financial awareness capsule 2014

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FINANCIAL ASpecially compiled for Banker

1. Sumit Bose is new Finance Secretary:

Bose, has been designated as the new FinSecretary. He will continue to hold the posRevenue Secretary.

2. Harsh Bhanwala is new Nabard ChairmaCentre has appointed Harsh Kumar BhanwaChairman of the National Bank for Agriculand Rural Development (Nabard). Prior to appointment, Bhanwala was an ExecuDirector at India Infrastructure Finance CompLtd (IIFCL), a state-owned infrastructure lenBhanwala, succeeds Prakash Bakshi, was Nabard Chairman in September.

3. C.V.R. Rajendran appointed CMD of AnBank: Prior to this elevation, Rajendran executive director at Bank of Maharashtra.

4. Arun Tiwari new CMD of Union BankUnion Government has appointed Arun TiwaChairman and Managing Director of Union Bof India. Prior to this elevation, Tiwari waexecutive director at Allahabad Bank.

5. Chairman IBA: K R Kamath is the ChairmaIndian Banks Association.

6. Gold traders opt for jewellery importackle curbs on bullion:

7. Though Gold bullion attracts import duty oper cent, and duty on gold jewellery is 15cent, yet conditions attached to bullion implike ‘80:20 scheme’, under which merchants wto re-export 20 per cent of each gold consignmbefore ordering fresh shipments makes impobullion difficult.

8. Ministry clarifies on role of shares hefiduciary capacity: According to Corpo

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INANCIAL AWARENESS FOR SBI PO EXAM Bankersadda by Mr. A.K. Gupta, Ex – Chief Manager, P

JAN 2014

Secretary: Sumit ed as the new Finance ue to hold the post of

d Chairman: The rsh Kumar Bhanwala as al Bank for Agriculture (Nabard). Prior to this a was an Executive ucture Finance Company ed infrastructure lender. kash Bakshi, who retired

CMD of Andhra

evation, Rajendran was k of Maharashtra.

nion Bank: The ppointed Arun Tiwari as Director of Union Bank levation, Tiwari was an

math is the Chairman of

lery imports to

racts import duty of 10 gold jewellery is 15 per ched to bullion imports r which merchants were

of each gold consignment ipments makes import of

shares held in ccording to Corporate

Affairs Ministry, shares held bfiduciary capacity should not bpurpose of determining hrelationship. Further, the powecan exercise in another compacapacity (only in the capacity asexcluded for determining hrelationship.

9. Bank of India plans to gbanking: Bank of India is planmerchant banking space via Ltd. Public sector banks whichbanking subsidiary include StaIDBI Bank and Bank of Baroda.

10. Pradeep Kumar is new MDKumar has been appointed by tManaging Director of State Bankhis elevation, Kumar was the Director and Group Executive Banking Group in India’s large

11. Cabinet nod for cancer instiUnion Cabinet, has approved thup a National Cancer Institute2,035 crore. The institute, whicat the Jhajjar campus of the AllMedical Sciences in Haryanacompleted within 45 months.

12. Insurance broking: In major rcompanies without bancassurafinance ministry has asked all pto act as insurance brokers topenetration in the country. Cupenetration (the ratio of the pinsurance premia to gross domabout five per cent. The minbanks to leverage their brainsurance penetration. The cmodel should be done away wto train and orient its staff toprovisions. Currently, bancassucorporate agency model, throucan only tie up with one life, on

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Manager, PNB

istry, shares held by a company in a apacity should not be counted for the of determining holding-subsidiary p. Further, the powers that a company e in another company in a fiduciary

nly in the capacity as a trustee) will be for determining holding-subsidiary

lans to get into merchant ank of India is planning to enter the

banking space via BOI Shareholding sector banks which have a merchant bsidiary include State Bank of India,

and Bank of Baroda. is new MD of SBI: P. Pradeep

been appointed by the Government as irector of State Bank of India. Prior to

on, Kumar was the Deputy Managing d Group Executive of the Corporate

oup in India’s largest bank. ancer institute at Jhajjar: The

net, has approved the proposal to set nal Cancer Institute at a cost of Rs . The institute, which would be set up ar campus of the All India Institute of iences in Haryana, is likely to be

within 45 months. In major relief to insurance

without bancassurance partners, the istry has asked all public sector banks

nsurance brokers to boost insurance in the country. Currently, insurance (the ratio of the percentage of total

premia to gross domestic product) is per cent. The ministry has advised leverage their branch network for

enetration. The corporate agency ld be done away with and each bank d orient its staff to conform to new Currently, bancassurance follows the agency model, through which a bank up with one life, one non-life and one


health insurer to sell their insurance prodTherefore, non-bank promoted insurcompanies and late entrants to the insursector do not have any bank partner to sell tpolicies. As an insurance broker, a bank is lito consumers, in terms of an insurance pounlike a corporate agent. The liability is hespecially as the bank will sell productmultiple insurers. The customers will now more choice while buying insurance from baThe Finance Ministry has set January 15 asdeadline for banks to start selling productmore than one insurance company.

13. 8.8 m families live in urban slumssurvey conducted by National Sample SuOffice (NSSO), about 8.8 million householIndia live in urban slums. A total of 33,510 slare present in urban India, of which 41 per are notified as slums by the concemunicipalities, corporations, local bodiesdevelopment authorities which accommoabout 63 per cent of all slumhouseholds. Maharashtra, accounts for 23 cent of all slums in the country. With 13.5cent of slums, Andhra Pradesh comes secfollowed by West Bengal (12 per cent).

14. Over 80% of rural homes have powe60% have no toilets: As per Government d80 per cent of rural households and 97.9 per urban households had electricity for domuse, and 88.5 per cent households in rural Iand 95.3 per cent in urban areas had improsource of drinking water. The percentaghouseholds who get drinking water facilwithin premises was 46.1 per cent in rural Iand 76.8 per cent in urban India while about per cent of rural households and 16.7 per ceurban households did not have any bathrfacility. 59.4 per cent and 8.8 per cent housin rural and urban India, respectively, hadlatrine facilities.

15. Govt draws up list of 23 countries for curswap arrangement: The Commerce Ministryfinalised a list of 23 countries with which Ican trade in local currencies to save prforeign exchange and strengthen the rupee.list includes oil exporting nations such as AnAlgeria, Nigeria, Oman, Iran, Iraq, VenezQatar, Yemen and Saudi Arabia. Other counon the list include Russia, Japan, SingapAustralia, Indonesia, South Korea, MalaMexico, South Africa and Thailand. A currswap arrangement for trade basically invotrading in local currencies where countriesfor exports and imports with domestic curren


heir insurance products. promoted insurance

trants to the insurance ank partner to sell their broker, a bank is liable

of an insurance policy, nt. The liability is high, will sell products of ustomers will now have g insurance from banks.

t January 15 as the tart selling products of

slums: As per a ational Sample Survey

.8 million household in . A total of 33,510 slums ia, of which 41 per cent s by the concerned

tions, local bodies or s which accommodate

of all slum-dwelling a, accounts for 23 per country. With 13.5 per Pradesh comes second,

(12 per cent). ave power, but

s per Government data, eholds and 97.9 per cent electricity for domestic ouseholds in rural India

ban areas had improved ter. The percentage of

g water facilities .1 per cent in rural India n India while about 62.3

olds and 16.7 per cent of not have any bathroom 8.8 per cent households ia, respectively, had no

ries for currency Commerce Ministry has ntries with which India

encies to save precious rengthen the rupee. The g nations such as Angola, , Iran, Iraq, Venezuela,

Other countries ussia, Japan, Singapore, outh Korea, Malaysia, d Thailand. A currency trade basically involves ies where countries pay with domestic currencies

at pre-determined exchange trading in US dollars.

16. Women gaining ground ininclusion: The share of femaincreased to 28 per cent of thindividual deposit accounts inper cent in the previous year. Thindividual deposit accounts in at 77.32 crore in 2012 against previous year. In terms of amouin the total individual deposits26 per cent in 2012 from 22 pe2012, individual deposits agglakh crore against Rs 28.05 lprevious year. The share of femin the total number of loan accoto 15.82 per cent in 2012. Womtotal outstanding loans (individ18 per cent in 2012 against 15The total outstanding loans individuals aggregated Rs 11.2012 against Rs 9.63 lakh crore

17. Insurance policy will cost The Government has widened to cover the policy premiums rates will be 12.36 per cenInsurance Polices (only on mortality and administration), traditional products as most of into savings, and 12.36 per cent

18. SEBI proposes framework faid the financing and refinancinfrastructure projects in Inmarket regulator SEBI has propfor the introduction of infrastrutrusts (InvIT). According to thPlan, India requires an investmcrore in infrastructure betweenSEBI suggested that the trustfloated using the mutual futhrough a separate structural fr

19. Consumer inflation linkedIndexed National Savings Securseek to protect savings fromoffering returns over and abovretail level. Only retail investobonds. The minimum investmenThe interest rate is the sum inflation based on the combine


ermined exchange rates instead of

ground in banks’ financial The share of female depositors has o 28 per cent of the total number of deposit accounts in 2012 against 24 the previous year. The total number of deposit accounts in the country stood ore in 2012 against 72.50 crore in the ar. In terms of amount, women’s share

l individual deposits has improved to t in 2012 from 22 per cent in 2011. In vidual deposits aggregated Rs 30.78 against Rs 28.05 lakh crore in the ear. The share of female loan accounts number of loan accounts has gone up r cent in 2012. Women’s share in the

g loans (individuals) has risen to t in 2012 against 15 per cent in 2011.

outstanding loans in the case of aggregated Rs 11.69 lakh crore in st Rs 9.63 lakh crore in 2011.

will cost more from Jan 1: ment has widened its service tax net e policy premiums paid. Service tax be 12.36 per cent on Unit-Linked Polices (only on charges, such as nd administration), 3.09 per cent on

s most of the premium goes s, and 12.36 per cent on term plans.

amework for infra trusts: To ancing and refinancing of long-term

ure projects in India, the capital ulator SEBI has proposed a framework oduction of infrastructure investment IT). According to the 12th Five Year requires an investment of Rs 65 lakh frastructure between 2012 and 2017. ested that the trust could either be

g the mutual fund structure or eparate structural framework.

ion linked bonds: Inflation

tional Savings Securities - Cumulative, rotect savings from price rise, by turns over and above inflation at the . Only retail investors can buy these minimum investment size is Rs 5,000. st rate is the sum of the prevailing sed on the combined consumer price


index (CPI) and a fixed rate of 1.5 per annually. The inflation rate will be reckoned a lag of three months, with the Septemberused in December, and so on. Interest onbonds will not be paid out but compounded half-yearly basis.

20. SME varsity to come up in Hyderabnational Small and Medium Enterprises (Suniversity will be soon set up at HyderaAnother technical training institute was being set up in Visakhapatnam at an investmof over Rs 150 crore.

21. Sidharth Birla is new FICCI President: Birla was elected as President, FICCI, afterindustry chamber’s 86th Annual General Mee

22. Misuse of bank guarantees, letters of crethe rise: Due to rising incidents of frauds, bare not in favour of issuing non-fund bfacilities, such as bank guarantees andcredit, to non-customers.

23. CCEA ups gas price for RIL subject to guarantee: The Cabinet Committee on EconoAffairs (CCEA) approved a Petroleum and NatGas Ministry proposal to allow RIL to sell KGblock gas at the new price effective April 201also decided against putting any cap/floor pon the gas rates and to maintain the gas pformula approved earlier. RIL can now getbenefit of the revised gas price in return fbank guarantee for the unmet sucommitment from its KG-D6 block.

24. Cabinet approves Rs 6,600-cr interesloans for sugar mills: The Cabinet CommitteEconomic Affairs has approved Rs 6,600 cinterest free loans to sugar mills to ease tcane payment burden. The CCEA also approthe exports of sugar without any quantitarestrictions.

25. Lok Sabha passes landmark Lokpal BilParliament on 18th Dec passed the Lokpal paving the way for the setting up of corruption watchdogs at the Centre and Slevel. The Bill was passed by Lok Sabha on Dec and by Rajya Sabha on 17th Dec. Highlighthe Bill include – (a) The Lokpal will consistchairperson and a maximum of eight memberwhom half will be judicial members; (b) Fiftycent of the Lokpal members shall be SC/ST/Ominorities and women; (c) The chairpersmembers will be chosen by a selection commconsisting of the Prime Minister, Speaker ofLok Sabha, Leader of the Opposition in theSabha, Chief Justice of India or a sitting SuprCourt judge nominated by the CJI, and an emijurist to be nominated by the President of I


d rate of 1.5 per cent te will be reckoned with

with the September CPI so on. Interest on the ut but compounded on a

Hyderabad: A ium Enterprises (SME) set up at Hyderabad. ing institute was also atnam at an investment

esident: Sidharth dent, FICCI, after the

Annual General Meeting. tters of credit on

ncidents of frauds, banks fund based

uarantees and letters of

subject to bank Committee on Economic a Petroleum and Natural allow RIL to sell KG-D6

tive April 2014. It tting any cap/floor price maintain the gas price r. RIL can now get the as price in return for a

the unmet supply

cr interest-free he Cabinet Committee on pproved Rs 6,600 crore ugar mills to ease their he CCEA also approved ithout any quantitative

Lokpal Bill: The passed the Lokpal Bill, he setting up of anti-t the Centre and State

ed by Lok Sabha on 18th Dec. Highlights of

e Lokpal will consist of a um of eight members, of

al members; (b) Fifty per ers shall be SC/ST/OBCs, (c) The chairperson and by a selection committee Minister, Speaker of the e Opposition in the Lok dia or a sitting Supreme y the CJI, and an eminent y the President of India

on the basis of recommendationmembers of the selection comjurisdiction will include all caservants and incorporate attachment and confiscationby corrupt means, even whipending; (e) Setting up of Loenactment of a law by the State 365 days from the date of comAct.

26. Rename company secretariprofessionals’: The CompInstitute has written to the Ministry suggesting that their rechristened as “governance pro

27. Status quo on repo rate, CRstatus quo on the repo rate at cash reserve ratio (CRR) at 4 peannounced on 18th Dec. Explaifor not hiking the rate in the mRBI Governor stated that wholesale inflation have incraccount of food prices and veglikely to fall both at the wholevels.

28. Tesco to invest $100 milliretail stores: British retailer Tthe first global retailer to seek nod to enter multi-brand retaTesco plans to pick up a 50 Trent Hypermarket Ltd, a retagroup, and enter the multiThe stores will operate underBazaar, Star Daily or Star will come up in Maharashtra an

29. RBI plans carrot-and-stick abad loans: To spur banks/finto agree collectively and quicresolution of stressed assets, Rliberal regulatory treatment inthe loss on sale of the asset oveyears; allowing takeout finaover a longer period and nosame as restructuring. In casreach an agreement on resolassets then they will be subjeprovisioning. Before a loan accnon-performing asset (NPA)


s of recommendations of the first four of the selection committee; (d) The will include all categories of public and incorporate provisions for and confiscation of property acquired

t means, even while prosecution is e) Setting up of Lokayuktas through of a law by the State Legislature within rom the date of commencement of the

y secretaries as ‘governance

: The Company Secretaries as written to the Corporate Affairs ggesting that their members may be d as “governance professionals”.

po rate, CRR: RBI maintained on the repo rate at 7.75 per cent and e ratio (CRR) at 4 per cent in its policy

Dec. Explaining the rationale ing the rate in the mid-quarter policy, rnor stated that both retail and inflation have increased mainly on

food prices and vegetable prices are all both at the wholesale and retail

$100 million in multi-brand British retailer Tesco Plc became

obal retailer to seek the Government’s brand retail trade segment.

s to pick up a 50 per cent stake in rmarket Ltd, a retail arm of the Tata

enter the multi-brand retailing arena. will operate under the names Star r Daily or Star Market, and the first few p in Maharashtra and Karnataka.

stick approach to curtail To spur banks/financial institutions

ollectively and quickly to a plan of of stressed assets, RBI may consider a ulatory treatment including spreading sale of the asset over a period of two wing takeout financing/refinancing ger period and not considering the estructuring. In case lenders cannot

ment on resolution of stressed they will be subject to accelerated g. Before a loan account turns into a

ming asset (NPA), banks should

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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 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.Financial Stability Development Council function in the systemic risk and developmcategory.

36. I-T dept stakes claim to Kingfisher assetIncome Tax Department has said a consortiubanks cannot stake any claim to the assetKingfisher Airlines until the department’s duover Rs 350 crore are settled.

37. Govt offers more concessions under rurascheme: Union Minister for Rural DevelopmJairam Ramesh has announced that job card holder under MNREGA, will be entitleRs 10,000 to build an individual toilet. At prea job card holder can avail Rs 4,500 to butoilet; the Centre will provide assistance forconstruction of buildings for women selffederations; MNarega scheme will be convewith the Indira Awas Yojana and other houschemes for the poor; (d) to allow the buildincommunity storage facilities for agriculproduce in gram panchayats to link the MGNRwith the Food Security Scheme; (e) if wagesdelayed beyond 15 days, compensation at per cent of wage per day of delay will be paidthis amount will be deducted from the salarthe responsible personnel.

38. Public sector banks may have to seinsurance broking arms by Februarpresent, banks are allowed to tie up with onlyinsurance company and sell products of onlyinsurer under the corporate ag(bancassurance) channel. According to FinanServices Secretary Rajiv Takru, all insurproducts should be available through the lakh-plus bank branches. According to guidelines finalised by the Insurance Regulaand Development Authority, as brokers, bwill have to cap business from their own grcompanies at 25 per cent for life insurance asimilar cap for non-life insurance business. Mmajor public sector and private sector basuch as State Bank of India, Union Bank of InBank of Baroda, Canara Bank, Bank of Punjab National Bank, Andhra Bank, ICICI Band IDBI Bank, have promoted insurcompanies. Most banks are not in favoubroking as many of them had promoted insurcompanies. Also, they will have fiduc


nd payment systems. The elopment Council will

c risk and development

isher assets: The onsortium of

claim to the assets of the department’s dues of

under rural jobs for Rural Development

ced that – (a) every REGA, will be entitled to ividual toilet. At present, vail Rs 4,500 to build a rovide assistance for the

en self-help heme will be converged ojana and other housing ) to allow the building of cilities for agriculture ats to link the MGNREGS

Scheme; (e) if wages are s, compensation at 0.05 of delay will be paid and ucted from the salary of

ave to set up

y February: At ed to tie up with only one sell products of only that corporate agency

According to Financial iv Takru, all insurance ilable through the one-es. According to the

he Insurance Regulatory ority, as brokers, banks s from their own group t for life insurance and a

insurance business. Most d private sector banks, dia, Union Bank of India, a Bank, Bank of India, ndhra Bank, ICICI Bank

e promoted insurance are not in favour of had promoted insurance will have fiduciary

responsibility towards the custoinsurance products under the br

39. ATM density still low in Indidata outlining global financial infor 2011, there are just 25.4 m1,000 sq. km in India. This trATMs for every one lakh populowest densities in the world. BChina have access to 2,975 macgeographical expanse, with 49lakh population. In UK, ATM denper 1,000 sq km. But the numblakh population is higher at 1density in populous Malaysia 1,000 sq km, with 56.4 machpopulation. While the densimachines per 1,000 sq km is losuch as Indonesia, Mexico andthey have more machines perowing to the lower population. Hof bank branch density, India many developing countries. Banin India is 30.4 per 1,000 km, coin the US, 3.1 in South Africa China ranks highest in termsdensity.

40. Funding for ‘specialised’ ediscussion paper on resolutiostated that RBI will allow banksto ‘specialised’ entities puacquisition of troubled companlenders should ensure that tadequately capitalized. The Rwithdraw the minimum holdininitial loan sale. However, thethe NPA will have to hold the asat least one year before selling t

41. Curbs on firms roping in dirboards of ‘wilful defaultersin respect of existing loans/expcompanies having director/sappear more than once in tdefaulters, could be set highercase of standard accounts (aprovisioning of 0.40 per ceaccounts).

42. Coal Regulatory Authority Bestablish an independent regulaeffective monitoring and regu


ity towards the customer while selling roducts under the broking regulation.

low in India: According to RBI ing global financial inclusion indicators here are just 25.4 machines in every km in India. This translates into 8.9 very one lakh population, one of the sities in the world. Bank customers in access to 2,975 machines in the same al expanse, with 49.6 ATMs per one tion. In UK, ATM density stands at 261

sq km. But the number of ATMs per 1 ation is higher at 122.8 ATMs. ATM populous Malaysia stands at 34 per

km, with 56.4 machines per 1 lakh . While the density in terms of er 1,000 sq km is lower in countries, donesia, Mexico and the Philippines, more machines per one lakh people e lower population. However, in terms anch density, India fares better than loping countries. Bank branch density

4 per 1,000 km, compared to just 9.6 3.1 in South Africa and 7.9 in Brazil. s highest in terms of bank branch

cialised’ entities: RBI, in its paper on resolution of NPAs, has

ow banks to extend finance lised’ entities put together for of troubled companies. However, the ould ensure that these entities are capitalized. The Reserve Bank will the minimum holding period for any sale. However, the bank purchasing ll have to hold the asset in its books for year before selling the asset.

ping in directors who are on defaulters’: The provisioning

ing loans/exposures of banks to having director/s, whose name/s re than once in the list of wilful could be set higher at 5 per cent in andard accounts (against the usual g of 0.40 per cent for standard

Authority Bill tabled: A Bill to

n independent regulatory authority for onitoring and regulation of the coal


sector has been introduced in the Lok Sabha.objective of the proposed coal regulaauthority include putting in place regulation will be a counter to the practices and methoda monopolistic producer of coal.

