Professional Documents
Culture Documents
3 Mar
3 Mar
Contents
................................................................................................................................................................ 2
1. RBI/SEBI/NABARD In NEWS ................................................................................................ 2
1.1. UPI 123 ................................................................................................................................... 2
1.2. Changes in Investment by Umbrella Organization ............................................. 3
1.3. Interest Equalization Scheme on Pre and Post Shipment .............................. 4
1.4. NaBFID - All India Financial Institution (AIFI) ..................................................... 5
1.5. Change in UPI Limit ......................................................................................................... 5
2. Finance In NEWS ....................................................................................................................... 6
2.1. Indian investors can trade in select US stocks via NSE IFSC from March
3 .......................................................................................................................................................... 6
3. Reports/Index in NEWS .......................................................................................................... 7
3.1 State of India’s Environment Report 2022............................................................. 7
3.2 India-UAE Trade................................................................................................................... 9
3.3 Democracy Report 2022 ................................................................................................ 10
3.4 IPCC released 2nd part of 6th assessment report ................................................. 10
3.5. Decline in Investments Through P-Notes ............................................................. 12
3.6. Market Infrastructure Institution ............................................................................ 13
3.7. US Executive order on Cryptocurrency ................................................................. 14
3.8. Mercom India Research ................................................................................................ 15
4. Other Imp NEWS ...................................................................................................................... 16
4.1. IARI Research on Resilient Crops ............................................................................ 16
Crack Grade B
4.2. Pandemic Treaty .............................................................................................................. 17
5. One Liner ..................................................................................................................................... 18
Key Highlights
Government of India has approved the extension of Interest Equalization Scheme for
Pre and Post Shipment Rupee Export Credit (‘Scheme’) up to March 31, 2024 or till
further review, whichever is earlier. The extension takes effect from October 1, 2021
and ends on March 31, 2024.
For the period from October 1, 2021 to March 31, 2022, banks shall identify the eligible
exporters as per the Scheme, credit their accounts with the eligible amount of interest
equalisation and submit sector-wise consolidated reimbursement claim for the said
period to the Reserve Bank by April 30, 2022.
With effect from April 1, 2022, banks shall reduce the interest rate charged to the
eligible exporters upfront as per the guidelines and submit the claims in original within
15 days from the end of the respective month, with bank’s seal, and signed by
authorised person, in the prescribed format.
Key Highlights
The National Bank for Financing Infrastructure and Development (NaBFID) Act, 2021
received the assent of the President on March 28, 2021 and has come into force w.e.f.
April 19, 2021.
Accordingly, NaBFID has been set up as a Development Financial Institution (DFI) to
support the development of long-term infrastructure financing in India.
NaBFID shall be regulated and supervised as an All India Financial Institution (AIFI)
by the Reserve Bank under Sections 45L and 45N of the Reserve Bank of India Act,
1934.
It shall be the fifth AIFI after EXIM Bank, NABARD, NHB and SIDBI.
Key Highlights
Sebi increased the investment limit for payments through UPI mechanism for retail
investors buying debt securities in public issues to Rs 5 lakh from Rs 2 lakh at present
in its effort to bring ease of investment for investors.
The new framework will be applicable to public issues of debt securities which open on
or after May 1, 2022, the Securities and Exchange Board of India (Sebi) said in a
circular.
The current Sebi rules provide an option to investors to apply in public issues of debt
securities with the facility to block funds through UPI (unified payment interface)
mechanism for application value of up to Rs 2 lakh.
Based on discussions with market participants and in order to bring uniformity in the
requirements as well as for ease of investment for investors, Sebi has now decided to
increase the limit for investment through UPI mechanism to Rs 5 lakh.
2. Finance In NEWS
2.1. Indian investors can trade in select US stocks via NSE IFSC
from March 3
Issue: - Indian investors can trade in select US stocks via NSE IFSC from
March 3.
Key Highlights
From March 3, investors in India will be able to trade in select US stocks through
the NSE International Exchange (NSE IFSC), a wholly owned subsidiary of the National
Stock Exchange (NSE). Investors can invest in NSE IFSC receipts on US stocks, which
will be in the form of unsponsored depository receipts (DRs).
Limit: - Indian retail investors will be able to transact on the NSE IFSC platform under
the Liberalised Remittance Scheme (LRS) limits prescribed by the Reserve Bank of India
(RBI), which currently stand at $250,000 per year.
How: - Resident investors will have to open a demat account at the IFSC and the stock
receipts will be considered foreign assets for filing income tax returns.
