2017
was the year when curiosity about the Bitcoin hit an all-time high,
thanks largely to a dramatic surge in its value. Notwithstanding recent
fluctuations in its price, interest remains strong in the original
cryptocurrency, which was launched in 2009.
One question
everybody has is what is the process of 'mining' that creates new
Bitcoins and how does the blockchain technology underpinning the
cryptocurrency really work. Here's how...
Making of the coin
Bitcoins
are generated by a mathematical formula, or algorithm. It started with
50 coins in Jan 2009, the formula produces batches of new coins every 10
minutes.
These coins can be 'mined' by anyone willing to dedicate computing power.
Then it goes public
The blockchain forms a permanent, publicly available history of every bitcoin transaction.
Miners get more
Miners are rewarded for their work with new bitcoins automatically generated by the bitcoin algorithm.
Is there a mining limit?
The bitcoin formula sets a limit of 21 million coins. This limit is expected to be reached around the year 2140.
Commenting on the development Mr. Rana Kapoor, MD & CEO, YES BANK, said, "This landmark issue is the first foreign currency bond offering by YES BANK under our newly established MTN program, and the significant over-subscription as well as high quality investor base is testament to the commitment reposed by global investors in the Bank. As the 1st Bank to have begun operations at GIFT, we remain committed to expanding our operations at the IBU, Gandhinagar." In its successful fund raising streak, YES BANK has previously raised a total of INR 37.5 Bn of Infrastructure bonds of which INR 3,300 Mn (USD 50 Mn) was raised through issue of Green Infrastructure Bond to FMO. In FY17, YES BANK was one of the best performing banks in India across key parameters of growth, profitability and asset quality owing to a differentiated strategy. Bank's Advances grew by 34.7% to INR 1,323 Bn compared to industry growth rate of 5.4%, Total Assets grew by 34.7% to INR 2,151 Bn and Net profit grew by 31.1% to INR 33.3 Bn. Further, YES BANK emerged as the fourth most profitable bank in India, as per H1FY18 net profit of INR 19.7 Bn. As on March 31, 2017, YES BANK's Total Capital Adequacy Ratio stood healthy at 17% with Tier I Capital at 13.3%, ensuring that the Bank is well positioned to capitalize on growth. As evidenced, YES BANK has been one of the strongest banks in India to have successfully demonstrated ability and consistency in raising capital across cycles. Through the equity route too, the Bank has raised a total of more than INR 200 Bn. • The Bank has raised a total of INR 78.5 Bn (USD 1.2 Bn) in QIPs since 2014 • Recently raised INR 40 Bn (USD 612 Mn) through private placement of Basel III Tier II bonds • INR 84.15 Bn was in total raised under Basel III Compliant Additional Tier-1 ('AT1') Bonds
Targeting a five-fold jump in Indo-US trade to US $500 billion, Prime
Minister Narendra Modi and US President Barack Obama on Wednesday
pledged to deepen economic cooperation and will set up a joint program
to boost business investment.
After two days of talks focused on
ways to reinvigorate the India-US relationship through economic, energy
and security cooperation, the two sides agreed on US $1 billion of
concessional financial from the US Export-Import Bank for the country's
renewable energy development agency.
The two leaders, who met for
the first time, agreed on boosting two-way trade to US $500 billion from
US $100 billion. However, no deadline was set for reaching that goal. FULL COVERAGE: PM Narendra Modi in US
The
US President and PM Modi recognised that businesses of the two
countries have a critical role to play in sustainable, inclusive, and
job-led growth and development, a joint statement issued after the
meeting said.
In order to raise investment by institutional
investors and corporate entities, the leaders decided to establish an
Indo-US Investment Initiative led by the Ministry of Finance and US
Department of Treasury, with special focus on capital market development
and financing of infrastructure.
They also agreed to establish an
Infrastructure Collaboration Platform convened by the Ministry of
Finance and the Department of Commerce to enhance participation of US
firms in infrastructure projects in the country. In this context, the US
government welcomes the government's offer for US industry to be the
lead partner in developing smart cities in Ajmer (Rajasthan),
Vishakhapatnam (Andhra Pradesh) and Allahabad (Uttar Pradesh), it said.
The
government will welcome two trade missions in 2015 focused on meeting
its infrastructure needs with US technology and services.
The
two leaders discussed their concerns over the current impasse (including
on the issue of public stockholding for food security purposes) in the
World Trade Organisation (WTO) and its effect on the multilateral
trading system. Modi and Obama directed their officials to consult
urgently along with other WTO members on the next steps, the joint
statement said.
The two sides committed to work through the Trade
Policy Forum to promote a business environment attractive for companies
to invest and manufacture in India and in the US. They committed to hold
public-private discussions in early 2015 under the Commercial Dialogue
on new areas of cooperation, including innovation in advanced
manufacturing.