43. Banks may soon begin charging customeATM usage: To make good the expenses incuon beefing up security, banks are conlevying a charge on all ATM transactions, becash withdrawal or a balance enquiry.all transactions by customers at their baATMs are free. The first five transactions month at other ATMs are also free. Accordininitial estimates, the cost per transaction wout to Rs 6 on the basis of an average of transactions in each of the 100,000-across the country.

44. Factory output falls, retail inflation Retail inflation surged to 11.24 per cenNovember (10.17 per cent in October). Facoutput contracted in October to 1.8 per cthough this was partly because of the base e— in October 2012, IIP growth was at a mmonth high of 8.2 per cent.

45. Govt plans education loans to mincommunities for overseas study: Under PaPardesh (study abroad) scheme, interest subwill be given on education loans takenmeritorious students belonging to economiweaker sections of notified minority commun– Muslims, Christians, Sikhs, BuddZoroastrians (Parsis). The Padho Pardesh schis being put together by the Ministry of MinoAffairs and the Finance Ministry to prominority community students with beopportunities for higher education (MastersPh.D level) abroad and enhance temployability. Thirty per cent of the beunder the scheme will be reserved for femcandidates.

46. IOB gets RBI nod to open second branBangkok: Indian Overseas Bank (IOB) received RBI approval for opening a secbranch in Bangkok. IOB is the only Indian leto have a branch presence in Bangkok.

47. Export growth slows to 5.86% in NoveExports grew at a slower pace in Novembe5.86 per cent, from double-digit increases po


ed in the Lok Sabha. The posed coal regulatory in place regulation that

practices and methods of

ng customers for od the expenses incurred , banks are considering TM transactions, be it a

lance enquiry. Currently, tomers at their bank’s t five transactions in a

According to t per transaction works is of an average of 200

-plus ATMs

inflation rises: to 11.24 per cent in ent in October). Factory ctober to 1.8 per cent, ecause of the base effect growth was at a multi-

s to minority Under Padho

scheme, interest subsidy cation loans taken by longing to economically ed minority communities Sikhs, Buddhists and e Padho Pardesh scheme the Ministry of Minority ce Ministry to provide students with better education (Masters and

and enhance their er cent of the benefit be reserved for female

econd branch in rseas Bank (IOB) has for opening a second is the only Indian lender e in Bangkok.

% in November: er pace in November, at

digit increases posted

in the four preceding months.due to a drop in shipments of gepetroleum products and phartrade deficit, however, shrankeasing pressure on the countrydeficit as imports posted a sharper cent during the monthCommerce Ministry is confidenexport target of $335 billion for

48. SBI plans study on customebid to assess the current lesatisfaction and experience, Staplanning to conduct a study acroas products, channels and pconducted across all 14 circleidentify opportunities to imexperience across various areaSBI’s processes and service agbanks in India and overseas.

49. Power tariffs may dropproducers are tightened: see a marginal drop if the drapower tariffs, issued by the CRegulatory Commission (CERCCERC reviews tariff regulationsThe existing regulations (2009March 31.

50. Tata Hall opens at HarvardTata Hall was funded by adonated by the philanthroGroup — the Sir Dorabji Tata TEducation and Development Tru

51. Garment exports up 15% inexports have grown 15.5 per cemonths of the fiscal to $8.2 billof demand in the US and the EU.

52. More remittances dirinvestment purposes: As per 2012-13, the share of transaverage size of individual remitand above was relatively higherthe total value of remittances ain 2009-10. The trends seem tothe years, a higher proportion obeing directed towards inveAbout 57 per cent of the total rare received in terms of dollar, of remittances are received inUAE dirham. The share of sterling are 7 per cent arespectively. According to th(Society for Worldwide InteTelecommunication) is the cotransferring funds.


preceding months. This was mainly op in shipments of gems and jewellery,

products and pharmaceuticals. The it, however, shrank to $9.2 billion, sure on the country’s current account ports posted a sharp decline of 16.37 during the month. However, the

Ministry is confident of reaching the et of $335 billion for 2013-14.

on customer experience: In a sess the current level of customer and experience, State Bank of India is conduct a study across key areas such ts, channels and processes. To be across all 14 circles, the study will

pportunities to improve customer across various areas and benchmark

and service against best-in-class dia and overseas.

may drop as norms for ghtened: Electricity rates may

inal drop if the draft regulations on ffs, issued by the Central Electricity

Commission (CERC), are approved. ws tariff regulations every five years. g regulations (2009-14) will expire on

at Harvard Business School: was funded by a $50-million gift

the philanthropic subsidiaries of Tata he Sir Dorabji Tata Trust and the Tata nd Development Trust.

up 15% in April-Oct: Apparel ve grown 15.5 per cent the first seven the fiscal to $8.2 billion due to revival in the US and the EU.

nces directed towards : As per a study by RBI, in

the share of transactions with an e of individual remittance of Rs 1 lakh was relatively higher at 45 per cent of lue of remittances against 27 per cent . The trends seem to suggest that over higher proportion of remittances are cted towards investment purposes. er cent of the total remittance inflows

n terms of dollar, while 16 per cent ces are received in Saudi riyal and

m. The share of Euro and pound re 7 per cent and 8 per cent, y. According to the survey, SWIFT or Worldwide Inter-bank Financial nication) is the costliest means of


53. RBI hits the jackpot with dollar deposit scheme: Banks have managed to mobilise $34 billion in foreign currency deposits since the special swap scheme was flagged off in September. This is much higher than the sums raised by the Resurgent India Bonds (RIBs) of 1998 ($4.2 billion) and the India Millennium Bonds ($5.5 billion).

54. MFI customers to be given credit scores: Equifax Credit Information Services, a credit information company, is offering scores to help understand the credit profile of microfinance customers. The product is called Equifax MFI Risk Score. Through this product, a microfinance institution that is a member of ECIS, can obtain credit reports of its customers.

55. Ministers’ panel okays Rs 7,200-crore soft loans for cash-strapped sugar mills:

56. A panel of senior Union ministers, which considered the demands of the sugar mills, has decided a soft loan of Rs 7,200 crore to settle the amounts due to sugarcane farmers. The loan will be given at 12 per cent interest rate to the sugar mills.

57. WTO adopts historic Bali package: The World Trade Organisation (WTO) Ministers at Bali

adopted the historic five-draft decision declaration and the 10-document full Bali Package that addresses the Doha Development Agenda. The draft proposes an interim mechanism for safeguarding minimum support prices to farmers against WTO caps till a permanent solution is found and adopted.

58. Defaults on commercial vehicle loans on the rise: According to India Ratings & Research report, the performance of commercial vehicle loans touched a new low in the third quarter (to September 30) of the ongoing calendar year. The Fitch Group’s credit rating agency, in its quarterly analysis, found that “even creditworthy borrowers may not remain insulated in times of economic slowdown”.

59. House panel opposes bank licences to industrial houses: As per the Standing Committee on Finance, RBI should desist from giving new bank licences to industrial houses.

60. Rebound in FDI flows into India: In its World Investment and Political Risk Report, by World Bank, the foreign direct investment (FDI) flows received by India in the January-March 2013 period reflects a rebound in inflows. This is a result of the new investment policies put in place for select sectors, such as telecoms and insurance. India is by far the largest recipient of FDI in South Asia, comprising India, Pakistan, Sri Lanka and Bangladesh. The growth of FDI flows into developing economies has been dominated by Brazil, China, and India. In 2012, China received 10.5 times more FDI than India. While India received $24 billion, China received $253.5 billion.

61. Moody’s outlook turns bleak for India Inc: Moody’s Investors Service said its outlook for Indian corporates (non-financial) is negative, reflecting macro-economic challenges over the next 12 months. It also expects the rupee to remain volatile due to heightened expectations of a scale-back of quantitative easing by the US Federal Reserve in 2014. This could make the operating environment more challenging for importers and exporters.

62. SBI asks officers to meet loan-seekers only at branch: To ensure that the dealings of its officers are more transparent, State Bank of India has asked them not to meet the borrowers, existing as well as prospective, at any location other than the branch. An officer should hold meetings with the borrower only in the presence of other officers. One-on-one meetings and meetings at the residence of either the officer or the borrower should be avoided. Further, talks between the


bank staff and the borrower, who may come loan/enhancement of loan limit/ onecompromise settlement of a loan that has gsour, should ideally be video recorded. emphasis on transparency in officers’ deawith borrowers comes in the wake of the CenBureau of Investigation recently registerincase against SBI Deputy Managing DireShyamal Acharya, Chairman of a New Delhiprivate company and others in an alleged bricase.

63. Asset quality of banks will worsen by M2014: According to a report by credit ratagency ICRA, the asset quality of the bansector is set to worsen with gross non-assets (NPAs) ratio likely to end at 4.2cent by March-end 2014 from 4 per cenSeptember 2013. The absolute gross NPAs deteriorate to Rs 2.70-2.90 lakh crore by M2014 from 2.37-lakh crore in September this y

64. Mulling automation to cut operational co‘no frills’ accounts: The State Bank of India (is looking to develop an automated system will help minimise the operational cfrills” or zero balance savings accounts. Tzero balance accounts, has led to hioperational costs but has not resulted inimprovement in the CASA (current and savaccount) ratio.

65. Timely, accurate data not coming from bFIs: According to CIBIL chief, inadequate poor quality data from financial institutionschallenge for credit health assessing ageCIBIL has four divisions or bureaus commercial, mortgage and frauds —which it serves banks, other financial institutand telecom companies. It will soon laun‘microfinance’ division, to offer credit informato microfinance institutions. The bucurrently has over 320 million records the retail bureau predominantly (305 miland the commercial bureau (15 million).

66. Mahila Bank mulls childcare allowancwomen staff: The Bharatiya Mahila Banplanning to give childcare allowance to its woemployees. The proposed move is aimedattracting and retaining talent, especiallyemployees in the junior management g(entry-level officer) and middle managemgrade (officers of the rank of manager and semanager) in India’s first women’s bank inpublic sector.

67. Create awareness among consumersadvised credit information companies (CICscreate awareness among consumers about cr


wer, who may come for a loan limit/ one-time

of a loan that has gone e video recorded. The ncy in officers’ dealings

the wake of the Central recently registering a

uty Managing Director an of a New Delhi-based ers in an alleged bribery

worsen by March report by credit ratings quality of the banking

-performing ly to end at 4.2-4.4 per 14 from 4 per cent in bsolute gross NPAs may .90 lakh crore by March e in September this year.

rational costs of State Bank of India (SBI) automated system that operational costs of “no savings accounts. These s, has led to higher has not resulted in an SA (current and savings

ing from banks, L chief, inadequate and financial institutions is a ealth assessing agency. s or bureaus — retail,

— through financial institutions

. It will soon launch a o offer credit information itutions. The bureau million records — from

ominantly (305 million) au (15 million).

e allowance for aratiya Mahila Bank is e allowance to its women sed move is aimed at talent, especially women ior management grade d middle management k of manager and senior t women’s bank in the

sumers: RBI has ion companies (CICs) to consumers about credit

behaviour and credit scores finances better. India stands at 189 countries on the ease of ghas the best ranking amoeconomies — China is at 73, Brazil are at rank 109.

68. Current account deficit naGDP: With a pick up in merchaa dip in imports, the country’deficit narrowed sharply to a 1.2 per cent of GDP in the seconthe excess of all goods, serviimported in a period over the toto $5.2 billion in the July$21 billion in the year-ago perlower than the CAD of 4.9 per cprevious quarter, ended June 30

69. Core industries’ output decAfter a robust 8 per cent rise eight core industries’ output ccent in October. The eight crude oil, natural gas, refertilisers, steel, cement and erecorded a 7.8 per cent growOctober last year.

70. Odisha displaces Gujarat attractive State for invesaccounts for over one-fifth of across the country in the first year, which were cumulativelylakh crore, according to DepartPolicy and Promotion (DIPP) da

71. To ensure stability, RBI waup capital buffer: In its implementation of counter(CCCB) regime in India, the endeavour to ensure that individsolvent through periods of stresseeks to ensure that the bacapital in hand to help maintainin the economy during economperiods of stress.

72. Mobile payments are gainindata show there has been a 1immediate payment service transferred using mobile pSeptember 2012 and July 20seven-fold rise in the numbe


and credit scores to manage their tter. India stands at 28th rank amongst ies on the ease of getting credit and best ranking amongst the BRICS

China is at 73, both Russia and

deficit narrows to 1.2% of a pick up in merchandise exports and

ports, the country’s current account rowed sharply to a more manageable t of GDP in the second quarter. CAD — of all goods, services and transfers a period over the total exports — fell

ion in the July-September quarter from ago period. This was also

the CAD of 4.9 per cent of GDP in the arter, ended June 30, 2013.

output declines 0.6% in Oct: ust 8 per cent rise in September, the industries’ output contracted 0.6 per

ober. The eight core industries — coal, , natural gas, refinery products, steel, cement and electricity — had 7.8 per cent growth in output in

s Gujarat as India’s most for investment: The State

fifth of project proposals country in the first 10 months of the

h were cumulatively valued at Rs 4.7 according to Department of Industrial Promotion (DIPP) data.

, RBI wants banks to build In its draft report on

ation of counter-cyclical capital buffer gime in India, the RBI said it will to ensure that individual banks remain ough periods of stress. The regime also nsure that the banking sector has

and to help maintain the flow of credit omy during economic downturns and

are gaining currency: Latest

there has been a 15-fold increase in payment service (IMPS) amounts using mobile phones between

2012 and July 2013, as well as a rise in the number of transactions.


Seventeen million of the 870 million mophone users in India now access banking servthrough their mobile phones.

73. Systemically important banks smaintain higher tier 1 capital: Accordindraft framework by RBI, Domestic-SystemiImportant Banks (D-SIBs) will have to additional common equity Tier 1 capital ranfrom 0.20 per cent to 0.80 per cent of their weighted assets. Common equity tier (CETcapital includes common shares; share premresulting from the issue of instruments, incluCET 1; and retained earnings. The banks havisize of beyond 2 per cent of GDP will be selein the sample of banks.

74. M. V. Tanksale is IBA’s new chief execM.V. Tanksale, former Chairman and ManaDirector of Central Bank of India, has taken as Chief Executive of the Indian BaAssociation

75. RBI move permitting banks’ entry insurance broking biz hailed: It will expcoverage and offer more choice to customerper RBI’s draft guidelines, banks willpermitted to undertake insurance brobusiness departmentally. For undertaking business, a bank’s capital-to-risk weighted asratio (CRAR) should not be less than 10 per (as against the regulatory minimum of 9 cent); and its net non-performing assets rshould not be more than 3 per cent. Furtherbank should have made profits for the last tconsecutive years; its net worth should noless than Rs 500 crore; and the track record operformance of the subsidiaries/ joint venturany, should be satisfactory.

FEB 2014

1. Fiscal deficit hits 95% of estimate in 9 moAccording to data published by the ContrGeneral of Account, the total deficit at the enDecember touched Rs. 5.16-lakh crore, whic95.2 per cent of the budget estimate lakh crore.

2. GDP growth in 2012-13 scaled downdecadal low of 4.5%: The downward revihas been prompted by lower than provision


llion mobile access banking services

banks should : According to

Systemically s) will have to maintain ty Tier 1 capital ranging 80 per cent of their risk-on equity tier (CET) 1 shares; share premium

of instruments, including ings. The banks having a t of GDP will be selected

w chief executive: hairman and Managing

of India, has taken over f the Indian Banks’

ks’ entry into

It will expand choice to customers. As elines, banks will be

ce broking y. For undertaking the

risk weighted assets be less than 10 per cent ory minimum of 9 per performing assets ratio 3 per cent. Further, the

profits for the last three et worth should not be nd the track record of the idiaries/ joint ventures, if

ate in 9 months: ished by the Controller otal deficit at the end of

lakh crore, which is get estimate of Rs. 5.42-

caled down to The downward revision lower than provisionally

estimated agricultural and manThe revised GDP growth of 4decadal low — the previous lowrecorded in 2002-03. The Craised GDP growth for 2011(second revised estimate) froEconomic growth for 2010per cent (third revised estimacent projected earlier. Accordrevised estimate of national incagricultural growth stood at 1.cent in 2011-12), and miningcent (0.1 per cent growth in 201

3. Core industries output upoutput of the eight core industoil, natural gas, refinery prosteel, cement, electricity than 7.5 per cent growth recor2012. In April-December 2industries’ output grew a meagainst 6.8 per cent in same output fell (-) 0.6 per cent in Dyear. Petroleum refinery produc1.7 per cent.

4. Banks to rethink fee on ATMaction points mooted at a recenOmbudsmen conference relateuse. In order to provide enhATMs, banks plan to cap the nutransactions to five a monthwhether customers use theianother bank’s ATMs. RBI DepChakrabarty had said it would bcustomers transacting at their oThe practice of levying a pmaintenance of a minimum basavings bank accounts was alsoconference. Henceforth, bankconverting such accounts into BDeposit accounts. The IBA may to discontinue levying a preall floating-rate loans. Furtherthat fixed rate loans are trureferenced to any floating rate band the IBA will also formulateliability of customers in eltransactions, when a bank is ucustomer-level negligence. Thecustomer-level negligence wouand when such negligence isbeyond doubt, the benefit of sugiven to the customer.

5. Need for more specialised bMr Nachiket Mor, Chairmacommittee on financial inclusio


gricultural and manufacturing output. d GDP growth of 4.5 per cent is a

the previous low of 4 per cent was 03. The CSO has however

growth for 2011-12 to 6.7 per cent vised estimate) from 6.2 per cent. rowth for 2010-11 was lowered to 8.9

third revised estimate) from 9.3 per cted earlier. According to the first imate of national income for 2012-13, l growth stood at 1.4 per cent (5 per

12), and mining declined 2.2 per r cent growth in 2011-12).

ut up 2.1%: The latest he eight core industries – coal, crude l gas, refinery products, fertilisers, nt, electricity – was however lower

er cent growth recorded in December December 2013, eight core

output grew a mere 2.5 per cent per cent in same period year. Coal

) 0.6 per cent in December year-on-leum refinery production shrank by (-)

fee on ATM use: One of the six ts mooted at a recent annual Banking n conference related to fee on ATM

der to provide enhanced security at s plan to cap the number of free ATM s to five a month, irrespective of ustomers use their own bank or nk’s ATMs. RBI Deputy Governor KC y had said it would be unfair to charge transacting at their own bank’s ATMs. ice of levying a penalty for non-ce of a minimum balance in ordinary

ounts was also discussed at the . Henceforth, banks may consider such accounts into Basic Savings Bank ounts. The IBA may issue instructions

nue levying a pre-payment penalty on rate loans. Further, it has to ensure rate loans are truly fixed and not

to any floating rate benchmark. Banks A will also formulate a policy on zero f customers in electronic banking s, when a bank is unable to establish

evel negligence. The onus of proving evel negligence would be on the bank such negligence is not established ubt, the benefit of such doubt may be

ecialised banks: According to ket Mor, Chairman of the RBI’s on financial inclusion, there is a need


to have specialised banks compared to newservice banks. The idea of financial inclusionbe better served in the medium termspecialised banks like the payments only band lending only banks are allowed to flourish

6. RBI working on early warning system foloans: The framework to revitalise distreloans in the economy will be fully effective fApril 1. The framework has been envisagethere is a need to ensure that the banking sysrecognises financial distress early, takes prosteps to resolve it, and ensures fair recoverylenders and investors. The main proposals oframework include early formation of a lendcommittee with timelines to agree to a planresolution. Main proposals include – will be given incentives to agree collectivelyquickly work out a debt resolution plan; beregulatory treatment of stressed assets resolution plan is underway and aprovisioning if no agreement can be reachedTo improve the current restructuring processframework wants independent evaluationlarge-value restructurings mandated, with a fon viable plans and a fair sharing of losses future possible upsides) between the promoand the creditors; (c) Borrowing could becmore expensive if borrowers do not cowith lenders in resolution. Lenders will be gmore liberal regulatory treatment for asset s(d) Lenders can spread the loss on sale overyears provided the loss is fully disclosed. Furtake-out financing / refinancing will be posover a longer period and will not be construerestructuring; (e) leveraged buyouts allowedspecialised entities for acquisition of ‘strecompanies’. Sector-specific companies / priequity firms will be encouraged to play an acrole in the stressed assets market.