TAX: - Short-term capital gains will be taxed at the slab rate while long-term capital
gains will be at 20 per cent with indexation.
Stocks: - For a start, this will include DRs of 50 US stocks such as Apple, Alphabet,
Amazon, Tesla, Microsoft, Morgan Stanley, Nike, P&G, Coca-Cola, and Exxon Mobil.
Issue: - India slips 3 spots on 17 SDG adopted as 2030 agenda, says report
Report By: - Centre for Science and Environment (CSE) and Down To Earth
magazine.
Name of the Report: - State of India’s Environment Report 2022.
Key Highlights
Economy: The target for the economy is to raise the Gross Domestic Product (GDP) to
nearly USD 4 trillion by 2022-23. But by 2020, the economy has grown only to USD
2.48 trillion.
Employment: The target is to increase the female labour force participation rate to at
least 30% by 2022-23. It stood at 17.3% in January-March 2020.
Housing: The targets are to construct 29.5 million housing units under Pradhan Mantri
Awas Yojana (PMAY)-Rural and 12 million units under PMAY-Urban. Only about 46.8%
and 38% respectively of the targets under ‘Housing for All’ have been achieved.
Drinking Water: The target is to provide safe piped drinking water to all by 2022-23.
Only 45% of the target has been achieved.
Agriculture: The target is to double farmers’ income by 2022. While the average
monthly income of an agricultural household has increased to Rs 10,218 from Rs
6,426, this increase is largely due to increase in wages and income from farming
animals.
Digitisation of Land Records: Another target is to digitise all land records by 2022.
While states like Madhya Pradesh, West Bengal and Odisha have made good progress,
states like Jammu and Kashmir, Ladakh and Sikkim languish at 5%, 2% and 8.8%
digitisation of land records, respectively.
Solid Waste Management: The target is to achieve 100% source segregation in all
households. The overall progress is 78%, and while states like Kerala and Union
territories like Puducherry have achieved the target, others like West Bengal and Delhi
are woefully behind.
Forest Cover: The target is to increase it to 33.3% of the geographical area, as
envisaged in the National Forest Policy, 1988. By 2019, 21.6% of India was under forest
cover.
Energy: The target is to achieve 175 GW of renewable energy generation capacity by
2022. Only 56% of this target has been achieved thus far.
• Jharkhand and Bihar are the least prepared to meet the SDGs by the target year
2030.
• Kerala ranked first, followed by Tamil Nadu and Himachal Pradesh in the second
position.
• The third position was shared by Goa, Karnataka, Andhra Pradesh and
Uttarakhand.
• Among the Union Territories, Chandigarh was ranked first, followed by Delhi,
Lakshadweep and Puducherry in the second place and the Andaman and Nicobar
Islands on the third
Issue: - Last month, India and the United Arab Emirates (UAE) signed their
first Co-mprehensive Economic Part-nership Agreement (CEPA).
Key Highlights
The UAE is India’s third largest trading partner and second largest export destination
after the US. But the content of trade flows between the two countries has changed in
the past decade.
In recent years, trade flows have reflected the pressures of the Covid-19 pandemic. In
2021-22, 6.6 per cent of India’s exports landed in the UAE. Although higher than the
5.7 per cent exp-or-ts to the UAE in 2020-21, it was much lower than the 9.3 per cent
in 2019-20. Until a decade ago, 13.5 per cent of India’s exports went to the UAE.
In absolute terms, India’s exports to the UAE will exceed the 2019-20 figures but will
still be lower than levels achieved in 2012-13. It is safe to assume that India’s trade
with the UAE has increased, but its trade with other nations has increased faster.
But the export basket has ch-a-nged. Mineral products, pearls, precious stones and
metals still account for most of India’s exports to the UAE, but their share is lower
than the peaks achieved in the past two decades. Mineral product exp-orts accounted
for 19.9 per cent of total exports from India to the UAE in 2021-22, similar to the 19.4
per cent share achieved in 2012-13. How-e-ver, they were still lower than the peak of
over 30 per cent share of total exports between 2006 and 2008.
Key Highlights
Sweden topped the LDI index, other Scandinavian countries such as Denmark and
Norway, along with Costa Rica and New Zealand make up the top five in liberal
democracy rankings.
India is part of a broader global trend of an anti-plural political party driving a country’s
autocratisation.
It was ranked 93rd in the LDI, India figures in the “bottom 50%” of countries.
It has slipped further down in the Electoral Democracy Index, to 100, and even lower
in the Deliberative Component Index, at 102.
