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Issue #3 Good morning all!
The RBI monetary policy committee meeting concluded this friday. The bank took one of its most dovish stances in recent history emphasising that it will extend its accommodative monetary policy stance for as long as required. It promised liquidity to banks and expanded central/state govt bond purchase program through OMO. Just about anyone who needs money can have it - Just ring up RBI 2 hours in advance.
If you are keen to know more, we shared on our Facebook & Instagram (see below) handles what some of the new measures announced actually mean.
IN TODAY'S NEWSLETTER
QUIZ What is the maximum amount of deposit insurance the DICGC provides per bank per person?
Hint - It was on our post on BEST Fixed Deposits and Risk Free Investments MARKET UPDATE SENSEX 40,509 +4.7% NIFTY 500 9,750 +6.5% Brent Crude $42.85 +9.1% Gold (per gram) Rs.5,041 +0.9% NEWS IN BRIEF
IN LESS THAN 200 WORDS (1/2)
Trend watching - Solar stocks surge in China 
Chinese president Xi Jinping announced last month at the virtual UN general assembly that China plans to go carbon neutral by 2060, 40 years from now. This stunned the entire world because China today consumes more coal the rest of the entire world put together. Over a quarter of all carbon dioxide emitted into the atmosphere is made in China. The country follows the footsteps of the EU and the UK that have pledged to go carbon-neutral by 2050.
Several solar stocks listed in the Hong Kong stock exchanged witnessed furious gains ranging from 50%-70%. The Chinese mainland stock exchange, which remained on a break for 8 days, reopened on Friday this week. Stocks of solar giants including Longi green energy (world’s largest solar company), Tongwei, Sungrow power witnessed massive gains (hit upper circuit).
India, the second largest consumer of coal, the third largest greenhouse gas emitter after China and US, has pledged to reduce carbon emission by a third in 2030 from 2005 levels. Less than 20% of our electricity is generated by renewable sources today. But with prices of solar energy falling (70% reduction in 5 years since 2014), pollution in major cities increasing (Delhi has the 2nd worst air quality index behind Beijing) and mounting international pressure, India will be forced to go the China way. Do you know the names of the solar companies listed on the exchange? IN LESS THAN 200 WORDS (2/2)
When elephants fight - PayTM vs. Google 
When elephants fight, it is the grass that often gets damaged. But, not so in the digital world. It all started when Google briefly banned PayTM from its app store in September for offering cashback through scratchcards and its fantasy sports app. Google called it 'gambling'. PayTM rightly pointed out that Google's Tez app offers similar cashback and rewards based on virtual gameplay. Truth be told, Tez Shots is banned in Tamil Nadu because of the state's lottery ban rule validating PayTM's claim.
Google also caused pain to several start-ups by modifying its app store policy to start charging 30% commission on digital purchases and by mandating payments through Google pay. PayTM launched an offensive this week against Google by launching its OWN mini app store within the PayTM app. While PayTM made a big deal out of it, it is really not. Google pay and PhonePe already have their own version of PayTM's mini app called Spot and Switch respectively. Realising what a PR nightmare this whole episode has been, Google deferred its policy change by 6 months to April 2022 to get app owners on board. At the end of it all, who is winning this fight? For a change, we the people! More competition is always good for consumers. COVER STORY
India, get ready for the credit revolution Credit is an extremely important engine that drives economic activity in the short run. The RBI knows this all too well. It has done a phenomenal job of increasing credit availability to individuals and businesses in India. The 33 scheduled commercial banks (SCBs) have collectively lent out over Rs.100 trillion rupees as of March 2020. 
In spite of all of this, India’s credit to GDP ratio, at 54%, is one of the lowest compared to its peers in the developing and developed world. 
The RBI, government and Nandan Nilekani’s crew have all been hard at work to resolve this - In a way that is unimaginable to the western world - Using Technology.
Have you heard about account aggregators? They are going to make financial data transfer possible at the click of a button. 
Have you heard about the OCEN framework? That is going to make credit available just about everywhere, for just about everyone and for just about everything - Perhaps even if you just want a loan to buy pizzas! 
Welcome to the future. Hit the link to read more. IN CASE YOU MISSED IT...
Mutual funds in India - Where to start? Part 1 
Imagine a box of chocolates that you want to buy in the hope that its price will go up. There is just one problem with it. You cannot buy the whole box on your own because it is too expensive. So you pool in money with other people to buy the whole box hoping that you can then sell it when its price has gone up. In most cases, the chocolatier (the expert) decides which chocolates to buy based on his opinion of which ones will appreciate in price – rum & raisin, marzipans, eclairs, toffees etc. This is exactly the idea behind a mutual fund.
A mutual fund is an investment vehicle where large numbers of investors come together and pool their money in to invest in the stock market. In most cases, the fund manager (chocolatier) decides which shares to buy depending upon his assessment of which ones will go up in price. At the end of each day, the fund calculates its total worth based on prices of stocks it owns and publishes what is known as Net Asset Value or NAV. This NAV is the price per unit of the mutual fund. In our example, the price of one share of that box of chocolate. ANSWER TO QUIZ Rs.5 Lakhs Give yourself a pat on the back if you got that right 🙂 READ/WATCH/LISTEN
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