Cable companies are looking for ways to limit password sharing

Cable companies are over people sharing logins with all their friends and family. As first spotted by Bloomberg, Charter CEO Tom Rutledge said at the annual UBS conference this month: “There’s lots of extra streams, there’s lots of extra passwords, there’s lots of people who could get free service.”

Charter has made cracking down on password sharing a priority during negotiations with channel providers. Bloomberg reports that the company requested Viacom help limit password sharing by reducing the number of simultaneous streams allowed on its apps. Rutledge tells Bloomberg that channel owners bear most of the blame for the current cable situation. They don’t secure their apps and, he says, “they devalued their own product in a dramatic way.”

Meanwhile, ESPN tells Bloomberg it wants to work with channel distributors to verify subscribers whenever there are a large number of people streaming through the channel’s app.

[“Source-timesofindia”]

Cryptocurrency: The Dark Side Of Investing

Disclosure: The author and American Dream Investing own shares of Disney, but have not invested in cryptocurrencies at the time of this writing.

Like the characters in the latest Star Wars film, I’m grappling with an inner struggle.

Do I stick to my core investing values and principles and ignore the cryptocurrency craze? Or, do I succumb to the “dark side” and buy some Litecoin or Bitcoin, hoping that demand keeps rising and prices continue to soar?

I know the reasons why I bought Walt Disney DIS -1.12%shares three years ago and why I’ve held onto them: they have an unparalleled collection of entertainment properties like Star Wars and Marvel, strong management, growing free cash flow and a history of raising their (admittedly paltry) dividend. It’s been a mostly solid, albeit unspectacular stock in my portfolio, despite the fact that its year to date performance is significantly trailing its broader index.

On a fundamental level, Disney passes my litmus test for an investment. Cryptocurrencies, on the other hand, do not. Despite that, I’m still tempted to make a calculated play on cryptos and their potential long-term future after careful consideration and due diligence.

I understand that there’s a basic concept of supply and demand at work here that’s driving prices so high. There will only be 21 million Bitcoins mined and afterwards, no more will be added to the circulation.

But I can’t pay my rent using Bitcoin or buy health insurance with Ethereum (not yet, at least). There’s a high risk of fraud, market manipulation and account hacking. The volatility of the crypto market is enough to make a professional rollercoaster tester queasy.

Still, the money keeps pouring in and prices continue to rise. CNBC spends half the trading day discussing the markets and the rest of the time talking about Bitcoin.

[“Source-timesofindia”]

The Next 10 Things Small Business Owners Should Do For Social Media Success

10 Actionable Social Media Tips for Small Business Owners

Social media is a tricky business. It seems so simple on the face of it and you may have launched your business profiles thinking that everything would take off if you only started posting. Sadly, that is rarely the case and many small business owners have hit their head against the wall trying to make headway, without any real results.

Don’t worry, it isn’t nearly as mysterious as you may be fearing. While social media has a tendency to change and adapt to new trends and features, not to mention shift with the way that users themselves choose to use it, there are some actionable social media tips that you can put into play right this second to begin seeing results.

Actionable Social Media Tips

Hire a Social Media Manager

This may seem like trite advice but it is actually a really good strategy. Not to run your social media campaigns, but to teach you how to do it. Here is what you do: put out an ad for a temporary social media manager.

Set the contract for as long as your budget allows and specify that part of the job will be setting up a campaign and showing you how to continue it once the contract ends. Watch the steps carefully because that is how you will learn.

Use a Productive Social Media Scheduling Solution

Yes, you need to be there interacting with your social media community on a regular basis, but there’s other work to be done too! You cannot quit everything and just socialize (especially if you cannot afford to hire a social media manager just yet).

So what you do? Scheduling social media updates is the answer. You can even schedule social media updates 6 or 12 months ahead: Think about holidays, for example! You’ll be busy but you need your social media account to remain active, so use the slower seasons to schedule social media updates for the holidays.

There are a few solid social media scheduling solutions out there.

Get a More Comprehensive Dashboard

Once you are ready to launch your campaigns, you will want a solid dashboard where you can schedule posts, watch analytics, etc. There are plenty of options right now for a social media dashboard. I’m currently using Cyfe.