7. FDI inflows into India in 2013 rose 17$28 billion: According to the UN ConferencTrade and Development (Unctad) report2013, FDI during the year rose 11 per cen$1.46 trillion which is the highest since the of the global economic crisis in 2008. Unforecasts that FDI flows will rise graduall2014 and 2015, to $1.6 trillion and $1.8 trilrespectively, indicating that the worst mayover for the crisis-ridden global econom


s compared to new full of financial inclusion will

the medium term if ts only bank

re allowed to flourish. g system for bad

to revitalise distressed ill be fully effective from has been envisaged as that the banking system ress early, takes prompt ensures fair recovery for he main proposals of the formation of a lenders’ s to agree to a plan for

(a) Lenders to agree collectively and t resolution plan; better f stressed assets if a erway and accelerated

ent can be reached; (b) estructuring process, the pendent evaluation of s mandated, with a focus ir sharing of losses (and between the promoters orrowing could become wers do not co-operate n. Lenders will be given reatment for asset sales;

the loss on sale over two s fully disclosed. Further, nancing will be possible will not be construed as ged buyouts allowed for acquisition of ‘stressed

ific companies / private uraged to play an active

13 rose 17% to

to the UN Conference on nt (Unctad) report for ear rose 11 per cent to e highest since the start

crisis in 2008. Unctad s will rise gradually in

lion and $1.8 trillion, that the worst may be

den global economy in

terms of foreign investment inflows in 2012 had shrunk 18trillion due to the weakeningenvironment, slow growth inemployment. India attracted billion in 2012 which was 13than $31.5 billion worth of FDI Brazil, Russian Federation, IndiaAfrica, popularly knownaccounted for 22 per cent of which was nearly twice that olevel.

8. Trade deficit with China seAccording to data from DirecForeign Trade, Indian exports $9 billion between Aprilimports totalled $34.5 billion.

9. IRDA officials meet RBI, banconcerns over insurancconcerns relate to taking the selling insurance policies. Threof banks relate to their conventure partners, equity arrancompete clause with insuranceother major concern is the IRDbanks will have to cap businesgroup companies at 25 per centwith a similar cap on nontoo. Banks, as insurance brokerfiduciary responsibility to the policies sold by them. Howeverprofessional indemnity policyliabilities. By selling produinsurers, the customer will havewill be able to choose the prodhis needs rather than the insurwhom the bank has a an excluthe present system of distribuproducts through ba(bancassurance), banks act as and sell the policies of only onnon-life insurer and a standalon

10. Currency notes issued bewithdrawn: RBI has decidebanknotes printed prior to 20behind move to withdraw bprior to 2005 is to remove themas they have fewer security featbanknotes printed after 2005easily identify the notes to be notes issued before 2005 do noprinting on the reverse sidbanknotes comes in the backdrof counterfeit currency and tmoney in stoking inflation


oreign investment flows. Global FDI 2012 had shrunk 18 per cent to $1.31 e to the weakening macroeconomic nt, slow growth in trade, GDP and t. India attracted FDI worth $27.3 012 which was 13.5 per cent lower

billion worth of FDI attracted in 2011. sian Federation, India, China and South ularly known as the BRICS economies, for 22 per cent of global FDI flows, nearly twice that of their pre-crisis

th China set to touch $40 b: to data from Directorate-General of ade, Indian exports to China touched between April-November 2013, while alled $34.5 billion.

et RBI, bank chiefs to discuss insurance broking: The

elate to taking the broking route for rance policies. Three major concerns

relate to their contracts with joint rtners, equity arrangement and non-

lause with insurance companies. The r concern is the IRDA provision that have to cap business from their own

es at 25 per cent for life insurance ilar cap on non-life insurance business as insurance brokers, will also have a esponsibility to the customer for the d by them. However, banks can take a

ty policy to cover their By selling products of multiple e customer will have more choice and

e to choose the product best suited to ather than the insurer’s product with bank has a an exclusive tie up. Under t system of distribution of insurance

through bank branches ance), banks act as corporate agents e policies of only one life insurer, one urer and a standalone health insurer.

ed before 2005 to be RBI has decided to withdraw

printed prior to 2005. The rationale ve to withdraw banknotes printed

05 is to remove them from the market e fewer security features compared to printed after 2005. The public can

tify the notes to be withdrawn as the d before 2005 do not have the year of n the reverse side. The recall of comes in the backdrop of rising cases feit currency and the role of black

stoking inflation in the economy.


According to RBI, it is standard international practice to withdraw old series notes. Between April 1 to June 30, 2014, banks will exchange these notes both for customers and non customers. From July 1, 2014, members of public can exchange any number of these old series notes from the bank branches where they have their accounts. However, to exchange more than 10 pieces of Rs 500 and Rs 1000 notes, non-customers will have to furnish proof of identity and residence to the bank branch in which she/he wants to exchange the notes. The notes printed prior to 2005 will continue to be legal tender.

11. Nanda Kumar is next NDDB chief: Nanda Kumar, currently Member of the National Disaster Management Authority, is slated to take over as Chairman of NDDB from March 1. Nanda Kumar will be the first ever person from the Indian Administrative Service to hold the position of NDDB Chairman.

12. NBFCs should form a single representative body: RBI has advised NBFCs to form a single representative body with the exception for microfinance where the RBI is keen on a self-regulatory organisation to cater to this segment’s needs. The RBI now regulates as many as 10 categories of NBFCs, including those engaged in asset financing, gold loans, micro-finance, credit information companies, factoring and residuary NBFCs. Currently, different segments of NBFCs have separate associations to pursue their interests.

13. Moody’s ups growth to 5.5% in 2014: The report titled ‘India Outlook: Steady Growth, Lower Risk’ highlighted there is growing list of reasons to believe that the Indian economy has started to turn the corner, albeit slowly, after 30 months of sub-par growth. A pick-up in exports and normal monsoon besides the prospect of a better Government after the May election have boosted business sentiment and investor confidence. Both the World Bank and International Monetary Fund have said that the world economy is showing signs of bouncing back this year. While the World Bank has forecast global growth of 3.2 per cent, the IMF has now projected global growth to be higher at 3.7% in 2014. For 2015, IMF sees global growth at 3.9%.

14. 6% inflation target in 2 years will raise interest rates: The expert committee set up to revise and strengthen the monetary policy framework, headed by Urjit Patel has suggested that RBI will try to bring down inflation gradually from 10 per cent to 8 per cent over the next 12 months and to 6% over the next 24 months

before formally adopting the recommended target of 4 per cent inflation with a band of +/-2 per cent around it. If the RBI accepts the recommendations of the Urjit Patel Committee, interest rates are unlikely to come down in 2014-15 even if the RBI removes its current restriction on bank borrowing through the repo window. The committee has also advocated that the real policy rate should be positive, implying that the repo rate (currently at 7.75 per cent) should be higher than the expected CPI inflation (expected to average around 8.5 per cent in 2014-15). The report is a step in the right direction as inflation leads to distortion of facts, such as savings behaviour, investment decisions and export competitiveness. Hence, bringing down inflation cannot be debated for growth.

15. All branches of IDBI Bank to offer export credit: These branches also support the export credit (both in foreign currency and rupees) requirements of exporters-customers of the 1,050 branches.

16. Panel to review commodity futures market

liberalization: The Finance Ministry has set up a 5-member panel to examine whether the objectives of price discovery and risk management, which motivated liberalisation of the commodity futures market, have been


achieved or not. The panel may look at the mof liberalisation of the commodities futmarket even from the aspect of inflamanagement. India had till early 2000 bantrading in commodities futures. But progressifrom 2002, all commodities were permittedfutures trading – purely as a hedging mechanBut options contracts are still banned.

17. Banks can now lend up to 75% of valpledged gold: RBI has allowed banks to more against pledged gold jewellery, thecreating a level-playing field for them visgold loan companies which can also lend up tper cent of the value of pledged gold jeweagainst the earlier 60 per cent. By allowing band NBFCs to lend more against the pledggold jewellery, the central bank may be tryinbreak the shackles of the unorganised the business of lending against gold.

18. RBI committee to review governance ofboards: The committee will review regulatory compliance requirements of the bof directors of banks, judge what canrationalised and where requirements nenhancements, examine the working of boards, including whether adequate time is bdevoted to issues of strategy, growth, governand risk management. The committee will revcentral bank regulatory guidelines on bownership, ownership concentration representation on the board, analyse representation to see whether the boards the appropriate mix of capabilities and necesindependence to govern the institution, investigate possible conflicts of interest in brepresentation, including among owrepresentatives and regulators. The Commwill also assess and review the ‘fit and procriteria for all categories of directors of baincluding tenor of directorship, bcompensation guidelines and any other irelevant to the functioning of the boards andgovernance they exercise. The Committee wiheaded by P.J. Nayak, former Chairman and of Axis Bank.

19. CBDT clarifies on TDS on service tax: not be deducted at source on the servicecomponent on payments made/due to a resipayee. This will be allowed only in cases wthe service tax component comprised in amount payable to a resident is indicseparately in the contract between the payerthe payee. In such situation, tax has todeducted on the amount paid/payable witincluding the service tax component.


el may look at the merits e commodities futures e aspect of inflation

till early 2000 banned utures. But progressively ities were permitted for

mechanism.

75% of value of allowed banks to lend gold jewellery, thereby field for them vis-à-vis

can also lend up to 75 f pledged gold jewellery r cent. By allowing banks re against the pledge of al bank may be trying to e unorganised sector in

ernance of bank tee will review the quirements of the board , judge what can be re requirements need the working of the

er adequate time is being tegy, growth, governance he committee will review y guidelines on bank

ncentration and e board, analyse the hether the boards have

apabilities and necessary rn the institution, and flicts of interest in board

ing among owner ulators. The Committee iew the ‘fit and proper’ s of directors of banks,

directorship, board s and any other issue ng of the boards and the e. The Committee will be rmer Chairman and CEO

ice tax: Tax need urce on the service tax made/due to a resident ed only in cases where

nent comprised in the resident is indicated t between the payer and

tax has to be t paid/payable without

20. India-EU free trade pact ‘likThe European Union is India’partner.

21. Merchanting’ eligible for shper RBI, short-term credit esuppliers’ credit or buyers’ credfor intermediary trade merchanting. Merchanting or intransaction involves purchase oresidents from non-residents athem to another non-resident digoods touching Indian ports. transactions will include theexport leg Letter of Credit by a bdeal in foreign exchange, as in ttransactions.

22. Dip in food prices eases inflow at 6.16% in Decembarticles fell 6.4 per cent monthprimary articles were down 5 pe

23. CAD to be around $50 bMinister P. Chidambaram, thedeficit (CAD) for 2013-14 shoubillion, down from nearly $8previous year.

24. Govt grants CBI more financCentre has told the Supreme CoDirector will be given the rankSecretary with more financial aDirector could now approve procrore in a year. The Director whand to appoint consultants anon contract in the investigating

25. NCDEX launches gold contThe National Commodity Derihas launched gold-hedge conmimic the international considering other charges suchlocal taxes and premiums. charges will make the contrcompared with the conventionthus leading to lower margin reeffect help to increase market pa

26. RBI tightens norms to reducto un-hedged foreign currento introduce incremental provisrequirements for banks’ expowith unhedged foreign currencApril 1, 2014. Unhedged


de pact ‘likely by early 2015’: ean Union is India’s biggest trading

ible for short-term credit: As term credit either by way of

redit or buyers’ credit will be available mediary trade transactions or g. Merchanting or intermediary trade involves purchase of goods by Indian

residents and then reselling resident directly without the

hing Indian ports. The merchanting s will include the discounting of etter of Credit by a bank authorised to ign exchange, as in the case of import

s eases inflation to 5-month n December: Prices of food

l 6.4 per cent month-on-month, while ticles were down 5 per cent.

d $50 b: According to Finance Chidambaram, the current account

14 should be around $50 wn from nearly $88 billion in the

ore financial autonomy: The told the Supreme Court that the CBI’s

the rank of a Government ith more financial autonomy. The CBI

uld now approve projects worth Rs 15 year. The Director will be given a free point consultants and employ people in the investigating agency.

gold contract for hedgers: al Commodity Derivatives Exchange

hedge contract which will e international prices without other charges such as customs duty,

s and premiums. Excluding other ill make the contract value lesser, with the conventional gold contracts, g to lower margin requirement and in to increase market participation.

s to reduce banks’ exposure

eign currency: RBI has decided e incremental provisioning and capital ts for banks’ exposures to entities ged foreign currency exposures from

Unhedged foreign currency


exposures (UFCEs) of corporates are an areconcern not only for individual corporatesalso for the entire financial system.

27. Employees’ Provident Fund to fetch 8Central Board of Trustees (CBT) of the EmploProvident Fund Organisation (EPFO) hrecommended to the Government 8.75 rate of interest for 2013-14 to its subscriberagainst 8.5% last year.

28. Aadhaar enrolment to cover 60 crore cisoon: The Unique Identification AuthorityIndia (UIDAI) has said that it would compissuing 60 crore Aadhaar numbers ithree-four months, from 55 crore at present.

29. Rough ride ahead for insurance Web poWeb aggregators, that is, Web sites that comand provide information on policies of varinsurers, will have to face tighter regulanorms. The new regulations rolled out byInsurance Regulatory and Development Authodo not allow these aggregators to disinformation pertaining to other procategories, such as loans, deposits and mufunds (which are revenue-generators at presor display advertisements or tie-ups with somedia sites. In a bid to ensure that they disonly factual information, the regulator disallowed Web portals from showing ratrankings, endorsements or listing of bestselThe IRDA has also introduced a foreign dinvestment limit at 26 per cent for ownershWeb aggregators.

30. SBI to outsource operations of some AThe State Bank of India (SBI) has planoutsource the management of some of its ATMhas called for a Request for Proposal (RFP) fvendors to manage about 7,843 cash dispen(ATMs). SBI had 32,777 ATMs as at September 2013. It has expanded its netwsteadily in the past few years, adding abothird of its network (about 11,000 ATMs) inpast 18 months.

31. Piped gas, CNG likely to cost more from The prices of piped cooking gas, transportafuel CNG, and electricity generated from gas cgo up, as the Government is set to announcenew price for domestically produced gaMarch. The Government on January 10 notified the new gas pricing policy that woulapplicable to all domestically produced natgas from April 1 for the next five years. The pcould range between $7 and $8 a unit wwould almost be double the current rates. Edollar increase in natural gas price results hike of about Rs 2.60 a unit for piped natural


rporates are an area of dividual corporates but

to fetch 8.75%: s (CBT) of the Employees nisation (EPFO) have vernment 8.75 per cent 14 to its subscribers as

60 crore citizens ntification Authority of that it would complete

ar numbers in the next 55 crore at present.

ce Web portals: , Web sites that compile

n on policies of various face tighter regulatory tions rolled out by the

d Development Authority aggregators to display to other product s, deposits and mutual

generators at present), ups with social-

ensure that they display on, the regulator has from showing ratings,

or listing of bestsellers. oduced a foreign direct er cent for ownership of

of some ATMs: dia (SBI) has plans to nt of some of its ATMs. It or Proposal (RFP) from t 7,843 cash dispensers 77 ATMs as at end-

s expanded its network years, adding about a

out 11,000 ATMs) in the

ore from April: king gas, transportation

generated from gas could t is set to announce the

ically produced gas in nt on January 10 had ing policy that would be

tically produced natural next five years. The price 7 and $8 a unit which

rent rates. Every al gas price results in a nit for piped natural gas,

Rs 3 a unit for CNG, and 50 paifor electricity at the retail end. is measured in standard cubic kg.

32. NELP X will offer uniformresources: Lifting all restrictionPetroleum & Natural Gas, in ththe oil and gas blocks auctionallow explorers to hunt for all k— oil, gas, coal bed methane, the country has been offering eunder specific policies: NLicensing Policy (NELP) for oil Policy for coal bed methane.

33. Bank staff can claim benefitfrom service: The Supreme Coa bank employee can claiencashment of leave even whservice. The case pertained to claims of late S.K. Kool who wservice ‘as a measure of punishBaroda.

34. Work on DTC, GST coParthasarathi Shome, AdviseFinance Minister, the Union Fincompleted the nitty-gritty onTaxes Code (DTC) and the Good(GST). For GST to be implclearance from the States is also

35. Dec export growth slowsexports grew at a sluggish 3.5 pbillion in December 2013 ccorresponding year-ago periodexport growth, the trade deficidropping to $62.77 billion incompared with $96.14 billion inThis was largely because of thegold and silver imports, whichper cent to $1.7 billion after vawere put in place. Overall, immonth declined by 15.25 perbillion.

36. Govt notifies new gas pricGovernment has notified the policy that would be appliproduced natural gas from Apfive years. However, Reliance foreign partners BP and Niko


for CNG, and 50 paise a unit increase ity at the retail end. Piped natural gas d in standard cubic metre and CNG in

fer uniform licence for all Lifting all restrictions, the Ministry of

& Natural Gas, in the 10th edition of gas blocks auction, has proposed to rers to hunt for all kinds of resources

coal bed methane, or shale. Till now has been offering exploration blocks

ecific policies: New Exploration olicy (NELP) for oil and gas, and CBM oal bed methane.

im benefits even on removal : The Supreme Court has ruled that

mployee can claim pension and t of leave even when removed from e case pertained to the denial of the ate S.K. Kool who was removed from

of punishment’ by Bank of

, GST completed: As per thi Shome, Adviser to the Union nister, the Union Finance Ministry has

gritty on both the Direct (DTC) and the Goods and Services Tax GST to be implemented, further

rom the States is also required. wth slows to 3.5%: India’s

w at a sluggish 3.5 per cent to $26.34 December 2013 compared to the

ago period. Despite the low wth, the trade deficit stayed on leash o $62.77 billion in December 2013

with $96.14 billion in December 2012. rgely because of the continued fall in

ilver imports, which declined by 68.3 $1.7 billion after various restrictions

in place. Overall, imports during the lined by 15.25 per cent to $36.48

w gas price mechanism: The

t has notified the new gas pricing would be applicable to all domestically atural gas from April 1 for the next However, Reliance Industries and its

rtners BP and Niko Resources in the


KG-D6 block would have to submit a bguarantee before they can avail themselves onew price. The new gas pricing mechanismsuggested by a panel headed by Prime MinisEconomic Advisory Council Chief C. Rangarhas been approved by the Cabinet CommitteEconomic Affairs (CCEA).

37. Bank accounts for all can be achieved thAadhaar: According to Nachiket Mor, Chairof the RBI-appointed financial inclucommittee, bank accounts for all can be achiein two years if banks can ride on the Aadenrolment drive that is currently underway. Mor committee, has proposed that banks shprovide every individual over 18 years a baccount by January 2016. In India, only 36cent adults have bank accounts.

38. LIC launches new Jeevan Anand plan: re-launched its “Jeevan Anand” planparticipating non-linked plan which offersattractive combination of protection and savThis product provides financial protection agadeath throughout the lifetime of the policyhowith a special feature wherein it offers covewhole life even after payment of amount.

39. Pre-paid instrument providers can be tuinto banks: According to Nachiket Chairman of the RBI-appointed financial inclucommittee, payment banks can be createdconverting the existing pre-paid instrument (providers into banks. The committee recommended setting up of specialised paymbanks to provide payment services and depproducts to small businesses and lowhouseholds. There are 27 such PPIs in country.

40. To protect lenders, mortgage registry to more assets: Banks and lending institutions soon be required to file with a central registrinformation on loans sanctioned for jewellery, plant and machinery, corporate brand logos. A legal working group set upCERSAI and International Finance Corporaunder the chairmanship of M. R. Umarji, CLegal Advisor, Indian Banks’ Association, recommended that the scope of CERSAIexpanded to cover movable assets, tangiblesintangibles. CERSAI (Central Registry Securitisation Asset Reconstruction and SecuInterest of India), a state-owned entity, curreoperates a central registry with winformation on all equitable mortgages is filelending institutions. This legal working groupalso recommended to the Finance Ministry


ave to submit a bank n avail themselves of the s pricing mechanism, as aded by Prime Minister’s ncil Chief C. Rangarajan, e Cabinet Committee on

chieved through Nachiket Mor, Chairman d financial inclusion ts for all can be achieved an ride on the Aadhaar urrently underway. The osed that banks should

l over 18 years a bank 6. In India, only 36 per

nd plan: LIC has an Anand” plan, a

plan which offers an f protection and savings. ancial protection against

etime of the policyholder herein it offers cover for payment of maturity

rs can be turned g to Nachiket Mor,

ointed financial inclusion nks can be created by

paid instrument (PPI) The committee had of specialised payment

ent services and deposit nesses and low-income 27 such PPIs in the

registry to cover lending institutions may with a central registry all sanctioned for gold hinery, corporate brands rking group set up by al Finance Corporation, of M. R. Umarji, Chief

Banks’ Association, has scope of CERSAI be ble assets, tangibles and (Central Registry of

onstruction and Security owned entity, currently registry with which ble mortgages is filed by legal working group has e Finance Ministry that

the scope of CERSAI be expankinds of mortgage transactioestablished with the main objecthe lenders against frauds/mand preventing multiple finansame asset (immovable properscenario).

