Weekly Top Finance News - Economy-Banking- FOR RBI GRADE B & SEBI GRADE A - 12th - 18th October 2020 - Oliveboard
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Weekly Top
Economy-Banking-
Finance News
12th - 18th October 2020
FOR RBI GRADE B & SEBI GRADE A
Weekly Top Economy-Banking-Finance News Free GA e-book
Weekly Top Economy-Banking-Finance News
12th-18th October
1. HDFC Bank board appoints Sashidhar Jagdishan as its MD & CEO
• The board of directors of HDFC Bank has approved appointment of Sashidhar
Jagdishan (Sashi) as Managing Director and Chief Executive Officer of bank for three-
year term from October 27, 2020. The Reserve Bank of India has already approved
Jagdishan’s appointment.
2. Forex reserves rise by $5.867 billion to a lifetime high of $551.5 billion
The country’s foreign exchange reserves surged by USD 5.867 billion to touch a record high
of USD 551.505 billion in the week to October 9, according to the RBI data.
3. The Union government is set to change the base year for the consumer price
index–industrial workers (CPI-IW), paving the way for a possible increase in
the minimum wage of private-sector workers and dearness allowance of
government employees.
• Union Labour and Employment Minister Santosh Kumar Gangwar are scheduled to
release the new CPI-IW index, keeping 2016 as the base year.
• “The government will also announce that it will revise the CPI-IW base year to 2021
and the work will begin next year. The International Labour Organisation,” the official
said, requesting anonymity.
• The move will lead to a hike in salaries of around 30 million industrial workers and 4.8
million central government employees.
• This is because the dearness allowance (DA), a component of salary which undergoes
revision every six months to keep pace with the inflation rate in the economy, is linked
to this inflation index for government employees. For private-sector workers, the
central government and most states in India increase the variable DA component of
the minimum wages twice a year.
• The CPI-IW, with the base year 2016, will give more weight to non-food items than the
food ones compared to the 2001 index. The weight for food and beverage components
is set to decline from 46 percent to 39 percent in the new series. On the other hand,
the weight for non-food items such as education, health, entertainment and
recreation, household goods and services, transport and communication is slated to
jump from 23 percent in 2001 to 30 percent in 2016.Weekly Top Economy-Banking-Finance News Free GA e-book
• As the prices of non-food items rise at a higher rate than food items, the DA
component of salaries of employees would see a higher hike if new CPI-IW is
considered than the existing one.
4. Walmart-backed payments firm PhonePe launches vehicle insurance
service
• Walmart-owned digital payments firm PhonePe has launched insurance products for
private cars and two-wheelers, partnering with Bajaj Allianz General Insurance for the
service.
• More than 230 million registered PhonePe users can insure their vehicles in under two
minutes, said PhonePe about the service. The Bengaluru-based firm said users do not
need to upload documents before making a purchase and they can view their policy
documents instantly.
• PhonePe users can also customize their car insurance plan based on their needs with
a range of value-added offerings such as zero depreciation, 24X7 roadside assistance,
and engine protection. Zero depreciation helps protect the vehicle regardless of the
annual depreciation in the value of its parts and pays for the entire claim amount,
thereby limiting out-of-pocket expenses for the users.
5. India’s public debt ratio to jump to 90 percent because of Covid-19: IMF
• India’s public debt ratio, which remarkably remained stable at around 70 percent of
the GDP since 1991, is projected to jump by 17 percentage points to nearly 90 percent
because of an increase in public spending due to COVID-19, the IMF said.
6. RBI fields FaQs on loan recast clears air over OTR, loan against property
• Outstanding debt on the date of invocation will be eligible for restructuring under the
regulatory scheme for borrowers facing financial stress due to the Covid-19 pandemic,
the Reserve Bank of India has said.
• The central bank addressed a volley of queries on operational issues in the Frequently
Asked Questions (FAQs) section for one-time restructuring (OTR).
• An RBI circular dated August 6 on OTR had stated that the reference date for the
outstanding amount of debt that may be considered for resolution shall be March 1,
2020.