Set Smaller Goals and Build From There

When you are talking about a big business it is good to look at long term goals and then set milestones and plans to meet them. For small businesses that don’t have an entire marketing team and millions in the budget on hand, making smaller goals and focusing on those is a far better idea.

Set little milestones to work on and monitor your progress. For example, instead of saying, “I will have 10,000 followers by the end of the year on Instagram” try “I will grow by at least 100 followers per month.” If you overshoot it, hey… good for you.

Go To Where Your Customers Are

Guess what? The platform you chooses matters… a lot. Facebook, for example, is popular with people over the age of 30, particularly those over the age of 40. But if your target audience is under 25 you have next to no chance of reaching them there. They are almost entirely on Instagram and Snapchat.

The same goes for Twitter, which is becoming more a home of influencers than normal users. Where are the highest concentration of women? Pinterest. Where can you launch potentially viral content? Reddit. The list goes well beyond the basics and if you don’t know where your audience is hanging out then you won’t be able to reach them.

Quality Over Quantity (But Quantity, Too)

Striking a balance here can be really hard. On one hand, you want to be able to post often enough that your profile grows. But on the other, crappy content is still crappy content.

If you are just churning out useless posts like inspirational quotes or jokes, especially if you don’t have a fair amount of original content, you are nothing more than a glorified bot account. You may have noticed the best brand social media sites out there are the ones that manage to really engage with their customers. So post often, post consistently, but only post good stuff.

Don’t Get Too Bogged Down In Analytics

Analytics are helpful and most brands use them in order to measure their progress and results, while coming up with new campaigns using that data. They are great to have. But they are also not everything.

The truth is that unless you are a well versed social media mogul, you probably aren’t going to understand the majority of the figures analytics give you. The important ones are the more basic: growth over time and how it correlates with strategies in play at each peak. You may also be able to learn more about your demographic, such as when they are most active.

Learn the Pareto Principle

The Pareto Principle is simple: for every 100 percent of your content, 80 percent should be engagement, 20 percent should be promotional.

See? Easy. I won’t even bother going further into it.

Think Visually

Another no brainer, visual content is pretty much the only way to go. It won’t make up all of what you post, but it should make up most of it.

Posts with visual media are more likely to be shared, commented on, saved and reach viral status. All of these are things you want, so invest most of your time in visual forms of social content.

Get Involved In the Community

This is one of the best things you can do. You are a local small business. You have ties to the community where you operate. So start getting involved: go to festivals, reach out to local news, engage with people via geolocation, get involved in local charities.

Have some actionable social media tips for small businesses looking to get into the game? Let us know in the comments!

[“Source-smallbiztrends”]a

ZipRecruiter and Square Partner to Help Small Businesses Find Job Candidates

ZipRecruiter and Square Partner to Help Small Businesses Find Job Candidates

Job application aggregator ZipRecruiter and digital payment solution Square (NYSE: SQ) have formed a new partnership which will help small businesses find candidates for job openings.

Under this partnership, ZipRecruiter will be the first and only hiring service in Square’s App Marketplace. The integration is going to give the 225,000 active Square customers, many small businesses, access to the talent available in ZipRecruiter.

Finding the right person for the job is no easy task, and for small businesses, it is even more difficult. When ZipRecruiter formed a similar partnership with Facebook earlier this year, Facebook’s Product Manager for Jobs, Gaurav Dosi, told TechCrunch, “40 percent of US small businesses report that filling jobs was more difficult than they expected, which is challenging when you consider that these small businesses also employ nearly half of the country’s workforce.”

The Integration of ZipRecruiter and Square

Small businesses already using Square or its App Marketplace can now log-on and post an opening to find candidates.

In a post on the ZipRecruiter blog, Director of Marketing PPartnerships Keren Zemer writes, “The App Marketplace is a convenient place where hundreds of thousands of active Square invoice sellers can find trusted and popular business apps endorsed by Square to help with their everyday operational needs.”

As the first and only hiring service to be featured in Square’s App Marketplace, ZipRecruiter will be able to take advantage of the already engaged user base using Square hardware and software. ZipRecruiter brings its technology, including hiring tools for small businesses, to the relationship.