41. Govt confident of meeting$325 billion: The Commeconfident of meeting the expobillion this fiscal with most secsuch as pharmaceuticals and gdoing well.

42. Crisil sees loss of 14 millionsector over next 6 years:people will return to work inactivities in the period betweenon-farm jobs will likely vanisslow economic growth and according to ratings agencyprojections come true, this will of a trend seen in the previous between FY 2005-12 that saw afarm-related jobs.

43. Offshore wind energy agenMinistry of New and Renewablis making efforts to set up a Wind Energy Agency to explorepotential in the offshore areas.

44. Govt to clearly define direThe Government is working onfor multi-layer marketing and dforeign direct investment (FDI)ambiguities on the legal scompanies operating in the sselling industry in India is vacrore and is growing at overannum. In multi-layered dicompany distributors sponsor nturn, bring in more suppliers.earned on the basis of productsdistributors and their sponsorthe FDI policy is silent marketing and direct selling, suthe risk of being clubbed withand pyramid schemes and under the Prize Chit and Mone1978.


of CERSAI be expanded to cover all mortgage transactions. CERSAI was with the main objective of protecting s against frauds/misrepresentations nting multiple financing against the (immovable property in the current

of meeting export target of The Commerce Ministry is

f meeting the export target of $325 fiscal with most sectors, except some

icals and gems & jewellery,

f 14 million jobs in non-farm t 6 years: About 12 million

l return to work in farms or related n the period between FY 2013-19 as

jobs will likely vanish in thin air due to omic growth and policy paralysis, to ratings agency Crisil. If the come true, this will mark the reversal een in the previous seven-year period

12 that saw a loss of 37 million

nergy agency on cards: The

New and Renewable Energy (MNRE) efforts to set up a National Offshore gy Agency to explore wind generation the offshore areas.

ine direct sellers for FDI: ment is working on a clear definition yer marketing and direct selling in the ect investment (FDI) policy to remove s on the legal status of foreign operating in the sector. The direct ustry in India is valued at Rs 7,000 is growing at over 10 per cent per

layered direct selling, the istributors sponsor new sellers who, in in more suppliers. Sales credits are he basis of products sold by the main

s and their sponsored vendors. Since policy is silent on multi-layered and direct selling, such companies run being clubbed with fraudulent ponzi

id schemes and getting penalised Prize Chit and Money Circulation Act,


45. Aditya Birla group is top corporate donor to Cong, BJP: According to Association of Democratic Reforms (ADR), business houses were the biggest donors to political parties, accounting for 87 per cent of their total contribution from known sources. Over the last eight years, business houses donated Rs 379 crore to political parties. The donations were made by companies across sectors, including manufacturing, power, oil, mining and real estate.

46. Soon, bank customers will get live video assistance: Some banks like Union Bank of India, Bank of Baroda, Andhra Bank are preparing to introduce interactive televisions which will guide customers and help resolve their issues. These will be connected live to a central studio, where bank personnel will be available round-the-clock to interact with customers.

47. SEBI notifies norms for portfolio investors:

The Foreign Portfolio Investor (FPI) Regulations formed on the recommendations of the K.M. Chandrasekhar Committee on rationalising investment routes and monitoring foreign portfolio investments has been notified. The regulations merge foreign institutional investors, sub-accounts and qualified foreign investors into a single investor class called FPI. SEBI has decided to do away with prior direct registration

of FIIs and sub-accounts. This would be done by designated depository participants authorised by the regulator and would be subject to know-your-client compliance. FPIs have been divided into three categories. They would receive the same tax treatment as FIIs. FIIs and QFIs that are already registered would be deemed to be FPIs until their registration expires. FIIs are allowed to buy and sell securities on payment of conversion fees till either the their FII/sub account registration expires or a certificate of registration as FPI is obtained. However, QFIs have been given one year to re-register as FPIs.

48. 100% FDI in pharma stays: India will continue to allow 100 per cent Foreign Direct Investment (FDI) in existing pharmaceutical companies. Domestic companies selling their facilities or operations to foreign players, however, will not be barred from starting a fresh venture in the same area as the “non-compete” clause will not apply in deals except in special cases. The DIPP had sought reduction of FDI limit for brownfield pharma projects from 100 per cent to 49 per cent in “critical’’ areas as it feared that acquisition of Indian companies could vitally affect availability and affordability of generic (off-patent) medicines.

49. IRDA chief bats for single product for all insurance needs: According to T.S. Vijayan, Chairman, Insurance Regulatory and Development Authority, a single product covering all basic needs of insurance will help increase the reach of insurance.

50. Health cover, pension plans to drive growth in insurance sector: According to an Assocham-Ernst and Young Report, Health insurance and pension plans will drive growth in the Indian insurance industry. However, the distribution and claim management would continue to be major challenges.

51. Court order puts spoke in banks’ loan recovery process in non-metros: As per Section 14 of the Sarfaesi Act, where the possession of any secured assets is required to be taken by the secured creditor the secured creditor may, for the purpose of taking possession or control of any such secured asset, request, in writing, the Chief Metropolitan Magistrate or the District Magistrate within whose jurisdiction any such secured asset or other documents relating thereto may be situated or found, to take possession thereof. ,The Madurai Bench of the Madras High Court observed that secured creditors in metropolitan areas could approach either the Chief Metropolitan


Magistrate or District Magistrate but cannot approach Chief Judicial Magistrate for relief under the SARFAESI Act.

52. RBI hikes NBFCs’ gold loan limit to 75% of value: NBFCs can now give up to 75 per cent, up from 60 per cent, of the value of the gold jewellery pledged as loan. In March 2012, the RBI had directed NBFCs not to give more than 60 per cent of the value of gold jewellery pledged in view of the rapid pace of their business growth and the nature of their business model, which has inherent concentration risk and is exposed to adverse movement of gold prices.

53. DIPP seeks stakeholders’ views on FDI in e-commerce: The existing policy does not allow FDI in business-to-consumer (B2C) e-commerce activities. But 100 per cent FDI is allowed in business-to-business (B2B) e-commerce and in the market place model under which the e-retailer does not sell directly to consumers but provides a platform to other sellers.

54. Every adult should have bank account by Jan 2016: According to RBI appointed Nachiket Mor Committee on Comprehensive Financial Services for Small Businesses and Low-Income Households, every resident should be issued a Universal Electronic Bank Account automatically at the time of receiving their Aadhaar number by a high quality, national, full-service bank. An instruction to open the bank account should be initiated by the Unique Identification Authority of India upon the issuance of an Aadhaar number to an individual over the age of 18. By January 1, 2016, the number and distribution of electronic payment access points would be such that every resident would be within a 15- minute walking distance from such a point anywhere in the country.

55. Create one agency to redress all customer complaints: The Committee on Financial Services has suggested that a unified Financial Redress Agency (FRA) across all financial products and services should be created by the Ministry of Finance to solve consumer complaints within 30 days. The FRA, which will in turn coordinate with the respective regulator, should have a presence in every district in the country and customers should be able to register complaints over the phone, using text messages, internet, and with the financial services provider directly. The provider should then forward the complaint to the redressal agency and customers should have their complaints resolved within 30 days of registration of the complaint with the FRA.

56. Specialised banks for low-income households: The RBI-appointed committee on financial inclusion has recommended that the central bank should set up specialised banks called Payments Bank to provide payment services and deposit products to small businesses and low-income households. Since the new bank will be dealing with poor customers, such a bank must be allowed to accept a maximum deposit of not more than Rs 50,000. Such a bank will earn from the payment services it offers, such as money transfers and online payments, as well as by deploying the deposits in secure government securities (G-secs). In order to protect the money of the poor customer, such a bank will not be allowed to lend in the market.

57. Priority lending targets may be revised based

on sectors, districts: To enable greater regional and sectoral specialisation among banks, RBI may revise the priority sector lending (PSL) targets and require banks to meet an adjusted PSL target of 50 per cent against the current requirement of 40 per cent.

58. Set up State finance regulatory panel: The Committee on Comprehensive Financial Services for Small Businesses and Low-Income Households has suggested that a State Finance Regulatory Commission (SFRC) could be created into which all the existing State Government-level regulators could be merged. Functions such as the regulation of non-government organisations,


microfinance institutions and local moservices business could be added on to the SF

59. Bank design — horizontal & verticalcommittee on financial inclusion has comewith two broad designs for the banking systethe country — the Horizontally DifferentiBanking System (HDBS) and the VertiDifferentiated Banking System (VDBS). In Hdesign while all configurations are depositthe variations between them are on account othe ways in which they originate risks transmit them throughout the system; andtheir size and focus — whether regionasectoral. The HDBS has six design categorienational bank with branches; national bank agents; regional bank; national —bank; national-wholesale bank; and natioinfrastructure bank. The rational for VDBusually linked to niche capabilities such as crunder-writing for specialised business segmor network management in the case of paymThe HDBS has five design categories —network operator; payments bank; fullbank; wholesale consumer bank; and wholeinvestment bank.

60. CAG can audit private telcos: The Delhi Court has ruled that the Comptroller and AudGeneral can audit revenues of private compaif they have an impact on Government’s incom

61. Services PMI down for sixth consecmonth: The HSBC PMI Index shrank to 46December from 47.2 in November. A reaabove 50 indicates growth while anything be50 denotes a contraction.

62. FinMin to re-examine capital controls, foportfolio investment norms: The Ministryextended the term of the Sahoo Committee, wrecently submitted its recommendationsdepository receipts. In the second phase,nine-member panel — headed by M. S. Sahoobeen asked to review the framework on extecommercial borrowings (ECBs) and forcurrency convertible bonds (FCCBs). Besreviewing the framework of direct listinIndian companies abroad, the panel will loodual listing of corporates.

63. Banks approach RBI to hike ATM transafee: Banks have mooted the charge on transactions to pay for the increased secu


ns and local money e added on to the SFRC.

& vertical: The inclusion has come up or the banking system in

zontally Differentiated S) and the Vertically ystem (VDBS). In HDBS

ations are deposit-taking, em are on account of: (i) ey originate risks and ut the system; and (ii)

whether regional or six design categories — ches; national bank with

— consumer k; and national-

e rational for VDBS is apabilities such as credit lised business segments in the case of payments.

— payments ents bank; full-service

er bank; and wholesale

The Delhi High

Comptroller and Auditor ues of private companies Government’s income.

xth consecutive Index shrank to 46.7 in November. A reading th while anything below

controls, foreign The Ministry has

Sahoo Committee, which recommendations on the second phase, the

eaded by M. S. Sahoo, has e framework on external s (ECBs) and foreign onds (FCCBs). Besides rk of direct listing of

d, the panel will look at

ATM transaction ed the charge on ATM the increased security

costs at ATMs, put in placeGovernments, following the griwoman inside an ATM kiosk November. Currently, there isnumber of transactions that undertake at his own bank’s ATcountry has about 1.40 lakh banks will roughly see an outgcrore a month on account of palone.

64. Company Law TribunalMinistry has invited applicationposts of technical member Company Law Appellate TrUnder the new company law, appeals against the orders Company Law Tribunal, an obeing set up for implementatioin India.

65. Early warning system to hestressed loans: Faced with a State Bank of India plans to warning system to identify signloans so that it can act immethem. The move comes in the wgross non-performing assets in40 per cent to Rs 64,206 croSeptember 2013 against Rs 49end of September 2012.

66. SEBI names 3 qualified clsecurities market: The capitalSEBI has said that National SCorporation Ltd (NSCCL), Corporation Ltd (ICCL) and Corporation Ltd (MCXqualified central counterpartieIndian securities market.are designated as MarkeInstitutions for oversight coimportance in securities marketSEBI. They are also subjecregulations that are based Organisation of Securities ComPrinciples for Financial Marke(PFMIs). These principles werein April 2012 to enhance the sain payment, clearing, etc.


TMs, put in place by many State ts, following the grievous attack on a ide an ATM kiosk in Bangalore last Currently, there is no cap on the

f transactions that a customer can at his own bank’s ATM. Given that the s about 1.40 lakh ATMs at present, roughly see an outgo of about Rs 560

account of providing security

ribunal: The Corporate Affairs s invited applications for filling up two technical member in the National Law Appellate Tribunal (NCLAT). new company law, NCLAT will hear

gainst the orders of the National Law Tribunal, an overarching body p for implementation of company law

stem to help SBI zero in on Faced with a pile of bad loans,

India plans to set up an early-stem to identify signs of stress in such at it can act immediately to resolve

move comes in the wake of the bank’s performing assets increasing by about

t to Rs 64,206 crore at the end of 2013 against Rs 49,202 crore at the

ualified clearing houses for

The capital market regulator aid that National Securities Clearing

n Ltd (NSCCL), Indian Clearing n Ltd (ICCL) and MCX-SX Clearing n Ltd (MCX-SXCCL) are the only entral counterparties (QCCPs) in the urities market. Clearing Corporations nated as Market Infrastructure for oversight considering its systemic in securities markets regulated by the y are also subject to rules and that are based on International n of Securities Commissions’ (IOSCO) for Financial Market Infrastructures

hese principles were issued by IOSCO 12 to enhance the safety and efficiency , clearing, etc.


67. Despite legal challenges, Govt moves ahead on Company Law Tribunal: The Government is moving ahead with the formation of the National Company Law Tribunal (NCLT), an overarching body being set up for implementing most provisions of the new company law, even as the outcome of a petition filed before the Supreme Court by the Madras Bar Association is awaited.

68. RBI panel enlists 2 administrators for setting financial benchmarks: According to an RBI committee, the Fixed Income Money Market and Derivatives Association of India (FIMMDA) and the Foreign Exchange Dealers Association of India (FEDAI) may be designated as administrators for all rupee interest rate and foreign exchange benchmarks, respectively. FIMMDA is a voluntary market body for the bond, money and derivatives markets. FEDAI is a self-regulatory body, whose major activities include framing of rules governing the conduct of inter-bank foreign exchange business and liaison with the RBI for reforms and development of the forex market. Financial benchmarks are primarily used for pricing, valuation and settlement purposes in financial contracts.

69. To boost supply, Govt relaxes norms for mega power projects: The Government has decided to ease the Mega Power Policy in a move that will help nearly 25 projects with investments of more than Rs 1.6 lakh crore. This is expected to increase power availability in the country and also ensure that consumers are charged reasonably for electricity supply. The amendment allows project developers to tie up for only 65 per cent of generation capacity through competitive bidding with the State distribution utilities against the earlier norm of 85 per cent. The amendment allows the developer to sell up to 35 per cent of installed/net capacity under regulated tariff as per the specific host State policy.

70. In FY13, export markets remain almost same: According to statistics put out by RBI, the destination of India’s exports during the first half of the current fiscal remained broadly the same as the previous year. India exported goods worth $300 billion in fiscal 2013. In the first six months of the current fiscal, exports have nearly touched $152 billion. About a third of the exports goes to OECD countries, which include the European Union, North America (US/Canada), Australia and Japan. About a fifth of the exports goes to OPEC countries (Indonesia, Iran, Iraq, Kuwait, the UAE and Saudi Arabia). Forty-three per cent of the exports were sent to ‘other developing’ countries (such as those in the SAARC region, other parts of

Asia and Africa) in the first six months ending September 2013.

71. Inflation, job creation are the challenges for Govt: According to PM, there are three main challenges on economic front – creating jobs in the manufacturing sector, controlling the persistent inflation, and curbing corruption.

72. Cabinet nod for conversion of pref shares into equity in 3 banks: The Union Cabinet has given its nod for conversion of perpetual non-cumulative preference shares held by the Government in three public sector banks — Indian Bank, UCO Bank and Vijaya Bank — into equity shares. PNCPS amounting to Rs 400 crore, Rs 1,823 crore and Rs 1,200 crore in Indian Bank, UCO Bank and Vijaya Bank, respectively, will be converted into equity in favour of Central Government.

73. Government cancels Rs 3,500-cr chopper deal with AgustaWestland: The Government has scrapped the controversial Rs 3,500-crore deal to purchase 12 helicopters from AgustaWestland. The deal was cancelled following allegations of unethical dealings by Italian company Finmeccanica in the sale by its Anglo-Italian subsidiary AgustaWestland to the Ministry of Defence. It is alleged that kickbacks were paid to win the contract.


74. RBI seeks taxman’s feedback on bank licence aspirants: RBI has asked the income-tax authorities information on six issues related to tax compliance of the 25 groups that have applied for starting a bank. The issues include whether the groups were subjected to any search and seizure/survey in the past five years; whether any penalty was imposed for concealment of particulars/furnishing inadequate particulars of income; whether the entities are facing any prosecution proceedings under the Income-Tax Act and/or whether they were convicted for any offence under the Act; whether the entities have filed their returns up-to-date; whether any tax dues are outstanding; and whether the entities are complying with the provisions relating to deduction of tax at source.

75. Service tax on insurance takes effect: From 1st January 2014, the services related to insurance like third-party administrators (TPAs), brokers, agents, insurance repositories, Web aggregators, referral entities and surveyors will be subject to service tax.

76. Farm, industrial sectors account for most of the bad loans: As per RBI’s Financial Stability Report, gross non-performing assets (NPAs) are likely to go up to 4.6 per cent of total loans by September 2014 from 4.24 per cent this September — from Rs 1.67-lakh crore to Rs 2.29-lakh crore. In terms of gross NPAs, agriculture has the highest ratio at 5.5 per cent at end-September 2013. The sector is followed by industries at 4.9 per cent. Share of retail loans in gross NPAs stood at 2.2 per cent, while restructured standard advances to total advances were 0.3 per cent at end-September. Public sector banks have the lowest share of the retail segment in their loans portfolio — around 16%.

77. Cabinet okays setting of 58 medical colleges: The Cabinet Committee on Economic Affairs (CCEA) has approved the establishment of 58 new medical colleges which will be attached with the existing district or referral hospitals.

MAR 2014

1. India, Dubai reach air services pact, to increase

seats by 11,000: The increase in the seats is to be in three phases, extending up to March 2015.

2. DK Saraff to head ONGC: DK Saraff, MD of ONGC Videsh, will take over as the new Chairman from March 1. He will hold the post till September 2017.

3. IRDA eases norms to reduce agent attrition:

The Insurance Regulatory and Development Authority (IRDA) has decided to remove minimum persistency criteria (the minimum number of policies sold by agents that have to be renewed), leaving it to the board of each life insurer to have their own norms on persistency. In 2011, the IRDA had put in place a minimum persistency rate of at least 50 per cent. Last year the IRDA had also waived off the condition of fresh training for agents whose licences had lapsed. Further, in a bid to attract more agents into the life insurance industry, the regulator reduced the cut-off percentage in the pre-recruitment examination from 50 per cent to 35 per cent.

4. Tiny deposit collectors get a minimum wage hike: The Tribunal has ruled that on a monthly collection of Rs. 3 lakh, a deposit collector should get fallback wages of Rs. 8,000 and conveyance of Rs. 750 a month. On a monthly collection of over Rs. 3 lakh and up to Rs. 5 lakh, a deposit collector will earn an incentive of 3 per cent. For a monthly collection of over Rs. 5 lakh, a deposit collector will earn an incentive of 2 per cent. The award will be applicable retrospectively from July 19, 2005, the date when the banks were summoned to appear before the Tribunal. Currently, a


deposit collector / agent gets fallback wageRs. 750 on a collection of Rs. 7,500 per monthcollections above Rs. 7,500/month, they geincentive of 2 per cent of the amount collectecase a deposit collector mops up Rs. 3 lakhmonth, he can take home only Rs. 6,600 ( Rs.as fallback wages plus Rs. 5,850 as incenremuneration).

5. Axis Bank rolls out e-KYC account opservice: The customer can approach the babusiness correspondents, who will accessMicroATM (a biometric handheld device) to oan Aadhaar-based account through e-KYC (knyour-customer). For the Aadhaar-based emode of account opening, Axis Bank has tiewith the National Payments Corporation of Iand the Unique Identification Authority of Ind

6. Third party motor insurance rates likelymarket driven by year-end: The rates are lito go up from April this year, consequent tIRDA proposal for rate hikes of between 25cent and 137 per cent. Currently, third pmotor insurance is the only segment wpremium rates are fixed by the insurregulator. Third party liability premium rhave been going up for the last two years.

7. Lending rate for fresh loans rise fasterfor existing ones: According to RBI’s quardata on WALR, the weighted average lending(WALR) for fresh loans rose 57 basis points f11.46 per cent (in the April-June period) to 1per cent (in the July-September period). WALR for existing loans nudged up 11 bpoints from 12.20 per cent to 12.31 per cent.

8. Rs. 3,000-cr PF deposits lying unclaimeper the CAG report, 8.53 per cent of the tot8.55-crore accounts were inoperative asMarch 2012. The number of such accozoomed to over 73 lakh in 2011-12 from ovelakh in 2006-07.