The US President welcomed Modi's ambitious plan to
extend basic financial services to all its citizens through the Jan Dhan
Yojana. Obama and the Prime Minister underlined the important
contribution that US locomotive technology, equipment to monitor rail
system assets, and US best practices can play in modernising the
country's vast railway network, including accessing programmes of US
Trade and Development Agency in this work, the statement said.
Agreeing
on the need to foster innovation in a manner that promotes economic
growth and job creation, the leaders committed to establish an annual
high-level Intellectual Property (IP) Working Group with appropriate
decision-making and technical-level meetings as part of the Trade Policy
Forum. In particular, the two leaders recognised the contribution of
the Information Technology industries of both the countries and the
IT-enabled service industry in strengthening India-US trade and
investment relations.
The Reserve Bank of India will issue final guidelines on small and
payments banks by November end, aimed at expanding the banking space and
paving way for corporates to enter these two segments.
"Based on
the feedback received, final guidelines on licensing of these banks will
be issued by end-November 2014," RBI said in its bi-monthly policy review on Tuesday.
Draft
guidelines for Small Banks and Payments Banks were issued by the
central bank in July and comments were invited till August 28.
The final norms will allow micro finance institutions (MFIs), telecom players, non-banking finance companies (NBFCs) and public sector companies eligible to apply for bank licences once RBI invites applications for the same.
The
proposed small banks will provide a whole suite of basic banking
products such as deposits and supply of credit, but in a limited area of
operation.
On the other hand, payments banks will offer a limited range of products
such as acceptance of demand deposits and remittances of funds. They
will have a widespread network of access points particularly in remote
areas, either through their own branch network or through Business
Correspondents (BCs) or through networks provided by others.
"Both
payments banks and small banks are 'niche' or 'differentiated' banks,
with the common objective of furthering financial inclusion," RBI had
said while issuing the draft guidelines for licensing these banks.
Small
banks can collect deposits and disburse small-ticket loans to farmers
and small and medium businesses, unorganised sector through high
technology-low cost operations, as per draft regulations.
Payment
banks will cater to marginalised sections of society, including migrant
labourers, for collecting deposits and remitting funds. They would,
however, not be allowed to indulge in lending operation.
Such
banks can be set up with a minimum capital of Rs 100 crore as against Rs
500 crore required for normal commercial banks, as per the draft norms.
With
regard to Non-Banking Financial Companies (NBFCs), the central bank
said changes in the regulatory framework would be introduced by
end-October 2014.
The new framework would cover prudential
regulations on core capital, asset classification and provisioning
norms, regulation on deposit acceptance, corporate governance and
consumer protection measures.
With these changes coming into force, the RBI will recommence registering new NBFCs, it said.
Major banks have devised additional payments to be paid alongside salaries to bolster pay deals and circumvent EU bonus cap.
Banks handing staff “allowances” to circumvent Brussels’
bonus cap face close scrutiny of their pay deals as a result of new
guidelines being drawn up by Europe’s top banking regulator.
The European Banking Authority is in the final stages of
producing guidance intended to unify the array of practices that banks
subject to the bonus cap have employed to avoid having to cut the pay of
their key staff.
Under a rule which is still being fought by the chancellor,
George Osborne, the EU has banned banks from paying bonuses worth more
than a banker’s salary, unless shareholders give approval for bonuses of
twice the amount.
As a result, major banks have devised a series of additional
payments – which have become known as allowances – which are paid
alongside salaries to bolster pay deals.
HSBC was one of the first banks to go public with its plans, handing its chief executive Stuart Gulliver £1.7m a year
in additional payments. He receives an allowance every three months in
shares. Barclays describes similar payments as “role-based pay”.
The EBA has been reviewing such practices since June
and this week circulated draft proposals for consultation on what
characteristics such allowances needed to have to be regarded as fixed
pay – which is not capped – rather than bonuses, which are.
According to the Financial Times, an allowance would need to
be based on an individual’s role rather than have any link to
performance, and would need to be paid for a set period. Banks should
not be able to claw back any of the allowances paid if losses are made
and the allowances should be for a preset amount, and not altered at any
time.
The EBA said that it had not finalised its work on allowances but said it would be “delivered in coming weeks”.
“The analysis in the report will not be a matter of being
more or less conservative on allowances; the task of the EBA is to
harmonise practices in the EU banking sector and this report will aim at
understanding the features of allowances across the EU single market,
so as to be able to make an informed choice on whether these should be
classified as fixed or variable remuneration,” the EBA said.
Deputy governor of the Bank of England Andrew Bailey, among others, has warned that the bonus cap will push up bankers’ pay.
TODAY Russia submitted its budget to the Duma, the lower house of
the parliament. After three rounds of discussions, Vladimir Putin, the
president, will sign it into law. The budget shows how much trouble the
Russian economy is in—and how unwilling the government is to face up to
reality.
