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How Covid has transformed banking, financial services

Thanks to the push for zero-contact interactions, banks and financial institutions have had to opt for digitised modes of functioning, leading to a major transformation in borrowing and lending processes.

Joydev Sengupta

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The pandemic has decimated thousands of lives and livelihoods in the last few months, impacting society everywhere at a very fundamental level. The business dailies repetitively narrate stories of yet another industry failing and stories of pathos in which hundreds more struggle to feed their family with the closing of each business.

Among this gloom and despondency, every industry did what it could to survive the period. However, the banking and financial services industry, or BFSI as it is called, took it to a different level altogether. The BFSI used the pandemic as an opportunity to reinvent itself, accelerating its own evolution as a digital avatar. The execution of documents, KYC, security creation and recovery of dues — all basic processes of lending underwent a sea change because of compulsions set by the pandemic. It would be tempting to conclude that this progress was due to the entrepreneurial spirit of the BFSI sector alone, but the fact is that the scale and pace of change are also in a large measure due to the regulators and the judicial system.

As any person who has ever availed a loan from a lender will testify, the process of doing so is very paper-intensive. It was customary to sign reams of paper, application forms, agreements, declarations, etc, and then more for identification (KYC) and security creation. Paper-intensive processes obviously have their challenges, not just for the borrower, but also for the lender who has to collect, process and secure every sheet of paper signed or collected. The human capital employed to collect or manage this paperwork also adds its own cost, making the historic processes sub-optimal.

 The onset of the pandemic changed the game for lenders. Bank staff could no longer physically obtain signatures on loan agreements. Stamping and registration before the relevant authorities being in public spaces were no longer considered safe, and no employee would agree to travel all over a city only to collect documents, at a risk to themselves and their families. The announcement of the moratoriums by the Reserve Bank of India was a temporary breather for some borrowers, but routine collection activities of sending notices, following up and collecting payments from borrowers, and litigation were severely impacted as postal and courier deliveries stalled.

Against this backdrop of systemic issues nationwide, owing to the fact that stopping lending activities for the duration of the pandemic was neither feasible nor practical, digitization of the processes with all its innovations grew in scale and popularity. The first and most obvious touchpoint was the execution of loan documents where the manual intervention of a borrower signing the loan documents physically was replaced by the use of an Aadhaar-based e-signature facility introduced by the government and administered by NSDL. E-Sign is an online electronic signature service which permits an Aadhaar cardholder to sign a document after his or her Biometrics/One Time Password authentication is carried out, thus requiring no paper-based application forms or documents. Lenders have started using this e-signature facility instead of obtaining physical signatures on loan documents to provide loans to borrowers in need during the pandemic, providing muchneeded succour to them.

At the heart of any financial transaction is a process called KYC, or to use its full form, Know Your Customer. As the name itself suggests, every banker and lender needs to “know” their customer before offering products and services to them. The process is not one where someone merely collects the identification documents of a customer, but one where they crosscheck and verify every bit of the data and documentation they obtain from a customer, including the place of business, residence, etc. This is often a tedious activity inasmuch as it calls for multiple visits to collect the papers, seeking attestations, clarifications and additional paperwork to really get to know the customer, and complete the statutory requirements. In a series of moves predating the pandemic, the Reserve Bank of India had, in tandem with the government, sought to create repositories of borrowers’ data through CKYC and information utilities. In effect, a borrower’s details recorded across the entire network of banks and financial institutions was sought to be securely stored and used as per the borrower’s explicit consent for the borrower’s needs using CKYC. The information utilities, on the other hand, seek to track loans of all kinds so that lenders make an informed choice before offering and loading customers with financial liabilities, which they could ill afford. To these far-reaching initiatives, the Reserve Bank added video KYC, a process that would allow the verification of the antecedents of a customer over a live video feed, thus reducing the regulatory burden on both the customer and also the banks and institutions. As on date, banking majors such as ICICI and Kotak have already launched their video KYC offerings, with press reports suggesting that HDFC Bank is expected to do so soon too and count itself among the early adopters.

Many people will remember that in the not too distant past, procuring stamp paper for documents, be it for availing loans or even making a simple affidavit, would be an onerous task. Horror stories about stamp vendors would abound, overcharging was rife, and the availability of the required denominations was always a challenge. The fact that we do not face such issues today is a tribute to the governments of the day, both central and state, making changes in the law allowing franking, and also creating infrastructure where people of certain states can pay stamp duty from the comfort of their homes and print out the stamp paper certificate. In Maharashtra, one can simply obtain a challan by paying the stamp duty and affixing it to the document. Initiatives of this kind have a huge impact in terms of convenience and cost for people, more so when a person is seeking to avail a loan during the pandemic. The borrower and even the lender is no longer dependent on a stamp vendor to deliver the requisite quantity of stamp paper, and financial assistance is not held up on this count.

