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RBI Mandates Linking Loan Rate to Repo Rate, 419mn Facebook Users' Data Leaked, UK Election Likely Soon

Professor of Financial Economics and Part-time Value Investor, Transfin.
Sep 5, 2019 1:42 PM 4 min read

Reliance Jio Fibre broadband set to challenge streaming platforms. RBI mandates linking of loans to external benchmarks. Google Pay records 60% of all UPI transactions. NPCI explores imposing cap on UPI entities. Facebook reports data leak affecting 419 million users. Samsung launches blockchain-friendly smartphone. US and China agree to sit down for trade talks. The Brexit question goes back to the British people.


Moving on to the top Business news of the day:



Reliance is set to challenge streaming platforms through Jio Fiber.

Hello from the Other Side: Reliance Jio is set to combat DTH players by offering free connections to their broadband customers that includes free voice calls for life, free set-top-boxes and free TVs along with high speed internet at a price of INR700. (Watch a take on Jio Fiber here.)

Broadband Ambani: The Mukesh Ambani service would include premium streaming content. Although, in order to compete with big streaming platforms they will need to create their own content.



RBI makes linking of loans to external benchmarks mandatory.

When Push Comes to Shove: In an attempt to push a more effective transmission of rate cuts, the Reserve Bank of India has asked banks to link loans to retail, personal and Micro, Small and Medium enterprises (MSME) borrowers to an external benchmark from October 1.
Banks have been allowed to choose between RBI’s repo rate, GoI’s three-month treasury bill yield published by the Financial Benchmarks India Private Ltd (FBIL), Government’s six-month treasury bill yield published by the FBIL or any other benchmark market interest rate published by the FBIL.
How Will This Affect Me?: The move will make home loans and auto loans cheaper, with banks being forced to pass on the rate cuts made by the RBI in the recent past. 
Previously: The Monetary Policy Committee has reduced the repo rate by 2.6% since 2014, but the banks have reduced their lending rates by only c. 1.1% during this period.
Read RBI’s Press Release here.



Google Pay accounts for 60% of all UPI transactions, Razorpay data shows. 

Pay-Z: When it comes to UPI transactions, Google Pay is the undisputed king in India. Almost 60% of UPI transactions in August 2019 were made on the real-time payments app, Razorpay data shows. PhonePe and Paytm lagged behind, with their shares being 24.91% and 5.93% respectively. BHIM was #4 on the list, powering 4.73% of UPI transactions. Numbers for app-wise growth also place Google Pay in a comfortable position – it saw a 14.6% rise in transactions.
Paytm, however, disputes the numbers, saying they only reflect transactions recorded on Razarpay’s platform.

NPCI explores imposing cap on UPI transactions on non-banking platforms.

Limiting Transactions: Addressing concerns that concentration of transactions in the hands of non-banking players like PhonePe and Google Pay could be detrimental to the digital payments ecosystem, the National Payments Corporation of India is reportedly mulling over imposing a market share cap or transaction value cap on these UPI entities. More details here.


RBI Mandates Linking Loan Rate to Repo Rate, 419mn Facebook Users' Data Leaked, UK Election Likely Soon



419 million accounts’ details including phone numbers leaked in latest Facebook data breach. 

Numbers Dump: Facebook is back in the news. And of course it’s because of another privacy violation. An exposed server was found to have more than 419 million records across multiple databases documenting users’ names, phone numbers, location and other details. 133mn of the accounts exposed are of US-based Facebook users while tens of millions of others are from Vietnam and the UK. Indian users’ information was most likely not affected by this breach.

Samsung launches another blockchain-friendly smartphone.

Blockchain Galaxy: Samsung is launching another blockchain-friendly smartphone. The “KlaytnPhone” will be a Galaxy Note 10 variant and will come with a crypto wallet and blockchain apps. It will reportedly go on sale today in South Korea and will come with a price tag of $1,000.


RBI Mandates Linking Loan Rate to Repo Rate, 419mn Facebook Users' Data Leaked, UK Election Likely Soon 



US and China agree to sit down for trade talks in early October. 

Trumpian Rhapsody: For what seems to be the umpteenth time, US-China trade talks have overcome an impasse and both sides have agreed to meet for another round of negotiations. China has said its trade representatives talked to their American counterparts over the phone recently and they agreed to meet in early October.

The Brexit question goes back to the people – another general election is in the offing.

A Second Referendum Through Other Means: The UK is most likely heading towards a general election in the coming weeks. Which is for the best because now the Brexit question will again be put back to the people. Since the 2016 referendum British politics has been paralysed and infinitely polarised, especially so after the 2017 snap election, which sent to Parliament a diverse array of MPs with a kaleidoscope of Brexit views. A new election will put the question back to the electorate and instruct MPs on the pulse of public opinion.


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