• Banks have to invoke restructuring plans not later than December 31, 2020. In the
case of personal loans, the resolution plan must be implemented within 90 days from
the date of the invocation. However, lending institutions should strive for early
invocation. For corporate debt, the plan must be implemented within 180 days.Weekly Top Economy-Banking-Finance News Free GA e-book
• RBI said Loan Against Properties (LAP) for business purposes with the immovable
property as security is not personal loans. They can be restructured only under a
framework for non-individual borrowers facing stress due to the COVID19 pandemic.
• RBI said there are loans granted to individuals where the property is in name of the
individual. But a related company/non-individual entity is taken as co-borrower on the
loan structure to supplement the income for repayment of the loan. Such advances
would not be treated as personal loans. Such advances would have to be dealt with
under a scheme for the resolution of other exposures, RBI said.
7. WPI inflation rises to 1.3% in September mainly on costlier food items
• The wholesale price-based inflation rose to 1.32 percent in September mainly on the
back of costlier food articles.
8. India set to slip below Bangladesh in 2020 per capita GDP, says IMF
• Bangladesh is set to beat India in terms of per capita gross domestic product (GDP)
this calendar year, thanks to a sharp contraction in the Indian economy due to Covid-
19 and the economic lockdown.
• According to the International Monetary Fund (IMF)-World Economic Outlook (WEO),
Bangladesh’s per capita GDP in dollar terms is expected to grow 4 percent in 2020 to
$1,888. India’s per capita GDP, on the other hand, is expected to decline 10.5 percent
to $1,877 – the lowest in the last four years. The GDP figure for both countries is at
current prices. This makes India the third poorest country in South Asia, with only
Pakistan and Nepal reporting lower per capita GDP, while Bangladesh, Bhutan, Sri
Lanka, and the Maldives would be ahead of India.
• India’s per capita GDP in dollar terms is expected to grow 8.2 percent in 2021, against
an expected 5.4 percent growth for Bangladesh. This will grow India’s per capita GDP
to $2,030 next year, against Bangladesh’s $1,990.Weekly Top Economy-Banking-Finance News Free GA e-book
9. Gross NPAs of banks may jump to 11.5% by end of FY21: Care Rating
• The gross non-performing assets (NPAs) ratio of Indian banks is likely to be 11 to 11.5
percent by end of the current fiscal and they are likely to restructure 4 to 5 percent of
the overall bank credit outstanding, according to Care Rating.
• The GNPA ratio of scheduled commercial banks stood at 8.2 percent in Q1 FY21
against 9.5 percent in the same period of last year.
• The additions to GNPAs will primarily from loans under SMA-1 (special mention
category) and SMA-2 categories which were under moratorium and not eligible for
restructuring.
• Also, banks may see stress coming from the lower-rated or stressed corporates as
personal loans not eligible for the restructuring scheme and banking exposure to
unsecured personal loans said Care.
10. Sebi lays down new conditions for debenture trustees signing ICAs
• The Securities and Exchange Board of India (Sebi) on Tuesday laid down the
framework for debenture trustees (DTs) signing inter-creditor agreements (ICAs) on
behalf of investors.
• “The resolution plan shall be finalized within 180 days from the end of the review
period. If it is not finalized (within this timeframe), the debenture trustee(s) shall be
free to exit the ICA altogether with the same rights as if it had never signed the ICA
and the resolution plan shall not be binding on the debenture trustees,” the
regulator has said.
11. Indian economy to dip 10.3% in 2020; rebound with 8.8% growth in 2021:
IMF
• The Indian economy, severely hit by the coronavirus pandemic, is projected to
contract by a massive 10.3 percent this year, the International Monetary Fund said.
• However, India is likely to bounce back with an impressive 8.8 percent growth rate in
2021, thus regaining the position of the fastest-growing emerging economy,
surpassing China’s projected growth rate of 8.2 percent, the IMF said in its latest
‘World Economic Outlook’ report.
• Released ahead of the annual meetings of the IMF and the World Bank, the report said
global growth would contract by 4.4 percent this year and bounce back to 5.2 percent
in 2021.