 This is not all, of course. As far back as 2013, the government of Maharashtra took a landmark step when it enacted the Maharashtra e-Registration and e-Filing Rules 2013, permitting online registration of documents using a special module developed by the office of the Inspector General of Registration. Anyone who has ever purchased property or gotten any document registered would remember the serpentine queues at the registration offices all over the country, often located inconveniently, and requiring one to take off from work. The 2013 Rules provide a credible alternative as they allow people to register their documents online. Imagine the difference this step alone would make to the housing finance industry where people who want to complete the formalities for loans required urgently for their dream home but have been justifiably wary of approaching an office during a pandemic where hundreds of people come for their work. Registrations of leases for properties on rent, new purchases of land and residential property would no longer be dependent on when the office opens for business but can be done safely and securely without endangering the parties. For every lender seeking to create security on newly purchased property, transaction execution would be so much simpler, safer and efficient.

It is fairly well known by now that the banking and financial services industry is expecting a significant amount of defaults and non-performing assets in the months to come. Communication with borrowers, including following up to collect past dues and initiate legal action, was impacted when the lockdowns began. The unavailability of postal and courier services meant that notices requiring a defaulter to either pay on time or to respond to a demand made or take cognisance of a court hearing could not be delivered physically. A common problem which occurs even when there is no pandemic is that defaulting borrowers often change their residence and disappear without a forwarding address with the intention of avoiding their creditors. The fact that not just recovery activity was carried out, but various notices and documents related to court proceedings were also delivered to their recipients, was actually due to a series of measures initiated by the Supreme Court of India and implemented by the High Courts and the rest of the judiciary. While the use of email for sending out notices was mandated by the Supreme Court long before the pandemic arrived, the use of instant messaging services such as WhatsApp was formally blessed by the highest court in the country and immediately put into practice in July 2020.

The aftermath of the pandemic will probably be felt in the immediate future as well. The only saving grace seems to be that human ingenuity and innovations like the e-sign, the changes in stamping, registration and use of technology in communicating with borrowers look like they are here to stay.

Joydev Sengupta is a practising lawyer, specialising in laws relating to supply chain financing, digital lending and payment systems. The views expressed are personal.

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Former Assam CM Tarun Gogoi shows some improvement but still critical

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The health of former Assam Chief Minister Tarun Gogoi has slightly improved after deteriorating on Saturday, the Superintendent of Gauhati Medical College and Hospital, where he is admitted, said on Sunday. His condition, however, is still critical.

“Last evening former Assam Chief Minister Tarun Gogoi’s health deteriorated so we intubated him, he was critical yesterday. His AGB (arterial blood gas) test and parameters are slightly better today,” hospital Superintendent Dr Abhijit Sarma told ANI here.

Gogoi’s heath had deteriorated on Saturday. He was “critical” and on ventilator support following post-Covid complications. There were also reports that Gogoi is suffering from multi-organ failure.’

The 86-year-old Congress leader had become “completely unconscious” on Saturday afternoon after difficulty in breathing, Assam Health Minister Himanta Biswa Sarma said. He also suffered multiple organ failure, the minister confirmed.

Since Saturday, Gogoi has been on mechanical life support at the Gauhati Medical College and Hospital, where a team of doctors is monitoring his health and efforts are being made to revive his organs with medicines and dialysis.

The GMCH doctors are in constant touch with experts from Delhi’s premier All India Institute of Medical Sciences who have ruled out the possibility of shifting Gogoi outside the state in this condition.

Tarun Gogoi’s son, Congress leader and MP Gaurav Gogoi, is at the hospital.

The three-time former Assam CM had tested positive for Covid-19 in August. On 26 October, he had thanked the medical team at Guwahati Medical College and Hospital including the specialists, doctors, nurses, staff, for their “excellent care for the past two months” and had said that he looked forward to continuing his recovery at home under medical supervision.

With agency inputs

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Bharti Singh, her husband sent to judicial custody till 4 December

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On Sunday, a court in Mumbai sent comedian Bharti Singh and her husband Haarsh Limbachiyaa to judicial custody till 4 December. The two were arrested by the Narcotics Control Bureau (NCB) in connection with the alleged consumption of cannabis.

Before producing the couple in the court, the NCB took them to the hospital for medical examination.

Bharti Singh was held on Saturday while Haarsh Limbachiyaa was arrested a day later on Sunday.

“Charges of consumption of drugs have been invoked against them,” said Sameer Wankhede, Zonal Director of the NCB, Mumbai.

NCB on Saturday raided the production office and house of comedian Bharti Singh and recovered 86.5 grams of ganja (cannabis) from both places.

The NCB had earlier raided a place in Khar Danda area and nabbed a trafficker aged 21 years with various drugs including 15 blots of LSD (commercial quantity), ganja (40 grams), and Nitrazepam (psychotropic medicines). In follow up and in corroboration with previous inputs, the NCB raided the production office and house of comedian Bharti Singh.