In South Asia, India is ranked below Sri Lanka (88), Nepal (71), and Bhutan (65) and
above Pakistan (117) in the LDI.
What is P-Notes?
P-notes are Offshore Derivative Instruments (ODIs) issued by registered
Foreign Portfolio Investors (FPIs) to overseas investors who wish to be a part of
the Indian stock markets without registering themselves directly.
P-notes have Indian stocks as their underlying assets.
FPIs are non-residents who invest in Indian securities like shares, government
bonds, corporate bonds, etc.
Key Highlights
According to the report, 3.2 GW of solar capacity installations were made by India in
2020.
According to the report, India’s cumulative solar installed capacity was at around 49
GW at the end of December 2021.
The report mentioned that in 2021, India added a total of 10 GW of solar power, the
highest in a single year. In 2021, solar accounted for 62% of new power capacity
additions, the largest power capacity shares ever.
Large-scale solar projects accounted for 83 percent of installations during the year,
with a 230 percent y-o-y increase.
In 2021, rooftop installations increased by 138 percent y-o-y.
In 2021, the average project cost was also higher due to higher raw material, module,
and freight costs.
As of December 2021, Rajasthan, Karnataka, and Andhra Pradesh were the top three
states in terms of cumulative large-scale solar capacity, accounting for 50% of the
country’s installations.
Rajasthan led capacity addition in 2021, with 4.5 GW of solar capacity installed.
Key Highlights
There are three different types of disease resistance basmati rice which has been
developed by IARI and they are PB 1847, PB 1886, and PB 1885. These have been
developed through projects funded by DBT and will be distributed to private sector seed
companies for multiplication. An MoU with a private company will also be signed.
In the case of wheat, NBPGR is working with different organizations to develop varieties
that will be able to cope with new problems posed by climate change scenarios.
According to DBT, 17 crop plant varieties with increased nutritional content, disease
resistance, and abiotic stress tolerance is being developed. The varieties are divided
into rice: 8, wheat: 4, and maize: 2. Out of these, 6 varieties have already reached
farmers after being multiplicated by private companies.
Contents
................................................................................................................................................................ 2
1. RBI/SEBI/NABARD In NEWS ................................................................................................ 2
1.1. Payment and Settlement Systems Regulations, 2008...................................... 2
1.2. Regulatory Framework for Microfinance Loans ................................................... 2
1.3. Green Transition Risks to Indian Banks (March 2022) .................................... 4
1.4. Monthly State of the Economy Report by RBI ..................................................... 6
1.5. Rupee-Dollar Swap ............................................................................................................ 7
2. Finance In NEWS ....................................................................................................................... 8
2.1. Retail inflation.................................................................................................................... 8
2.2. NPCI launches on-device wallet feature .................................................................. 9
2.3. Factory Output ................................................................................................................. 10
3. Reports/Index in NEWS ........................................................................................................ 11
3.1 Unemployment Data ........................................................................................................ 11
3.2 Telangana Crop Diversification Index ..................................................................... 12
4. Other Important NEWS ......................................................................................................... 13
Crack Grade B
4.1. Market Capitalisation .................................................................................................... 13
4.2. Change in GST System .................................................................................................. 14
4.3. World Happiness Report 2022 ................................................................................... 15
4.4. Abortion Care .................................................................................................................... 16
4.5. Maternal Mortality in India......................................................................................... 18
5. One Liner ..................................................................................................................................... 20
Key Highlights
With this amendment, certain monthly / quarterly / annual returns prescribed in sub-
regulations (a) to (g) of regulation 6 (2) have been discontinued and redundant
operational guidelines listed in the ‘schedule’ to regulation 5 have been removed.
Key Highlights
As per the revised norms, Regulated Entities (REs) should put in place a board-
approved policy regarding pricing of microfinance loans, a ceiling on interest rate
and all other charges applicable to microfinance loans.
Each RE shall disclose pricing-related information to a prospective borrower in a
standardised, simplified factsheet.
There shall be no prepayment penalty on microfinance loans.
Penalty, if any, for delayed payment shall be applied on the overdue amount and
not on the entire loan amount.
Any change in interest rate or any other charge shall be informed to the borrower
well in advance and these changes shall be effective only prospectively.
RE would have to put in place a mechanism for identification of the borrowers
facing repayment-related difficulties, engagement with such borrowers and
providing them necessary guidance about the recourse available.
