of 100% of their original capital investment in CNY 2 by the World Bank. The payment at maturity will be made in EUR.

The INR-denominated bond pays a yearly coupon of 5.80% distributed in EUR every year and at maturity investors are entitled to the repayment in INR of 100% of their original capital investment2 by the World Bank. The payment at maturity will be made in EUR.

INR denominated sustainable bond was priced at Rs 1,50,000 per bond. The maturity period is of 5 years.

Source - World Bank Press Release, Euronext.

- Chaitanya Kulkarni ( ) 

#Jio4G effect : Airtel to offer free voice calling

Reliance Industries Ltd's ambitious telecom arm Jio ( Reliance Jio Infocomm Ltd ) is creating buzz of Twitter and other social media channels. Jio has rolled out an attractive preview offer for LYF, Samsung smartphones and HP laptop users. Jio's Samsung offer is limited to high end phones. Although, Jio fans can enjoy the preview offer by buying a LYF phone. The cheapest LYF smartphone is available at Rs. 2,999 and comes with 4G Volte feature and two years warranty.

Jio preview offer gives unlimited internet, voice calls and SMS to its current 15 lakh users. Jio fans continuously teasing slow internet users like me by posting unbelievable speed tests on twitter. Jio offers speed as high as 70 MBPS in some parts of India. Reliance Jio Infocomm Ltd will be the largest startup in the world with the investment of Rs 1,50,000 crores before commercial launch. The company would foray into 4G, fibre broadband, DTH, Wi-Fi business etc. via physical investments. Jio has also launched 11 apps related to payment banking, music streaming, cloud services, live TV and video streaming. In coming time, these apps would prove as stronger digital assets for RIL. Reliance Jio would provide disruptive plans in Rs 300 to Rs 500 ARPU to get 10 crore user base in the launch year. Shares of other telecom players are crashing in Bombay Stock Exchange over the fear of closure of smaller telecom companies. RIL report says that they intend to make India truly digital by giving best speeds. Current internet ranking of India is 155th and Jio plans to bring India in top 10 in few years.

Bharati Airtel has joined the 4G revolution by offering free calls. Telecom analyst suggest the recent price cuts are directly related to #JioPhobia. The new postpaid plan under MyInfinity series would offer unlimited voice. Under the Rs 1,199 plan, customers will get free calls, bundled with 1 GB of 3G or 4G data and 100 SMS’ per day. The Rs 1,599 plan will offer unlimited voice calling, 100 SMS’ per day, and 5 GB of 3G or 4G data.

Infrastructure of Reliance Jio seems ready as they have launched 4G in all bands in most circles. Although consumers are facing activation issue. Some of my blogger friends told me they had to wait for 10 days to start a SIM. Reliance Jio is expected extend preview offer on 15th August for Apple. Being a national day of pride, Jio may also join hands with local brands like Micromax and Karbonn. The commercial launch is expected in October. #AccheDin for mobile users are here.

- Chaitanya Kulkarni

Thursday 4 August 2016

F-16 : #MakeInIndia, for India and the world

With nasty neighbours and souring relations with Pakistan and China, India is in dire need for all-weather multirole fighter planes. India already has given a contract for LCA Tejas to Hindustan Aeronautics Ltd. In 2007, India began an official tender for procuring 126 multirole fighter combat jets from France's Dassault at the tender cost of $11 billion. At that time, it was the largest defence deal. The deal unraveled after the global financial crises. In 2014, PM Narendra Modi made a modest deal to acquire 36 Rafale fighter jets in a fly-away condition. India is short of fighter jets when the Arab revolution has turned into a full fledged civil war. Major defence companies across the world are wooing India. Saab, Lockheed Martin, Boeing took part in #MakeInIndia expo which was held in Mumbai.

Pic - Coup plotters using F-16 to kill pro government supporters in Istanbul, Turkey

Make In India is not merely a campaign but an amalgamation of all ongoing projects and forward thinking for India's defence security systems. Lethargic PSUs have seen a turnaround and are creating world class products. Narendra Modi's warm relations with US and 100% FDI in defence have paved a greater deal for India. Lockheed Martin has offered to manufacture more than 100 F-16 in India on the condition that Indian Air Force agrees to buy some of it. F-16 would not just be made for India but will be sold across Europe and Asia.

As per some defence sources, India is not keen for procuring fourth generation F-16. We are eyeing for fifth generation F-35 jets. But India is unlikely to get the deal especially under the 'Make In India' campaign. No country would want to assemble its newest innovation in a foreign country. Defence companies are mostly owned by the government of origin and a large chuck of research grants and defence budget is funded by the government for efficient running of a company. is of an opinion that F-35 is not the bang for buck for Indian Air Force. Surely, it has state of the art accuracy and meets modern standards. F-35 is heavier than most fighter jets in the market. The payload matches to LCA Tejas and various defence analyst suspect its multirole capabilities. Pentagon has confirmed that F-35 has lost against F-16 as it lacked a special coat of stealth paint.

The deal for F-16 would not just be an ordinary buy but a diplomatic victory over Pakistan. The US government had offered Pakistan 8 F-16s last year but it denied any subsidies. The double-play of Pakistan is highly suspected by Pentagon. Like any other business deal, US has offered to sale F-16 at market rate. On the other hand, Lockheed Martin has offered to manufacture more than 100 F-16 in India facility. Locally produced F-16 would mean discounted deal for India and would not harm our fiscal deficit.

US based Lockheed Martin has submitted a proposal to Ministry of Defence for locally manufacturing of F-16 Block 70 under the #MakeInIndia scheme. Sales division of Lockheed Martin are ambitiously calling it 'a unmatched and unprecedented deal'. The company termed India as '' new epicentre of the world's most extensive industrial defence network".'s take

Locally manufactured F-16 would be the biggest success of Make In India. F-16 is highly appreciated by defence analysts across the globe. F-16 is currently operational in UK, Italy, Spain, Turkey, Pakistan etc. and the new buy is from Romania. Lockheed Martin would obviously employ from the best universities in India ie. the IITs and NITs. Local manufacturing of world class F-16 would add to highly skilled labour which can be later employed by Indian defence companies to make innovative breakthrough in defence world. We need a ISRO in defence. To be defence superpower, we need to manufacture world class defence equipments at an attractive price so that countries smaller than Romania could buy our products to protect themselves. We think Ministry of Defence may accept Lockheed Martin's offer and state governments may soon start talks with the company. Maharashtra's MIHAN and newly launched Ottappalam Defence park may soon take off with major defence companies planning to #MakeInIndia.

- Chaitanya Kulkarni ( )