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FINANCIAL AWARENESS FOR SBI PO EXAM
Specially compiled for...
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will be built in each Panchayat, will be taken up with
the...
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cent in value terms. In volume, it went up from 99 kg
to 5...
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impact assessment documents and consent
proceedings will b...
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government is promoting guar farming, especially in
the ar...
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retail-price inflation will remain high at 11 per cent
thi...
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to renew their licence. According to earlier rules
formula...
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71. 5-kg gas cylinders from Oct 5: As part of a series of
...
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negotiations as there are alternative channels
such as ATM...
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17. IRDA plans unique identity code for hospitals:
In a ma...
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process of financial inclusion through the low-
cost outso...
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Exports during the April-October period grew
6.32 per cent...
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new nomenclature for company secretaries –
governance prof...
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62. Oil Ministry wants FinMin to cut taxes on
branded petr...
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seen a reduction in the overall inflation in the
past two ...
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loans (as percentage GDP) extended to all
segments increas...
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foreign ministers of Russia, India and China, or
RIC, star...
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Chairman and Managing Director of Union Bank
of India. Pri...
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domestic currencies at pre-determined exchange
rates inste...
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public servants and incorporate provisions for
attachment ...
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would help improve housing stock in the country
and also g...
Financial awareness capsule_sbi_po
Financial awareness capsule_sbi_po
Financial awareness capsule_sbi_po
Financial awareness capsule_sbi_po
Financial awareness capsule_sbi_po
Financial awareness capsule_sbi_po
Financial awareness capsule_sbi_po
Financial awareness capsule_sbi_po
Financial awareness capsule_sbi_po
Financial awareness capsule_sbi_po
Financial awareness capsule_sbi_po
Financial awareness capsule_sbi_po
Financial awareness capsule_sbi_po
Financial awareness capsule_sbi_po
Financial awareness capsule_sbi_po
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  1. 1. www.bankersadda.com | www.careerpower.in | www.careeradda.co.in FINANCIAL AWARENESS FOR SBI PO EXAM Specially compiled for Bankersadda by Mr. A.K. Gupta, Ex – Chief Manager, PNB NOV 2013 1. Appointments: Arundhati Bhattacharya takes over as Chairman of SBI and becomes first ever woman to head SBI in 206 years. S R Bansal, has taken over as Corporation Bank’s CMD. 2. LIC gets its first woman MD: The government has appointed Usha Sangwan, executive director (corporate communication) at LIC and V K Sharma, MD and chief executive officer of LIC Housing Finance, as the two new MDs. According to the norms, LIC can have four MDs, and a chairman, as part of its top management. LIC is India’s largest insurer, with 83 per cent market share in terms of the number of policies, and 71 per cent in premium. 3. Forex reserves rise $1.83 bn in a week: Forex reserves rose to $282.95 billion in the week ending October 25. 4. Jignesh Shah quits MCX board, pre-empts FMC action: Jignesh Shah, the founder-chairman of Financial Technologies (FT) who resigned from the MCX-SX board, quit the board of Multi Commodity Exchange of India (MCX) as well. The resignation follows the Rs 5,600-crore payment crisis at NSEL, also controlled by FT. 5. Sept core sector growth signals infra recovery: In early signs of industrial recovery, data for the eight core sector industries’ growth in September 2013, showed a year’s high of eight per cent, against 3.7 per cent in August. In the same month last year, the core sector had recorded 8.3 per cent growth, the highest since January 2009-10. The core sector contributes around 37 per cent to the Index of Industrial Production (IIP). 6. April-Sept fiscal deficit touches 76% of Budget estimate: According to data released by the Controller General of Accounts, at Rs 4.12 lakh crore, the fiscal deficit for the first six months of 2013-14 was 76 per cent of the BE of Rs 5.43 lakh crore. For the corresponding period last year, the deficit stood at 65.6 per cent of the BE. 7. 'Sakala' to cover more services: 'Sakala', Karnataka government's innovative scheme, which promises timely delivery of government services to citizens, will be expanded to cover more services under various departments. The scheme that has been lauded for bringing transparency and accountability in the system, presently covers over 375 services of 42 departments and organisations of the state government. 8. Karnataka to build 10,000 playgrounds in villages: The project, under which two playgrounds
  2. 2. www.bankersadda.com | www.careerpower.in | www.careeradda.co.in will be built in each Panchayat, will be taken up with the cooperation of the Departments of Revenue, Education and Sports. 9. State Bank cuts short-term bulk deposit rate as liquidity eases: State Bank of India, the country’s largest lender, has reduced short-term bulk deposit rate by 200 basis points. SBI will offer 6.5 per cent for deposits of Rs 1 crore and above, for seven to 60 days maturity, as compared to 8.5 per cent offered earlier. 10. Parikh panel for Rs 5 hike in diesel prices: The Kirit Parikh committee, asked to revisit the pricing methodology of petroleum products, has recommended to the government an increase of Rs 5 a litre in diesel, Rs 250 a cylinder in LPG (cooking gas) and Rs 4 a litre in kerosene with immediate effect. It also suggested a cap on diesel subsidy by oil marketing companies (OMCs) at Rs 6 a litre, which along with the rise it recommends would collectively save at least Rs 40,000 crore of the government’s subsidy burden. It also recommended to cap subsidised cylinders to each household at 6 from 9 now. 11. Wheat export floor price cut by $40/tone: To enable swifter movement of wheat stocks from state warehouses, the Union Cabinet has decided to reduce the export floor price from $300 a tonne at present to $260 a tone and to allow export till June 31, 2014, instead of March 31, 2014. 12. Allahbad Bank not to accept deposits from public under West Bengal’s 'Safe Savings Scheme': WBIDFC, a financial services company promoted by the state government of West Bengal, has come out with a scheme for deposits with a minimum amount Rs 1,000. The money can be kept for 12-60 months and will earn 9.00-9.25 per cent interest per annum. The scheme has been launched to offer a secured savings option to rural people in the state, who are often cheated by illegal deposit schemes promoted by swindlers. 13. RBI prescribes Rs 500-cr initial capital for foreign bank subsidiaries: Foreign banks seeking to set up subsidiaries in India would need at least Rs 500 crore as initial paid-up voting equity capital or net worth. Though foreign lenders would be incentivised to convert their branches here into wholly-owned subsidiaries, subsidiarisation wouldn’t be mandatory. The wholly-owned subsidiaries of foreign banks would be given “near- national treatment”, including for the opening of branches. As of March, 43 foreign banks operated in India, through a network of 333 branches; and, 47 foreign lenders were present in through representative offices. According to its commitments to the World Trade Organization, India has to allow 12 new foreign bank branches in a year. 14. RBI to launch inflation-indexed securities: RBI is set to launch two new instruments by the end of this year — inflation-indexed national saving securities (IINSSes) and cash-settled 10-year interest rate futures (IRFs). However, the 10-year inflation- indexed bonds launched earlier this year, which were linked to the Wholesale Price Index, had failed to attract much interest from investors. 15. RBI shuts special liquidity window for mutual funds: RBI has closed the special window for banks to meet the cash requirements of mutual funds (MFs). It had opened this window in mid-July to help MFs meet sharp redemptions in fixed income schemes, after RBI's move to make it more expensive for participants to borrow short-term money. The special repo window allowed banks to borrow a total of Rs 25,000 crore at 10.25 per cent for MFs. 16. Reserve Bank expects trade deficit to moderate in Q2: India’s CAD widened from 3.6 per cent of gross domestic product (GDP) in the fourth quarter of 2012-13 to 4.9 per cent of GDP in the first quarter of 2013-14. Inflows from foreign institutional investors, which had turned negative since end-May, reversed in September. Since the introduction on September 10 of the swap facility for foreign currency non-resident account (banks) or FCNR(B) deposits and bank foreign borrowings, $6.9 billion and $4.4 billion had been received under the respective schemes until October 25. 17. FinMin relaxes norms for CMD jobs in PSBs: Executive directors (EDs) appointed merely a couple of months earlier would now be allowed to appear in the interviews. Earlier, one needed to have completed a year as ED. However, the criteria for residual service of two years of a candidate hasn’t been changed. A selection committee headed by RBI Governor will interview 19 EDs of various PSBs for six positions that will become vacant in the next financial year, 2014-15. In the present financial year, chairmen of four PSBs will retire. The government is yet to fill vacancies in two, Andhra Bank and Bank of Maharashtra, where the chairman had retired in the past couple of months. 18. Gold smuggling surges with govt's import curbs: Gold worth Rs 130 crore was seized from 383 cases in April-September against Rs 28 crore from 339 cases in the year-ago period, an increase of 360 per
  3. 3. www.bankersadda.com | www.careerpower.in | www.careeradda.co.in cent in value terms. In volume, it went up from 99 kg to 500 kg in the first half. 19. World Bank slashes GDP growth forecast to 4.7%: The Bank also pegged the current account deficit (CAD) at 4.1 per cent of GDP in 2013-14, significantly higher than the 3.7 per cent hoped by the ministry. The Bank believes the RBI should probably look at core or manufactured product inflation, rather than food inflation, to decide on its monetary stance. The International Montery Fund, had projected GDP to grow 4.25 per cent in FY14. The Prime Minister's Economic Advisory Council (PMAEC) had cut India's growth forecast to 5.3% from its earlier projection of 6.4% for the current financial year. The finance ministry too expects the economy to grow above the 5%. The Planning Commission expects India's economy to clock a growth rate of 5.3 per cent for the current financial year, a shade higher than a decadal low of five per cent in the previous year. 20. India may use forex reserves to finance CAD: According to World Bank, India may have to dip into its foreign exchange reserves to finance the current account deficit (CAD) in 2013-14 but the reserves would still amount to a comfortable import cover of approximately five months. 21. FinMin asks ministries to buy tickets from Air India directly: The move is part of government's austerity measure to restrict the fiscal deficit to the budgeted figure of 4.8% of GDP in 2013-14. However, if it is not possible to obtain tickets directly from Air India/Airlines counters, they may obtain the services of three authorised travel agents -- Balmer Lawrie & Company (BLCL), Ashok Travels & Tours (ATT) and Indian Railways Catering and Tourism Corp (IRCTC). 22. Centre eases eligibility criteria for UMPPs: For setting up ultra-mega power projects (UMPPs), the capital cost requirement for UMPPs used to be 10 per cent of the overall project cost and earlier norms took into account expenditure by prospective developers over five years. Now, the total capital cost requirement, has been brought down to five per cent of the overall project cost and the expenditure incurred by the companies on projects in the past seven years will be counted. 23. End of the road for tax breaks: Union Commerce Minister Anand Sharma has said that the centre would announce a new package without tax incentives for Uttarakhand and Himachal Pradesh. The tax breaks in these states expired on March 31, 2010. 24. E-KYC to be accepted for verification: As per IRDA, the e-KYC (electronic know-your-customer) services operationalised by the Unique Identification Authority of India (UIDAI) will be accepted as valid KYC process for insurance. Earlier, a letter issued by the UIDAI containing details such as name, address and Aadhaar number was a valid document for customer identification. 25. 25 mn small borrowers' data now a click away: Equifax Credit Information Services and High Mark Credit Information Services are the two credit bureaus that collate data from MFIs. So far, details of 100 million loan accounts belonging to 25 million individual customers have been collected. These loan accounts have a gross loan portfolioof Rs 21,300 crore as of June. The data thus collected is used to assess over-indebtedness and instances of multiple lending among borrowers. According to RBI norms, not more than two MFIs or non-banking finance companies should lend to the same borrower with an individual cap of Rs 50,000. 26. RIL first Indian private sector firm to clock Rs 1- lakh-cr sales in a quarter: Reliance Industries became the first private sector company in the country to achieve quarterly turnover or sales of more than Rs 1 lakh crore in a quarter. Its turnover during the quarter stood at Rs 1,06,523 crore, against Rs 93,266 crore in the previous quarter. 27. To unlock FDI, govt to ease lock-in period for realty: Foreign real estate developers, investing in India’s construction sector might be allowed to exit before the mandatory three years stipulated at present. However, for that, they would have to complete the project and procure completion occupancy certificates from local authorities. India allows 100 per cent FDI through the automatic route in townships, housing, built-up infrastructure and construction-development projects. 28. Economy moving towards stagflation: CII survey of CEOs has indicated the economy was moving towards stagflation. Stagflation refers to a situation where economic growth is too low and inflation is too high, leading to high unemployment levels. The situation indicates a dilemma for policymakers, since actions designed to cut inflation may aggravate unemployment. 29. Government lists draft rules to implement Land Acquisition Act: The rules are with a focus on consent and social impact assessment to ensure the rights of the farmers were protected when the land was acquired. According to the rules, all social