9. United Bank of India chief quits as badcrisis boils over: Archana Bhargava, CMDUnited Bank of India (UBI), opted for volunretirement with effect from February Bhargava’s resignation comes in the wake surge in bad loans at UBI, leading to a losaround Rs. 1,200 crore in the third quarter. Ugross non-performing assets (NPAs) jumpeRs. 8,546 crore in the October-December qua(including a fresh slippage of Rs. 3,172 crore)of December 31, 2013, UBI’s gross NPA10.82 per cent of total advances, one ofhighest among Indian banks.


t gets fallback wages of Rs. 7,500 per month. For 500/month, they get an f the amount collected. In mops up Rs. 3 lakh per

only Rs. 6,600 ( Rs. 750 Rs. 5,850 as incentive

ccount opening can approach the bank’s s, who will access the andheld device) to open

KYC (know-based e-KYC

g, Axis Bank has tied up nts Corporation of India tion Authority of India.

rates likely to be The rates are likely

year, consequent to an hikes of between 25 per

Currently, third party e only segment where xed by the insurance liability premium rates e last two years.

rise faster than rding to RBI’s quarterly ted average lending rate ose 57 basis points from

June period) to 12.03 eptember period). The s nudged up 11 basis

to 12.31 per cent. g unclaimed: As

per cent of the total of ere inoperative as on ber of such accounts

12 from over 25

uits as bad-loan ana Bhargava, CMD of BI), opted for voluntary t from February 20. comes in the wake of a

leading to a loss of n the third quarter. UBI’s ssets (NPAs) jumped to

December quarter e of Rs. 3,172 crore). As BI’s gross NPAs stood at l advances, one of the

10. I-T Dept shoots letters to The Finance Ministry has stidentified 21.75 lakh people fortax returns and letters have individuals. The Incomeidentified these non filers onbusiness intelligence projectPermanent Account Number (Phave not filed income tax rewhom specific information is aInformation Return (AIR), CeBranch (CIB) data and TDS (Source) or TCS (Tax Collected at

11. Fertiliser subsidy may touc2014-15: Fertiliser subsidy isto Rs. 90,000 crore for the 20130 per cent more than the estiinterim budget. The estimate carry-over from the current demand for subsidy.

12. Banks as brokers: Life Insuno firm view: The Life Insuraapex industry/consultative bodlife insurers in the country. Finance has asked public sectorcompulsory insurance brokera15, 2014, which has howeveabeyance. As a corporate agent,to sell products of a singlcompany. But as a broker, it policies of different insurers.

13. RBI panel to examine recfinancial sector reforms: constitute a committee torecommendations of the Legislative Reforms Commissionto capacity building in the bankexamine if the members on banbe certified — by way of say,designed course which could befor every individual before apboard of a bank. The committeeby G Gopalakrishna, Executive Bank of India, has beenresponsibility of identifying requirements keeping in view thsector and what it should delive


letters to 50,000 non-filers: ce Ministry has stated that it has 1.75 lakh people for not filing income and letters have been sent to 50,000

The Income-Tax Department these non filers on the basis of a intelligence project. This identifies Account Number (PAN) holders who filed income tax returns and about

ormation is available in Annual n Return (AIR), Central Information IB) data and TDS (Tax Deducted at TCS (Tax Collected at Source) returns.

y may touch Rs. 90,000 cr in Fertiliser subsidy is estimated to rise

00 crore for the 2014-15 fiscal. This is t more than the estimate made in the dget. The estimate is based on the from the current fiscal and new

s: Life Insurance Council has : The Life Insurance Council is an

try/consultative body representing 24 rs in the country. The Ministry of s asked public sector banks to take up y insurance brokerage from January

has however, been kept in s a corporate agent, a bank is allowed oducts of a single life insurance

But as a broker, it can sell multiple ifferent insurers.

amine recommendations on reforms: RBI has decided to

a committee to examine the dations of the Financial Sector Reforms Commission (FSLRC) relating building in the banking sector. It will the members on bank boards need to

by way of say, an appropriately urse which could be made mandatory

individual before appointment to the bank. The committee, which is headed lakrishna, Executive Director, Reserve India, has been tasked with the ity of identifying capacity building ts keeping in view the role of financial

what it should deliver.


14. Weakening bank balance-sheets is a worry: The International Monetary Fund (IMF) has cautioned Indian authorities to “closely monitor” the deteriorating corporate financial position and weakening bank balance sheets of banks, especially public sector banks. There is need to strengthen prudential regulations of banks’ asset quality classification and concentration risks.

15. State Bank of India to go slow on hiring: The country’s largest lender, which used to hire 30,000-35,000 employees annually till a few years ago, has slowed down fresh recruitments since last year amid rising staff expenses and other concerns.

16. Indian banks abroad see credit growth rise 31.7%: According to Reserve Bank of India’s survey on international trade in banking services, Indian banks operating overseas witnessed higher credit growth compared to their foreign counterparts operating in India. According to the survey for 2012-13, growth of credit extended by Indian banks’ branches operating abroad increased by 31.7 per cent to Rs. 5,85,570 crore ($ 107.7 billion). Credit extended by foreign banks operating in India increased 27.5 per cent to Rs. 3,07,700 crore billion ($56.6 billion) during 2012-13. Deposits mobilised by Indian bank branches operating abroad increased 45.5 per cent to Rs. 3,93,070 crore ($72.3 billion) during 2012-13. In case of foreign banks operating in India, deposit growth moderated to 3.2 per cent at Rs. 2,83,510 crore.

17. Govt to take back coal blocks allotted to 50 companies: According to the Government, blocks that were not able to achieve the requisite milestones have been de-allocated.

18. Parliament passes Telangana Bill: Both Lok Sabha and Rajya Sabha have passed Andhra Pradesh Reorganisation Bill, 2014, to create a separate Telangana State.

19. Rice exempted from service tax: Rice was originally exempted from service tax as it was classified as agriculture produce. However, the Finance Ministry later said that only paddy was agriculture produce, while rice was a processed item. By virtue of the definition of ‘agricultural produce’ in Finance Act 2012, read with the Negative List, storage or warehousing of paddy was excluded from the levy of service tax. Rice was not. Budget 2014-15 has proposed to exempt loading, unloading, packing, storage and warehousing of rice from service tax.

20. Banks can continue as agents of insurers: Insurance Regulatory and Development Authority (IRDA) is renewing the corporate agency licences

of banks having tie-ups with insurers. At present, banks have a corporate agency arrangement with insurance companies to sell insurance products. Under this arrangement, they are allowed to sell products exclusively of one life insurer, one non-life insurer and a standalone health insurer. IRDA has not yet set a deadline on when banks should become insurance brokers. In December, the Finance Ministry issued a notification asking banks to become insurance brokers, whereby they will sell policies of multiple insurers. This move is aimed at creating a level-playing field for non-bank promoted insurance companies vis-à-vis bank-promoted insurance companies. Major public sector and private sector bankshave promoted insurance companies. Most of these banks are not keen to become insurance brokers as they have contractual obligations with joint venture partners of insurance companies.

21. Inflation tumbles to 8-month low of 5.05% in Jan: Led by softening food prices, inflation as measured by the Wholesale Price Index (WPI) cooled to an eight-month low of 5.05 per cent in January. The WPI inflation in January is the lowest since May 2013 and significantly lower than the 7.31 per cent figure in January 2013. This moderation comes on the heels of Consumer Price Index (CPI) inflation hitting a two-year low of 8.79 per cent in January. There was, however, no respite on the core inflation front, with the rate inching up to 3 per cent in January from 2.8 per cent in December 2013.

22. SBI tweaks recovery model: With bad loans surging 27 per cent year-on-year to touch Rs. 67,799 crore towards the end of December, State Bank of India has got into a ‘non-performing asset control’ mode, tweaking its recovery model and setting up committees to check further slippages.

23. Govt rakes in Rs. 61,162 cr in spectrum sale: The spectrum auction, which ended after 10 days of intense bidding, has thrown up Vodafone, Airtel and Reliance Jio as clear winners giving these operators spectrum that can be used for high-end data services using 3G and 4G technologies.

24. Regulator sets seven-board cap for independent directors: In a move to promote good business practices, the SEBI board has approved new corporate governance norms that restrict the number of independent directors on a company board, spell out whistleblower policies, and institute checks on salaries of key managerial persons, among other things. The board has now revised its listing agreement, bringing it in line with the requirement of the provisions of the


Companies Act, 2013. The new norms will cinto effect from October 1. Under the new ran individual can serve as an independirector on a maximum of seven licompanies. The Board also decided that iindividual is a whole-time director in a licompany, he can serve as an independirector in a maximum of three companies. Aif one has completed five years or more aindependent director, he will be eligible forone more term of five years. Managremuneration will be decided by a compensacommittee headed by an independent directo

25. Moderation in farm support prices wilease inflation: Moderation in agricultsupport price will ensure that these prices provide a baseline level of support whenfarmer is in difficulty, without displacing maprices. Raising energy prices to market levelsalso lead to lower inflation over the medterm, the horizon over which the RBI is tryincontain inflation. The reason is that higher prwill reduce excessive consumption, redsubsidies and fiscal deficits, and incentinvestment and competition, even while allowprices to be determined by an increasingly stand plentifully supplied global market for ene

26. IIP contracts 0.6%; retail inflation easesyear low in Jan: Growth in industrial producremained negative for the third month in a contracting 0.6 per cent in December 2mainly due to the sluggish performance ofmanufacturing sector. However, retail inflafor January 2014, eased to a two-year low of per cent as against 9.87 per cent in the prevmonth.

27. Bitcoins are still under the lens: RBI GoveRaghuram Rajan has said the central bancurrently trying to understand virtual currenand will come out with a more considered von it. In December, the RBI had cautioned uholders and traders of virtual currencies apotential financial, operational, legal security-related risks they are expothemselves to. The Government has said creatrading or usage of virtual currencies amedium of payment are not authorised bycentral bank or monetary authority.


he new norms will come 1. Under the new rules, ve as an independent

um of seven listed also decided that if an

r in a listed ve as an independent f three companies. Also,

ve years or more as an will be eligible for just

five years. Managerial cided by a compensation independent director.

prices will help

ration in agricultural e that these prices only l of support when the ithout displacing market ices to market levels will ation over the medium hich the RBI is trying to son is that higher prices

consumption, reduce eficits, and incentivise

tion, even while allowing by an increasingly stable lobal market for energy.

ation eases to 2- in industrial production e third month in a row, nt in December 2013,

gish performance of the owever, retail inflation

year low of 8.79 per cent in the previous

: RBI Governor aid the central bank is rstand virtual currencies a more considered view

RBI had cautioned users, virtual currencies about perational, legal and

they are exposing as said creation,

irtual currencies as a not authorised by any

28. Trade deficit halves in Janusilver imports: India’s trade de$9.92 billion in January from $1corresponding month last Government succeeding in cuttisilver imports through higher iother curbs. Total imports feyear-on-year to $36.57 billioncent drop in gold and silveexports increased a modest $26.75 billion over the correspoyear. A low trade deficit is necthe current account deficit, andto maintain a healthy balance ofcurrent account deficit, on weakens the domestic currencyforeign investors.

29. Marked drop in complainselling and recovery agentannual report on the Bank Omprepared by the Reserve Bank oagainst direct selling agents andeclined to 351 at the end of1,722 at the end of 2010-

30. Maruti 800 production stoplargest carmaker Maruti Suzproduction of its nearly threecar Maruti 800 with effect fromsmall car was being sold in nontwo years. But with the stoppagwill now no longer be available

31. Sugar industry calls for chascheme: The Indian sugar induGovernment to ease or removethe proposed bank loan schemeto cane farmers. In DecembeCabinet Committee on Econoapproved Rs. 6,600-crore interesugar industry and announcedcent interest subvention wouldGovernment.

32. Rs. 10 plastic note to be trieAbout 1billion Rs. 10 plastiintroduced on a trial basis in fiMysore, Jaipur, Shimla and Bfield trial is expected to be launchalf of 2014.


ves in January on fall in gold, India’s trade deficit fell by half to

n in January from $18.87 billion in the ing month last year, with the t succeeding in cutting down gold and rts through higher import duties and s. Total imports fell 18.07 per cent ar to $36.57 billion due to a 77 per in gold and silver imports, while creased a modest 3.79 per cent to ion over the corresponding month last

trade deficit is necessary to contain account deficit, and this in turn helps a healthy balance of payments. A high count deficit, on the other hand, e domestic currency and keeps away

complaints against direct very agents: According to the

on the Bank Ombudsman scheme, y the Reserve Bank of India complaints ect selling agents and recovery agents 351 at the end of 2012-13 against

-11. uction stopped: The country’s

rmaker Maruti Suzuki has stopped of its nearly three-decade-old popular 800 with effect from January 18. The as being sold in non-metros in the last But with the stoppage of production, it

e available to the public. alls for changes to bank loan

he Indian sugar industry has urged the t to ease or remove key conditions of

ed bank loan scheme to clear the dues In December last year, the

ommittee on Economic Affairs had crore interest-free loan to the

stry and announced that the 12 per st subvention would be borne by the

e to be tried out in five cities: llion Rs. 10 plastic notes will be on a trial basis in five cities — Kochi, ipur, Shimla and Bhubaneswar. The expected to be launched in the second


33. 4 more States identified for Aadhaar

enrolment: Aadhaar enrolment in four States — Uttar Pradesh, Bihar, Chhattisgarh and Uttarakhand — will be carried out in addition to enrolment by the Registrar General of India (RGI). As of now, over 57-crore Aadhaar numbers have been generated, facilitating the roll-out of the Direct Benefits Transfer (DBT) scheme in select districts. At present, the DBT scheme covers 28 Centrally-sponsored schemes in 121 districts.

34. Justice Mathur to head 7th Central Pay panel: The Government has approved the composition of the Seventh Central Pay Commission. The Commission will be headed by former Supreme Court Judge Ashok Kumar Mathur. The Commission has been mandated to submit its report in two years’ time and its recommendations would be implemented from January 1, 2016.

35. RBI releases Report of the Committee on Financial Benchmarks: The Committee was headed by Shri P. Vijaya Bhaskar, Executive Director, RBI to study various issues relating to financial benchmarks in India.

36. Report on Enabling PKI in Payment System Applications: RBI has released, the Report of the Technical Committee on Enabling Public Key

Infrastructure (PKI) in Payment System Applications.

37. Committee to examine FSLRC Recommendations: RBI has constituted a Committee headed by Shri G. Gopalakrishna, Executive Director, Reserve Bank of India to examine issues relating to Capacity Building in Banking Sector as suggested by the Report of the Financial Sector Legislative Reforms Commission (FSLRC).

38. Report of the Technical Committee on Mobile Banking: RBI has released the "Report of the Technical Committee on Mobile Banking" which was headed by Shri B. Sambamurthy, Director, Institute for Development and Research in Banking Technology, to 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.

APRIL 2014

Important Data: FY14 fiscal deficit seen at 4.6% of GDP; FY14 CAD likely to be $35 bn; FY14 Plan Expenditure at Rs 4.75 lakh cr; FY14 exports projected at $326 bn; Forex reserves crossed $300 bn

Re-promulgation of ordinance to boost Sebi power: The Securities Laws (Amendment) Ordinance, 2014, that seeks to empower the Securities & Exchange Board of India (Sebi) to effectively check illegal deposit taking and Ponzi schemes has been re-promulgated. The ordinance, gives the legal backing to Sebi for powers to respond to the growing menace of illegal deposit taking and Ponzi schemes. It also empowers the Sebi board to recall and enhance a penalty imposed by the adjudicating officer.

NRI remittances surge to $7.18 bn in 2013: Remittances by non-resident Indians grew 6.44 per cent between January and December 2013, as compared with last year, which is the highest since 2008. States like Kerala, Maharashtra and Tamil Nadu have contributed nearly 60 per cent to the total inflows during the year. This is 10 per cent of the total global remittance of $71 billion in 2013, estimated by the World Bank. Kerala remains the top recipient, contributing 33 per cent to the total remittances into the country.

Regulator for Coal Sector: The government has put in place a Regulator for Coal sector, through an executive order. The coal regulator will advise the government on principles and methodologies for price determination, while state-owned Coal India Ltd (CIL)


will continue to fix prices, subject to the ministry’s approval. There are proposals regulatory bodies to govern the roads, biotechnoand real estate sectors as well.

Indirect tax collection at Rs 4.41 lakh cr inFeb: Indirect tax collections grew by 5.6 per cent t4,41,826 crore in the April-February period of financial year. Excise collection dropped by 3.8cent to Rs 1,49,711 crore; Service tax collectionby 18.2 per cent; The government has set a revindirect tax collection target of Rs 5.19 lakh crore2013-14.

Limit raised for investment in inflation bondhas decided to increase the maximum limitinvestment in Inflation Indexed National SaSecurities-Cumulative (IINSS-C) to Rs 10 lakh annum from Rs 5 lakh earlier for eligible indiviinvestors and Rs 25 lakh per annum from Rs 5 per annum earlier for institutions such as Hundivided families, charitable trusts, eendowments and similar institutions which arepro-profit in nature. Interest rate on the bondslinked to Consumer Price Index (CPI).

Election Commission vetoes gas price hikeElection Commission (EC) has refused to clearUnion government's proposal for a steep increasdomestic gas prices. This will have a major bearinReliance Industries Ltd (RIL), besides Oil and NatGas Corporation, Oil India Ltd (OIL) and Cairn InThe poll panel decision puts on hold doubling ofdomestic natural gas price, from $4.2 per miBritish thermal units (mBtu) to $8.4, till a government takes charge at the Centre.

Core sector grows only 1.6% in January: sector - fertilisers, cement, steel, electricity, crudecoal, petroleum refinery products and natural gasroughly 28 per cent in the Index of IndusProduction.

Unified transport ministry mooted: A highcommittee on transport development, headedformer Reserve Bank of India (RBI) deputy govRakesh Mohan, has suggested a unified ministrtransport with roads, railways and ports asdepartments. It has also recommended raising


s, subject to the coal e are proposals for the roads, biotechnology

lakh cr in Apr-rew by 5.6 per cent to Rs February period of this ion dropped by 3.8 per rvice tax collection, grew nment has set a revised of Rs 5.19 lakh crore for

ation bonds: RBI he maximum limit for

tional Saving C) to Rs 10 lakh per

er for eligible individual r annum from Rs 5 lakh itutions such as Hindu able trusts, education titutions which are not

t rate on the bonds are

price hike: The as refused to clear the l for a steep increase in have a major bearing on , besides Oil and Natural d (OIL) and Cairn India. on hold doubling of the from $4.2 per million u) to $8.4, till a new

anuary: The core teel, electricity, crude oil, ucts and natural gas has he Index of Industrial

A high-powered evelopment, headed by a (RBI) deputy governor d a unified ministry of ays and ports as its

commended raising the

road cess on petrol to Rs 4 a litre cess of Rs 2 a litre.

New IIP to use value of somensure an accurate picture of econpoint of time, a new Index of Indu(IIP) would include value of procapital goods in various phases of pof their volumes at the final stage. over double of existing 800 items. It10 as the base year against 2004series.

CVC seeks report on United BVigilance Commission (CVC) has souFinance Ministry on crisis- ridden Unfor under reporting of its bad loans oAssets (NPAs). UBI's gross NPAs ro8,546 crore at the end of December 2

FinMin-backed ATM rollout plaUnion finance ministry-backed planpublic sector banks' Automated (ATMs) by March 2014 is stuck in vaand commercial problems. The plaATMs to be installed in 16 geog33,000 during 2012-13 and 30,

Insurers not yet ready for Solvnorms, which call for risk-based capmay take longer than expected to bIndia. Solvency-II is a European Unioprogramme to be implementestates. It introduces a new, harminsurance regulatory regime. Solveninsurers what Basel-III norms are norms are made up of provisions relrequirements of companies, regulata specific firm’s risk, and the resupervision of the entire market.

No error in printing of notesthat new Rs 1,000 and Rs 50Subbarao’s signature, who had dSeptember 2013, are being rolleprinting presses of RBI. RBI hasbearing a signature of former goveare legal tender and the process of cwas underway. Changing the governthe banknotes is a tedious process. AIndia are issued in the denomination20, Rs 50, Rs 100, Rs 500 and Rs 1notes from four currency note printinthe currency note printing presses Government of India and two arReserve Bank, through its wholly o


etrol to Rs 4 a litre from the existing

e of some capital goods: To rate picture of economic activity at a new Index of Industrial Production

clude value of production of some various phases of production, instead

l stage. New IIP will have xisting 800 items. It will have a 2009-

year against 2004-05 in the present

n United Bank: The Central ission (CVC) has sought a report from

ridden United Bank of India ting of its bad loans or Non Performing UBI's gross NPAs rose 188.3% to Rs e end of December 2013.

rollout plan hits a wall: The backed plan for expansion in

banks' Automated Teller Machines h 2014 is stuck in various operational

The plan was for 63,000 stalled in 16 geographical regions,

13 and 30,000 in 2013-14.

y for Solvency-II: Solvency-II based capital in insurance,

r than expected to be implemented in II is a European Union (EU) legislative be implemented in all 28 EU member duces a new, harmonised EU-wide atory regime. Solvency-II norms are to

III norms are for banks. These up of provisions related to the capital

, regulatory assessment of ’s risk, and the regulator’s broader he entire market.

of notes: There were reports 1,000 and Rs 500 notes bearing

nature, who had demited office in 3, are being rolled out from the s of RBI. RBI has said new notes ture of former governor D Subbarao and the process of changing signature Changing the governor’s signature on a tedious process. At present, notes in in the denomination of Rs 5, Rs 10, Rs 00, Rs 500 and Rs 1,000. RBI receives currency note printing presses. Two of te printing presses are owned by the India and two are owned by the through its wholly owned subsidiary,


the Bharatiya Reserve Bank Note Mudran Ltd (BRBNML). The government owned presses are at Nasik and Dewas. The other two presses are at Mysore and Salboni. Coins are minted in four mints owned by the Government of India. The mints are located at Mumbai, Hyderabad, Calcutta and Noida.