Key Highlights
The transition to the net-zero emission target will entail limited spill-over impact on
Indian banking because three sectors with direct exposure to fossil fuels — electricity,
auto, and chemical — form only 10 per cent of non-retail credit, according to a study
by the Reserve Bank of India (RBI).
But several other industries indirectly use fossil fuels and therefore, any transition to
green energy can have implications for their income and consequently their interest
coverage ratio (ICR).
Therefore, the gross non-performing assets (GNPA) ratio of such industries may be
sensitive to green energy transition and thus, the impact on the overall banking system
needs to be monitored closely by the RBI.
The RBI study pointed out sectors like cement production have large exposure to fossil
fuel but their credit shares are small. So, large vulnerabilities are not expected to
emerge in the banking sector from disruptions, if any, in the sectors that are highly
exposed to fossil fuels.
At the all-India level, only about 8 per cent of the bank credit deployed in the electricity
industry is towards non-conventional energy production.
The ratio varies from 17 per cent in Punjab to 0.1 per cent in Odisha.
But the share of non-conventional energy in utility sector credit is higher for private
sector banks (14.8 per cent), it is only 5.2 per cent in public sector banks.
Key Highlights
India’s retail inflation rate inched up to an eight-month high in February,
remaining above the upper limit of the central bank’s comfort level of 6 per cent for the
second consecutive month, while the wholesale price inflation rate remained in double
digits for the eleventh consecutive month.
The data released by the statistics department showed that the consumer price index
(CPI)-based inflation rate rose to 6.07 per cent in February from 6.01 per cent in the
previous month, driven by food and beverages, clothing and footwear, and fuel and light
groups.
Food and beverages rose to a 15-month high of 5.85 per cent as vegetables and edible
oils witnessed high inflation.
Separately, the data released by the industry department showed that the wholesale
price index (WPI)-based inflation rate rose to 13.11 per cent in February after declining
for two consecutive months.
• UPI Lite will be an on-device wallet functionality that will enable offline
transactions of smaller values. UPI Lite will work via the wallet system. You will
have to add funds in the UPI Lite wallet and use these to make small payments
under Rs 200.
HOW DOES UPI LITE WORK
• There is a Rs 2,000 limit on the amount of money you can have in this UPI Lite
wallet. In the initial stages, it will be a partially offline system.
• This means that money will be debited offline, but credited online. Meaning that
if you are using a UPI Lite wallet and paying someone, the money will be debited
from your account without being connected to the internet, but it will get credit
to the receiver’s account when they are online.
• This, NPCI says will also go completely offline, meaning both debit and credit will
be possible offline. The agency also said that users will not be required to enter
their UPI PIN while confirming UPI Lite payments.
WHEN WILL UPI LITE LAUNCH
• NPCI has said that initially UPI Lite shall be launched as a pilot with multiple
banks and app providers, and after a due comfort is achieved, the full-scale
commercial launch with compliance timelines for on-boarding for the issuers
and app providers shall be declared.
Key Highlights
Data released by the National Statistical Office (NSO) on Friday showed the IIP on the
year-on-year (YoY) basis picked up marginally to 1.3 per cent in January from 0.7 per
cent in the preceding month as manufacturing output grew 1.1 per cent. Mining and
electricity outputs registered 2.8 per cent and 0.9 per cent growth respectively.
However, when compared to December 2021, IIP did not grow in January as the index
remained unchanged. Despite the dismal growth numbers, the index or output level in
January remained higher than pre-pandemic levels.
India’s industrial activity escaped relatively unscathed from the third wave of Covid-19
in January registering no change in output sequentially even as Omicron-led
restrictions across the country reduced demand for goods and services. However, the
index of industrial production (IIP) grew in the low single digit when compared to the
same month a year ago, helped by a favourable base.
Key Highlights
Unemployment rate for persons of age 15 years and above in urban areas dipped to
12.6 per cent in April-June 2021 from 20.8 per cent in the same month of the previous
year, as per the periodic labour force survey by the National Statistical Office (NSO).
The joblessness was high in April-June in 2020 mainly due to the impact of lockdown
restrictions in the country which were imposed to curb the spread of deadly
coronavirus.
The unemployment rate for persons of age 15 years and above in January-March 2021
was 9.3 per cent in urban areas, as per the 11th Periodic Labour Force Survey (PLFS).
As per the data unemployment rate among females (age 15 years and above) in urban
areas also declined to 14.3 per cent in April-June 2021 from 21.1 per cent a year ago.
It was 11.8 per cent in January-March 2021. Among males, the UR in urban area also
dipped to 12.2 per cent in April-June 2021 compared to 20.7 per cent a year ago. It
was 8.6 per cent in January-March 2021.