• America’s economy is projected to contract by 5.8 percent in 2020 and grow by 3.9
percent the next year, the IMF said.
• China is the only country, among the major economies, to show a positive growth rate
of 1.9 percent in 2020, it said.
• In 2019, India’s growth rate was 4.2 percent.Weekly Top Economy-Banking-Finance News Free GA e-book
12. Stimulus 2.0 to push the fiscal deficit to 9.5 percent of GDP: SBI report
• A day after Finance Minister Nirmala Sitharaman announced schemes to boost
consumer spending hit by the coronavirus lockdown, the State Bank of India’s Ecowrap
pointed that the announcement is set to push the fiscal deficit to 9.5 percent of the
GDP.
• The new schemes will put an additional burden of Rs 40,000 crore on the government.
• Sitharaman announced the LTC Cash Voucher and Festival Advance Schemes to
encourage government employees to spend more and boost demand in the economy.
• As part of the announcement, central government employees who get Leave Travel
Concession (LTC) for their travels will get an equivalent of the amount even without
traveling. They could use the allowance to make purchases of their choice. This will
apply to the purchase of goods that attract 12 percent GST or more and can be spent
on buying goods worth three times the fair and equal to the cash encashment. The
spending will have to be done by digital mode only.
• There are around 3.5 million central government employees who would be entitled to
this benefit. The report highlighted that out of the two schemes, it is only in the case
of the festival advance proposal that one can think there is some additional income
over and above the current income.
13. PM KISAN Yojana
• PM-KISAN was launched by Prime Minister Narendra Modi on February 24, 2019,
when Rs 2021 crore was transferred to bank accounts of more than 10 million
beneficiaries. According to the scheme, the total income support of Rs 6,000 per year
is provided in three equal installments. In the beginning, the families of only the small
and marginal farmers (those having a combined landholding/ownership of up to 2
hectares) were eligible. Later, from June 2019, the scheme was extended to all farmers
irrespective of the size of their landholding.
• The central scheme is conceptually indebted to Rythu Bandhu, the state scheme of
Telangana by which a grant of Rs 4,000 per acre is provided to each farmer in the state.
Every season, farmers are given assistance to purchase inputs like seeds, fertilizers,
pesticides, labor, and other investments in the field. Rythu Bandhu was implemented
in 2018-19 after receiving accolades from none other than the World Bank.
• In Odisha, too, in a similar state scheme called Kaliya, financial assistance of Rs 10,000
was initially granted to small and marginal farmers in two installments for separate
crops in a year. The scheme had an additional provision of providing interest-free crop
loans of up to Rs 50,000 to all farmers. While both these state governments continued
with their grant, the Odisha government reduced it to Rs 4,000 after joining the central
scheme.Weekly Top Economy-Banking-Finance News Free GA e-book
14. Retail inflation rises to 7.34% in September over higher food prices
• Retail inflation rose to 7.34 percent in September, mainly on account of higher food
prices, according to government data.
• The inflation based on the Consumer Price Index (CPI) stood at 6.69 percent in August.
It was 3.99 percent in September of last year.
• The rate of price rise in the food basket was 10.68 percent in September compared to
9.05 percent in August, as per the data released by the National Statistical Office
(NSO).
15. IIP declines 8% in Aug, manufacturing output contracts 8.6%
• Industrial production declined by 8 percent in August, mainly due to lower output of
manufacturing, mining, and power generation sectors, official data showed on
Monday.
• According to the Index of Industrial Production (IIP) data, manufacturing sector
production registered a decline of 8.6 percent, while the output of mining and power
segments fell 9.8 percent and 1.8 percent, respectively.
• The IIP had contracted by 1.4 percent in August 2019.
16. What is SVAMITVA?
• SVAMITVA is a new government project that primarily aims to demarcate abadi
areas (that includes inhabitant land, inhabited areas contiguous to abadi and
wadis/basties in rural areas) using drone surveying technology. The project would
provide a ‘record of rights’ to house owners in villages who have houses in inhabited
rural areas, and every eligible and authentic property owner in villages across India
will receive a ‘property card’ as a government-approved valid proof of their
ownership. This, in turn, would enable them to use their property as a financial asset
and secure loans and other financial benefits from banks against those properties.