It’s an austere affair: 700 billion roubles ($17.8
billion) of previous spending plans have been axed. New taxes on tobacco
and alcohol will probably be imposed. These measures are partly to do
with Russia’s poor economic growth, which has crimped tax revenues. The
World Bank has cut its forecast
for Russian economic growth to 0.3% in 2015 and 0.4% in 2016, down over
one percentage point on previous projections. The rouble has lost about
20% of its value against the dollar since October 2013. There are
rumours that the central bank will soon enact controls on capital
outflows, which in the first quarter were about $50 billion.
But
amid the austerity there are some winners. Mr Putin wants to make good
on an electoral promise to hike social spending (say, in the form of
higher public-sector wages). Defence, with a 20% rise, is another
beneficiary. According to Julian Cooper of Birmingham University, this
largesse has little to do with the recent Ukraine crisis, but is part of
a long-term plan to modernise the military. Spending on defence will
rise by 85% between 2012 and 2017.
Then there is the question of
oil. In 2015 Russia will need an oil price of about $105 a barrel to
balance its budget (see chart). But crude is currently trading in the
mid-$90s, down by about 10% since May. Weak demand from China and
healthy supply from America help explain the drop.
Break-even oil price, dollars (Source: Deutsche Bank Markets Research; Economist Intelligence Unit).
Lower dollar-denominated oil prices are not so bad for Russia,
given that the rouble has weakened so much. But over the past few years
the budget’s reliance on oil revenues has increased. When excluding oil,
there was a shortfall of 3.6% of GDP in 2007, but now it is more like 10%.
Russia expects to run a small budget deficit (about 0.6% of GDP) this
year. That prediction is optimistic—the Kremlin is banking on an oil
price of $100. The latest predictions from Energy Aspects, a
consultancy, show that the price of Brent is not expected to pass $100
for about nine months.
There are other strange assumptions in the
budget. The Kremlin's economic growth projection (of 1.2% in 2015) is
much higher than the market consensus. It reckons that the inflation
rate will be 5% next year, even though European and American sanctions
have helped push the current rate to 7.6%. High inflation over the long
term will make Russia less competitive. It could also force the central
bank to raise interest rates further, which would weigh on growth. Since
March the bank has hiked rates by 2.5% points and they are now at 8%.
The budget looks like a desperate attempt by the Kremlin to project
strength and maintain public support, when in fact it is looking ever
weaker.
DETROIT — Lenders are betting that the City of Detroit will be a good investment following bankruptcy, the city's investment banker testified Tuesday.
Ken Buckfire, president of New York-based investment bank Miller Buckfire, testified on Day 15 of the city's bankruptcy trial that Detroit will have a "very high level of certainty" in its finances over the next decades.
He said the significant reduction in Detroit's unsecured debts and liabilities — which are expected to fall from $10.4 billion to $3.1 billion — clears the way for the city to pay its debts with relative ease.
But he also acknowledged the city's ability to stabilize its tax revenue will also affect its financial health.
The city's restructuring plan provides a stable level of pension contributions and wipes out the city's obligation to pay for retiree health care.
The reduced debt load — combined with a state oversight board that
can reject future borrowing schemes and profligate spending — has made
Detroit debt an attractive investment, Buckfire said.
"It's
certainly not a distressed situation any longer," Buckfire said. "The
market, I believe, is now reaccepting Detroit's credit."
He went a step further.
"I
will actually argue that the credit of Detroit will actually be better
than the credit of other major cities that have not dealt with their"
pension and health care liabilities, he testified.
Buckfire's
remarks came as the city is expected to borrow $325 million in exit
financing from Barclays to pay off its interest-rate swaps, pay off an
earlier bankruptcy loan and boost its cash reserves. The city was
previously expected to borrow $275 million.
Judge Steven Rhodes
pressed Buckfire to say whether the city could procure unsecured exit
financing instead of the Barclays loan, which would be secured by the
city's income tax revenue.
Buckfire said it's possible at a premium of $500,000 to $1 million per year.
Detroit
City Council already approved the higher Barclays loan, but the city
needs Rhodes to sign off on the loan when he decides whether to approve
the city's sweeping restructuring plan.
Buckfire testified that
the state's Financial Review Commission is crucial to providing "another
check and balance" for the city and will give lenders confidence in
Detroit's finances.
"We believe that will give the city the ability to access capital post-bankruptcy at the lowest possible cost," he said.
Still,
he acknowledged that the city's plan to reinvest $1.4 billion over 10
years to rehabilitate basic services is a risk factor in the city's
finances. That is, the city may not have enough money to pay for the
upgraded services.
But he said the plan of adjustment allows the
city to defer the reinvestment plan to free up enough cash to repay its
debts, if necessary.
The trial continues Wednesday with
billionaire buisnessman Dan Gilbert expected to testify about blight
removal, and emergency manager Kevyn Orr to testify about the plan of
adjustment.
