ISSUE: 376 2023 16 Nov 2023

Food inflation needs to fall more,

says government source: India's food
inflation needs to decline further,
according to a senior government official
on November 15. The official, requesting
anonymity, emphasized that although the
headline retail inflation rate had
decreased somewhat, food inflation must
moderate more. Data released on November 13 revealed that India's
headline retail inflation rate dropped to a five-month low of 4.87 percent
in October, remaining within the Reserve Bank of India's (RBI) tolerance
band of 2-6 percent for the second consecutive month. However, food
inflation remained relatively stable at 6.61 percent, compared to 6.62
percent in September. Concerning price momentum, the Consumer Food
Price Index rose by 1.1 percent month-on-month (MoM) in October. This
increase was propelled by a 3.4 percent sequential rise in the vegetable
index, particularly due to a 15 percent surge in the price index for onions.
Additionally, there was a 3.4 percent MoM increase in egg prices, while
pulses rose by 2.5 percent, and cereals increased by 0.8 percent.
(Moneycontrol)
India's trade deficit hits record high in October as gold imports
double: India's merchandise trade deficit rose to a record high in
October, propelled by a 95 percent increase in gold imports, the
commerce ministry said on November 15.
According to latest data released by the ministry, India's goods trade
deficit increased to $31.46 billion in October compared to $26.3 billion in
the same month last year. Gold imports in October amounted to $7.2
billion, up from $3.7 billion a year ago. According to Commerce Secretary
Sunil Barthwal, the huge year-on-year jump in gold imports last month
was down to the difference in the festival calendar in 2023, with Diwali
falling in November this year as opposed to October in 2022.
(Moneycontrol)

RBI orders Bajaj Finance to stop

lending via eCOM, Insta EMI Card:
The Reserve Bank of India has asked Bajaj
Finance to stop the sanction and disbursal
of loans under two lending products:
eCOM and Insta EMI Card, with
immediate effect. This is due to non-
adherence by the NBFC to the RBI‟s digital
lending guidelines, particularly the non-
issuance of Key Fact Statements (KFS) to the borrowers under these two
lending products and the deficiencies in the Key Fact Statements issued
in respect of other digital loans sanctioned by the company. The action
has been taken under Section 45L(1)(b) of the Reserve Bank of India Act,
1934, which gives RBI the power to direct regulated entities (REs)
pertaining to their conduct of business as a financial institution if it
believes that such action is necessary to help it regulate the credit system
of the country.
(Business Line)
DICGC report: Banks witness drop in insured deposits;
uninsured funds surge in FY23: The ratio of insured deposits to
assessable deposits in the banking system declined to 46.31 per cent in
FY2023 from 49 per cent in FY2022 as customers, lured by attractive
deposit rates, placed larger deposits (over and above the Rs 5 lakh deposit
insurance cover) with banks, going by latest Deposit Insurance and Credit
Guarantee Corporation (DICGC) data. This means that bank customers
preferred to place larger quantum (Rs 5 lakh and above) of deposits
(accounting for 53.69 per cent of the deposits by value), which remained
uninsured. In the preceding year, 51 per cent of the deposits were
uninsured. Deposit insurance cover is available on deposits up to Rs 5
lakh.
(Business Line)
UCO Bank shares up amid bank clarification on erroneous
credits via IMPS: Shares of UCO Bank were trading higher in
Wednesday‟s trade amid the bank‟s clarification on erroneous credits via
Immediate Payment Service (IMPS). The bank said there was internal
technical issue due to which some account holders‟ accounts saw credits
initiated by holders of other banks via its IMPS without actual receipt of
money from these banks. The PSU bank said there was no issue with the
IMPS platform. The bank said it, as a precautionary measure, was
working closely with the stakeholders to resolve the issue and restore the
IMPS services at the earliest. It said the matter has also been reported to
the law enforcement agencies for necessary action. “It is clarified Bank
were due to internal technical issue as a result of account holders of our
bank have received some erroneous credits via IMPS. We wish to clarify
that there was no issue with the IMPS platform. The PSU bank, as a
precautionary measure has made the IMPS channel offline working
closely with the stakeholders to resolve the issue and restore the IMPS,” it
said.
(Business Line)