How the project is being implemented?
• While property mapping and digitization of records have been going on for nearly two
decades in India, the new SVAMITVA project has introduced cutting edge drone
technology into the process to further strengthen mapping and reduce the chances of
any discrepancies in records.
• Apart from the demarcation of individual rural property, other Gram Panchayat and
community assets like village roads, ponds, canals, open spaces, school, Anganwadi,
health centers, among others, would also be surveyed to create Geographic
Information System (GIS) maps. These GIS maps and spatial databases would also be
used in the preparation for accuracy of work estimates for various projects
undertaken by Gram Panchayats and other departments of the respective stateWeekly Top Economy-Banking-Finance News Free GA e-book
governments. These can also be used to prepare a top-quality Gram Panchayat
Development Plan (GPDP).
• Under the project, all the 662,000 villages in the country will be surveyed and data will
be mapped and recorded over the next four years – by 2024. Currently, the pilot phase
is being approved for the year 2020-21. It has been extended to six pilot states –
Haryana, Karnataka, Madhya Pradesh, Maharashtra, Uttar Pradesh, and Uttarakhand
– covering nearly 100,000 villages. Further, the Continuous Operation Reference
System (CORS) network establishment is planned for two states – Punjab and
Rajasthan.
• The scheme has six phases – establishment of CORS network, large scale mapping
using drones, information, education, and communication (IEC) activities,
enhancement of spatial planning application (Gram Manchitra), online monitoring
system, and implementation through program management units (at national and
state levels).
Who will implement it?
• Spread over four years (between 2020 and 2024), the SVAMITVA project is overseen
by the Ministry of Panchayati Raj as the nodal body. Moreover, Survey of India
(technology implementation agency), concerned state revenue departments, state
Panchayati Raj departments, local district authorities, respective gram panchayats,
and property owners will be actively involved in the scheme, apart from the National
Informatics Centre. For monitoring purposes, a three-layer monitoring and
evaluation framework shall be put in place for timely monitoring, reporting, and
course corrections.
• The government has already allocated Rs 79.65 crore for the pilot phase, to be
finished during 2020-21.
17. Exim Bank extends $400 mn soft loans to the Maldives for connectivity
project
• India has extended a USD 400 million (about Rs 2,932 crore) soft loan to the
Maldives through the Exim Bank to finance a connectivity project in the nation of
islands.
18. Tamil Nadu signs 14 MoUs worth Rs 10,000 cr, to create 7,000 new jobs
• In a move that would help create 7,000 additional direct jobs in the state, the Tamil
Nadu government has signed 14 memorandums of understanding (MoUs), for
investments worth over Rs 10,000 crore, with companies including JSW Renew,
Britannia, Apollo Tyres, Li-Energy for EV battery packs, Britannia and Hyundai Wia.Weekly Top Economy-Banking-Finance News Free GA e-book
19. UP CM Yogi Adityanath to launch Mission Shakti for women in Navratri
• The Yogi Adityanath government will dedicate the upcoming Navratri festival to
women’s safety, dignity, and empowerment by launching ‘Mission Shakti’ on
October 17.
• The initiative will begin in ‘Shardiya Navratri’ and will continue for the next six
months until the ‘Chaitra Navratri’ in April.
• The government spokesman said in a statement that various programmes will be
organized from the Gram Panchayats to industrial units, school campuses to
government offices, from the Durga Puja pandals to Ramlilas to reaffirm the faith
and resolve towards the women power.
• As many as 23 departments, including basic education, secondary education, higher
education, MSME, other government and non-government agencies will be
participating in the programmes.
• Private cab operators will also be partners in this initiative.
• Short films, street plays, safety pledge, sensitization about the women’s laws, and a
public display of inspirational stories of women will mark the events during the drive.FREE Ebooks Current Affairs
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