For businesses not familiar with ZipRecruiter, the app will be available for free with a four-day trial. This will let business owners get familiar with the platform, and if they find a candidate within the four days even better, because it will be free.

Benefit for Small Business

Large organizations have HR departments to find the right candidates. For most small businesses, an HR department is not even an option. This partnership is going to help small companies find local help with a simplified process for employees and employers alike.

[“Source-smallbiztrends”]

5 Personal Finance Hacks to Help You Invest

Image result for 5 Personal Finance Hacks to Help You Invest

In this video, Entrepreneur Network partner Phil Town gives five hacks you can use to pay off debt, avoid fees and save for the future. His first piece of advice is to use a zero-interest credit card to pay off your debt. That way, you aren’t accruing more debt over time.

Next, Town advises that you should make bi-weekly payments on your debt, rather than monthly, and that you should pay more than the minimum on your debt for at least the first few years.

Click play to learn more financial tricks from Phil Town.

Related: 5 Great Money Habits That Will Set Your Kids Up for Financial Success

Entrepreneur Network is a premium video network providing entertainment, education and inspiration from successful entrepreneurs and thought leaders. We provide expertise and opportunities to accelerate brand growth and effectively monetize video and audio content distributed across all digital platforms for the business genre.

EN is partnered with hundreds of top YouTube channels in the business vertical. Watch video from our network partners on demand on Amazon Fire, Roku, Apple TV and the Entrepreneur App available on iOS and Android devices.

Click here to become a part of this growing video network.

[“Source-entrepreneur”]

The best of 2017 in personal finance advice

In 2004, my daughter, who was 9 at the time, gave me a Christmas present that I shall treasure for the rest of my life.

Olivia created “Yo Mamma: Sayings from My Momma,” a book of all the things I would repeat to her and her siblings. As you might imagine, most of the sayings were about money.

Here are two of my favorite quotes that made it into the book.

— “Do you have a job?” (I started saying this as soon as the kids started talking and asking for stuff.)

— “Do you have money to pay for that?” (A standard question when she tried to put something in the shopping cart.)

I smile every time I pull her book from my bookshelf.

So, with Olivia’s book in mind, I thought I’d pull five of my quotes over the past year that resonated with readers.

— “If debt were a person, I’d slap it.” I said this in a column about good debt versus bad debt. I hate all debt. As I wrote, I know my views are extreme, almost un-American, in a nation that relies so heavily personally and politically on borrowing. But when it comes to money, what you tell yourself matters. When we use positive adjectives to describe debt, we minimize the financial bondage it creates.

— “Empathy does not equal endorsement.” In April, I recommended for the Color of Money Book Club an essay by novelist and former Washington Post book critic William McPherson. McPherson died this past spring and I thought the essay “Falling (You can read it at http://bit.ly/Falling_essay) was a powerful look at how this once privileged person ended up poor because of a series of bad decisions.

“Life is about choices,” one reader wrote. “One does not ‘fall into poverty.’ One walks into it with open arms.”

Many people feel that there shouldn’t be a government safety net for the irresponsible. They only want to help the poor they deem worthy of assistance. But that’s a dangerous means test. It leaves no room for people to make mistakes. And we are all fallible. Advocating for government supported anti-poverty programs doesn’t mean you absolve people of personal responsibility.

What do we as a society owe the poor? We owe them empathy. We owe them a safety net that gives them a chance to get back on their feet — and maybe even survive.

— “When it comes to helping your young adult to successfully launch — and stay in flight — there’s no place like home.” A lot of young adults are moving back in with their parents, often because they are saddled with student loans.

“More young people today live in their parents’ home than in any other arrangement,” according to the Census Bureau.

Is this a good thing?

It’s not a bad thing necessarily. I encourage young adults who have burdensome debt to move home if they can. Instead of paying rent they can attack the debt.

You may think that living at home is a failure to launch or that it delays the all-important lesson of learning to be independent. But we should remove the stigma of young adults returning home as a financial embarrassment. It is not, especially if parents allowed or encouraged a student to attend a college that necessitated some heavy borrowing.

— “Sales are bait, and you have to keep in mind that you never save when you spend.”