CAD falls to 0.9% of GDP in Q3; lowest in 4 years: India’s current account deficit (CAD) for the quarter ended December stood at $4.2 billion, or 0.9 per cent of the gross domestic product (GDP), a sharp fall from $31.9 billion (6.5 per cent) in the year-ago period. The fall resulted from a pick-up in exports and moderation in imports, especially of gold.

Govt approves 8.75% interest on EPF deposit for 2013-14: Interest rate was 8.5 per cent in 2012-13.

Muthoot to set up 9,000 white-label ATMs: The Muthoot group company has partnered with FIS Payment Solutions & Services India, which will act as the technical partner for the project and Federal Bank Ltd, is the sponsor bank for this venture.

Central Bank sells entire stake in CIBIL: Central Bank of India has sold its entire stake in credit information provider Cibil to Transunion International Inc. Central Bank had a 5 per cent stake in CIBIL.

Transunion is the majority shareholder in CIBIL at 27.5 per cent. Among others, Bank of Baroda, Bank of India, Punjab National Bank, Union Bank, Citicorp Finance (India), HSBC, Standard Chartered Bank, Indian Overseas Bank and HDFC Ltd each hold 5 per cent stake in CIBIL. State Bank of India and ICICI Bank carry 10 per cent each, while rest of 2.5 per cent is with Sundaram Finance Ltd.

Demand for energy highest in India: The growth in energy demand in India would be the highest among all countries by 2030-35, beating even China, says the 2014 energy outlook report issued by British oil giant BP. According to the report, India’s energy production would rise by 112 per cent, while consumption would grow by 132 per cent. Oil imports would rise by 169 per cent and account for over 60 per cent of the net increase in imports, followed by increasing imports of gas (+573 per cent) and coal (+85 per cent).

UP clocks maximum food grain production in India: The food grain production in Uttar Pradesh during 2012-13 crop year (July-June) has once again topped its peers at about 50.84 million tonnes (MT). Higher production has come about primarily due to improving productivity. Against food grain productivity of 2,448 kg/hectare in 2011-12, the productivity index rose to 2,547 kg/hectare in 2012-13.

Industrial Production rises: Having declined for three months in a row, industrial production expanded by 0.1 per cent in January. However, merchandise exports declined 3.67 per cent in February, for the first time in eight months. Manufacturing output declined for the fourth consecutive month in January. This sector, which occupies over 75 per cent weight in the Index of Industrial Production (IIP), fell by 0.7 per cent compared to a 1.2 per cent decline a month ago. Within manufacturing, consumer durables and capital goods persisted with a fall in output.

Govt panel to review LPG subsidy pipeline: The government has set up a committee to recommend changes in a scheme to pay the cooking gas subsidy into consumers' bank accounts. The 12-member panel, headed by S G Dhande, former director of the Indian Institute of Technology, Kanpur, will look at the difficulties consumers faced in receiving the subsidy after buying gas cylinders at market rates. The scheme was launched last June and put on hold in January over difficulties in implementing it.

Retail inflation declines to 25-month low in February: Consumer Price Index (CPI)-based inflation


fell to 8.1 per cent in February, the second-lowest since the index was launched in 2012. Inflation for food items, which account for about 45 per cent weight of CPI, fell to 8.57 per cent from 9.9 per cent in January.

Feb WPI at 9-month low: Wholesale inflation fell to a nine-month low of 4.68 per cent in February from 5.05 per cent in the previous month, as prices of food items rose at a lower pace. The inflation, based on the Wholesale Price Index (WPI), declined to the Reserve Bank of India (RBI)’s comfort zone — below five per cent — after eight months.

Forex reserves up $1.09 bn; back to April level: Foreign exchange reserves rose $1.09 billion for the week ended March 7 to $295.45 billion, back to the level seen at the start of the current financial year.

India remains the biggest arms buyer: According to Stockholm International Peace Research Institute (SIPRI), India imported nearly three times as many weapons as its nearest competitors China and Pakistan over the last five years. The main supplier of arms to India in 2009-13 was Russia, accounting for 75 per cent of all imports. The five largest arms suppliers worldwide between 2009 and 2013 were the US, Russia, Germany, China and France. The world’s top five arms importers were now India, China, Pakistan, the United Arab Emirates and Saudi Arabia.

Private banks pip PSBs in Casa mobilization: In 2013, while the share of low-cost current account and savings account (Casa) deposits improved in the case of most private lenders, many government banks reported a decline. While the Casa ratios of public sector banks such as SBI, Bank of India, Canara Bank and Union Bank of India declined compared to the year-ago period, the ratio improved for private banks such as ICICI Bank, Axis Bank, Kotak Mahindra Bank, IndusInd Bank and YES Bank.

Attractive pricing, better customer service and branding of Casa products have helped private banks gain a good share of the low-cost deposit market.

Banks' deposit growth beats rise in credit: The banking system’s deposit growth continues to be higher than the growth in credit, owing to slow economic growth. Reserve Bank of India (RBI) data show for the fortnight ended March 7, credit grew 14.65 per cent year-on-year, while deposits rose 15.55 per cent.

Reserve Bank has yet to decide on inflation targeting: Urjit Patel committee’s has recommended

that monetary policy should move towards inflation targeting. However, RBI is yet to take a final view. The committee has said retail inflation should be the anchor measure for the central bank, instead of wholesale inflation. The aim is to bring CPI to eight per cent in one year and six per cent at the end of two years.

RBI's foreign exchange reserves near 27-month high: The foreign exchange reserves rose by $1.84 billion to $ 297.29 billion for the week ending March 14. Foreign exchange reserves had hit a 39-month low on September 6 when it touched $ 274 billion.

New players opt out of national health insurance scheme: The scheme was launched by the labour ministry to provide health insurance to families living below the poverty line. The Rashtriya Swasthya Bima Yojana provides insurance to five members of a family—the head of the household, spouse and three dependents—up to Rs 30,000 for most diseases that need hospitalisation. The government has set hospital rates for a large number of treatments. Existing ailments are covered from day one and there is no age bar. Beneficiaries register with Rs 30 and the government pays the policy premium to insurers chosen through bids. The Centre pays 75 paise of


every rupee of policy premium for the RashtSwasthya Bima Yojana and the states pay the Jammu & Kashmir and the northeastern states only 10 per cent of the premium.

Public sector lenders write off more bad than recovery: These banks wrote off Rs 19,505 cnon-performing assets in the third quarter of 2013The cash they recovered over the quarter wa18,933 crore. Another Rs 21,988 crore wreclassified as not being bad any more, bringing dthe sticky loan portfolio of these banks by Rs 60crore. The state-owned banks had Rs 1,64,461 cronon-performing assets on their books on April 1, 2which grew by Rs 1,24,147 crore in nine months t2,28,181 crore on December 31, 2013.

e-filing services under MCA-21 temposuspended from April 1-13: This move is intendefacilitate a smooth transition to the new forms uthe new company law. In this April 1-13 period, alnew forms under the new company law are expeto be uploaded so that they could be used bybusiness community under the new company regime. As many as 282 sections in the new complaw—which comprises 470 sections—will come effect from April 1.

University of Chicago opens academic centDelhi: The centre will promote scholarship throthree broad programmes — business, economics, and policy; science, energy, medicine, and puhealth; and culture, society, religion, and arts. university already has centres in Beijing and P

New company law: First set of final rules is a mbag for India Inc: Private companies with an anturnover of Rs. 200 crore or an outstanding loan o100 crore would now be required to appoininternal auditor. The final rules provide that unlipublic companies (with paid up capital of Rs. 10 cand above and those with loan of over Rs. 50 crneed to have at least 2 independent directors.in variance to earlier proposal that one-third ofboards of unlisted public companies should compindependent directors. Also, now every licompany and a public company with a paidof Rs. 100 crore or a turnover of Rs. 300 crore shhave a woman director.


r the Rashtriya the states pay the rest. northeastern states pay

more bad loans wrote off Rs 19,505 crore third quarter of 2013-14. er the quarter was Rs

s 21,988 crore were any more, bringing down ese banks by Rs 60,426

had Rs 1,64,461 crore of ir books on April 1, 2013, ore in nine months to Rs

21 temporarily This move is intended to

to the new forms under 13 period, all the

mpany law are expected y could be used by the

the new company law ons in the new company

will come into

demic centre in ote scholarship through usiness, economics, law, , medicine, and public religion, and arts. The in Beijing and Paris.

l rules is a mixed mpanies with an annual n outstanding loan of Rs. required to appoint an

that unlisted up capital of Rs. 10 crore an of over Rs. 50 crore) endent directors. This is

third of the panies should comprise

so, now every listed ny with a paid-up capital r of Rs. 300 crore should

Govt to borrow Rs. 3.68-lakh crGovernment will borrow Rs. 3.68 lakfirst six months (April-September) year 2014-15 starting April 1.for the first half is 61.5 per centborrowing as announced in the inteborrowing was pegged at Rs. 5.934,000 crore higher than 201331. However, net borrowing, redemptions of government securitielakh crore, which is around 3 per cecurrent fiscal.

RBI extends deadline to implemeto 2019: The implementation of regulations may necessitate some leto raise capital within the interntimeline for full implementation ofregulations. The breather wimplementation of Basel III in Ininternationally agreed date of Januar

RBI eases forex hedgiexporters/importers: Contracts bocent of the eligible limit may be cexporter/importer bearing/being enor gain as the case may be. The el


lakh cr in April-Sept: The l borrow Rs. 3.68 lakh crore during the

September) of the next fiscal tarting April 1. Borrowing programme lf is 61.5 per cent of gross market

nnounced in the interim budget. Total pegged at Rs. 5.97 lakh crore, Rs. gher than 2013-14 fiscal ending March

net borrowing, which excludes government securities, will be Rs. 4.57 h is around 3 per cent lower than the

to implement Basel III norms implementation of Basel III capital necessitate some lead time for banks l within the internationally agreed implementation of the Basel III capital The breather will align full of Basel III in India closer to the greed date of January 1, 2019.

x hedging rules for Contracts booked up to 75 per

ible limit may be cancelled with the ter bearing/being entitled to the loss case may be. The eligible limit in the


case of exporters is computed as the average ofprevious three financial years’ (April to March) export turnover or the previous year’s actual exturnover, whichever is higher. The eligible limit incase of importers is computed as 25 per cent ofaverage of the previous three financial years’ acimport turnover or the previous year’s actual imturnover, whichever is higher.

MCX-SX appoints former LIC chief Mr Mathchairman: Ashima Goyal, Professor at Indira GaInstitute of Development Research, has bappointed as Vice-Chairperson.

Kotak Bank rolls out social networked ac‘Jifi’: In an aggressive bid to go digital, Kotak MahiBank has launched an online social current accintegrated with Facebook and Twitter. Targeted atech-savvy and the young, Kotak Jifi is a no minimbalance, zero interest current account which canopened with an initial payment of Rs. 5,000. The bhas tied up with online retailers such as eMakeMyTrip and Jabong, among others, to atcustomers.

Banks denied access to wealth tax returdefaulting borrowers: Though the details of wein the hands of defaulters (as stated in the wealthreturns) could be useful for recovery of dues,income tax authorities do not share the same banks even under the Right to Information Act.

IRDA allows collection of advance premiumcommission to the agents, however, could be paid after the adjustment of premium on due date.

Corruption, bribery, corporate frauds biggesfactors for India Inc: As per India Risk Survey 2carried out by FICCI and Pinkerton to assessimpact of risks across industry and geographies wthe country, corruption, bribery, corporate frbiggest risk factors for India Inc. ‘Strikes, closures,unrest’ have been rated as the second biggest category.

Bank boards suffer from huge governance dAccording to RBI Deputy Governor KC Chakrabthe Indian banking system needs a cleangovernance, especially at the board level and sysshould be rule-based or principle-based but discretion-based, as is the case now.

Govt to sell stake in Axis Bank: SUUTI, ownedGovt currently holds 20.72 per cent in Axis Bank.

KC Chakrabarty quits RBI: RBI Deputy GovernorChakraborty has requested for a slightly ea


d as the average of the s’ (April to March) actual ious year’s actual export . The eligible limit in the

ed as 25 per cent of the e financial years’ actual

ear’s actual import

f Mr Mathew as ofessor at Indira Gandhi

Research, has been

rked account o digital, Kotak Mahindra e social current account Twitter. Targeted at the tak Jifi is a no minimum t account which can be

nt of Rs. 5,000. The bank etailers such as eBay,

mong others, to attract

tax returns of gh the details of wealth stated in the wealth tax r recovery of dues, the ot share the same with Information Act.

e premium: The ever, could be paid only

um on due date.

uds biggest risk India Risk Survey 2014,

kerton to assess the y and geographies within ibery, corporate frauds nc. ‘Strikes, closures, and the second biggest risk

vernance deficit: vernor KC Chakrabarty, needs a clean-up of board level and system

based but not

: SUUTI, owned by r cent in Axis Bank.

BI Deputy Governor, K C for a slightly earlier

departure (April 25) than the scheend).

IRDA may ask life insurers repositories: The Insurance Development Authority (IRDA) is mandatory for life insurance companall five insurance repositories by Jrepository system lets policyholderelectronic form, and make changesthe policy. IRDA has licensed KarvyCentral Insurance Repository, SHCCAMS Repository Services as reposit

New secretarial audit rules likelInstitute of Company Secretarierecommended that the norms for praudit should be on par with that ofaudit. The Government needs recommendation as a rule under tlaw.

Private banks at higher risk ofthan State-run lenders: commissioned by IBM and conInternational Data Corporation (IDbanks are at a higher risk of losintheir public sector counterparts,unsatisfactory customer services. Abprivate bank customers transact wibank, compared with 24 per centbanks. The prime reasons for customare unsatisfactory branch experiencerespondents), problem resolution (5channel experience (41 per cent).

Govt mulls new ways to raise These include investment by peinsurance companies, rights issushareholders at the time of capitaGovernment and issuance of shares estimated that banks need aroundcapital in the next few years to meet


il 25) than the scheduled one (June-

insurers to tie up with The Insurance Regulatory and

uthority (IRDA) is likely to make it ife insurance companies to tie up with ce repositories by July.The insurance m lets policyholders keep policies in

, and make changes and revisions in has licensed Karvy, NSDL Database, ce Repository, SHCIL Projects, and y Services as repositories.

rules likely from April 1: The ompany Secretaries of India has hat the norms for proposed secretarial on par with that of internal financial vernment needs to approve the

n as a rule under the new company

her risk of losing customers ers: According to a study

by IBM and conducted by the ata Corporation (IDC), private sector

risk of losing customers than ector counterparts, chiefly due to ustomer services. About 41 per cent of stomers transact with more than one

d with 24 per cent at public sector ons for customer dissatisfaction

ry branch experience (63.6 per cent of roblem resolution (55.3 per cent) and nce (41 per cent).

s to raise capital for banks: investment by pension funds and

panies, rights issue for minority t the time of capital infusion by the d issuance of shares to employees. It is banks need around Rs. 1-lakh crore xt few years to meet business needs.


JUNE – JULY 2014

New Chief Justice of India: Justice R.M.Lodhabeen appointed as new Chief Justice of India.

Deputy Governor of RBI: R. Gandhi has bappointed as Deputy Governor of RBI.

New FED Chief: Janet Yellen, takes over from Bernanke as new Fed Reserve Chief..

Dadasaheb Falke Award 2013: Poet Gulzar has bselected for the Dadasaheb Phalke Award 2013.

Arvind Mayaram is finance secretary:government has named Economic Affairs SecreArvind Mayaram the finance secretary. Sumit Boseretired in March.

RBI appoints three new EDs: The Reserve BanIndia (RBI) has appointed three new execudirectors (EDs) namely N S Vishwanathan, ChanSinha, and U S Paliwal. The central bank has executive directors. Traditionally, among the deputy governors, two are promoted from withinranks of RBI while one is an economist and the foone is a commercial banker. Apart from R Gandhi has been recently appointed as Deputy Governorother deputy governors are H R Khan and Urjit Pat

Shri Gurdial Singh Sandhu nominated onCentral Board: The Central Government nominated Shri Gurdial Singh Sandhu, SecreDepartment of Financial Services, Ministry of FinaNew Delhi as a director on the Central BoarDirectors of the Reserve Bank of India.

Ila Patnaik appointed principal economic adin FinMin: Noted economist Ila Patnaik has bappointed principal economic advisor in the Ufinance ministry. Patnaik, is currently Reserve BanIndia chair professor at the National Institute of PuFinance and Policy (NIPFP), a government funthink tank.

Issue of ` 5 coins to commemorate the occas"Acharya Tulsi Birth Centenary": The Governmof India has minted the above mentioned coins wthe Reserve Bank of India will shortly put circulation.

India Ratings pegs FY15 growth at 5.6%:group entity India Ratings on Monday kept its groforecast for 2014-15 unchanged at 5.6 per despite the India Meteorological Department (Ipredicting a sub-normal monsoon this year. official estimate for growth in 2013-14 is 4.9 per cagainst a decade-low of 4.5 per cent in 2012


: Justice R.M.Lodha has ustice of India.

: R. Gandhi has been

n, takes over from Ben

: Poet Gulzar has been alke Award 2013.

secretary: The nomic Affairs Secretary

tary. Sumit Bose had

The Reserve Bank of three new executive Vishwanathan, Chandan central bank has nine nally, among the four

romoted from within the economist and the fourth

part from R Gandhi who as Deputy Governor, the R Khan and Urjit Patel.

inated on RBI tral Government has

ngh Sandhu, Secretary, ices, Ministry of Finance,

tral Board of

conomic advisor t Ila Patnaik has been

ic advisor in the Union urrently Reserve Bank of ational Institute of Public , a government funded

e the occasion of The Government

ed coins which will shortly put into

at 5.6%: Fitch Monday kept its growth

anged at 5.6 per cent, Department (IMD)

onsoon this year. The 14 is 4.9 per cent,

r cent in 2012-13.

D&B sees FY15 growth at 5.5%clock a GDP growth of 5.5% dufinancial year provided there is norstable government at the centre, says

Mutual funds make AUM dischouses have begun disclosing invecompanies in their assets under manBirla Sun Life MF tops the list with Rsits related entities.

No entry age limit for govt stapension sector regulator has sgovernment employees (central & stthe government can be enrolled Pension System (NPS), irrespective of entry. However, this is subject to the total period of contribution to not be more than 42 years. NPS ispension scheme launched by the UniJanuary 2004. It was made compugovernment employees.

IndusInd Bank to foray into assIndusInd Bank plans to start assbusiness in the next couple of monsector lender has already firmedstrategy and plans to partner asscompanies (ARCs) for this new bWhile the Reserve Bank of India has acquiring bad loans from sponsor babasis, it has allowed such transactioauctioned in a transparent manner, obasis and if prices are determined by

ICAI to issue norms on fraud repAccounting watchdog the InstituAccountants of India (ICAI) will brinote for auditors on detecting corpfollows the new Companies Act makfor auditors to report corporategovernment within a specified timenew Act, if the statutory auditor hasto believe an offence involving fraubeen committed in a company, it hasthe government within 60 days ofabout it.


wth at 5.5%: India is likely to rowth of 5.5% during the current

rovided there is normal monsoon and ent at the centre, says a D&B report.

AUM disclosures: All fund gun disclosing investments of group eir assets under management (AUMs). F tops the list with Rs 6,585 crore from

r govt staff under NPS: The r regulator has said all eligible ployees (central & state) on the rolls of

rolled into the National (NPS), irrespective of age at the time er, this is subject to the condition that of contribution to NPS account shall an 42 years. NPS is the contributory launched by the Union government in

It was made compulsory for all new

ay into asset reconstruction: plans to start asset reconstruction next couple of months. The private-has already firmed up its business lans to partner asset reconstruction Cs) for this new business venture. ve Bank of India has barred ARCs from ans from sponsor banks on a bilateral

owed such transactions if the asset is ransparent manner, on an arm's-length es are determined by market factors.

fraud reporting by auditors: tchdog the Institute of Chartered India (ICAI) will bring out a guidance rs on detecting corporate fraud. This Companies Act making it mandatory o report corporate frauds to the hin a specified time frame. Under the tatutory auditor has sufficient reasons ffence involving fraud is being or has in a company, it has to be reported to

t within 60 days of coming to know


Sebi revises norms for liquidity enhanceschemes: Capital markets regulator Securities Exchange Board of India (Sebi) has revised nogoverning the incentive schemes that stock exchacan provide members for trading on tplatforms.The new norms allow exchanges tincentives for a maximum of three years.