  4. 4. www.bankersadda.com | www.careerpower.in | www.careeradda.co.in impact assessment documents and consent proceedings will be made publicly available. The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 stipulates mandatory consent of at least 70 per cent for acquiring land for Public Private Partnership (PPP) projects and 80 per cent for acquiring land for private companies. 30. Big banks can be dismantled: According to US and UK regulators, even one of the largest global banks could be taken apart safely by US government authorities if it were to fail today. The 2010 Dodd- Frank Act empowered the FDIC (Federal Deposit Insurance Corporation) to seize a firm and dismantle it if regulators think it can't pass through bankruptcy without posing a significant threat to the financial system. 31. Despite negative list, service tax coverage yet to increase: The introduction of a negative list in July 2012 had given the government the power to tax all services, except the 17 on the list. But it was difficult for service tax commissioners to map each activity and determine whether it is a service. The total number of taxable services has increased from three in 1994 to 119 in 2012. Service tax collections accounted for just over 12 per cent of the total tax collections and over 28 per cent of indirect tax collections in 2012-13. 32. Centre to raise wheat support price by Rs 50 a quintal: The Cabinet Committee on Economic Affairs (CCEA) has approved an increase of Rs 50 a quintal in the procurement price of wheat. It will be now Rs 1,400 per quintal for the 2014-15 crop year (April-March). CCEA also approved an increase of Rs 50 for mustard MSP, to Rs 3,050 a quintal. The support price for chana (gram) was raised by Rs 100 to Rs 3,100 a quintal. For masur, the MSP was increased by Rs 50 to Rs 2,950 a quintal and safflower by Rs 200 to Rs 3,000 a quintal. The increase in wheat MSP is the same as recommended by the government advisory body, Commission for Agricultural Costs and Prices (CACP). 33. HSBC to exit Indian retail broking and depository biz: Hongkong and Shanghai Banking Corporation (HSBC) has decided to discontinue its retail broking and retail depository services businesses in India. It was operating these under HSBC InvestDirect Securities (India) Ltd. HSBC InvestDirect Securities (India) is an arm of HSBC InvestDirect (India), which also offers investment advisory services and securities- related financing. 34. Parikh panel says no to export parity for OMCs: The Kirit Parikh committee has ruled out any change in the way of calculating under recoveries on the basis of traded-parity pricing. The export-parity price is the benchmark free-on-board price of products, import-parity pricing includes import duty and various expenses, such as freight and insurance incurred to import products to India. At present, subsidy is calculated in terms of import-parity pricing — 80 per cent of the import parity price and 20 per cent of the export-parity price. 35. New RTGS system to improve financial market efficiency: According to RBI Governor Raghuram Rajan, the new real time gross settlement (RTGS) system for fund transfers will improve the efficiency of the country’s financial markets, with its advanced liquidity and queue management features. It will have features such as a facility to accept future value dated transactions and options to process multi- currency transactions. 36. RBI sets up advisory panel for national bill payment system: RBI has constituted an advisory group to implement a national bill payment system enabling households to pay utility bills, school fees and remittances using their bank accounts. The group is headed by Umesh Bellur of the Indian Institute of Technology-Bombay. The panel would suggest the nature of the payment platform—either an existing one or through a new entity—for Giro (general inter-bank recurring order)-based bill payments. A Giro is a payment instruction from one bank account to another. It facilitates payments through cash, cheques, credit/debit cards and prepaid payment instruments, transferring funds to the bank accounts of beneficiaries. 37. Govt to give Rs 14,000 cr to PSBs: The government will infuse capital of Rs 14,000 crore in public sector banks (PSBs) this financial year, including Rs 2,000 crore to the State Bank of India and Rs 1,800 crore each in IDBI Bank and Central Bank of India. The banks can raise another Rs 10,000 crore from the market, depending on their requirements through a rights issue, follow-on public issue and qualified institutional placement (QIP). 38. Gujarat govt announces new agriculture power scheme: The scheme is named 'Immediate Power Connection Scheme 2013'. Under the new immediate power connection scheme, applicants will have to bear 80 per cent of the power connection cost and will also have to adopt drip irrigation technique. 39. RBI appoints Technical Committee on Mobile Banking: The Committee will examine the options/alternatives including the feasibility of using encrypted SMS based funds transfer using an application that can run on any type of handset for expansion of mobile banking in the country. The Committee will be headed by Shri B. Sambamurthy, Director, Institute for Development & Research in Banking Technology (Chairman). 40. UP promoting guar farming to increase agri income: To maximise farm income and insulate farmers from seasonal losses, Uttar Pradesh
  5. 5. www.bankersadda.com | www.careerpower.in | www.careeradda.co.in government is promoting guar farming, especially in the arid region of Bundelkhand. Guar provides better returns to farmers compared to other cash crops, including paddy and wheat. 41. FM tells PSBs to step up NPA recovery: Finance Minister P Chidambaram has asked PSBs to monitor 30 big bad debt accounts each. 42. RBI measures got $9.6 bn in forex: India has received over $9 billion from two foreign schemes namely RBI's liberalisation of FCNR(B) and tier-I capital schemes which were announced in Sept to attract foreign funds and help the country bridge the widening current account deficit. 43. Arunachal, Meghalaya to be on railways map soon: Three of the five key railway projects identified by the Prime Minister’s Office (PMO) as “critical” for the region are nearing completion. 44. Discoms' dues to PSUs more than double in 3 yrs: With last year’s restructuring package for loss- making power distribution companies yet to bear fruit, the dues that discoms owe state-owned generation firms jumped to Rs 15,792 crore last month, compared with Rs 6,200 crore in June 2010. Damodar Valley Corporation (DVC), which runs power plants with a cumulative capacity of over 2,800 Mw in Jharkhand and West Bengal, alone accounts for Rs 5,900 crore of the dues. 45. WPI inflation edges up to 6.46% in September: Headline inflation accelerated to a seven-month high of 6.46 percent in September, mainly driven by higher food prices. Wholesale prices, India's main inflation measure, had risen 6.1 percent in August. 46. India becomes leading rice supplier to Singapore: India has overtaken Thailand as Singapore's biggest rice supplier for the first time, exporting 92,865 tonnes or 32.9 per cent of the total rice supply to the island nation in the first eight months of 2013. 47. Financial literacy among urban working young people low: According to a study by IIM Ahmedabad, despite high education levels, working young people in urban India don't fare well as far as financial literacy is concerned. This is likely to be due to the absence of inputs relevant to financial literacy in the general education process. 48. Electronic payment can save 1.6% of India's GDP: According to a World Bank Report, cash can carry significant handling and transportation costs, and run the risks of theft, loss, and counterfeiting. The report stated that individuals and small firms that make use of this technological medium benefit from convenient online authorisations, easier record keeping, and the availability of dispute resolution mechanisms. 49. Industrial output growth slows to 0.6% in August: The growth in July was 2.7 per cent and in August 12, it was two per cent. 50. Health Insurance TPA of India formed, for govt- owned general insurers: The common in-house third party administrator (TPA) of public sector general insurers, named Health Insurance TPA of India, was incorporated on August 14. The operationalisation is likely to happen by April 2014. This common TPA to process health claims has National Insurance Company, New India Assurance Company, United Insurance Company, Oriental Insurance Company and General Insurance Corporation of India as stakeholders. While the first four have 23.75 per cent stake each, GIC has five per cent. The common TPA has been proposed to prohibit large-scale leakages while settling insurance claims in the health segment. Further, it is intended to process claims of public general insurers in-house, rather than handling by an external agency. 51. 2014-18 growth at 5.9%: According to the Paris- based Organisation for Economic Cooperation and Development (OECD), India is projected to see moderate average annual growth of 5.9 per cent during the 2014-18 period. The forecast for India is much lower than OECD's estimated growth of 6.9 per cent for overall emerging Asia during the same period. Emerging Asia comprises Southeast Asian nations, China and India. 52. UIDAI Bill to give Aadhaar statutory status gets nod: To give a statutory recognition to the Unique Identification Authority of India (UIDAI), the Cabinet has approved a National Identification Authority of India Bill. The proposed legislation seeks to create a National Identification Authority of India, which will oversee the implementation of the Aadhaar project and “regulate it”. It also seeks to define the penalties in case of misuse of the data collected under the UID project. These cover impersonation using Aadhaar data; unauthorised collection or dissemination of information, and unauthorized access to the central database, which will contain all individual details such as biometrics collected for Aadhaar. 53. IMF pegs FY14 growth at 4.25% on weak demand: The International Monetary Fund pegged the country's economic growth at 4.25 per cent. IMF attributed low growth to poor demand and weak manufacturing as well as services sector performance. If India's economy grows by this rate, it would be the lowest economic expansion in 11 years. Before this, the economy grew by lower rate of 4 per cent in 2002-03. IMF also predicted that the