Issue: - India breaks into world's top five club in terms of market
capitalisation
Key Highlights
India’s equity market has broken into the world’s top five club in terms of market
capitalisation for the first time. The country’s total market cap stands at $3.21 trillion,
which is higher than that of the UK ($3.19 trillion), Saudi Arabia ($3.18 trillion), and
Canada ($3.18 trillion).
This year, India has climbed two positions, despite a 7.4 per cent drop in its market
cap. At the start of the year, the UK and France ranked fifth and sixth with a market
cap of $3.7 trillion and $3.5 trillion, respectively.
Meanwhile, Saudi Arabia has climbed three places from 10th to 7th. The country,
particularly its biggest firm Aramco, stands to gain from the surge in oil prices this
year.
Key Highlights
Assesses have got some relief as only jurisdictional tax officers would now be able to
adjudicate notices issued under the goods and services tax (GST) system.
The power to adjudicate these notices have been taken away from auditing and
investigating officers under the GST system, according to a circular issued by the
Central Board of Indirect Taxes and Customs (CBIC).
Now, the central tax officers of audit Commissionerate and Directorate General of
Goods and Services Tax Intelligence (DGGI) can issue only notices, raising additional
demand. Once a notice is issued by an auditing officer or an investigating officer or a
jurisdictional officer, the assesses could approach the respective officer to correct it in
the earlier scheme of things.
Key Highlights
India’s Position:
• India saw a marginal improvement in its ranking, jumping three spots to 136,
from 139 a year ago.
Top Performers:
• Finland has been named the world's happiest country for the fifth year running
followed by Denmark.
• The biggest gains in happiness have taken place in Serbia, Bulgaria and
Romania.
Worst Performers:
Key Highlights
Status as in Report.
• Globally, between 13,865 and 38,940 lives are lost yearly due to the failure to
provide safe abortion. Developing countries bear the burden of 97 per cent of
unsafe abortions, according to the WHO’s website.
• Over half (53.8 per cent) of all unsafe abortions occur in Asia, the majority of
those in south and central Asia. A quarter (24.8 per cent) occur in Africa, mainly
in eastern and western Africa and a fifth (19.5 per cent) in Latin America and the
Caribbean.
• Abortion rates were highest in low-income countries with the most legal
restrictions to abortion care. There was also an increase of 12 per cent in the
number of abortions in countries with legal restrictions on the procedure, while
it declined slightly in countries where abortion is broadly legal.
New Guidelines.
• WHO has released more than 50 recommendations that include clinical practice,
health care delivery and law and policy interventions to support quality abortion
care.
• The new guidelines include recommendations on many simple interventions at
the primary care level that improve the quality of abortion care provided to
women and girls.
• These include task sharing by a wider range of health workers; ensuring access
to medical abortion pills, which mean more women can obtain safe abortion
services and making sure that accurate information on care is available to all
those who need it.
• The guidelines also include recommendations for the use of telemedicine, which
helped support access to abortion and family planning services during the
COVID-19 pandemic.
• The guidelines also recommend removing medically unnecessary political
barriers to safe abortion, such as criminalisation, mandatory waiting periods
before receiving a requested abortion, third-party authorisation for abortion,
restrictions on which health workers can provide abortion services.
Key Highlights
Challenge:
• Such barriers can lead to critical delays in accessing treatment and put women
and girls at greater risk of unsafe abortion, stigma and health complications,
while increasing barriers to education and their ability to work.
• While most countries allow abortion under certain circumstances, about 20
countries do not provide any legal basis for abortion.
• More than three out of four countries have legal penalties for abortion, which
may include long-term imprisonment or heavy fines for people who perform or
assist with the procedure.
• Evidence shows that restricting access to abortions does not reduce the number
of abortions that take place. In fact, restrictions are more likely to push women
and girls into unsafe practices.
• In countries where abortion is most restricted, only one in four abortions are safe,
compared to almost nine out of 10 in countries where the procedure is mostly
legal.
What is MMR?
Maternal Mortality Ratio (MMR) is defined as the number of maternal
deaths during a given time per 1,00,000 live births during the same time.
5. One Liner
➔
Digital Age ➔ With banks already facing a big challenge in
Banking retaining customers, they will not be pleased with
Challenges the new data that shows 50 per cent of the
customers are willing to switch banks in the next
12 months.