One of my new favorite books is “Dollars and Sense: How We Misthink Money and How to Spend Smarter” by Dan Ariely and Jeff Kreisler. It’s a brilliant and accessible look at behavioral economics. Ariely and Kreisler agree with me that consumers are too driven by a discount and that can lead to some bad decision making.

— “Should you invest in bitcoins for retirement? Only if you think riding a roller coaster without a safety harness is a good idea.”

I wrote this in response to questions from some readers on whether they should buy bitcoin, an electronic currency that has skyrocketed, causing people to ignore caution.

As I told folks, if you can afford to lose every penny you invest and not miss any sleep over the loss, go ahead and invest in bitcoin. However, if you have a regular job, a mortgage, kids to put through college, credit card debt, a pitiful emergency fund and a lackluster retirement account, don’t even think about buying bitcoin. The currency may be virtual, but the investment risk is very real.

Tell me your favorite financial quote, one that may help you do better with your money in 2018. Send me an email to colorofmoney@washpost.com. I love quotations, which are a shorthand way to remember some important life lessons.

[“Source-washingtonpost”]

10 Ideas for Communicating With Target Customers, Team Members and More

Communication is an incredibly important part of running a successful business. You need to be able to effectively communicate with your target customers and the members of your own team. But doing so requires a lot of skill and strategy.

This week, members of our small business community share tips for targeting your ideal customer, creating effective communication in the workplace and more.

Read on for a full list of valuable resources.

Use These Questions to Target Your Ideal Customer

In order to target your ideal customers, you first need to find out who he or she is. In this post, Brittany Taylor of See Britt Write shares a long list of 80 questions you can use to find out who your target customers are.

Create Effective Communication in the Workplace

If you want your business to succeed, you need to make sure that your team can work well together. And to do that, you need to create a system of effective communication in the workplace. Kelly Riggs of Business LockerRoom discusses the importance of effective communication at work, along with some tips for creating such an environment.

Make People Fall in Love With Your Online Store

Running an ecommerce business means you have to convince customers to fall in love with your store if you want them to shop with you again and again. Vanhishikha Bhargava of Exit Bee includes some tips for doing just that. And BizSugar members also share their input on the post here.

Make the Most of Marketing Automation

There are so many different services and processes out there today to help make your marketing tasks easier. But marketing automation isn’t a magic solution. Stacy Jackson of Jackson Marketing Services sharessome tips to ensure that your marketing automation actually increases the effectiveness of your overall marketing plan.

Add These Must Haves to Your About Page

Your about page is an important part of your website because it tells visitors and potential customers who you are and why they should want to work with you. This post by Crystal Rice of PixelSmith includes three must-haves to include on your about page for contractors, but most of the points are relevant to other industries as well.

Get Over These Self Publishing Obstacles

People come up with all kinds of excuses for not writing or publishing their own books. But self publishing is now easier than ever, thanks to platforms like Amazon Direct Publishing. Vinay Kachhara of Aha!NOW shares some reasons why you should get over those obstacles. And members of the BizSugar community also discuss the post here.

Check Out This Guide to Local SEO

When marketing a local business, it’s important that you make it as easy as possible for local customers to find you via search engines. If you’re starting a local business or just want to improve your local SEO strategy, check out this guide to local SEO by Chris Babajide on WP Site Updates.

Create a Call to Action That People Actually Click

So you’ve added a call to action on your website, but it’s not getting any results. There can be several reasons why your CTA isn’t getting the results you hoped for. This post by Nicole Dieker on KlientBoost includes some potential problems your call to action may have, along with ways to fix them. BizSugar members also share thoughts on the post here.

Keep Both Your Body and Your Biz in Shape

To have sustainable success in business, you also need to take care of your own health. And since January is a popular time for people to renew their health goals, this post by Nellie Akalp of CorpNet includes some tips for keeping both your body and your business in shape.

Don’t Be Fooled by Prior Business Models

When you’re running a startup, it can be easy to fall into the trap of thinking that a business model will work simply because it has worked in the past. But that isn’t a great strategy, as this post by Martin Zwilling on Startup Professionals Musings points out. You can also see discussion about the post in the BizSugar community.