  6. 6. www.bankersadda.com | www.careerpower.in | www.careeradda.co.in retail-price inflation will remain high at 11 per cent this year owing to food price pressures. 54. Aadhaar-based remittance & query services launched: The National Payments Corporation of India has launched two new services, an Aadhaar- based Remittance Service (ABRS) and a Query Service on Aadhaar Mapper (QSAM). ABRS will enable transfer of funds by using an Aadhaar number. The QSAM service will enable mapping one's status by using an Aadhaar number. There are more than three crore (30 million) Aadhaar-linked bank accounts. 55. Nabard expects to benefit from its new warehousing scheme: Nabard Warehousing Scheme 2013 -14 (NWS) which has a corpus of Rs 5,000 crore, envisages disbursing direct loans for construction of warehouses, silos, cold storage and cold chain infrastructure. The warehouses and cold storage created from this scheme will be compliant to Warehousing Development and Regulatory Authority ( WDRA) norms, which could facilitate pledge loan against stored commodities. 56. FinMin asks public sector banks to ramp up rural ATMs: The PSU banks have put up only 5,726 ATMs by end of August as against the target to install 34,668 by the end of March 2014. Further, Direct Benefit Transfer Scheme, which was initially launched in 25 districts early this year, has been extended to 78 districts. The government has identified 191 districts more to introduce the DBT- LPG scheme, which will be done in a phased manner. 57. RBI allows banks to borrow from international and multilateral financial institutions: RBI has granted permission to banks to borrow from international/ multilateral financial institutions for a limited period of up to November 30. Such borrowings should be for the purpose of general banking business and not for capital augmentation. Such borrowings shall be eligible for the concessional swap facility of RBI. 58. Bharti and Walmart call off their retail JV: Bharti and Walmart, after staying together for six years in cash-and-carry, have decided to independently pursue their retail businesses in India. Walmart will fully own the cash-and-carry business, buying out Bharti’s 50 per cent stake. 59. Aadhaar-linked accounts to be basis for mobile payments: Government is launching a payment facility where mobile-to-mobile payments could be singularly effected through the Unique Identity (UID) number. Under the Aadhaar-linked payment bridge, individuals’ UID numbers would be linked with their bank accounts at the back-end. A PIN will be used for authenticating debits, putting a layer of security on transactions. The Aadhaar-based remittance system on mobile will make transferring money easy by removing the need to remember bank account details, such as IFSC code, etc, as users will only need their Aadhaar numbers. 60. Bihar registers highest industrial growth among BIMARU states: As per a study by ASSOCHAM, Bihar has registered highest growth rate of 14 percent in the industrial sector during nine years period of 2004-2012 among BIMARU category states -Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh. However, lack of land, power and health services and poverty may hamper Bihar's prospects in future. 61. Mandatory training for agents puts pressure on insurers: Licensing rules by Irda stipulate that agents have to undergo 50 hours’ training for basic licence and 75 hours’ training for composite licence. Insurance agents also have to undergo a 25-hour practical training to renew their licence, which is valid for three years. Composite agents will have to undergo a practical training of 50 hours if they want
  7. 7. www.bankersadda.com | www.careerpower.in | www.careeradda.co.in to renew their licence. According to earlier rules formulated in July 2000, mandatory training was 100 hours for insurance agents and 150 hours for composite agents who were entering the industry for the first time. This was reduced to 50 hours and 75 hours, respectively, in October 2007. The insurers want reduction in training hours. Various estimates suggest approximately Rs 600-650 crore is spent annually by insurance companies on training their agents. 62. RBI may make bank licensing process more frequent: To expand the reach of banking, RBI is considering making the licensing process more frequent and allow free entry of banks as and when necessary. 63. All national, state highways in Punjab to be four/six-laned by January 2016: The Punjab government is working to realise its target of 4/6 laning of all national and state highways by January 2016 and has set aside Rs 3,080 crore for the purpose. This distinction of world-class connectivity would help Punjab to attract more investment and ease traffic on the roads thereby in the coming years. 64. April-Aug fiscal deficit swells alarmingly: Rise in Plan expenditure has pushed the central government’s fiscal deficit to 74.6 per cent of the entire year’s Budget estimate (BE) at the end of only the first five months of the current financial year. The fiscal deficit in the first five months of a financial year was higher than 75 per cent of BE only in 2008-09, when the global financial crisis began. But that year, BE was just 2.5 per cent of GDP and it turned out to be more than eight per cent when the year ended. 65. FM heat on unregulated financial sector: According to Finance Minister, Chidambaram, a financial consumer is comfortable to participate in a regulated market and there should be an assurance that she will be protected. However, exploiting the limitations of the regulatory architecture, ingenious financial engineers come up with innovative products outside the regulatory jurisdiction and deprive the consumers with such products from regulatory protection. There have been five institutional milestones in Indian corporate financial institutions in the last six months — FSLRC report, new Companies Act, the passage of Pension Fund Regulatory and Development Authority (PFRDA) Bill, placing commodity futures market regulation under the finance ministry and the re-promulgation of the Security Laws Amendment Ordinance. 66. SC upholds HC order on CNG to Gujarat under APM: The Supreme Court has directed the Union government to provide compressed natural gas (CNG) to Gujarat on the same rate as it is given to Delhi and Mumbai. But at the same time, the state government will have to pass necessary laws to make it compulsory for all four wheelers registered in Gujarat to covert to natural gas. 67. India shoring forex reserves to deal with tapering: According to Mr P Chidambaram, Union Finance Minister, India is shoring up its forex kitty to deal with the impact of US tapering. Tapering refers to gradual withdrawal of monetary stimulus by the US Federal Reserve. The reversal of the easy money policy by the US is expected to impact the global markets as well as the economy. 68. NABARD takes to pvt sector financing: National Bank for Agriculture and Rural Development (NABARD) has opened a lending window to the private sector for creation of warehouse space, cold storages and cold chains. This is besides financing to state governments, state government undertakings, (special purpose vehicles) SPVs set up under PPP mode, cooperatives, federations, cooperative federations, (Agricultural Produce Market Committees) APMCs, state-level boards, apex marketing boards' bodies and panchayats for creation of scientific storage space for food grains and other agricultural commodities and perishables. 69. Life insurers get 3 months to phase out old products: The Insurance Regulatory and Development Authority (Irda) has extended the deadline for phasing out old products in the traditional segment to December 31. The earlier deadline was October 1. However, the sale of highest net asset value (NAV) products and index-linked products in the life insurance segment has been banned from October 1. 70. Punjab University steals a march over IITs in global rankings: According to the Times Higher Education World University Rankings, while Panjab University, is placed at 226 among 400 institutions worldwide, IIT Kharagpur has slipped from 226 to 250 and IIT Roorkee is placed in the 351-400 band. The two other new entrants are IIT Delhi and Kanpur, both in the 351-400 group. India has increased its representation in the world rankings with five world top 400 universities. Overall, California Institute of Technology holds on to the world number one spot for the third consecutive year, while Harvard University tied with Oxford regains second place, pushing Stanford University to fourth. The US remains dominant with seven institutions in the world top 10 and 77 in the top 200 (one more than last year).
  8. 8. www.bankersadda.com | www.careerpower.in | www.careeradda.co.in 71. 5-kg gas cylinders from Oct 5: As part of a series of customer empowering initiatives, the Ministry of Petroleum and Natural Gas is set to commence the sale of five-kg gas cylinders at market-linked prices through selected petrol pumps in major cities. The ministry is also launching portability of LPG connection across oil marketing companies (OMCs) on the same day. The first initiative allows the sale of these LPG cylinders at the market price with minimal paperwork through company- owned retail outlets (petrol stations). Under this portability scheme, a consumer can now opt for the distributor of his choice within a cluster of LPG distributors in the vicinity and across the oil companies. 72. ADB cuts FY14 GDP growth forecast to 4.7%: The multi-lateral agency said the Indian economy has been under pressure with the recent depreciation of the rupee and capital outflows, adding to structural constraints, which is making it difficult for the economy to return to a high growth path. 73. Poor are more trustworthy and bankable: Seeking to promote financial inclusion, Finance Minister P Chidambaram has called upon banks to focus on poor customers who were more trustworthy and "bankable" as compared to large borrowers. 74. RBI forms crack team to help Jalan vet bank licence bids: RBI has nominated three members to the advisory committee formed to scrutinise bank licence applications. Former Securities and Exchange Board chairman C B Bhave, former RBI deputy governor Usha Thorat and central bank board member Nachiket Mor would assist Bimal Jalan, former RBI governor, to vet the applications. The central bank is conducting the initial screening of the 26 applications. 75. India to start power supply to Bangladesh: India will start supplying electricity to Bangladesh through the new transmission line between the two nations. Transmission line will link India's eastern power grid with the western electricity grid of Bangladesh. 76. India's share in M&As of emerging nations is a mere 5.1%: This is lowest in the BRIC (Brazil, Russia, India and China) nations. China led the emerging market activity with $107.1 billion (32 per cent market share), followed by Russia ($52.1 billion or 15.7 per cent), Brazil ($35.3 billion or 10.7 per cent) and India ($17 billion or 5.1 per cent). 77. Regulators' pay raised by Rs 75,000 a month from July: Chairpersons and full-time members of regulatory bodies would now draw higher salaries, with the Cabinet approving raises of Rs 75,000 a month, with retrospective effect from July. Now, a chairperson would get Rs 4.5 lakh a month (without house and car), against Rs 3.75 lakh earlier. A full- time member would draw Rs 3.75 lakh (without house and car) a month, against Rs 3 lakh earlier. The raises would benefit chairpersons and members of the Securities and Exchange Board of India, the Insurance Regulatory Development Authority, the Telecom Regulatory Authority of India, the Central Electricity Regulatory Commission, the Competition Commission of India, the Pension Fund Regulatory and Development Authority, the Petroleum and Natural Gas Regulatory Board, the Warehousing Development and Regulatory Authority and the Airports Economic Regulatory Authority of India. 78. Clones of existing banks: Finance Minister P Chidambaram has said “several” new banks, licences for which would be issued by the Reserve Bank of India shortly, should have a differentiated approach rather than becoming clones of existing banks. Each one of them should cater to the needs of a special group of customers who do not have banking today. Each one must pursue a different path. While Singapore has five different kinds of licences, Hong Kong has a three-tier structure. DEC 2013 1. Rich get poorer in India, other emerging nations: According to World Ultra Wealth Report 2013 from UBS AG and Wealth-X, India’s billionaire club shrinks by 5% losing six members to become 103 last year; their combined wealth also declined by the same percentage. Mumbai is home to 30 billionaires, of which, one in three is associated with industrial conglomerates or the pharmaceuticals industry. 2. WTO Bali meet: The Right to Food Campaign, an umbrella of about a 100 non-profit organizations have appealed to the Government to reject the peace clause proposed by developed countries and safeguard India’s food sovereignty while negotiating at the World Trade Organisation’s (WTO) Bali Ministerial meet to be held from December 3 to 6. The four-year Peace Clause has been proposed by the developed countries as a compromise formula to provide protection to developing countries against penalties for breaching the farm subsidy limit. 3. Bank unions demand 5-day week: Trade unions in the banking sector have demanded 5 days week as part of their bipartite wage