➔ A survey by Bain & Company based on its
proprietary tool, Net Promoter Score Prism, which
tracks changing customer experiences, found
customers willing to switch if they were being
offered a competitive product or service by another
company, which includes fintech players, neo
banks amongst others.
➔ The data, which has been made public for the first
time, is based on responses from over 100,000
➔
ICRA Data ➔ The finance companies and housing finance
companies would require Rs 1.8-2.2 trillion of
incremental fresh funding to meet its growth
requirement in FY23 while maintaining the liquidity
buffers, according to rating agency ICRA.
➔ The liquidity (on-balance sheet and undrawn
sanctions) for the sector has remained adequate
with entities typically maintaining coverage for their
next three months’ repayments.
Bahini ➔ The Sikkim government is set to announce a
Scheme scheme (Bahini) to install vending machines to
provide free sanitary pads. This is the first time
that a state government has taken a decision to
cover all girls studying in Classes 9-12. The scheme
is known as Bahini Scheme.
Contents
1. RBI/SEBI/NABARD In NEWS ................................................................................................ 2
................................................................................................................................................................ 2
1.1. Framework for Geo-tagging of Payment System Touch Points .................... 2
1.2. Sectoral Deployment of Bank Credit – February 2022 (SGB)......................... 4
1.3. WMA Limit for Government of India......................................................................... 5
1.4. Introduction of Options on Commodity Indices ................................................. 6
1.5. Covenant monitoring with DLT................................................................................... 7
1.6. Data Breach .......................................................................................................................... 7
1.7. Passive breaches' by MFs ............................................................................................... 9
1.8. Reserve Bank Innovation Hub ................................................................................... 10
2. Finance In NEWS ..................................................................................................................... 11
2.1. Parliamentary Panel on NPA ....................................................................................... 11
2.2. Rs 1-trillion infrastructure lending target ........................................................... 11
2.3. Stake in ONDC by Banks .............................................................................................. 13
2.4. AT1 Bonds ........................................................................................................................... 14
Crack Grade B
3. Reports/Index in NEWS ........................................................................................................ 15
3.1 India’s GDP Growth .......................................................................................................... 15
3.2 86% farmer groups supported 3 repealed laws .................................................... 16
3.3 EY-FICCI report on Advertising Sector ................................................................... 17
3.4 NITI Aayog Export Preparedness Index 2021 ....................................................... 18
3.5 World Air Quality Report 2021 ................................................................................... 19
3.6 State of World Population 2022 Report .................................................................. 21
3.7 World Energy Transitions Outlook 2022 ................................................................ 22
4. Other Important NEWS ......................................................................................................... 23
4.1. India opens up central govt procurement ............................................................ 23
4.2. Change in GST System .................................................................................................. 24
4.3. Minamata Convention on Mercury .......................................................................... 25
4.4. Hidden Inflation ............................................................................................................... 26
5. One Liner ..................................................................................................................................... 27
Key Highlights
Credit to agriculture and allied activities continued to perform well, registering an
accelerated growth of 10.4 per cent in February 2022 as compared to 8.6 per cent
in February 2021.
Credit growth to industry accelerated to 6.5 per cent in February 2022 from 1.0
per cent in February 2021. Size-wise, credit to medium industries registered high
growth of 71.4 per cent in February 2022 as compared to 30.6 per cent last year.
Credit growth to micro and small industries accelerated to 19.9 per cent from 3.1
per cent and credit to large industries recorded a marginal growth of 0.5 per cent
against a contraction of 0.6 per cent during the same period.
Within industry, credit growth to ‘all engineering’, ‘chemicals & chemical
products’, ‘food processing’, ‘infrastructure’, ‘leather & leather products’, ‘mining
and quarrying’, ‘petroleum, coal products & nuclear fuels’ and ‘rubber plastic &
their products’ accelerated in February 2022 as compared to the corresponding
month of the previous year. However, credit growth to ‘basic metal & metal
products’, ‘beverage and tobacco’, ‘cement & cement products’, ‘construction’,
‘glass & glassware’, ‘gems & jewellery’, ‘paper & paper products’, ‘textile’, ‘vehicles,
vehicle parts & transport equipment’ and ‘wood & wood products’
decelerated/contracted.
Credit growth to services sector stood at 5.6 per cent in February 2022 as
compared to 8.8 per cent a year ago. Within services, credit growth to NBFCs
improved significantly to 14.6 per cent in February 2022 from 7 per cent a year
ago.
Personal loans segment continued to expand at a robust rate and grew by 12.3
per cent in February 2022 from 9.6 per cent in February 2021, driven primarily
by housing loans and vehicle loans.