Core accountancy tasks still outside

PMLA ambit, says ICAI: The Institute of
Chartered Accountants of India (ICAI) has
clarified that only those chartered
accountants (CAs) that carry out “financial
activities” on behalf of their clients will
become reporting entities under the new
PMLA rules notified on May 3. The core
functions of assurance, audit and taxation remain outside the purview of
the notification, allaying fears that routine services and transactions
would come under its ambit. The financial activities include buying and
selling of immovable property, managing client monies, bank accounts or
other assets and creation, operation or management of companies, LLPs
or trusts. This would, for example, cover CAs and company secretaries
organising contributions from dummy shareholders or lenders for a
company. Or those involved in investing directly into properties
(including payment of token amount) or buying businesses. There are
instances where CAs play a role in money laundering, either directly or
indirectly, said experts. Such CAs now need to report the movement of
funds (exceeding ₹10 lakh in most cases) to the Financial Intelligence
Unit of India.
(Business Line)
ONGC plans to invest Rs 1 lakh crore to set up 2 petrochemical
plants: India‟s top oil and gas producer ONGC plans to invest about Rs 1
lakh crore in setting up two petrochemical plants to convert crude oil
directly into high-value chemical products as it prepares for energy
transition, top company officials said on Wednesday. Crude oil, which
companies like ONGC pump out from below seabed and underground
reservoirs, is a primary source of energy. It is processed in oil refineries to
produce petrol, diesel and jet fuel. With the world looking to transition
away from fossil fuels, companies around the globe are looking at new
avenues to use crude oil.
(Financial Express)

PM Modi launches Janman Scheme,

Sankalp Yatra: Prime Minister Narendra
Modi on Wednesday launched two
ambitious initiatives to mark the Jan Jatiya
Gaurav Diwas, celebrated on November 15
every year on the birth anniversary of tribal
icon Birsa Munda. PM Janman, aimed at
social justice to the tribals with a budget allocation of ₹24,000 crore as
well as the Viksit Bharat Sankalp Yatra - a drive to create awareness and
facilitate saturation of welfare schemes that will continue till January 26
across the country - were launched.
(Economic Times)
Prime Minister Shri Narendra Modi inaugurates Viksit Bharat
Yatra from Khunti, Jharkhand: PM Shri Narendra Modi released
the 15th instalment of over Rs 18,000 crore under the Pradhan Mantri
Kisan Samman Nidhi (PM-KISAN) scheme from Khunti, Jharkhand. The
instalment was released on the birthday of the „father of the land‟ Shri
Bhagwan Birsa Munda, which is celebrated as the JanJaatiya Gaurav
Divas every year. On the occasion, PM Modi launched the PM Janjati
Adivasi Nyaya Maha Abhiyan, an initiative with a budget of Rs 24,000
crore, aimed at ensuring holistic development of tribal groups.
Under PM JANMAN, the government aims to reach out to primitive
tribes, many of whom still live in forests. 75 such tribal communities and
primitive tribes, totalling lakhs of people across more than 22 thousand
villages, have been identified. The central government is investing Rs
24,000 crores in this extensive campaign.
Talking about the 15th instalment of PM Kisan Samman Nidhi released
today, the Prime Minister shared that over Rs 2,75,000 crores have been
sent to farmers' accounts so far. He also mentioned initiatives like the
Kisan Credit Card for cattle farmers and fishermen, a Rs 15,000 crore
government spending on free livestock vaccination, financial support for
fish farming under Matsya Sampada Yojana, and the creation of 10,000
new Farmer Produce Unions. These measures aim to reduce costs for
farmers by making markets more accessible.
(PiB)

RBI KEY RATES FOREX EQUITY

(RBI REF. ) /COMM. MARKET
Repo Rate: 6.50% INR / 1 USD : 83.1272 Sensex: 65675.93 (+742.06)
SDF: 6.25% INR / 1 GBP : 103.8298 NIFTY: 19675.50 (+232.00)
MSF /Bank Rate: 6.75% INR / 1 EUR : 90.4008 Bnk NIFTY: 44201.70 (+310.40)
CRR: 4.50% INR /100 JPY: 55.1800 Gold: 60,166.00 (+101.00)
SLR: 18.00% Silver: 72,285.00 (+692.00)
BUSINESS/FINANCIAL CONCEPTS
VENTURE CAPITAL
 Startup companies with a potential to grow need a certain amount of
investment. Wealthy investors like to invest their capital in such
businesses with a long-term growth perspective. This capital is known
as venture capital and the investors are called venture capitalists.
 Such investments are risky as they are illiquid, but are capable of
giving impressive returns if invested in the right venture. The returns
to the venture capitalists depend upon the growth of the company.
Venture capitalists have the power to influence major decisions of the
companies they are investing in as it is their money at stake.

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