  9. 9. www.bankersadda.com | www.careerpower.in | www.careeradda.co.in negotiations as there are alternative channels such as ATMs, Internet and mobile banking for banking operations. 4. Reliance Life ties up with five insurance repositories: Reliance Life Insurance Company (RLIC) has tied with all five insurance repositories to provide life insurance policies in electronic form across all its products. The Insurance Regulatory and Development Authority (IRDA) has approved five companies — Database Management Ltd, Central Insurance Repository Ltd, SHCIL Projects Ltd, CAMS Repository Services Ltd and Karvy Insurance Ltd — as insurance repositories (IRs). 5. M. V. Tanksale is IBA’s new chief executive: M.V. Tanksale, former Chairman and Managing Director of Central Bank of India, has taken over as Chief Executive of the Indian Banks’ Association. Tanksale succeeds K. Ramakrishnan, who was at the helm of the Association for five years up to November 30, 2013. 6. SEBI extends ESOP deadline: SEBI has extended the timeline for employee welfare trusts for aligning their schemes with the SEBI ESOP/ESPS guidelines to June 30 next year. In January 2013, SEBI had prohibited employee welfare trusts from purchasing shares of the company from the secondary market. 7. FMC nod for S. Mishra as MCX Chairman: The commodity market regulator Forward Markets Commission has approved the appointment of Satyananda Mishra (IAS Retd) as the Chairman of Multi Commodity Exchange. 8. India seeks Australia’s help in skills training: As per HRD Minister M. M. Pallam Raju, the availability of good quality trainers is a significant challenge as India raises its efforts to meet the national goal of skilling 500 million people by 2022. The Ministry of HRD has launched an ambitious programme under the national vocation education qualification framework of the AICTE to provide for skill development in schools in classes 9 to 12. 9. Fiscal deficit touches 84% of Budget target: According to data released by the Controller General of Account (CGA), the deficit in the first seven months of the current fiscal touched Rs 4.58 lakh crore against the target of Rs 5.42 lakh crore for full year. This is 84.4 per cent of the target. This increase is due to low tax collections, while both Plan and non-Plan expenditure has gone up. Fiscal deficit is mainly the difference between income and expenditure of the Government. Higher deficit means, Government will borrow more from the market. This can drain the liquidity from the market leading to increase in interest rates. 10. Sahoo panel submits review report on GDRs, FCCBs: The M.S. Sahoo Panel that was set up to undertake a comprehensive review of the global depository receipts (GDR) scheme has submitted its report. The committee is understood to have reviewed the GDR scheme of 1993 in the light of legislative changes in the financial sector and macroeconomic developments besides the enactment of a new company law. 11. Threshold limit for e-payment of excise, service tax lowered: The Centre has lowered the threshold limit for mandatory e-payment of excise duty and service tax to Rs 1 lakh from Rs 10 lakhs earlier. With effect from January 1, a manufacturer or a service taxpayer who has paid duty or tax of more than Rs 1 lakh in the previous financial year will be required pay duty or tax through internet banking. 12. Don’t bank on incentives, tax sops: According to Financial Services Secretary Rajiv Takru, Pension funds should look to maximise returns and improve their reach rather than seek incentives and tax breaks. 13. Monitoring MFIs - Self-regulatory organisations get RBI recognition: To ensure effective functioning of Non-Bank Finance Company-Microfinance Institutions (NBFC-MFIs), the RBI has decided to recognise self-regulatory organisations for monitoring such institutions. At present, there are two SROs — Micro Finance Institutions Network (MFIN) and Sa-dhan — monitoring the functioning of NBFC-MFIs in the country. However, SRO as a body was not recognised by the RBI. 14. Foreign banks taking subsidiary route to get capital gains tax exemption: As per RBI, foreign banks that wish to convert their branch holding operations in India into wholly-owned subsidiaries will be exempt from capital gains tax and stamp duty. 15. RBI nod for NHB’s $200-million overseas loan: National Housing Bank has received RBI approval for raising $ 200 million external commercial borrowing under the affordable housing window. 16. Police orders closure of over 1,000 ATMs in Bangalore: Bangalore Police has ordered the shutdown of 1,037 ATM centres in Bangalore. The State Government had ordered banks to post security personnel and install CCTV cameras (both inside and outside) all ATM sites.
  10. 10. www.bankersadda.com | www.careerpower.in | www.careeradda.co.in 17. IRDA plans unique identity code for hospitals: In a major step to bring down frauds in health insurance, the Insurance Regulatory and Development Authority and the Insurance Information Bureau (IIB) have started an initiative to provide a unique identity code for hospitals. The step will help the health insurance industry streamline and identify the charges for different treatments by different hospitals. 18. Bank frauds rising: Double to Rs 6,212 cr in 2012-13: Bank loan frauds almost doubled in 2012-13 adding up to Rs 6,212 crore against Rs 3,183 crore in the previous year. In terms of numbers, 349 cases of fraud of over Rs 1 crore were reported in 2012-13 up 28 per cent over the previous year’s 273 cases. 19. Sarfaesi Act most effective tool to recover bad loans: According to the RBI’s Report on Trend and Progress of Banking in India, 2012-13, banks have recovered Rs 18,500 crore through the Sarfaesi route. Also, in terms of efficiency, the Act has proved to be more effective than the debt recovery tribunals (DRTs) or mediation by Lok Adalats. 20. RBI troubled by loan quality of banks: In its report, Trend and Progress of Banking in India, 2012-13, the RBI observed that the banking system’s loan quality, primarily in the industrial and infrastructure sectors, has deteriorated significantly during the year and there was an increase in total stressed assets. The banking system’s total stressed assets (bad loans plus restructured standard loans) rose to 9.2 per cent of total advances as on March-end 2013 against 7.6 per cent as on March-end 2012. While the primary driver of the deteriorating loan quality was the domestic economic slowdown, other factors such as delays in obtaining statutory and other approvals as well as lax credit appraisal/monitoring by banks were also significant. Further, higher credit concentration in certain sectors and higher leverage among corporates also increased the stress on loan quality. 21. RBI for diluting Govt stake in public sector banks: As per RBI, the current level of Government shareholding in public sector banks gives it sufficient headroom for diluting its stake in many of these banks. The Government’s shareholding in the 21 public sector banks ranges from 55 per cent to 82 per cent. 22. Private banks racing ahead of public sector ones in setting up ATMs: The total number of ATMs in the country rose to 1.14 lakh in 2012-13, with the growth primarily driven by private sector banks. Their share in the total increased 38 per cent as of March 2013. Although urban and metropolitan centres accounted for over 65 per cent of the total ATMs, there has been a rising trend in those located in the rural and semi- urban centres in the recent years. India’s largest lender State Bank of India topped in the number of ATMs at 32,777 as on September 30. Among the private sector banks, Axis Bank had the highest number at 11,796. 23. Weak rupee has no significant impact on creditworthiness: According to Fitch Ratings, the spillover effects of a weaker rupee have not significantly hurt India’s creditworthiness, and hence would not trigger any rating action at this point. 24. Complaints against foreign, private banks on the rise: A per RBI Report on Trend & Progress of Banking 2012-13, despite the common perception of dissatisfaction from services of public sector banks, the per bank branch/account number of complaints in the last fiscal was higher for foreign and private sector banks. In 2012-13, there were 1,543 complaints per 100 bank branches of foreign banks, highest among all bank groups. Complaints in Tier-I cities — New Delhi, Mumbai, Chennai, Kolkata, Bangalore and Hyderabad — account for more than half the total complaints received by 15 Banking Ombudsman offices. 25. Banks’ investment in G-Secs must come down gradually: As per RBI, it is necessary to reduce banks’ requirements of investing in government securities in a calibrated way, to what is strictly needed from a prudential perspective. The scope for such reduction will increase as government finances improve. 26. First bank for women: Bhartiya Mahila Bank has started operations. Usha Ananthasubramanian, is the bank’s first Chairperson and Managing Director. BMB, has been set up with a capital base of Rs 1,000 crore. 27. 29 developers get more time to complete SEZ projects: Twenty-nine developers of Special Economic Zones (SEZ), including Tata Consultancy Services, Navi Mumbai SEZ and Parsvnath have been given more time by the Government to execute their projects. Global slowdown and fluctuating market conditions were among the top factors cited by the developers for the delay in their projects. 28. Banking on low-cost outsourcing model: Bharatiya Mahila Bank (BMB) is the only bank to be built completely on a low-cost outsourcing model. While the bank will focus on acquiring and servicing customers and speeding up the
  11. 11. www.bankersadda.com | www.careerpower.in | www.careeradda.co.in process of financial inclusion through the low- cost outsourcing model, back-end services such as debit and credit card management, digital and mobile banking, asset-liability management and ATM management will be taken care of by US- based banking technology company FIS. 29. Moody’s maintains negative outlook on banking sector: UBS downgraded India to ‘neutral’ from ‘overweight’ even as it upgraded China to ‘overweight’. Global ratings agency Moody’s Investors Service maintained its negative outlook on India’s banking system, reflecting the negative effects of currency volatility, persistent inflation and slowing economic growth. 30. Process of deregulating diesel prices will continue: As per Veerappa Moily, Minister of Petroleum & Natural Gas, had it not been for the steep fall in the rupee recently, he would have completed the process of diesel deregulation. 31. Bharat Ratna for Sachin, C.N.R. Rao: The Union Govt has announced conferring the Bharat Ratna on Sachin Tendulkar who becomes the first sportsperson to receive the nation’s highest civilian honour. Eminent scientist C. N. R. Rao has also been conferred the award. 32. Bancon 2013: Bankcon held in Mumbai was hosted by Bank of India. The theme of the conference was ‘Banks of the future: Gearing up to meet the emerging environment’. 33. Withdrawal of application for New Bank: RBI had, on July 1, 2013 placed on its website a list of 26 applicants for new bank licences in the private sector. The following applicants have withdrawn their applications for establishment of New Banks as per RBI policy – (a) Tata Sons Limited; (b) Value Industries Limited, Aurangabad. Application of K. C. Land & Finance Ltd., Chandigarh has been included in the list. 34. RBI extends Liquidity Support to Micro, Small and Medium Enterprises: RBI has decided to provide refinance of an amount of Rs 5,000 crore to the Small Industries Development Bank of India (SIDBI). The refinance will be available for direct liquidity support to finance receivables, including export receivable, to MSEs by SIDBI or for liquidity support to MSEs through selected intermediaries, that is, banks, Non-Banking Financial Companies (NBFCs) and State Finance Corporations (SFCs). The refinance will be available against receivables, including export receivables, outstanding as on November 14, 2013 onwards. The facility will be available at the prevailing 14-day term repo rate for a period of 90 days. During this 90-day period, the amount can be flexibly drawn and repaid. At the end of the 90-day period, the drawal can also be rolled over. The refinance facility will be available for a period of one year up to November 13, 2014. 35. Chakrabarty blames public sector banks for sitting on bad loans: As per RBI Deputy Governor K.C. Chakrabarty, public sector banks sat on NPAs far longer than their private sector counterparts. According to him, (a) NPAs had started rising from 2007, before the financial crisis; (b) Private sector banks and even foreign banks have been able to deal with the NPA menace better and these banks identified the problem earlier; (c) when regulations are tightened, asset quality improves; (d) Prudential norms (like higher provisioning) are in the interest of the banks; (e) for government companies, the project appraisal has to be more stringent. The more powerful the borrower, the appraisal has to be more stringent. 36. Onion, food items push wholesale inflation to 8-month high of 7%: The Wholesale Price Index (WPI) for October rose to 7 per cent from 6.46 per cent in September. The retail inflation, represented by the Consumer Price Index (CPI), rose 10.09 per cent in October from 9.84 per cent in September.The core inflation (reflecting mainly prices of manufacturing goods) also rose to 2.6 per cent in October from 2.1 per cent in September. Costlier vegetables, especially onion, and food articles are to blame for the wholesale price and retail inflation. 37. Bad loans of 40 listed banks rise 38% in H1: The net NPAs of 40 listed banks as on March 31, 2013, were Rs 93,109 crore, which rose to Rs 1,28,533 crore as on September 30, 2013. Of the 40 listed banks, 14 have reported more than 50 per cent jump in net NPAs. period. 38. Power sector fuels modest recovery in factory output: Industrial production recorded a growth of 2 per cent in September against a contraction of 0.7 per cent in the same month last year. Industrial production in August was up 0.4 per cent. The IIP growth came mainly from the power and mining sectors, while manufacturing was only marginally better. The consumer durables segment contracted 10.8 per cent in September. 39. Exports surge in Oct: Rising demand from the US and the EU helped India’s merchandise exports grow for the fourth month. Exports posted a robust 13.47 per cent growth to $27.27 billion in October 2013. Imports continued to decline bringing down the trade deficit to $10.5 billion during the month. This is almost half the $20.21 billion registered in October 2012.