Key Highlights
The Reserve Bank may trigger fresh floatation of market loans when the Government
of India utilises 75 per cent of the WMA limit.
The Reserve Bank retains the flexibility to revise the limit at any time, in consultation
with the Government of India, taking into consideration the prevailing circumstances.
The interest rate on WMA/Overdraft will be:
Issue: - The Reserve Bank of India (RBI) has decided to review the business
models of payment aggregators in view of a spate of frauds hitting customers
due to unauthorised sharing of financial data.
Background - Payment aggregators invested a lot in developing their
payment infrastructure. After the MDR was abolished, their revenues were
impacted, because they stopped making any money by processing the
transactions so they are now trying to monetise the payment data by
sharing it with NBFCs (non-banking financial companies). They also tie up
with NBFCs and sell loans on their behalf to earn a commission.
Issue: - The Securities and Exchange Board of India (Sebi) has tightened
rules around rectification and reporting of ‘passive breaches’ by mutual fund
(MF) schemes.
Circular By – SEBI
Effective From - The new rules will come into effect from July 1, 2022.
2. Finance In NEWS
Issue: - Par panel cautions govt against early euphoria over NPA reduction.
Current Status of NPA (As Replied on Lok Sabha – 28th March 2022)- As
per Reserve Bank of India (RBI) data, recovery made by public sector banks
(PSBs) during the financial year as a percentage of gross non-performing
assets (NPAs) as on beginning of the financial year (FY) has improved from
11.33% in FY2017-18, to 13.52% in FY2018-19, to 14.69% in FY2019-20.
• In October last year, the government had appointed KV Kamath as the chairman
of NaBFID. Recently, Kamath said the DFI, with a capital base of Rs 20,000 crore,
will provide funding to projects in public as well as private sectors. NaBFID will
start operations by approving the first loan for the project in the first quarter of
the next financial year.
• The DFI will get 10-year tax concession so that it can provide long-term funds at
an affordable cost to the infrastructure sector.
Defining NaBFID
The National Bank for Financing Infrastructure and Development
(NaBFID) Act, 2021 received the assent of the President on March 28, 2021
and has come into force w.e.f. April 19, 2021.
Accordingly, NaBFID has been set up as a Development Financial
Institution (DFI) to support the development of long-term infrastructure
financing in India.
NaBFID shall be regulated and supervised as an All-India Financial
Institution (AIFI) by the Reserve Bank under Sections 45L and 45N of the
Reserve Bank of India Act, 1934. It shall be the fifth AIFI after EXIM Bank,
NABARD, NHB and SIDBI.
• AT1 bonds, also called perpetual bonds, carry no maturity date but
have a call option. The issuer of such bonds may call or redeem the
bonds if it is getting money at a cheaper rate, especially when
interest rates are falling. They are like any other bonds issued by
banks and companies, but pay a slightly higher rate of interest
compared to other bonds.
Who Issue it?
• Banks issue these bonds to shore up their core capital base to meet
the Basel-III norms.
Basic Feature.
• These bonds are also listed and traded on the exchanges. So, if an
AT-1 bondholder needs money, he can sell it in the secondary
market.
• Investors cannot return these bonds to the issuing bank and get the
money. i.e there is no put option available to its holders.
• Banks issuing AT-1 bonds can skip interest pay-outs for a particular
year or even reduce the bonds’ face value.
Regulated By.
• AT-1 bonds are regulated by the Reserve Bank of India (RBI). If the
RBI feels that a bank needs a rescue, it can simply ask the bank to
write off its outstanding AT-1 bonds without consulting its investors.
Key Highlights
India's projected economic growth for 2022 has been downgraded by over two per cent
to 4.6% by the United Nations, a decrease attributed to the ongoing war in Ukraine.
Global Data - The UN Conference on Trade and Development (UNCTAD) report
downgraded its global economic growth projection for 2022 to 2.6% from 3.6% due to
shocks from the Ukraine war and changes in macroeconomic policies that put
developing countries particularly at risk.
Russia and Europe - The report said while Russia will experience a deep recession this
year, significant slowdowns in growth are expected in parts of Western Europe and
Central, South and South-East Asia.
USA and China - The report has downgraded the GDP growth of the US from three per
cent to 2.4 per cent. China will also see growth decrease to 4.8 per cent from 5.7 per
cent. The report projects a deep recession for Russia, with growth decelerating from 2.3
per cent to -7.3 per cent.