This comes as the probe, which began from the drug case in connection with the death of actor Sushant Singh Rajput, continues to expand to the alleged drug abuse by Bollywood celebrities.

Recently, a raid was also conducted at the residence of actor Arjun Rampal, after which he and his girlfriend were summoned by the NCB for questioning in the matter.

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With rise in respiratory diseases, Covid-hit Delhi in a health soup

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Amid the massive spike in Covid-19 cases in the national capital, Delhi-NCR has another cause for big concern: Deadly smog and its health implications. With pollution seeing a big rise with the first hint of winter in the sight, health experts on Sunday said they have seen a substantial increase in patients with respiratory disorders in the Delhi-NCR region.

Air pollution is an important cause of worsening of respiratory disorders, including sinusitis, allergic rhinitis, bronchitis and respiratory difficulty in those patients who do not smoke or have pre-asthmatic conditions.

According to experts, air pollution also plays a significant role in making Covid infections worse. Dr Praveen Gupta, Director and Head, Neurology, Fortis Hospital in Gurugram told IANS: “Pollution has been identified as a leading cause of stroke and heart disease increasing the risk by 25 per cent in people who do not have risk factors for stroke or any heart ailment.”

“Exposure to high levels of air pollutants may cause irritation to the eyes, nose and throat, wheezing, coughing, breathing problems. Air pollution can also affect existing lung and heart conditions,” he added.

Smog can cause irritation in the eyes, throat and can damage the lungs, can also lead to fatigue, migraine, headaches, anxiety and depression.

“It can also worsen the skin, cause allergic disorders as well as significant hair problems,” Gupta added.

He has observed a 25 per cent increase in patients with respiratory disorders in the OPD in past weeks.

Dr. Puneet Khanna, HOD and consultant-Respiratory Medicine, HCMCT Manipal Hospitals in Delhi said that as the winter approaches, smog is exacerbated by low temperature and slow movement of air.

“Ground-level ozone O3 and PM2.5 play a significant role in the formation of smog. Besides industrial activities and public transportation, stubble burning and road dust are majorly responsible for smog in winters,” Khanna informed.

The vulnerable group include newborns and children, pregnant women, elderly and those with pre-existing health conditions such as asthma, chronic bronchitis, diabetics, angina and cardiac diseases.

Peaks in air pollution often irritate the upper and lower respiratory system making it harder to breathe besides aggravating symptoms of asthma and COPD.

According to Dr. Khanna, even a small increase in air pollution leads to heavy rush in OPDs, increased emergency room visits, hospitalisations and deaths. Long-term risks include lung cancer and reduction in life expectancy.

“During smog periods, these people should avoid intense physical activity outdoors particularly in morning and evening hours. They should venture out if absolutely essential and preferably wear an N95 mask during peak hours,” he said.

Dr. Navneet Sood, Pulmonary Consultant, Dharamshila Narayana Superspeciality Hospital said that “the apparent effect of air amid Covid pandemic is creating more problems for people living in Delhi-NCR”.

“A comprehensive approach is needed to deal with the problem. Wear a mask whenever stepping out of the house, avoid going out early morning and late evening, follow every precaution related to Covid-19,” Sood advised.

With IANS inputs

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Moderna may cost up to Rs 2,700 per dose, Sputnik V to be much less

Moderna CEO Stephane Bancel says that governments willing to purchase Covid-19 vaccine may have to shell out Rs 1,854 and Rs 2,744 per dose—depending on the size of the order.

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Moderna CEO Stephane Bancel has said that governments seeking to purchase Moderna’s potential Covid-19 vaccine may have to shell out $25 and $37 per dose—which amounts to Rs 1,854 and Rs 2,744—depending on the size of the order. Bancel said that this would be a “fair price” and that the company was not interested in “maximum profit”.

However, on Sunday, the official Twitter handle for Russia’s Sputnik V tweeted that their vaccine will cost governments much less than that of Pfizer’s (estimated at Rs 1,446) and Moderna’s.

“Translating pharma lingo: the announced price of Pfizer of $19.50 and Moderna of $25-$37 per dose actually means their price of $39 and $50-$74 per person. Two doses are required per person for the Pfizer, Sputnik V and Moderna vaccines. The price of Sputnik V will be much lower,” said the tweet.

According to a spokesman for the Russian Direct Investment Fund (RDIF), RDIF is Russia’s sovereign wealth fund, the price of the Russian vaccine will be made public next week, TASS news agency reported.

Sputnik V is the world’s first registered vaccine against the Covid019 pandemic. It was developed by the Gamaleya National Research Centre for Epidemiology and Microbiology of the Russian Health Ministry. However, it was officially registered and given regulatory approval by the Russian government ahead of large-scale clinical trials.