  12. 12. www.bankersadda.com | www.careerpower.in | www.careeradda.co.in Exports during the April-October period grew 6.32 per cent to $179.37 billion. Imports at $270 billion were lower by 3.8 per cent. 40. IRDA to set up insurance clearing house: IRDA will set up an Insurance Clearing House to ensure timely and effective reconciliation of inter- company reinsurance and coinsurance balances and efficient settlement of these balances. The clearing house will be registered as a public limited company under the Companies Act, 1956. It will have a minimum paid-up share capital of Rs 100 crore. 41. Posco gets more time to complete Odisha SEZ: South Korean steel major Posco has got time till next year to acquire land and disburse compensation for its proposed multi-product Special Economic Zone in Odisha. Posco proposes to invest $12 billion in the SEZ, one of the largest foreign direct investments to be brought into the country. 42. The SEZ project proposes to produce 63,48,000 tonnes of finished steel products per year and provide direct employment to about 18,000 people and indirect employment to 30,000 more. 43. Oxford arm to set up university in Sanand with Whistling Group: The university, which opened its portals in 1096, is planning a higher- education campus through its wholly-owned subsidiary, Isis Innovation Ltd. Isis will be partnered by the Whistling Group. This independent, industry-focused university will offer courses in alternative energy and environmental studies. 44. CSIR set to open TechVills in rural areas: The Council for Scientific Industrial & Research (CSIR) is gearing up to establish a chain of 28 TechVills in rural areas. These TechVills, to be spread across the country, will showcase technologies suitable for application in specific areas. 45. Govt plans survey-based data collection for services sector: The Central Statistics Office (CSO) and the Directorate General of Commercial Intelligence & Statistics (DGCIS) are conducting domestic pilot surveys on services data collection in areas such as tourism and health. India, like many other developing countries, has inadequate data on services. It is a big handicap while negotiating Free Trade Agreements with other countries and also framing domestic policies for the sector. 46. Competition panel okays Jet-Etihad deal: The Competition Commission of India has given clearance to sale of stake by Jet Airways to Etihad Airways. The Commission is of the opinion that the proposed combination is not likely to have appreciable adverse effect on competition in India. 47. Vegetables push retail inflation over 10%: The Consumer Price Index (CPI) touched 10.09 per cent in October, up from 9.84 per cent in September. Prices of vegetables shot up a 45.67 per cent against 10.74 per cent in October 2012. 48. Retailers seek fixed 20% margin on drugs: According to retailers, due to drastic cut in prices of about 350 drugs following the Drug Price Control Order, their gross average margins fell to 14-16 per cent and that of stockists to 8.5 per cent. 49. Capital infusion by Govt is key to PSU banks’ ratings: As per India Ratings & Research, public sector banks would depend more on capital infusion from the Government, as their capital ratios could be impacted by falling internal accruals along with pressure on loan portfolio. The Government and Life Insurance Corporation of India (LIC) injected about 95 per cent of equity into banks between FY10 and FY13. Any dilution in the Government’s stance due to fiscal pressures could have an immediate impact on the ratings of weak banks. The Prime Minister’s Economic Advisory Council, has suggested that the Government to dilute its stake in its banks to raise Rs 55,000 crore for equity injections. 50. SEBI panel for hiking mutual funds net worth to Rs 25 cr: Market regulator SEBI’s mutual fund advisory committee has recommended that fund houses with assets under management (AUM) of over Rs 1,000 crore should have a net worth of Rs 25 crore. The current net worth requirement for an asset management company (AMC) is Rs 10 crore. The committee has also suggested Rs 25 crore as the minimum net worth for new applicants. 51. Inclusion of labour norms in free trade pacts on the rise: According to a report by ILO, more countries are now ensuring that Free Trade Agreements lead to better working conditions. It found that 58 trade agreements included labour provisions in June 2013, up from 21 in 2005 and four in 1995. 52. Company Secretaries may soon be called governance professionals: As per Corporate Affairs Minister Sachin Pilot, the Government would move amendments in Parliament for a
  13. 13. www.bankersadda.com | www.careerpower.in | www.careeradda.co.in new nomenclature for company secretaries – governance professionals. The Govt is sharpening supervision of compliance procedures by corporates through the proposed National Financial Regulatory Authority. 53. Indian billionaires only half as wealthy as Chinese counterparts: According to the report on ultra high net worth individuals published by Wealth-X and UBS, India is home to 103 billionaires with a combined wealth of $180 billion, six fewer individuals than the year before. By contrast, China’s billionaire population grew by 10 to 157, with a total wealth of $384 billion. The US has the largest number of billionaires, 515, representing nearly a quarter of the total global billionaire population, with a combined wealth of $2,064 billion. Mumbai is home to 2,135 of India’s richest individuals, followed by New Delhi (1,980), Bangalore (1,980), Kolkata (635), Hyderabad (540) and Chennai (385). 54. Life insurers back on growth path after 3 years: According to IRDA, after three years of decline, life insurance business is back on the growth path. The industry witnessed a steep fall in business after the introduction of new guidelines in September 2010 for unit-linked insurance plans, stipulating, among others, lower commission for agents and higher lock-in periods . Unit-linked plans, at that time, accounted for over 80 per cent of business of private life insurers. 55. Commerce Ministry allays fears on free trade pacts: The Commerce & Industry Ministry has clarified that India’s Free Trade Agreements (FTAs) with most trading partners have resulted in an increase in exports and not caused any adverse impact on the manufacturing sector. Most regional and bilateral FTAs signed by India either related to SAARC countries or to South East Asia and North East Asia. In case of SAFTA, India has a trade surplus of about $12 billion. With Asean, exports have more than doubled after signing of the Indo-Asean Trade in Goods Agreement in 2009, though imports have also grown. A significant part of India’s imports from this region were in essential items such as edible oils from Malaysia and Indonesia and petroleum products and coke from Indonesia. 56. India, US launch agri training programme with Africa: The US and India have launched the third India-US-Africa triangular agricultural training programme at the National Institute of Agricultural Extension Management (MANAGE) Hyderabad. This partnership, supported by the US Government’s global hunger and food security initiative ‘Feed the Future’, aims to improve agricultural productivity and support market institutions in Kenya, Liberia, and Malawi. 57. S&P affirms BBB-minus rating and negative outlook: Global rating agency Standard & Poor’s has affirmed its ‘BBB minus’ sovereign rating for India, but the outlook remained negative. ‘BBB minus’ is the last investment grade. A notch lower will not only hurt foreign investment flows, but Indian companies will also have to pay more to borrow abroad. Giving reasons for affirming the rating, the agency listed strengths such as low external debt, ample foreign exchange reserves and an increasingly credible monetary policy. But these strengths, were counter-balanced by the onerous burden of its public finance, lack of progress on structural reforms and shortfalls in basic services. 58. Service tax noose to tighten on specific sectors: The Finance Department will closely monitor service tax compliance in sectors identified as ‘chronic tax evasion’. These sectors include renting of immovable property, construction and real estate, information technology, mining, advertisement and storage and warehousing. 59. Direct plans of mutual funds not a hit with retail investors: From January 1, 2013, all mutual funds were asked to offer a new Direct Plan with their schemes so that investors could bypass the services of a distributor, save on costs and thus earn higher returns from their funds. But 10 months on, while a good number of institutions and affluent investors have moved their money into direct plans, very few retail investors have made the shift. 60. CAG becomes member of UN audit panel: The Comptroller and Auditor General of India Shashi Kant Sharma has been elected to the coveted United Nations Board of Auditors for a six-year term. India will replace China beginning July 1, 2014. The CAG of India will now get access for audit of the UN organisations, including the UN Headquarters. India was earlier in the Board for six years from 1993. 61. US pushes India again for early phase-out of textile sops: India will have to start phasing out its textile subsidies soon to conform with the Subsidies Agreement of the World Trade Organisation. While export subsidies are prohibited under WTO rules, the multilateral trade body allows countries with per capita income below $1,000 to give such incentives till exports are lower than 3.25 per cent of world trade in that particular commodity. India’s share in the global market for textiles crossed the limit in 2007, according to WTO records, and is almost four per cent at the moment. However, since countries are given eight years to remove the subsidies, India has time till 2015 to do so.