RBI group wants use of public key infrastrufor safe payment system: As consumer banfrauds are on the rise, a Reserve Bank of India (group has suggested the use of public infrastructure (PKI) in order to ensure a safe secure payment system in the country. The cenbank has launched a series of initiatives to imptechnological infrastructure to support paymentsettlement systems (RTGS) — which are termePKI — such as real time gross settlement, natielectronic fund transfer (NEFT), etc. Acknowledthat non-PKI payment systems such as magneticcharacter recognition (MICR) or non-MICR cleaelectronic credit system, credit and debit ccontributed 75 per cent in volume terms but onlyper cent in value terms in 2012-13 in bantransactions, the group has called for using PKprovide a safe, secure payment system and enlegal compliance. According to the report, banktheir internet banking applications, shmandatorily create an authentication environmenpassword-based, two-factor authentication as wea PKI-based system. Besides, banks should proviPKI-based authentication system for online bantransactions as an optional feature for customers.

RBI puts curb on using ECB to repay domloans: The Reserve Bank of India (RBI) has bacompanies from repaying domestic loans throfunds raised through external commercial borrow(ECBs) from foreign branches of Indian banks.banks to put restrictions on their foreign brancheterms of giving guarantees to offshore ventures/subsidiaries of Indian companies to avaforeign currency loans to repay rupee credit.

Indo-US trade to cross $100 billion: AccordinJames Golsen, principal commercial officer India, US Commercial Service; trade between United States and India is soon expected to cross $billion,

The total goods trade between the countries in 2stood at $ 63.7 billion.

Intervention difficult when currency falls shAccording to RBI Deputy Governor H R Kintervention in the face of the sharp depreciation


ty enhancement egulator Securities and ebi) has revised norms

es that stock exchanges or trading on their ow exchanges to provide

y infrastructure As consumer banking

erve Bank of India (RBI) use of public key r to ensure a safe and he country. The central of initiatives to improve to support payment and

which are termed as oss settlement, national

Acknowledging s such as magnetic ink

MICR clearing, redit and debit cards lume terms but only 6.3

13 in banking called for using PKI to ent system and ensure to the report, banks, in

applications, should tication environment for uthentication as well as

, banks should provide a stem for online banking ature for customers.

repay domestic India (RBI) has barred domestic loans through l commercial borrowings

an banks. RBI told their foreign branches in es to offshore joint

an companies to avail of y rupee credit.

According to mercial officer - south

ice; trade between the n expected to cross $ 100

en the countries in 2013

cy falls sharply: Governor H R Khan,

e sharp depreciation is a

difficult choice for several reasons,reserves, particularly in a country likexternal liabilities far exceed the Between April and August, 2depreciated about 19 per cent afollowing fears of the US Fed's tapand also, weak domestic fundamcurrent account deficit aggravated th

RBI ED seeks voluntary retiremeIndia (RBI) Executive Director G Gvoluntarily retired from the servidirector of Centre for Advanced Fand Learning (Cafral). Cafral, organisation, is an independent bodRBI.

Mor panel's financial inclusion on back burner: The Union financeReserve Bank of India (RBI) have raviability and implementation of the made in the Nachiket Mor commitpanel had, among other things, banking structure to foster financial unease with the idea of nongetting the status of banks, withouadhering to the cash reserve ratio liquidity ratio. The Mor committesetting up two types of banks wholesale banks - besides talkconvergence in regulations for banksfinancial companies (NBFCs).suggestion that existing commercialto hold payment banks as subsidiarunviable as this might not servefinancial inclusion, as NBFCs charge rates and might continue to do soconverted into banks.

CAG can audit private companies: Thas held that the Comptroller and(CAG) could audit the account btelecom companies, which share ththe government for using spectrumsuch a scrutiny was crucial fogovernment got its “legitimate shprivate telecom operators to use thresource. Though the Supreme Couis for the telecom sector, it may ha


for several reasons, including loss of ularly in a country like India where the ies far exceed the official reserves. l and August, 2013, the rupee out 19 per cent against the dollar of the US Fed's tapering programme

k domestic fundamentals like high deficit aggravated the problem.

ry retirement: Reserve Bank of cutive Director G Gopalakrishna has

red from the service and joined as tre for Advanced Financial Research

(Cafral). Cafral, a not-for-profit an independent body fully funded by

inclusion report may be put The Union finance ministry and the

f India (RBI) have raised questions on plementation of the recommendations achiket Mor committee's report. The ong other things, suggested a new re to foster financial inclusion. There is he idea of non-banking companies us of banks, without obligations like cash reserve ratio and the statutory The Mor committee had suggested types of banks - payment banks and

besides talking about some regulations for banks and non-banking anies (NBFCs). The committee's

existing commercial banks be allowed t banks as subsidiaries is also seen as is might not serve the purpose of on, as NBFCs charge very high interest t continue to do so even after being

rivate companies: The Supreme Court he Comptroller and Auditor General udit the account books of private

nies, which share their revenues with t for using spectrum. The Court said ny was crucial for ensuring the t its “legitimate share” for allowing operators to use the valuable natural h the Supreme Court’s present order m sector, it may have an implication


for other industries like power, mining, roadwports and airports, in which private companies eishare revenues with the government or partunder the public-private partnership (PPP) model.

Stamp Act revamp to benefit treasury:proposed Bill to amend the Indian Stamp Act of 1has sought to increase the maximum penalty to lakh for various offences, compared with a hundred rupees at present. According to the dcirculated by the Union finance ministry for commif a share warrant is issued without being stamped, the penalty on those executing or signiwill increase from Rs 500 at present to Rs 1 lakthe case of any other instrument chargeable with dsuch as debentures or preferential shares, the finebe Rs 10,000. Once the Bill was enacted, strevenue would double to about Rs 60,000 crore a yas penalties for various offences under thproposed to be increased substantially. In the dBill, a provision has also been made to levy a penof up to Rs 1 lakh for failure to provide the requcooperation in inspection of private and governmpremises and providing the required informationrecords (paper as well as electronic). The fine hasbeen increased substantially for stamp duty evaCurrently, the maximum penalty for this is Rs 5,00


wer, mining, roadways, private companies either vernment or partner it ership (PPP) model.

treasury: The ndian Stamp Act of 1899 aximum penalty to Rs 1 compared with a few According to the draft,

ce ministry for comment, ed without being duly e executing or signing it present to Rs 1 lakh. In ent chargeable with duty, ntial shares, the fine will ill was enacted, stamp ut Rs 60,000 crore a year, nces under the Act are bstantially. In the draft

n made to levy a penalty to provide the required private and government

ired information and tronic). The fine has also

for stamp duty evasion. lty for this is Rs 5,000. It

has been proposed that for an evalakh, the fine can be increased to Rscent of the duty evaded, whicheveevaded amount is more than Rpunishment will involve imprisonmeor a fine of at least Rs 50,000 or both

RBI push for Interest Rate trading: RBI may introduce more tRate Futures (IRF) to drive trading vDecember, the regulator made a launch IRFs. The previous two attema lukewarm response. RBI's definistandardised interest rate derivativon a recognised stock exchange notional security or any otherinstrument or an index of such instrurates at a specified future date,at the time of the contract”. Cupermitted where the underlying prtreasury bill, a two-year, fivebearing government security.

State Bank of India to review metros: The State Bank of India gron a fresh strategy for expansiobranches and automated teller macrelocating branches - in the four meof Delhi, Mumbai, Chennai and Bangcut the time for break-even to a yearfrom the present period of up to from the imperatives of competitioeffective use of locations and bettresources in metropolitan regions.

March inflation data dash Wholesale Price Index (WPI)three-month high of 5.7 per cent nine-month low of 4.68 per cent increase was mainly due to supplyprimarily in certain foods. Retmeasured by the Consumer Princreased to 8.31 per cent in Marchcent in February, led by a sharp risvegetables and fruit. The increase i8.89 per cent and in urban areashowed the official data.


sed that for an evasion up to Rs 10 be increased to Rs 50,000 or 20 per

ty evaded, whichever is more. If the t is more than Rs 10 lakh, the l involve imprisonment of up to a year st Rs 50,000 or both.

est Rate Futures to boost ay introduce more tenures in Interest F) to drive trading volumes further. In regulator made a third attempt to previous two attempts had witnessed

sponse. RBI's definition of IRF is, "a terest rate derivative contract, traded d stock exchange to buy or sell a ity or any other interest-bearing n index of such instruments or interest fied future date, at a price determined f the contract”. Currently IRFs are e the underlying product is a 91-day

year, five-year or 10-year coupon ent security.

to review branch policy in ate Bank of India group is embarking rategy for expansion - opening of utomated teller machines (ATMs) and

in the four metropolitan regions ai, Chennai and Bangalore. It wishes to

even to a year for new branches nt period of up to 24 months. Apart atives of competition, it is looking at

f locations and better deployment of tropolitan regions.

ta dash rate cut hopes: Index (WPI)-based inflation rose to a gh of 5.7 per cent in March, from a of 4.68 per cent in February. This

e to supply-side constraints, certain foods. Retail inflation, as the Consumer Price Index (CPI), 1 per cent in March against 8.03 per

y, led by a sharp rise in the prices of increase in rural areas was

and in urban areas, 7.51 per cent,


Now, life insurers can file only 5 products a yr: The Insurance Regulatory Development Authority (Irda) has come out with a new product planner rule by which an insurance company can file only five products for approval a year. But, this has not gone down well with the companies. Irda has said if the number of products exceeded five, the insurer should furnish supporting market research, product-wise persistency for the 13th month, 25th month and 37th month as on April 30 of the previous year. At present, Irda follows the file-and-use method of application, wherein insurers apply to obtain prior approval of the authority to introduce/modify insurance products. Beginning April 2014, insurers have been advised to file this planner, at least 45 days before the beginning of the next financial year, that is, before February 15 of each year.

Jalan bats for better govt-central bank ties and flexible policy-making: Former RBI governor Bimal Jalan has said that the priority of a central bank should not be fixated on either growth or inflation. Central banks need to consider national priorities in their policy decisions. The Urjit Patel committee advised explicit focus on an inflation target, with the retail price inflation figure seen as appropriate in this regard.

Corporate Governance Norms: Capital market regulator, SEBI, has issued corporate governance norms for listed companies. The new rules will be effective from 1st October 2014. Highlights include – (a) The listed companies need to provide the option of facility of e voting to shareholders on all resolutions proposed to be passed at general meetings; (b) To get shareholders approvals for related party transactions; (c) Establish whistle blower mechanism; (d) Elaborate disclosures on pay packages; (e) At least a woman director on their boards; (f) Maximum tenure of an independent director to two terms of five years and if a person has already served as an independent director for five years or more in a listed company till the date new norms come into effect, he would be eligible for appointment for one more term of five years only.

Final Standards to curb Exposures of Banks to customers: The Basel Committee on Banking Supervision issued Final standards for measuring and controlling large exposures of banks to customers. These standards will take effect from 1 January 2019. Main objective of the rules is to minimize the risk of fallout from a counterparty going default without imposing excessive burdens on financial firms and to ensure that the maximum possible loss a bank could incur if such a default were to occur would not

endanger the bank's survival as a going concern. In cases where the bank's counterparty is another bank, large exposure limits will directly contribute towards the reduction of system-wide contagion risk. The supervisors can impose a 25% cap on exposures. A tighter limit will apply to exposures between banks that have been designated as global systemically important banks (GSIBs). This limit has been set at 15% of Tier 1 capital.

India down in leveraging ICT for growth: A World Economic Forum report states that India has slipped down to 83rd spot among 148 economies in terms of leveraging information and communications technologies for growth and well being. In 2013, it ranked 68th out of 144 countries. Among emerging market economies, China was placed on the 62nd position, Brazil (69th), Mexico (79th) and India (83rd).

JULY 2014

XLRI receives recognition as top educational institution: XLRI, was felicitated in London at the first-ever ‘SkillTree Great Place to Study – India Edition’. The other institutions felicitated include Great Lakes Institute of Management, IMT-CDL, Ghaziabad, ICFAI University, Manipal University, AIMS Institutes, Apeejay Education Society and Apeejay Stya University, among others. SBI launches digital touch banking branches: State Bank of India has launched six digital branches in Mumbai, Bangalore,Chennai and Ahmedabad, besides Delhi. Named as sbiINTOUCH, these branches will have digital banking capabilities, which include instant account opening with personalised debit cards, instant loan approvals for education, car and home and remote expert advisors available via video links. The bank has engaged Accenture to develop the digital business strategy for its programme. Manufacturing output registers strongest growth since Feb: The HSBC Purchasing Manager Index (PMI) rose to 51.5 in June from 51.4. Though the increase is marginal the important thing is that the manufacturing output has increased for the eighth successive month. Fiscal deficit hits 45% of full-year target in 2 months: The country’s fiscal deficit in the first two months of the current fiscal (2014-15) touched 45.6 per cent of the Budget Estimate for the whole year; it was 33.3 per cent in the same period last year.


5-7 lakh banking jobs in the offing: With close tper cent of the workforce in public sector banks sretire in the next few years, the banking industrysoon be among the top employers offering fivelakh jobs.

External debt rises to $440.6 billion: external debt as of March 31, 2014, showedincrease of $31.2 billion over the year to $4billion. The increase in total external debt du2013-14 was primarily on account of the rise in resident deposits. In terms of major componentsshare of external commercial borrowings continuebe the highest at 33.3 per cent of total external dfollowed by NRI deposits (23.6 per cent) and sterm debt (20.3 per cent). Treat gold deposits as part of CRR/SLRwant the Reserve Bank of India to include a portiotheir gold deposits to meet the statutory prerequirements relating to either Cash Reserve R(CRR) or Statutory Liquidity Ratio (SLR), botwhich banks consider as non-productive. High inflation remains a threat for economyRBI, high inflation and the consequent low real rareturn on financial assets may force savers to excessive risks in their search for better returns. I


With close to 50 ublic sector banks set to he banking industry will oyers offering five-seven

billion: India’s 31, 2014, showed an ver the year to $440.6 al external debt during count of the rise in non-f major components, the borrowings continued to nt of total external debt, 3.6 per cent) and short

RR/SLR: Bankers ia to include a portion of e statutory pre-emption

her Cash Reserve Ratio y Ratio (SLR), both of

economy: As per nsequent low real rate of ay force savers to take for better returns. In its

9th Financial Stability Report, thdomestic growth and high inflationan adverse effect on the savingsHouseholds’ financial savings as a GDP declined from about 12% in 200in 2013-14. Expenditure on valuablabout 7% to about 10%.

Ministry clears the air on scompanies: The Corporate Affaiclarified that private companies thaof foreign parents will not be tcompany for the purpose of compliacompany law. SEBI raises the bar on related pNew company law (enacted in 2revised corporate governance frameffective from October 1, have clearlyRPTs but it would enhance the tranof such transactions. The new regiboard and shareholders’ approval into conform to the new law. The big dnow and the erstwhile regime (comin 1956) is that the Government willto play in the approval process transactions. Under the new regime,be approved by an audit committeerequired to have such committeedirectors and also shareholders. Arrangement between banks, asfirms needs a relook: A spurt in thereconstruction companies (ARCs) efforts to clean up their balance scloser look at the extant arrangemeand banks. In 2013-14 (FY14), performing assets (NPAs) aggreg18,000 crore ( around Rs. 10,000 ARCs. As most of the securitisationplace predominantly with the issureceipts (SRs) rather than cash, therbanks may tend to use this option tbalance sheets. NBFCs outside regulatory ambitfinancial system: A Shadow BankinGroup carried out a preliminary


tability Report, the RBI said low h and high inflation continue to have t on the savings-investment dynamics. ancial savings as a percentage of the om about 12% in 2007-08 to about 7% enditure on valuables has risen from

air on status of private he Corporate Affairs Ministry has ivate companies that are subsidiaries ents will not be treated as public e purpose of compliance with the new

n related party transactions: law (enacted in 2013) and SEBI’s te governance framework to become ctober 1, have clearly raised the bar on ld enhance the transparency quotient tions. The new regime requires both holders’ approval in certain situations e new law. The big difference between stwhile regime (company law enacted the Government will now have no role approval process for related party

regime, RPTs will have to an audit committee (if a company is ve such committee), the board of

so shareholders.

n banks, asset reconstruction A spurt in the activities of asset

companies (ARCs) driven by banks’ up their balance sheets calls for a e extant arrangements between ARCs

14 (FY14), banks sold non-sets (NPAs) aggregating about Rs. around Rs. 10,000 crore in FY13) to of the securitisation activity is taking antly with the issuance of security

ather than cash, there is a concern that to use this option to evergreen their

tory ambit may pose risk to A Shadow Banking Implementation

out a preliminary study of such


institutions and recommended that they be brounder some regulation. It found that there was a degree of heterogeneity in business models and profiles across various non-banking financial entin the organised as well as the unorganised (inforsectors. It also identified “exempted” provident fuunregulated chit funds, co-operative and crsocieties and primary agricultural credit societiegroups of institutions that need a greater degreoversight. The current regulations focus onlydeposit-taking NBFCs and large systemiimportant non-deposit taking NBFCs. Those NBwhich are below the asset size threshold of Rscrore, are not under the surveillance of the RBI. Govt imposes $450/tonne MEP on potatoGovernment has imposed a minimum export pric$450/tonne on potatoes to prevent shortage domestic market and tame rising prices. This folsimilar restrictions imposed on onion exports week. The DGFT had fixed an MEP of $300 on onio Delhi University rolls back FYUP: In line withdirective of the UGC, the University of Dedecided to roll back the Four Year UndergradProgramme. SBI business per employee surges on largehiring: The State Bank of India’s business employee has seen a 51 per cent jump in the last years on the back of large-scale recruitment.productivity or business per employee increased t10.64 crore as at March-end 2014 against Rs. crore as at March-end 2011. The largerecruitment of Generation Next employees inOfficers and Assistant grade over the last thyears has brought about a far-reaching attitudchange among staff in their customer interface services across the branches. Govt hikes import duty on sugar: The Governmhas hiked the import duty on sugar to 40 per cent f15 per cent to curb inflow of cheaper sweeteGovernment also decided to provide additiinterest-free loans of about Rs. 4,400 crore to the cstarved sugar mills to clear cane payment arrestimated at around Rs. 11,000 crore. The subsidraw sugar exports would be extended till Septem2014. Also 10 per cent mandatory blending of eth(a by-product of sugar) with petrol would be alloagainst 5 per cent at present. However, all tdecisions were subject to the sugar indusguarantee that it would clear all arrears.


ed that they be brought here was a high

usiness models and risk financial entities

e unorganised (informal) mpted” provident funds,

operative and credit ltural credit societies as eed a greater degree of ulations focus only on d large systemically

BFCs. Those NBFCs, size threshold of Rs. 50 illance of the RBI.

on potato: The inimum export price of

prevent shortage in the ising prices. This follows on onion exports last MEP of $300 on onions.

In line with the University of Delhi has ur Year Undergraduate

s on large-scale f India’s business per ent jump in the last four

itment. Staff mployee increased to Rs.

d 2014 against Rs. 7.04 The large-scale

Next employees in the ver the last three to four

reaching attitudinal customer interface and

The Government sugar to 40 per cent from of cheaper sweetener. to provide additional . 4,400 crore to the cash- cane payment arrears

00 crore. The subsidy on extended till September atory blending of ethanol petrol would be allowed ent. However, all these the sugar industry's

Govt sets 2-week deadline forconsultations on Cabinet proposwhere the notes for the Cabinet/Caare required to be circulated for consultations, the entire process wiltwo weeks’ time.