According to the Russian Health Ministry, these vaccines have proved their ability to form lasting immunity for a period of up to two years.

The third, post-registration, stage of clinical tests for the vaccine had begun on August 25 and the first batch of the vaccine was dispatched to Russian regions on September 12, said the TASS report.

Meanwhile, US pharma giant Moderna said last week that its vaccine has shown more than 94.5 per cent effectiveness in preliminary data from the company’s ongoing study. Before Moderna, Pfizer and BioNTech had said that their vaccine candidate was found to be more than 90 per cent effective in preventing Covid-19.

Moderna is expecting to produce approximately 20 million doses of its mRNA-1273 vaccine by the end of 2020. The company said it remains on track to manufacture 500 million to 1 billion doses globally in 2021.

The Moderna CEO also said that his company was engaged in negotiations with the EU Commission for the delivery of its vaccine against Covid-19, adding that talks have been “constructive”, and that it was “only a matter of days” before the contract is signed.

On the other hand, Pfizer said on Friday that it was moving ahead with its request of asking the US regulators to grant emergency approval of its Covid-19 vaccine candidate.

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Won’t back down: Australian PM rebuffs Chinese grievance list

A Chinese official gave a dossier to Australian media containing 14 grievances, saying: ‘If you make China the enemy, China will be the enemy’.

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Australia will not bow to pressure from China, Prime Minister Scott Morrison said on Thursday after Beijing released a laundry list of complaints about the country. A Chinese official gave a dossier to Australian media containing 14 grievances, highlighting the increasingly fractious relationship between the two nations.

“If you make China the enemy, China will be the enemy,” a Chinese government official reportedly told three prominent outlets on Wednesday.

Among the complaints are Australia’s strict foreign interference laws, the country’s ban on Huawei’s involvement in its 5G network and decisions that blocked Chinese investment projects on “national security grounds”.

PM Morrison said the “unofficial document” came from the Chinese embassy and would not stop Australia from setting “our own laws and our own rules according to our national interest”.

“We won’t be compromising on the fact that we will set what our foreign investment laws are or how we build our 5G telecommunications networks or how we run our systems of protecting against interference Australia’s way we run our country,” the Australian PM told Channel Nine.

The document also claimed Canberra had engaged in “incessant wanton interference” in China’s affairs while singling out Australia’s call for an independent inquiry into the origins of Covid-19. It accused Australia of “siding with the US’ anti-China campaign and spreading disinformation” about where the virus originated—a particularly sore point for Beijing.

Relations between China and Australia have reached a new low in recent months, leaving Australian government ministers unable to persuade Chinese counterparts to even accept their phone calls. The discord has left Australian exporters exposed as their largest trading partner places a series of retaliatory bans on agricultural goods including beef, barley and timber.

With agency inputs

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Big B to do ‘Khushboo Gujarat Ki’ campaign around Kevadia

Amitabh Bachchan’s campaign will no longer be just about Kutch. The new tagline will be: ‘If you haven’t seen Kevadia, then you have not seen anything.’

Abhijit Bhatt

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Ever since Prime Minister Narendra Modi was the Chief Minister, he had a dream that Gujarat would become a tourism hub, now that dream is coming true. Gujarat’s tourist places have become world-famous, first after the development of Kutch and now the Statue of Unity and the development of Kevadia around it which is being considered to promote the campaign starring Amitabh Bachchan.

The ‘Khushboo Gujarat Ki’ campaign will no longer be just about Kutch. A senior government official said that the campaign is being planned around Kevadia. “If you haven’t seen Kevadia, then you have not seen anything,” the new tagline will say.

Sources reveal that the discussions have started that Big B is going to star in a new ad film to promote Kevadia’s tourism development around the Statue of Unity. The world’s tallest statue and the new attractions built around it have enhanced its tourism value.

The Gujarat government led by Chief Minister Vijay Rupani wants the ‘Khushboo Gujarat Ki’ campaign to attract the attention of the tourists from all over the world and this time only Kevadia would be there.

The earlier done ad films done for the campaign included Kutch, Gir, Buddhist Caves, Ambaji, Gujarati Handicraft, Saputara, Gujarat’s Architect Modhera’s Sun Temple and Ahmedabad. Since Kevadia has been revamped, the Gujarat government is now considering this campaign and shooting dates are likely to be announced soon. Once the campaign agreement and shooting dates are set, Amitabh Bachchan will come to Gujarat. Apart from the Statue of Unity in Kevadia, the veteran actor is likely to do jungle safari, river rafting and also visit Butterfly Garden. Amitabh Bachchan’s new ad film might be shot around these tourist spots.

Recently, Prime Minister Narendra Modi inaugurated 17 projects in Kevadia. Preparations are going on to invite Big B for international branding.

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