  14. 14. www.bankersadda.com | www.careerpower.in | www.careeradda.co.in 62. Oil Ministry wants FinMin to cut taxes on branded petrol, diesel: The Ministry of Petroleum & Natural Gas has requested the Finance Ministry to review the duties levied on branded auto fuels (petrol/diesel) to bring down the price differential with non-branded or regular fuels. This, will attract consumers to branded fuels, which will help improve fuel efficiency by about two per cent, resulting in reduction in overall demand. 63. PM’s panel will drive execution of infra projects: The Prime Minister’s Project Monitoring Group will start supervising the implementation of 99 infrastructure projects, with investments worth Rs 3.6-lakh crore, already cleared by it. The projects, cleared by the PMG and the Cabinet Committee on Investments, include Sterlite Energy Ltd’s project worth Rs 12,000 crore, Adani Mundra’s thermal power plant worth Rs 9,900 crore, Lanco’s Rs 6,000- crore facility, Mumbai Airport’s new terminal worth Rs 12,000 crore and Jhajjar Power Ltd’s project worth Rs 6,600 crore. Bank funds worth about Rs 7-lakh crore are locked in these projects that were stuck due to various reasons, including environment clearance. 64. UK’s decision to scrap visa bond: The British government has decided to scrap a controversial £3,000 visa bond scheme for six Commonwealth nations, including India. 65. Top 200 firms have fewer than 10% woman staff: According to a survey by CII, women employees account for less than a tenth of the workforce in more than half of the top 200 companies by market capitalization. Such companies mainly operated in sectors such as mining, manufacturing, oil exploration, construction and engineering. About 20 per cent of the companies had women employees accounting for 10-20 per cent of their staff strength. Another 12 per cent of the companies – mainly in the service sector had female staff ranging between 20 and 40 per cent of their workforce. Also, half of the companies surveyed had at least one woman on their board of directors. The Companies Act stipulates appointment of at least one woman on the board of a company. 66. Mars Orbiter lifts off successfully, begins 400- million-km journey: India’s maiden mission to Mars blasted off on 5th Nov from launch pad at the Satish Dhawan Space Centre at Sriharikota in Andhra Pradesh. 67. Jignesh Shah quits MCX: Jignesh Shah, promoter of troubled National Spot Exchange Ltd (NSEL), has stepped down as Non-Executive Vice- Chairman of MCX. Shah, who recently quit from the board of MCX Stock Exchange, also heads Financial Technologies as Chairman and Group CEO. 68. New Chairman for National Payments Corp: M. Balachandran has been appointed chairman of National Payments Corporation of India (NPCI), taking over the reins from Infosys’ N. R. Narayana Murthy. 69. CAD will be below $70 b this fiscal: According to C Rangarajan, Chairman of the Prime Minister’s Economic Advisory Council, India may contain the current account deficit for 2013-14 below $70 billion, lower than 2011-12 level. 70. Manufacturing shrinks for third straight month: HSBC’s manufacturing purchasing managers’ index for India remained unchanged in October, staying below 50 for the third consecutive month. The index in October was at September’s level of 49.6. 71. G.K. Pillai appointed Chairman of MCX-SX: MCX Stock Exchange (MCX-SX) has appointed Gopal Krishna Pillai, IAS (Retd), as the Chairman and Thomas Mathew T, as Vice-Chairman of its board of directors. 72. FDI may soon be allowed in e-retail services: The Government may widen the scope of foreign investment in e-retailing by allowing FDI in services such as selling of financial products and rail-ticket booking, in addition to transacting in goods. 73. FIPB eases defence FDI norm: The Foreign Investment Promotion Board (FIPB) has decided not to reject proposals from a foreign company only because it or any of its group companies or their parent is under investigation in the country or abroad. Clearance will be given without prejudice to any existing or future civil or criminal proceedings against the foreign investor or its parent. 74. Decoding the numbers that drive food inflation: Food inflation has increased since the beginning of 2012. The rate of retail food inflation for urban households has been higher than the wholesale food inflation rate in recent months. The general increase in food inflation is being driven by protein-rich eggs, fish and meat, which have experienced volatile but high inflation; and, above all, vegetables. Other major components of spending, like fuel and light, have
  15. 15. www.bankersadda.com | www.careerpower.in | www.careeradda.co.in seen a reduction in the overall inflation in the past two years but, sufficiently high to keep the retail inflation rate close to double digits. Retail inflation remains significantly higher than wholesale inflation and is much higher than core inflation in particular, which has been sharply reduced by policy and the slowdown. 75. Banks send notice to Delhi Airport Metro for payment of dues: A consortium of lenders led by Axis Bank which have a total exposure of Rs 1,800 crore has sent a notice to Delhi Airport Metro Express Pvt Ltd (DAMEPL) for payment of loans which have turned into non-performing assets. The notices have been served on Reliance Infrastructure Ltd and Delhi Metro Rail Corporation (DMRC). 76. RBI asks banks to increase bad loan provisions: The banking system’s provision coverage ratio (PCR) has dropped below 50 per cent, compared with 70 per cent two years ago. RBI expects banks to maintain a high level of overall provision, over and above the regulatory requirement for individual loan losses. Internationally, provisioning is 70-80 per cent. 77. NCAER report pegs fiscal deficit at 5.1%: The National Council of Applied Economic Research (NCAER) has pegged the government’s fiscal deficit for this financial year at 5.1 per cent of gross domestic product (GDP), against the finance ministry’s estimate of 4.8 per cent. The GDP growth is estimated at 4.8-5.3 per cent in 2013-14. 78. RBI to overhaul debt recovery process: Speaking at Bancon 2013, RBI Governor Raghu Ram Rajan said that RBI will announce measures to ensure fair recovery for bankers and investors, and to punish those trying to milk the system. Other observations by him included – (i) Promoters were taking undue advantage of the debt restructuring process; (ii) Bank management with limited tenure keeps on extending and evergreening a loan so that one’s successor has to deal with it; (iii) the practice of transfer of top management among public sector banks (PSBs) could be reviewed; (iv) Country’s industrial sector had come a long way and there was no need to enter free-trade agreements that give foreign manufacturers an undue advantage, but there is no reason to give domestic manufacturers protection. 79. Pakistan hints at MFN status, allowing more products from India: The negative list which became operational from March 21 last year contains 1,209 items that India cannot export to Pakistan, including pharmaceutical and agricultural products. India can export around 7,500 items there. Pharmaceutical and agricultural items are likely to be allowed to be imported. 80. Inflation control still RBI's main agenda: As per deputy governor of RBI, K C Chakrabarty, cost of money is high whenever inflation is high and growth is not sacrificed because of high interest rates. Growth is sacrificed because of high inflation. People will not save if the rate of return is lower than inflation. If banks have to give higher rates for mobilising deposits, then they cannot lend money at lower rates. 81. FM wants bank licences to go to those with innovative models: According to Finance Minister P Chidambaram, the new banking licences, expected to be given in January, would be issued to applicants with innovative and different banking models. According to FM, banks are required to cater to different sections like communities, tribal populations, Northeast, urban poor, rural poor, farmer families, women. It is, therefore, necessary to promote banks that cater to these individual segments of people. 82. Banks' exposure to shadow banking entities up in India: According to an international body of financial regulators, India is among the nations which have witnessed a marked increase in the exposure of its banks to 'shadow banking' entities, whose asset base globally grew to $71 trillion in 2012-end. Shadow banking system refers to credit intermediation involving entities and activities outside the purview of the regular banking system. 83. Yogesh Agarwal's term as pension regulator cut short: Yogesh Agarwal, chairman of the Pension Fund Regulatory and Development Authority (PFRDA), resigned about one-and-a- half years before the end of his tenure. 84. India's netizens set to be world's second- biggest internet user base: According to a report released by the Internet and Mobile Association of India (IAMAI) and market research firm IMRB International, by June 2014, Indians might outnumber American internet users to become the world’s second-largest online community after China. 85. Low cost distribution channel needed for 'Bank of future': According to McKinsey report, ‘Reimagining Banking in India: Gearing up to meet the new environment’, banks need innovation in their distribution channels to cater to changing customer preferences, as well as improve productivity and cost-efficiency. Total
  16. 16. www.bankersadda.com | www.careerpower.in | www.careeradda.co.in loans (as percentage GDP) extended to all segments increased 103 per cent, from 0.29 per cent in 2003 to 0.59 per cent in 2013. However, despite the presence of nearly 90 scheduled commercial banks in India, the extent of access is still low, with about 35 per cent of India’s population financially excluded, and only 28 per cent of total bank retail credit being channelled to rural and semi-urban areas, which constitute 87 per cent of the population. To become a “bank of the future”, banking players should innovate in three aspects---customer insights and proposition, distribution and risk architecture. Banks should leverage digital banking to cater to high-value customers. 86. HRD ministry to set up 120 community colleges: The human resource development ministry will set up 120 community colleges, based on community colleges in the US, to provide academic and vocational training. India has a gross enrolment ratio of 19 as compared to a global average of 29. 87. Life insurers rush to revive lapsed policies: A policy is considered lapsed if the premium is not paid within the grace period. According to Insurance Regulatory and Development Authority (Irda) recommendations, a uniform grace period of 30 days is extended for annual, half-yearly and quarterly renewals, and 15 days for monthly renewals. Renewals not just boost renewal premiums, but also improve the overall persistency rates of the life insurers. Persistency is an indicator of the percentage of policies that an insurer is able to renew in the 13th, 25th and 37th and 49th month of the policy term. 88. Centre plans 4 solar UMPPs of Rs 90,000 cr: The Centre has proposed four ultra mega solar power projects (UMPPs). These would be in Rajasthan (4,000 Mw), Gujarat (4,000 Mw), Kargil (2,000 Mw) and Ladakh (5,000 Mw). These would cost Rs 90,000 crore. 89. Sumit Bose to become finance secretary: Ratan P Watal is set to be the expenditure secretary, while Revenue Secretary Sumit Bose would be finance secretary on the retirement of R S Gujral towards end of Nov 13. 90. Govt tells states to lower levy rice quota for PDS: In a move that could increase the supply of rice in the retail markets, the Centre has directed states to reduce quota for levy rice, sold for public distribution system (PDS), from the existing 30-75 per cent to 25 per cent of the total produce of millers in the current procurement season. The government gets the rice for the central pool to be distributed through PDS by two ways: Custom-milled and levy rice. In CMR, the government purchases husked rice from farmers and then allocates it to mills for processing for a fixed charge and rebuys again from them. In the levy rice policy, millers are allowed to sell a certain percentage (25–70 per cent in major rice producing states) of rice procured by them in the open market, while the remaining (called levy rice) is collected by government agencies at a minimum support price (MSP). 91. RBI hikes ways and means advances limit of states: The aggregate normal Ways and Means Advances (WMA) limit for the state governments has been increased by 50 per cent to Rs 15,360 crore. The current limit for state governments and the Union territory of Pondicherry is at Rs 10,240 crore for the year 2013-14. 92. PM's council wants govt to cut stake in banks to 51%: The Prime Minister's Economic Advisory Council has recommended phased dilution of government stake in public-sector banks, from 58 per cent to 51 per cent, and introduction of on-tap licensing of new banks. The stake reduction would help raise the additional capital required to implement the Basel III norms. 93. Up to 10,000 killed in Philippines by super typhoon Haiyan: Super typhoon Haiyan destroyed about 70 to 80 percent of structures in its path. Nearly 480,000 people were displaced and 4.5 million "affected" by the typhoon in 36 provinces. 94. India to host 2 key multilateral meetings: The first would be a trilateral dialogue between the