If you’d like to suggest your favorite small business content to be considered for an upcoming community article, please send your news tips to:  sbtips@gmail.com.

[“Source-smallbiztrends”]

Beware of the True Cost of Private Student Loans

Image result for Beware of the True Cost of Private Student Loans

Most of my young clients join the ranks of the professional world with some amount of student debt. It’s this very reason that any family with a student getting ready for college or graduate studies should read on.

Recently, I took on a client who came to me with $168,000 in total student loans. To make following the story easier we will give my client a fictitious name and call her Anne. Anne obtained her degree at a private institution and graduated with a substantial amount of debt. Her level of debt isn’t unlike most young adults without wealthy parents to pay the astronomical cost of tuition. However, Anne could have saved well over $100,000 on her student loans. (For more, see: 10 Tips for Managing Your Student Loan Debt.)

Anne borrowed $97,000 of her $168,000 from private lenders Sallie Mae and Wells Fargo. Yes, Sallie Mae is a private lender. Unfortunately, too many borrowers assume Sallie Mae is a part of the federal lending program. The confusion is that up until 2014, Sallie Mae used to be the loan service provider for two federal loan programs: the William D. Ford Federal Direct Loan Program and Federal Family Education Loan (FFEL) program. On October 13, 2014, Sallie Mae split into two companies and the part that services federal loans became Navient.

Unfortunately, what I have learned from analyzing so many client student loan plans is that most borrowers do not understand the terms and conditions of their loans. Nor do they know the proper channels to follow before choosing a private lender. These are fundamental problems that result in the average person potentially finding herself getting taken to the cleaners.

Borrowing Options

For most families, borrowing might be the only option. In order to help aid in that decision process, use the following hierarchy when borrowing at the undergraduate level (best to worst):

  • Perkins Loans – $5,500/year
  • Direct Subsidized – $5,500/year
  • Direct Unsubsidized – $20,500/year (less any subsidized amount received)
  • Parent PLUS Loans
  • Private Loans – Fixed rate
  • Private Loans – Variable rate

For those looking for higher learning opportunities at the graduate level, like my client Anne, federal loans should be the first choice. The common misconception is that a grad student can only borrow $20,500 per year from the federal program, with a lifetime limit of $138,500. This is true with the direct unsubsidized program, However, the Graduate PLUS program allows a student to borrow up to the cost of attendance, minus any financial aid received. (For more, see: Student Loans: Paying Off Your Debt Faster.)

It is entirely possible to pay 100% of the cost of tuition with federal loans. In order to qualify for the Graduate PLUS program, a student must have sound creditworthiness. So for students with bad credit, they may need a parent to guarantee the loan and co-sign. Assuming that parent trusts and understands their credit is tied to their child, the federal program remains a better alternative to borrowing from a private lender.

Some parents prefer to see their kids have some skin in the game and pay for a portion or all of the cost of college – or at least make their kid think they have to pay for their education until that student has earned their degree. The bank of mom and dad is always the place to start for those who are more fortunate than others. However, that parent or grandparent should review the minimum personal loan rates published by the IRS so that they do not inadvertently get hit with a gift transfer tax.

Government Debt Forgiveness

It just so happens that Anne works for a hospital that is classified as a non-profit, 501(c)(3). Student loan borrowers working for a 501(c)(3) are currently eligible for a government debt forgiveness program called, Public Service Loan Forgiveness (PSLF). In order for a public employee’s loans to qualify for debt forgiveness, the following criteria must be met:

  • Full-time public sector job (30 hours or more)
  • Direct federal loans only
  • Loan status is repayment
  • Cumulative of 120 on-time payments
  • Payments made from an income-driven repayment plan – Income-Based Repayment (IBR), Pay As You Earn (PAYE) and Revised Pay As You Earn (REPAYE)

The key criteria missing for Anne was that her federal debt only amounted to $72,000, which is still a lot. However, when compared to her annual income of $109,000 it wasn’t. Basically, the higher ratio of income-to-debt greatly reduced Anne’s level of forgiveness. In fact, she gets a marginal benefit compared to a standard 10-year payment plan. Only $350 of forgiveness was projected in our analysis.