FIU wants banks to sniff outtransactions: Frequent operation and making loan re-payments in creported by banks to the financial inThis is to keep a tab on suspicioushas advised banks to incorporate mtheir transaction monitoring systemgets alerts on suspicious transactions Youngsters may get an earninATM keepers: Andhra Bank plindividuals and business persons forefficient management of its ATgraduates and other willing individuto keep a watch on ATMs as a subsecurity personnel who now man the RBI sets timelines for regulatohas announced timelines for regulatCitizens Charter for delivery of serapprovals that the RBI will grant in 9principle approval for a privatappointment/re-appointment of whoand part-time chairmen in privaAmong the approvals that the centrin 60 days include remuneration, boStock Option Plan of whole-chairmen of private sector banks anbanks operating in India. Approvafinance companies for the issue Registration (other than SecReconstruction Companies) will be is Ahead of Budget, rail fare hiked From June 25, rail travel will becomper cent and moving goods by abEvery day, the Railways ferries overand hauls over 2.8 million tonnes of ccement, fertiliser and petroleum pro


eadline for inter-Ministerial net proposals: In all the cases

s for the Cabinet/Cabinet Committees be circulated for inter- ministerial

he entire process will be completed in

sniff out more suspicious requent operation of locker facility

payments in cash will soon be ks to the financial intelligence agency.

a tab on suspicious transactions. IBA ks to incorporate more parameters in n monitoring system so that the FIU spicious transactions.

an earning opportunity as Andhra Bank plans to rope in

business persons for cost-effective and gement of its ATMs. Unemployed ther willing individuals will be asked

h on ATMs as a substitute to private nel who now man these counters.

r regulatory approvals: RBI timelines for regulatory approvals and r for delivery of services. Among the he RBI will grant in 90 days include in-oval for a private bank licence,

appointment of whole-time directors, chairmen in private sector banks.

rovals that the central bank will grant de remuneration, bonus and Employee

-time directors, part-time vate sector banks and CEOs of foreign

Approval to non-banking nies for the issue of Certificate of

other than Securitisation and Companies) will be issued in 45 days.

fare hiked 14%, freight 6.5%: ail travel will become costlier by 14.2 oving goods by about 6.5 per cent. ailways ferries over 20 million people .8 million tonnes of cargo such as coal, r and petroleum products.


New shareholding norm: Govt in a bind on distake worth Rs. 61,000 cr: About 35 PSUs (25 CPnine public sector banks and one State-level puenterprise) would need to dilute stake worth aroRs. 61,282 crore. SEBI has said all listed PSUs will hto maintain 25 per cent minimum public shareholas against 10 per cent currently. Mid-sized banks may struggle to mobilise deposits: Mid-sized banks will now be making a to mobilise more retail deposits and increase liquto meet the liquidity coverage ratio (LCR) requiremprescribed by RBI. The main objective of LCR ipromote short-term resilience of a bank’s liquidityprofile by ensuring that it has sufficient highliquid assets to survive a significant stress scenlasting 30 days. PSU banks lag peers in code implementAccording to the Banking Codes and Standof India, the overall score of public sector banks lower at 69.6 against that of all banks at 74.2 per The overall score of private sector banks (78.2)foreign banks (88.6) was above the all baaverage.The overall scoring was based on parameters — information disseminatransparency, customer centricity, grievance redreand customer feedback. Insurance firms eye telecom operators toproducts: Insurers have written to the DepartmeFinancial Services to allow them to approachTelecom Regulatory Authority of India. This will in using the wide distribution network of telecompanies to sell basic insurance products, suchealth and personal accident covers. If the distribuof insurance products is allowed through teleoperators, then they can sell the products facilitate premium payments through mobile phon

Puducherry tops on elementary educPuducherry with an EDI score of 0.762 has toppethe Educational Development Index (EDI) for 2013while Uttar Pradesh fared worst at 0.Lakshadweep, Sikkim, Himachal Pradesh Karnataka were second, third, fourth and respectively. The index is a measurement of country’s progress in terms of elementary educa


bind on diluting bout 35 PSUs (25 CPSEs,

level public lute stake worth around d all listed PSUs will have

um public shareholding

mobilise retail ill now be making a rush its and increase liquidity ratio (LCR) requirement

n objective of LCR is to e of a bank’s liquidity risk as sufficient high-quality gnificant stress scenario

implementation: des and Standards Board public sector banks was ll banks at 74.2 per cent. sector banks (78.2) and above the all banks’

ased on five ation dissemination,

icity, grievance redressal

perators to sell ten to the Department of them to approach the y of India. This will help ion network of telecom rance products, such as covers. If the distribution llowed through telecom sell the products and

through mobile phones.

ary education: e of 0.762 has topped in

ex (EDI) for 2013-14, ed worst at 0.462. machal Pradesh and hird, fourth and fifth a measurement of the

of elementary education.

EDI is calculated using a set regrouped into four subinfrastructure, teachers and outcome Power sector: A risky asset fAccording to Moody’s Investor Servwill continue to be a source opublic and private sector banks in Incondition of State electricity bocompanies (discoms) do not istructural reforms. Crackdown on hoarders tops minflation: With the prices of esseshooting up, Finance Minister Aannounced a series of measures, inclof fruits and vegetables and releasinmarket, to tame inflation. The CentrStates to crack down on hoardercommodities under active obseGovernment. Sops for electronics production to boost electronics manufacturingand Information Technology MinisPrasad said incentives would be githat set up greenfield factories in eGhaziabad, Vadodara, GandhinagNagpur, Nashik, Aurangabad and Thcalled Modified Special Incentive SuSIPS), was launched by the UPA GovIt provides refunds for investmexpenditure — 20 per cent in SEZs anon-SEZs. It also provides for rcountervailing duty/excise for capthe non-SEZ units. Prasad also annoup of greenfield electronic manufacBhopal, Bhubaneshwar, HyderabadBhiwadi, Jabalpur, Hosur and Electronic Manufacturing Cluster Schin 2012, offers financial assistance thFor greenfield clusters, the assistancthe project cost, subject to a ceiling every 100 acres of land. Don’t blame us for emissions:Climate Summit 2014 to be September, Environment Minister Psaid, “don’t blame us for carbon emicountry definitely needs to reduce itand other developing countries alsogrow” which can entail some rise iyear, the Indian delegation, along wideveloping countries, had walked oNations Climate Change Conferenc


ted using a set of 24 indicators to four sub-groups — access, eachers and outcomes.

ky asset for Indian banks: oody’s Investor Service, power sector be a source of asset quality risk for te sector banks in India if the financial

State electricity board distribution scoms) do not improve through

ers tops measures to tame the prices of essential food items

Finance Minister Arun Jaitley has ries of measures, including free trading getables and releasing rice in the open

The Centre has also advised down on hoarders. There are 22

under active observation of the

roduction in 8 cities: In a bid nics manufacturing, Communications

n Technology Minister Ravi Shankar entives would be given to companies nfield factories in eight cities namely dodara, Gandhinagar, Ahmedabad, , Aurangabad and Thane. The scheme, Special Incentive Subsidy Scheme (M-ched by the UPA Government in 2012. efunds for investments in capital 20 per cent in SEZs and 25 per cent in lso provides for reimbursement of duty/excise for capital equipment in its. Prasad also announced the setting electronic manufacturing clusters in

neshwar, Hyderabad, Maheshwaram, lpur, Hosur and Kakkanad. The facturing Cluster Scheme, also notified inancial assistance through aid grants. lusters, the assistance is 50 per cent of , subject to a ceiling of Rs. 50 crore for

emissions: Ahead of the UN t 2014 to be held in New York in ironment Minister Prakash Javadekar e us for carbon emissions.” While the

ly needs to reduce its emissions, India loping countries also have a “right to

some rise in emissions. Last delegation, along with more than 100 ntries, had walked out of the United e Change Conference (UNCCC) 2013


held in Warsaw over the refusal of the develocountries to agree to a mechanism for compensafor climate change-induced disasters, which affecdeveloping and least developing countries most. RBI not in favour of two structures for regulaAccording to RBI Governor, Raghuram Rregulators must be given the flexibility and freedoregulate as too much of checks and balances ccompletely vitiate the flexibility afforded. Financial Sector Legislative Reforms Comm(FSLRC) report has suggested that almost everytthe regulator does should be subject to legal appehas suggested the creation of a Financial SeAppellate Tribunal. Common service centres to begin sellininsurance: CSC e-Governance Services India Ltspecial purpose vehicle floated by the Governmenoperate common service centres, will begin sellinginsurance in about a month’s time. The organisawhich operates 130,000 common service centreprovide a host of services in rural areas acrosscountry, has tied up with 14 insurers and is woron teaming up with the others. Instant transfer funds from US to Indian Punjab National Bank (PNB) and Nasdaq-listed XCorporation have partnered to roll out instant bdeposit services to bank accounts in India. The insmoney transfer will be done by using the ImmedPayment Services (IMPS), a unique remittprocessing platform offered by the National PaymCorporation of India. Through this tie-up, moneybe transferred instantly by a Xoom user from the Unot only bank accounts held in Punjab National Bbut to any bank account in India. At present, IMPS63 banks (in India) as part of its ecosystem. State Bank to ramp up POS terminal networwill ramp up its point-of-sale (POS) terminal netwby 1.20 lakh each year over the next two years. Binstall POS terminals at merchant outlets to facilacceptance of payments from customers by switheir debit/credit/pre-paid cards on the termiTowards April-end, ICICI Bank had the larnetwork of POS terminals (2,90,898), followed by Bank (2,47,392), HDFC Bank (2,12,748) and (1,40,628). Already, SBI has the largest networATMs (44,062 of April-end) in the country. WithATM network of SBI’s five Associate Banks together, the State Bank Group has 51,753 ATMs.


efusal of the developed anism for compensation isasters, which affect the ng countries most.

s for regulations: nor, Raghuram Rajan, lexibility and freedom to cks and balances could xibility afforded. The

e Reforms Committee d that almost everything

ject to legal appeal. It of a Financial Sector

gin selling life ce Services India Ltd, a d by the Government to res, will begin selling life

The organisation, mon service centres to

n rural areas across the insurers and is working

to Indian bank: listed Xoom

to roll out instant bank unts in India. The instant by using the Immediate

a unique remittance by the National Payment

up, money can oom user from the US to in Punjab National Bank dia. At present, IMPS has its ecosystem.

nal network: SBI (POS) terminal network he next two years. Banks hant outlets to facilitate customers by swiping

cards on the terminals. Bank had the largest

90,898), followed by Axis nk (2,12,748) and SBI the largest network of in the country. With the e Associate Banks put p has 51,753 ATMs.

Foreign creditors may recall loastake falls below 51%: If the govepublic sector banks drops below foreign creditors of these banksnegotiate the loans or call them back Inflation at 5-month high on rWholesale price index (WPI)-five-month high of 6.01 per cent inspike in food, fuel and manufactureThis was higher than the 4.58 persame month last year and the 5.2 pApril. India is poorest in South Asia According to an Oxford varsity studyover 340 million destitute people apoorest country in South Asia Afghanistan. Forty per cent of all polive in India, mostly in rural areas. RBI guidelines on liquidity positive for banks: According toguidelines on liquidity standards afor Indian banks. The LCR is desshort-term liquidity risk by ensurinsufficient cash and other liquid obligations in a 30-day market stress Power Ministry wants Statperiodically revise tariffs: The PowState regulators to regularly revise ethat there are no financial outagecompanies or distribution utilitieprotect consumers from sudden, stelectricity bills. The Central ElectCommission (CERC) undertakes annually while the tariff determinatrevised every five years. Sardar Sarovar: Gujarat’s battle war on canals ahead: Gujarat Govethe eight-year-long battle to install Sardar Sarovar dam on the river Nincreasing its height by 17 metrHowever, so far, the State Governmeconstruction of only 22,284 km of cof a total of 72,624 km planned. Thi


y recall loans to PSBs if Govt : If the government’s stake in

anks drops below 51 per cent then rs of these banks may either re-ans or call them back.

high on rising food prices: -based inflation touched a

of 6.01 per cent in May, driven by a uel and manufactured product prices. r than the 4.58 per cent recorded in t year and the 5.2 per cent logged in

th Asia after Afghanistan: Oxford varsity study, India is home to n destitute people and is the second y in South Asia after strife-torn

rty per cent of all poor in 49 countries tly in rural areas.

liquidity standards credit : According to Moody’s, RBI’s

iquidity standards are credit positive ks. The LCR is designed to address idity risk by ensuring that banks hold and other liquid assets to meet

day market stress scenario.

wants State regulators to The Power Ministry wants

to regularly revise electricity tariff so no financial outages for generation distribution utilities. This will also ers from sudden, steep hikes in their

The Central Electricity Regulatory ERC) undertakes a tariff revision

the tariff determination principles are

at’s battle on height won, but Gujarat Government have won

ong battle to install 30 sluice gates at dam on the river Narmada, thereby height by 17 metres to 138.68 m. , the State Government had completed only 22,284 km of canal network, out

624 km planned. This means, now, the


Government will have to rush through the construction of nearly 52,340-km-long canal network so that benefits of Narmada waters could reach across Gujarat. Cost inflation index raised by 9.05%: Last year, the index was ‘939’, and this year it is ‘1024’. The index is useful for income-tax assessees in the computation of tax on long-term capital gains (for indexation purposes). Vishal Sikka is new Infosys CEO: In a major break with tradition, India's No 2 IT services firm, Infosys, brought in an outsider as its CEO after keeping the top job among its co-founders ever since its inception, in 1981. SEBI to okay quota, discount for retail investors in offer for sale: Market regulator SEBI proposes to reserve for retail investors as much as 10 per cent of the issue size of offer-for-sale (OFS) of shares through the stock exchange platform. As part of its efforts to enhance retail investors’ participation in OFS, SEBI also intends to allow sellers of shares to offer discounts to retail investors. For this purpose, retail investors will be those who bid for amounts less than Rs. 2 lakh. Till date, the OFS mechanism — launched in February 2012 — is allowed only for promoters so as to help them achieve minimum public shareholding in listed companies. Ordinance to empower SEBI will become an Act soon: The Ordinance to empower SEBI to curb ponzi scheme, will be converted into Acts during the Budget session starting next month. SEBI Ordinance was re-promulgated by the previous Government on March 29. The Ordinance aims to provide more teeth to the capital market regulator SEBI to act against ponzi and fraudulent schemes, assessing call data record in securities related offences besides others. Change in norms for commodity bourses: Commodity market regulator Forward Markets Commission has amended regulations for corporate governance and independent director in commodity exchange. The regulator has now aligned the norms in line with the new Companies Act. Inflation-linked bonds to be made more attractive: The proposed features will make sure the retail investor gets payouts at regular intervals and higher tax-adjusted returns. AirAsia takes off, eyes non-trunk routes: AirAsia India became the country’s latest domestic airline.

With its maiden flight, AirAsia India became the country’s fourth low-cost carrier, after IndiGo, SpiceJet and GoAir. Exports post double-digit growth in May: Exports increased 12.4 per cent in May (the highest in six months ) to $28 billion over the same month a year ago. Imports fell 11.41 per cent in May to $39.23 billion. Gold imports declined to $2.19 billion, plummeting 72% from May 2013. India has the potential to grow at 7% annually - IMF: The IMF’s current forecast for India’s GDP growth for 2014-15 is 5.4 per cent, rising to 6.3 per cent in 2015-16. The IMF’s optimism on India’s potential comes on the heels of the World Bank’s 5.5-per cent growth projection for 2014-15 and 6.3 per cent for 2015-16. Canara Bank opens New York branch: Canara Bank has opened a branch in New York, the bank’s seventh overseas branch after London, Leicester (UK), Hong Kong, Shanghai, Bahrain and Johannesburg. IRDA to launch pilot on life insurance repository system: This is meant for keeping/storing a policy in digitised/de-materialised form to enable access as and when required. During the launch, each life insurer shall convert a minimum of 1,000 or 5 per cent of the existing individual policies (issued in hard form and currently in force), whichever is less for each of the IRs into electronic form. Each life insurer shall also issue a minimum of 1,000 or 5 per cent of the total individual policies issued during the launch period, whichever is lower, in electronic form for each of the IRs. In July 2013, the authority had granted certificates of registration to five entities to act as insurance repositories. Banks seek exemption from TDS while selling mortgaged property: Banks have sought exemption from tax deducted at source (TDS) when they sell mortgaged property to recover loans. According to Section 194-IA of the Income Tax Act, any person, being a transferee (buyer), responsible for paying to a resident transferor (seller), any sum by way of consideration for transfer of any immovable property (other than agricultural land), is required to deduct an amount equal to one per cent of the sum as income tax, at the time of credit of the sum to the account of the transferor. TDS is not applicable when the consideration for the transfer of an immovable property is less than Rs. 50 lakh.


By 2025, every seventh netizen will be an InThe country would emerge as a leading player invirtual world by having 700 million Internet useragainst the 4.7 billion global users by 2025. Half o4.7 billion will come from the emerging countriesby countries like India, Cameroon and Pakistan. PM’s call to improve work culture extenbanking sector: Prime Minister’s fiat to Cenministries and departments to ensure “improved wculture and work environment” has been extendeall financial sector regulators, chiefs of public sebanks, financial institutions and public seinsurance companies. Finance Ministry has advbanks to initiate immediate action to improve wculture and work environment in all their offbranches, premises or any other spaces in torganisation. As part of this exercise, the minwants the workspace cleared and spruced up filed/papers neatly stacked so that a positive wenvironment is created. The financial sector regulaand financial intermediaries are required to ideforms that are in vogue and shorten them to one pFor quick turnaround in decisions, the ministry decision-making layers should be whittled down maximum of four. The entire organisation shwork as a team, with every level being encourage


will be an Indian: s a leading player in the million Internet users as sers by 2025. Half of the emerging countries, led oon and Pakistan.

ture extends to nister’s fiat to Central ensure “improved work

nt” has been extended to s, chiefs of public sector s and public sector

ce Ministry has advised action to improve work ent in all their offices, other spaces in their s exercise, the ministry d and spruced up and so that a positive work inancial sector regulators are required to identify

horten them to one page. isions, the ministry said d be whittled down to a ire organisation should evel being encouraged to

provide inputs and value-addition. well as the financial intermediaries hensure effective and timely resogrievances. In the case of financial the ministry wants them to identify aprocesses and even archaic laws, whand not lead to any loss of efficiencybe repealed. There are five financial— Reserve Bank of India, SecuritiBoard of India, Insurance Development Authority, Pension FunDevelopment Authority, and FCommission — in the country.

Receiving money from abroad Bank of India (SBI) plans to launch the beneficiaries of foreign remittanwithdraw money easily. A Nona deposit account with an overseasneeds to give instructions usingbanking to load his kin’s prerequired funds. In turn, the benefiwithdraw cash from any of SBI’s 43the country using the card. Online rentail any documentation as the NRISBI’s customer; the money trainstantaneous; and be relatively easypocket in terms of charges viscompanies. According to a World Barecipients of remittances for 2013billion), China ($60 billion), the billion), Mexico ($22 billion), Nigeria Sidbi repositioning itself to fulfilMSMEs: The Small Industries DeveIndia (Sidbi) has zeroed in on founiche financing. These include finarisk capital, services sector, anddevelopment of the MSME sector. Banks ultimatum to United Spirifrom board or no credit: The bankSprits that not only will no fresh loUnited Spirits, but even the exiscompany may be recalled if Mallya cthe company’s board.


addition. The regulators as cial intermediaries have been asked to e and timely resolution of public he case of financial sector regulators, nts them to identify at least 10 rules or ven archaic laws, which are redundant any loss of efficiency, so that they can ere are five financial sector regulators k of India, Securities and Exchange dia, Insurance Regulatory and

uthority, Pension Fund Regulatory and Authority, and Forward Markets in the country.

m abroad made easy: State BI) plans to launch pre-paid cards for

s of foreign remittances to receive and ly. A Non-Resident Indian having

nt with an overseas SBI branch, only instructions using internet/mobile d his kin’s pre-paid card with the In turn, the beneficiary in India can

any of SBI’s 43,500 ATMs across g the card. Online remittance will not entation as the NRI would already be

r; the money transfer would be nd be relatively easy on the remitter’s of charges vis-à-vis other remittance rding to a World Bank report, the top

emittances for 2013 are India ($71 ($60 billion), the Philippines ($26

($22 billion), Nigeria ($21 billion).

self to fulfil financial needs of all Industries Development Bank of

s zeroed in on four or five areas of . These include financing receivables, ervices sector, and for sustainable the MSME sector.

nited Spirits: Remove Mallya The banks have told United

only will no fresh loans be granted to but even the existing debt to the

recalled if Mallya continues to be on


Power Minister plans to roll out Gujarat’s Jyoti Gram scheme at the national level: Union Power Minister Piyush Goyal has said that he plans to replicate Gujarat’s flagship scheme of Jyoti Gram Yojana (JGY), which is aimed at providing 24-hour electricity to non-agriculture consumers in the State. JGY, announced in 2003, was aimed at making available 3-phase quality power supply for 24-hours to all the villages and their hamlets for non-agricultural activities. The scheme provides for a separate electric feeder for domestic use. It also provides limited but quality supply of power to agriculture for about eight hours a day. RBI allows foreign investors to invest on repatriation basis: RBI has allowed a host of foreign investors to invest, on repatriation basis, in non-convertible/ redeemable preference shares or debentures issued by an Indian company and listed on recognised stock exchanges in India. This investment will be within the overall limit of $51 billion earmarked for corporate debt. The investors who can invest in non-convertible/ redeemable preference shares or debentures include FIIs, qualified foreign investors deemed as registered Foreign Portfolio Investors. Long-term investors registered with SEBI – Sovereign Wealth Funds, Multilateral Agencies, Pension/ Insurance/ Endowment Funds, foreign Central Banks— too will be considered as eligible investors.

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