  17. 17. www.bankersadda.com | www.careerpower.in | www.careeradda.co.in foreign ministers of Russia, India and China, or RIC, staring November 10. India would also host another key meeting, the Asia-Europe Meeting (ASEM) from November 11-12, with 36 foreign ministers and 12 deputy foreign ministers from Asia and Europe participating. ASEM represents about 60 per cent of the world’s population, 52 per cent of the global gross domestic product and 68 per cent of global trade. 95. Forex reserves fall to $281.29 bn: India's foreign exchange reserves fell in the week ending November 1 by $1.66 billion to $281.29 billion. 96. India Inc sees red on voting rights for preference shares: The Companies Act, 2013, gives the same voting rights to preference shareholders as to equity capital holders. This will impact voting rights of all those companies whose preference share capital is larger than their equity capital. However, the Act is silent on whether this will be with retrospective or prospective effect. 97. Centre sets Rs 1-lakh-cr retail loan disbursal target for PSBs: The finance ministry expects public sector banks to disburse about Rs 1,00,000 crore of consumer loans at low rates. 98. RBI signs cooperation pacts with central banks of Australia & NZ: RBI has signed cooperation agreements with the central banks of Australia and New Zealand for exchange of information. With this, the apex bank had signed such MoUs with 18 supervisors. The MoUs provided for sharing of information on the health of the supervised entities, cooperation between the supervisors during on-site examinations, frequent meetings between the supervisors and preserving the confidentiality of information shared. 99. FinMin shortlists EDs for top job in six govt banks: The Union finance ministry has shortlisted the names of executive directors (EDs) likely to head public sector banks (PSBs) in 2014-15. The banks whose CMDs are likely to retire in 2014-15 include Bank of Baroda (BoB), Indian Overseas Bank (IOB), Canara Bank, Oriental Bank of Commerce (OBC), Vijaya Bank and United Bank of India. 100.Foreign bank subsidiaries get M&A, branch freedom: As per guidelines issued by RBI, Wholly Owned Subsidiaries of foreign banks could acquire domestic private-sector banks, as well as set up branches anywhere in the country. These WOSes might be permitted to enter into merger & acquisition (M&A) transactions with any private bank in India, subject to the overall foreign investment limit of 74 per cent. The current law permits foreign investors to hold up to 74 per cent stake in an Indian private bank, but it does not allow a single entity to own more than five per cent share in a local lender. Currently, foreign banks need RBI’s permission to open branches in the country. According to its commitments to the World Trade Organization, the central bank is required to allow only 12 new foreign bank branches in a year. At present, 43 foreign banks have only 334 branches — mostly in cities — less than 0.5 per cent of the banking system’s total branch network. 101.Cyprus blacklisted for not sharing tax info: The Centre has blacklisted Cyprus for not sharing information about tax evaders. This would make it difficult for Indian residents to do business with the tax haven. JAN 2014 1. Sumit Bose is new Finance Secretary: Sumit Bose, has been designated as the new Finance Secretary. He will continue to hold the post of Revenue Secretary. 2. Harsh Bhanwala is new Nabard Chairman: The Centre has appointed Harsh Kumar Bhanwala as Chairman of the National Bank for Agriculture and Rural Development (Nabard). Prior to this appointment, Bhanwala was an Executive Director at India Infrastructure Finance Company Ltd (IIFCL), a state-owned infrastructure lender. Bhanwala, succeeds Prakash Bakshi, who retired as Nabard Chairman in September. 3. C.V.R. Rajendran appointed CMD of Andhra Bank: Prior to this elevation, Rajendran was executive director at Bank of Maharashtra. 4. Arun Tiwari new CMD of Union Bank: The Union Government has appointed Arun Tiwari as
  18. 18. www.bankersadda.com | www.careerpower.in | www.careeradda.co.in Chairman and Managing Director of Union Bank of India. Prior to this elevation, Tiwari was an executive director at Allahabad Bank. 5. Chairman IBA: K R Kamath is the Chairman of Indian Banks Association. 6. Gold traders opt for jewellery imports to tackle curbs on bullion: 7. Though Gold bullion attracts import duty of 10 per cent, and duty on gold jewellery is 15 per cent, yet conditions attached to bullion imports like ‘80:20 scheme’, under which merchants were to re-export 20 per cent of each gold consignment before ordering fresh shipments makes import of bullion difficult. 8. Ministry clarifies on role of shares held in fiduciary capacity: According to Corporate Affairs Ministry, shares held by a company in a fiduciary capacity should not be counted for the purpose of determining holding-subsidiary relationship. Further, the powers that a company can exercise in another company in a fiduciary capacity (only in the capacity as a trustee) will be excluded for determining holding-subsidiary relationship. 9. Bank of India plans to get into merchant banking: Bank of India is planning to enter the merchant banking space via BOI Shareholding Ltd. Public sector banks which have a merchant banking subsidiary include State Bank of India, IDBI Bank and Bank of Baroda. 10. Pradeep Kumar is new MD of SBI: P. Pradeep Kumar has been appointed by the Government as Managing Director of State Bank of India. Prior to his elevation, Kumar was the Deputy Managing Director and Group Executive of the Corporate Banking Group in India’s largest bank. 11. Cabinet nod for cancer institute at Jhajjar: The Union Cabinet, has approved the proposal to set up a National Cancer Institute at a cost of Rs 2,035 crore. The institute, which would be set up at the Jhajjar campus of the All India Institute of Medical Sciences in Haryana, is likely to be completed within 45 months. 12. Insurance broking: In major relief to insurance companies without bancassurance partners, the finance ministry has asked all public sector banks to act as insurance brokers to boost insurance penetration in the country. Currently, insurance penetration (the ratio of the percentage of total insurance premia to gross domestic product) is about five per cent. The ministry has advised banks to leverage their branch network for insurance penetration. The corporate agency model should be done away with and each bank to train and orient its staff to conform to new provisions. Currently, bancassurance follows the corporate agency model, through which a bank can only tie up with one life, one non-life and one health insurer to sell their insurance products. Therefore, non-bank promoted insurance companies and late entrants to the insurance sector do not have any bank partner to sell their policies. As an insurance broker, a bank is liable to consumers, in terms of an insurance policy, unlike a corporate agent. The liability is high, especially as the bank will sell products of multiple insurers. The customers will now have more choice while buying insurance from banks. The Finance Ministry has set January 15 as the deadline for banks to start selling products of more than one insurance company. 13. 8.8 m families live in urban slums: As per a survey conducted by National Sample Survey Office (NSSO), about 8.8 million household in India live in urban slums. A total of 33,510 slums are present in urban India, of which 41 per cent are notified as slums by the concerned municipalities, corporations, local bodies or development authorities which accommodate about 63 per cent of all slum-dwelling households. Maharashtra, accounts for 23 per cent of all slums in the country. With 13.5 per cent of slums, Andhra Pradesh comes second, followed by West Bengal (12 per cent). 14. Over 80% of rural homes have power, but 60% have no toilets: As per Government data, 80 per cent of rural households and 97.9 per cent urban households had electricity for domestic use, and 88.5 per cent households in rural India and 95.3 per cent in urban areas had improved source of drinking water. The percentage of households who get drinking water facilities within premises was 46.1 per cent in rural India and 76.8 per cent in urban India while about 62.3 per cent of rural households and 16.7 per cent of urban households did not have any bathroom facility. 59.4 per cent and 8.8 per cent households in rural and urban India, respectively, had no latrine facilities. 15. Govt draws up list of 23 countries for currency swap arrangement: The Commerce Ministry has finalised a list of 23 countries with which India can trade in local currencies to save precious foreign exchange and strengthen the rupee. The list includes oil exporting nations such as Angola, Algeria, Nigeria, Oman, Iran, Iraq, Venezuela, Qatar, Yemen and Saudi Arabia. Other countries on the list include Russia, Japan, Singapore, Australia, Indonesia, South Korea, Malaysia, Mexico, South Africa and Thailand. A currency swap arrangement for trade basically involves trading in local currencies where countries pay for exports and imports with
  19. 19. www.bankersadda.com | www.careerpower.in | www.careeradda.co.in domestic currencies at pre-determined exchange rates instead of trading in US dollars. 16. Women gaining ground in banks’ financial inclusion: The share of female depositors has increased to 28 per cent of the total number of individual deposit accounts in 2012 against 24 per cent in the previous year. The total number of individual deposit accounts in the country stood at 77.32 crore in 2012 against 72.50 crore in the previous year. In terms of amount, women’s share in the total individual deposits has improved to 26 per cent in 2012 from 22 per cent in 2011. In 2012, individual deposits aggregated Rs 30.78 lakh crore against Rs 28.05 lakh crore in the previous year. The share of female loan accounts in the total number of loan accounts has gone up to 15.82 per cent in 2012. Women’s share in the total outstanding loans (individuals) has risen to 18 per cent in 2012 against 15 per cent in 2011. The total outstanding loans in the case of individuals aggregated Rs 11.69 lakh crore in 2012 against Rs 9.63 lakh crore in 2011. 17. Insurance policy will cost more from Jan 1: The Government has widened its service tax net to cover the policy premiums paid. Service tax rates will be 12.36 per cent on Unit-Linked Insurance Polices (only on charges, such as mortality and administration), 3.09 per cent on traditional products as most of the premium goes into savings, and 12.36 per cent on term plans. 18. SEBI proposes framework for infra trusts: To aid the financing and refinancing of long-term infrastructure projects in India, the capital market regulator SEBI has proposed a framework for the introduction of infrastructure investment trusts (InvIT). According to the 12th Five Year Plan, India requires an investment of Rs 65 lakh crore in infrastructure between 2012 and 2017. SEBI suggested that the trust could either be floated using the mutual fund structure or through a separate structural framework. 