India - India was forecast to grow at 6.7 per cent in 2022 and this projection has been
downgraded to 4.6 per cent by UNCTAD.
• One of the options that the committee deliberated upon is to allocate the current
expenditure by the central government on procurement, storage and PDS of
wheat and rice across states based on an objective formula giving due weightage
to production, procurement and poverty. The states should be given the freedom
to devise their own approaches to support farmers and protect poor consumers
in their respective states.
• The committee has recommended that procuring crops at a declared MSP can be
the prerogative of the states in accordance with their specific agricultural policy
priorities.
• Another option the panel suggested is to give freedom of choice to the
beneficiaries of the public distribution system to choose cash transfers equivalent
to MSP + 25 per cent for every kg of grain entitlement or get it in kind (wheat or
rice).
• A road map for gradual diversification from paddy to more sustainable high-value
crops, especially in the Punjab-Haryana belt, needs to be formulated, the panel
said.
Issue: - Gujarat tops Niti Aayog's export index for second year in a row.
Index By: - NITI Aayog
Why: - The index can be a valuable tool for the government and policymakers
in encouraging healthy competition among states and UTs, hence enhancing
India’s standing in the global export market.
Framework: -
• Lakshadwdeep
Bottom • Arunachal Pradesh
5 States • Mizoram
Are • Ladakh
• Meghalaya
Issue: - Recently, the 2021 World Air Quality Report was released, the report
presented an overview of the state of global air quality in 2021.
By: - IQAir, a Swiss group
How: - It’s a measures of air quality levels based on the concentration of
Particulate Matter (PM) 2.5.
Survey Size: - The report is based on PM2.5 air quality data from 6,475 cities
in 117 countries, regions and territories around the world.
Why: - Air pollution is now considered to be the world's largest environmental
health threat, accounting for seven million deaths around the world every year.
Air pollution causes and aggravates many diseases, ranging from asthma to
cancer, lung illnesses and heart disease. Air pollution affects those that are
most vulnerable the most. It is estimated that in 2021, the deaths of 40,000
children under the age of five were directly linked to PM2.5 air pollution.
Issue: - Recently, the United Nations Population Fund’s (UNFPA) flagship State
of World Population Report 2022 launched.
By: - United Nations Population Fund’s (UNFPA)
Title of the Report: - Seeing the Unseen: The case for action in the neglected
crisis of unintended pregnancy
Key Highlights
India has opened up its central government procurement market to the United Arab
Emirates (UAE) under the free trade agreement (FTA) signed last month. This will give
national treatment status to UAE companies, on a par with Indian companies, while
bidding for central government tenders.
The (two) parties recognise the importance of government procurement in trade
relations and set as their objective the effective, reciprocal and gradual opening of their
government procurement markets, in order to maximise, inter alia, competitive
opportunities for the suppliers of the parties.
The trade deal also specifies what will and will not be opened up. Public procurement
of goods and services, including construction services above Rs 200 crore (SDR 20
million) by 34 designated central government ministries, including the Ministry of New
and Renewable Energy and the Ministry of Power, will be opened up.
Key Highlights
Assesses have got some relief as only jurisdictional tax officers would now be able to
adjudicate notices issued under the goods and services tax (GST) system.
The power to adjudicate these notices have been taken away from auditing and
investigating officers under the GST system, according to a circular issued by the
Central Board of Indirect Taxes and Customs (CBIC).
Now, the central tax officers of audit Commissionerate and Directorate General of
Goods and Services Tax Intelligence (DGGI) can issue only notices, raising additional
demand. Once a notice is issued by an auditing officer or an investigating officer or a
jurisdictional officer, the assesses could approach the respective officer to correct it in
the earlier scheme of things.
➔
EPFO Data ➔ Retirement fund body EPFO added 15.29 lakh
subscribers on a net basis in January 2022, an
increase of over 21 per cent compared to 12.60 lakh
in December 2021, according to the latest payroll
data.
➔ Approximately 6.65 lakh net subscribers exited the
scheme but re-joined EPFO by continuing their
membership with EPFO instead of opting for final
withdrawal.
➔ Age-wise comparison of payroll data revealed that
the age group of 18-25 years has recorded the
highest number of net enrolments with 6.90 lakh
additions in January 2022, around 45.11 per cent of
total net subscribers added in the month.
➔ State-wise comparison of payroll figures highlights
that the establishments covered in Maharashtra,
Haryana, Gujarat, Tamil Nadu and Karnataka are
leading by adding approximately 9.33 lakh
subscribers during the month, which is around 61