On the other hand, had Anne borrowed everything from the Grad PLUS program, her total federal debt would have exceeded her annual income. This is when PSLF and other types of debt forgiveness offer a substantial financial benefit to the borrower. In Anne’s case, she would have benefited from a projected savings of $116,700. Instead, we had to go a more conventional route and refinance a majority of Anne’s student debt. This meant her total estimated savings was reduced to $22,600.

The impact of student debt borrowing decisions and how to pay for college, even at the beginning stages, is substantial. For my client, Anne, we are talking about a difference of $94,100. It’s why college planning is essential for families with college-bound kids. Especially when that kid wants to pursue a higher cost degree like a doctor, lawyer, veterinarian or pharmacist. Regardless, the economics of making sound choices will dramatically affect your child’s adult life. So if you are a parent or young professional and don’t know or don’t have the time to learn it, enlisting the help of an expert is worth every penny. (For more, see: Debt Forgiveness: Escape Your Student Loans.)

[“Source-investopedia”]

Bankruptcy code: Baby-steps towards recovery of bad loans

Image result for Bankruptcy code: Baby-steps towards recovery of bad loans
Challenges ahead: All eyes are on banks to see if they will take the plunge and accept the haircuts

Bargain-hunters on the prowl for big assets, but huge haircuts hang over banks

A lot of hope is pinned on the Insolvency and Bankruptcy Code (IBC) to provide the much-needed cure to all the ills in the banking system.

Year 2017 was eventful when it came to taking the initial steps in loan recovery. The Reserve Bank of India’s first list of 12 large defaulters — who in aggregate owed ₹2.6 lakh crore to the banking system — has been able to draw the attention of buyers, including global investment funds. These 12 accounts constituted 25 per cent of the gross non-performing assets (NPAs) in the banking system.

The reason for excitement among buyers for the assets referred to the National Company Law Tribunal (NCLT) is not far to see. They hope to bag great bargains, as India goes about setting its stressed assets house in order. The idea is to get hold of good assets at a fraction of the costs of building new ones. Aiding the buyers in this quest has been a controversial government decision to keep out existing promoters from bidding for the stressed assets. The silver lining is that the existing promoters could bid if they repay the dues to the banking system, which is a tough ask.

According to a recent Motilal Oswal Securities report, tightening the eligibility norms in bidding for stressed assets might lead to higher haircuts for banks in the short run. However, in the long run, it would prevent the re-entry of wilful defaulters in the system and promote transparency, it added.

Interested buyers

From London-based Arcelor Mittal, Korea’s POSCO, Blackstone, TPG Capital to domestic biggies like the Tata Group, Mumbai-based Shapoorji Pallonji Group, Ajay Piramal-controlled Piramal Enterprises and Sajjan Jindal’s JSW Steel, there is now a good line-up of interested buyers for the stressed assets/companies referred to the NCLT under the insolvency process.

In India, the total outstanding amount for top 50 stressed borrowers, funded by scheduled commercial banks, stood at ₹3,72,379 crore as on September 30, 2017, according to the RBI.

Banks’ haircuts

The main issue is how are banks going to play the insolvency game. Rather than holding on to stressed assets in their balance sheets, will they be ready to take big haircuts? The grapevine in the market is that many prospective buyers are looking for an average 50 per cent haircut in large cases. All eyes are on banks to see if they would take the plunge and accept the haircuts.

Of course, the buyers’ response has been good only for large corporates. There are few takers for small and medium companies.

Going by the recent case of resolution at Murli Industries, banks had to settle for as high as 75 per cent haircut, which is not a happy situation for the lenders.

However, Pawan Agrawal, Chief Analytical Officer, Crisil, felt that the quantum of haircuts were more a function of specific cases. High haircuts may be reflective of lower economic value and viability of the businesses being referred, rather than it being a reflection of the IBC process, Agrawal said. “In future, once the resolution process is initiated early, the haircuts are expected to be lower,” he said. Tarun Bhatia, Managing Director, Kroll, a global risk consulting firm, said that ultimately recovery for the banks will be market determined and “we anticipate meaningful write-offs”.

He said these are early days for the IBC and one needs to see how many accounts achieve meaningful resolution or successful liquidation.