19. Consumer inflation linked bonds: Inflation Indexed National Savings Securities - Cumulative, seek to protect savings from price rise, by offering returns over and above inflation at the retail level. Only retail investors can buy these bonds. The minimum investment size is Rs 5,000. The interest rate is the sum of the prevailing inflation based on the combined consumer price index (CPI) and a fixed rate of 1.5 per cent annually. The inflation rate will be reckoned with a lag of three months, with the September CPI used in December, and so on. Interest on the bonds will not be paid out but compounded on a half-yearly basis. 20. SME varsity to come up in Hyderabad: A national Small and Medium Enterprises (SME) university will be soon set up at Hyderabad. Another technical training institute was also being set up in Visakhapatnam at an investment of over Rs 150 crore. 21. Sidharth Birla is new FICCI President: Sidharth Birla was elected as President, FICCI, after the industry chamber’s 86th Annual General Meeting. 22. Misuse of bank guarantees, letters of credit on the rise: Due to rising incidents of frauds, banks are not in favour of issuing non-fund based facilities, such as bank guarantees and letters of credit, to non-customers. 23. CCEA ups gas price for RIL subject to bank guarantee: The Cabinet Committee on Economic Affairs (CCEA) approved a Petroleum and Natural Gas Ministry proposal to allow RIL to sell KG-D6 block gas at the new price effective April 2014. It also decided against putting any cap/floor price on the gas rates and to maintain the gas price formula approved earlier. RIL can now get the benefit of the revised gas price in return for a bank guarantee for the unmet supply commitment from its KG-D6 block. 24. Cabinet approves Rs 6,600-cr interest-free loans for sugar mills: The Cabinet Committee on Economic Affairs has approved Rs 6,600 crore interest free loans to sugar mills to ease their cane payment burden. The CCEA also approved the exports of sugar without any quantitative restrictions. 25. Lok Sabha passes landmark Lokpal Bill: The Parliament on 18th Dec passed the Lokpal Bill, paving the way for the setting up of anti- corruption watchdogs at the Centre and State level. The Bill was passed by Lok Sabha on 18th Dec and by Rajya Sabha on 17th Dec. Highlights of the Bill include – (a) The Lokpal will consist of a chairperson and a maximum of eight members, of whom half will be judicial members; (b) Fifty per cent of the Lokpal members shall be SC/ST/OBCs, minorities and women; (c) The chairperson and members will be chosen by a selection committee consisting of the Prime Minister, Speaker of the Lok Sabha, Leader of the Opposition in the Lok Sabha, Chief Justice of India or a sitting Supreme Court judge nominated by the CJI, and an eminent jurist to be nominated by the President of India on the basis of recommendations of the first four members of the selection committee; (d) The jurisdiction will include all categories of
  20. 20. www.bankersadda.com | www.careerpower.in | www.careeradda.co.in public servants and incorporate provisions for attachment and confiscation of property acquired by corrupt means, even while prosecution is pending; (e) Setting up of Lokayuktas through enactment of a law by the State Legislature within 365 days from the date of commencement of the Act. 26. Rename company secretaries as ‘governance professionals’: The Company Secretaries Institute has written to the Corporate Affairs Ministry suggesting that their members may be rechristened as “governance professionals”. 27. Status quo on repo rate, CRR: RBI maintained status quo on the repo rate at 7.75 per cent and cash reserve ratio (CRR) at 4 per cent in its policy announced on 18th Dec. Explaining the rationale for not hiking the rate in the mid-quarter policy, RBI Governor stated that both retail and wholesale inflation have increased mainly on account of food prices and vegetable prices are likely to fall both at the wholesale and retail levels. 28. Tesco to invest $100 million in multi-brand retail stores: British retailer Tesco Plc became the first global retailer to seek the Government’s nod to enter multi-brand retail trade segment. Tesco plans to pick up a 50 per cent stake in Trent Hypermarket Ltd, a retail arm of the Tata group, and enter the multi-brand retailing arena. The stores will operate under the names Star Bazaar, Star Daily or Star Market, and the first few will come up in Maharashtra and Karnataka. 29. RBI plans carrot-and-stick approach to curtail bad loans: To spur banks/financial institutions to agree collectively and quickly to a plan of resolution of stressed assets, RBI may consider a liberal regulatory treatment including spreading the loss on sale of the asset over a period of two years; allowing takeout financing/refinancing over a longer period and not considering the same as restructuring. In case lenders cannot reach an agreement on resolution of stressed assets then they will be subject to accelerated provisioning. Before a loan account turns into a non-performing asset (NPA), banks should identify incipient stress in the account by creating a new sub-asset category — Special Mention Accounts (SMA) - a standard account, which is moving towards the substandard category. SMA will have three sub-categories — SMA-NF (classified on the basis of non-financial signals); SMA-1 (when principal or interest payment is overdue between 31-60 days); and SMA-2 (when principal or interest payment is overdue between 61-90 days). The RBI also plans to set up a Central Repository of Information on Large Credits (CRILC) to collect, store, and disseminate credit data to lenders. Banks will have to furnish credit information to CRILC on all their borrowers having aggregate fund-based and non-fund-based exposure of Rs 5 crore and above. Systemically important non-banking finance companies (NBFC-SIs) will also be asked to furnish such information. In addition, banks will have to furnish details of all current accounts of their customers with outstanding balance (debit or credit) of Rs 1 crore and above. The reporting of an account as SMA-2 by one or more lending banks/NBFC-SIs will trigger the mandatory formation of a Joint Lenders’ Forum (JLF) and formulation of Corrective Action Plan (CAP). JLF formation would be made mandatory for distressed corporate borrowers with aggregate fund-based and non-fund based exposure of Rs 100 crore and above. The options under the CAP by the JLF would generally include: rectification (for regularising the loan account), restructuring and recovery (when the first two options fail). 30. Relief to banks on asset sales to ARCs: As per RBI, the excess provision on any bad loan which is sold to an asset reconstruction company (ARC) for a higher value can be reversed to the bank’s profits. 31. Inflation hits 14-month high: Surging food prices pushed November wholesale price index- based inflation to a 14-month high of 7.52 per cent. Food inflation shot up a huge 19.93 per cent — a near-four-year high. It had risen 18.19 per cent in October. Vegetable prices shot up an alarming 95.25 per cent in November compared with 78.38 per cent in the previous month. 32. India for food security subsidies out of WTO actionable sops ambit: India will push for complete exclusion of subsidies given under public stock holding programmes from the category of actionable subsidies at the World Trade Organisation. India has managed to get only an interim reprieve from legal action against such breaches at the recently concluded Ministerial Meeting in Bali. 33. Third home loan as a commercial real estate advance: The National Housing Bank has suggested to the Finance Ministry that home loans provided to a borrower for the third time should not be treated as commercial real estate advance. According to R. V. Verma, Chairman and Managing Director, NHB, such an approach
  21. 21. www.bankersadda.com | www.careerpower.in | www.careeradda.co.in would help improve housing stock in the country and also give a fillip to the rental housing market. NHB is the housing finance regulator of the country. 34. SMS alerts: Banks prefer to charge a flat rate: Instead of linking the charges to the number of transaction alerts received by customers, banks are weighing the possibility of recovering Rs 5-10 a month from those opting to receive the alerts via SMS. 35. Centre to review RBI powers as part of financial sector reforms: The Financial Sector Legislative Reforms Commission (FSLRC) has proposed a financial regulatory mechanism comprising the RBI, Unified Financial Agency, Financial Sector Appellate Tribunal, Resolution Corp, Financial Redressal Agency, Public Debt Management Agency and the Financial Stability Development Council. Under the proposed regulatory structure, the RBI will perform the functions of monetary policy, regulation and supervision of banking and payment systems. The Financial Stability Development Council will function in the systemic risk and development category. 36. I-T dept stakes claim to Kingfisher assets: The Income Tax Department has said a consortium of banks cannot stake any claim to the assets of Kingfisher Airlines until the department’s dues of over Rs 350 crore are settled. 37. Govt offers more concessions under rural jobs scheme: Union Minister for Rural Development Jairam Ramesh has announced that – (a) every job card holder under MNREGA, will be entitled to Rs 10,000 to build an individual toilet. At present, a job card holder can avail Rs 4,500 to build a toilet; the Centre will provide assistance for the construction of buildings for women self- help federations; MNarega scheme will be converged with the Indira Awas Yojana and other housing schemes for the poor; (d) to allow the building of community storage facilities for agriculture produce in gram panchayats to link the MGNREGS with the Food Security Scheme; (e) if wages are delayed beyond 15 days, compensation at 0.05 per cent of wage per day of delay will be paid and this amount will be deducted from the salary of the responsible personnel. 38. Public sector banks may have to set up insurance broking arms by February: At present, banks are allowed to tie up with only one insurance company and sell products of only that insurer under the corporate agency (bancassurance) channel. According to Financial Services Secretary Rajiv Takru, all insurance products should be available through the one- lakh-plus bank branches. According to the guidelines finalised by the Insurance Regulatory and Development Authority, as brokers, banks will have to cap business from their own group companies at 25 per cent for life insurance and a similar cap for non-life insurance business. Most major public sector and private sector banks, such as State Bank of India, Union Bank of India, Bank of Baroda, Canara Bank, Bank of India, Punjab National Bank, Andhra Bank, ICICI Bank and IDBI Bank, have promoted insurance companies. Most banks are not in favour of broking as many of them had promoted insurance companies. Also, they will have fiduciary responsibility towards the customer while selling insurance products under the broking regulation. 39. ATM density still low in India: According to RBI data outlining global financial inclusion indicators for 2011, there are just 25.4 machines in every 1,000 sq. km in India. This translates into 8.9 ATMs for every one lakh population, one of the lowest densities in the world. Bank customers in China have access to 2,975 machines in the same geographical expanse, with 49.6 ATMs per one lakh population. In UK, ATM density stands at 261 per 1,000 sq km. But the number of ATMs per 1 lakh population is higher at 122.8 ATMs. ATM density in populous Malaysia stands at 34 per 1,000 sq km, with 56.4 machines per 1 lakh population. While the density in terms of machines per 1,000 sq km is lower in countries, such as Indonesia, Mexico and the Philippines, they have more machines per one lakh people owing to the lower population. However, in terms of bank branch density, India fares better than many developing countries. Bank branch density in India is 30.4 per 1,000 km, compared to just 9.6 in the US, 3.1 in South Africa and 7.9 in Brazil. China ranks highest in terms of bank branch density. 40. Funding for ‘specialised’ entities: RBI, in its discussion paper on resolution of NPAs, has stated that RBI will allow banks to extend finance to ‘specialised’ entities put together for acquisition of troubled companies. However, the lenders should ensure that these entities are adequately capitalized. The Reserve Bank will withdraw the minimum holding period for any initial loan sale. However, the bank purchasing

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