Meanwhile, the Motilal report highlights that haircut at 70 per cent of net stressed loans can impact net worth of lenders by 37-100 per cent. Private banks are better placed than PSU banks in terms of capital availability to absorb such potential losses. However, the government’s recapitalisation plan will enable the PSU banks to make necessary provisions towards such assets, according to the report.

Some visibility

By April 2018, there should be some visibility on how the entire IBC process is moving, said an economy watcher. Metal (mainly steel) and power assets form bulk of the cases referred to the NCLT (45 per cent in the RBI’s two lists taken together). Healthy recovery in these sectors are critical to assess the success of the NCLT route.

One of the many challenges faced in resolution of accounts under IBC is the RBI’s norm of classifying interim debt as standard, which will encourage bankers to go for interim lending in case of operating companies witnessing cash crunch, and thus, help them make a turnaround. Crisil’s Agrawal said that 2018 will be a critical year where one would get to know the effectiveness of the IBC, especially about the key expectation of a time-bound resolution. In particular, progress in resolution of large NPAs referred by banks can materially change the asset quality picture of banking system, according to Agrawal.

“2017 can be considered as an initial phase of implementation of an effective IBC in India. Even as the rules, infrastructure, and skills of Insolvency Resolution Professionals are falling in place, the number of cases initiated under the code have gathered pace. Even in this initial phase, the IBC has restored the much-needed balance between lenders and borrowers,” Agrawal added.

Litmus tests

According to Kroll’s Bhatia, 2018 will be a critical year as IBC will be tested for: i) Can promoters really be kept out despite the recent ordinance disallowing them from participating? ii) Will IBC be as relevant for mid and small accounts? iii) Who will be held accountable for the write-offs. Will the borrower/defaulter be tried for fraud?

“With promoters being kept out, as of now we see only the top 25-50 accounts having meaningful outside interest,” Bhatia said. Pankaj Dutt, Managing Partner, Alexander Hughes, a global executive search firm, said the Indian banking system could have avoided the current NPA mess had public sector banks given enough attention to the ‘risk management’ function and focused on having a chief risk officer at a level next to the board.

[“Source-thehindubusinessline”]

Soured loans of big banks up anew in October

A loan that is non-performing is in default or close to being in default if the debtor has not made his or her scheduled payment for at least 30 days. File

MANILA, Philippines — Soured or non-performing loans of big banks climbed anew in October, rising 9.4 percent to P107.69 billion from P98.42 billion in the same period last year amid the industry’s rising loan portfolio, data from the Bangko Sentral ng Pilipinas (BSP) showed.

A loan that is non-performing is in default or close to being in default if the debtor has not made his or her scheduled payment for at least 30 days.

The total loan portfolio of universal and commercial banks grew at a faster rate of 17 percent to P7.36 trillion as of end-October from P6.29 trillion in end-October last year.

This translated to a lower gross non-performing loan (NPL) ratio of 1.46 percent in end-October from a year-ago level of 1.56 percent.

The BSP said the latest NPL figures indicate the continued adherence to high credit underwriting standards of universal and commercial banks.

Despite keeping NPL levels low, major banks continued to allocate substantial reserves for potential credit losses to P144.94 billion or 1.97 percent of total portfolio in end-October from last year’s P133.05 billion or 2.11 percent of the total.

The BSP pointed out the gross NPL of big banks also remained manageable across economic sectors as seen in financial and insurance activities, real estate, manufacturing, wholesale and retail trade and electricity, gas, steam and air-conditioning supply.

Latest data from the BSP showed the industry’s credit growth eased to 19.9 percent in October from 21.1 percent in September after rising for four straight months, prompting debt watchers and economists to flag possible overheating of the Philippine economy.

Loans for production activities extended by banks went up 18.7 percent to P6.01 trillion in end-October from P5.06 trillion in end-October last year. This was slower than the 20.7 percent growth recorded in September but still accounted for 88.3 percent of the loans disbursed by the banking sector.

Credit disbursed to the real estate sector increased 16 percent to P1.17 trillion while lending to the wholesale and retail trade as well as repair of motor vehicles and motorcycles grew faster at 19.9 percent to P924.56 billion.

[“Source-philstar”]