arth (11th april-20th april)- economic affairs 1.india's
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ARTH (11TH APRIL-20TH APRIL)- Economic Affairs
1.India's response to pandemic swifter than US, Germany, South Korea- UK study
As per a study taken up by the Oxford University, India moved swifter than many
developed countries in unveiling measures to deal with Covid-19 outbreak within its
borders.
Keypoints-
• As per data available on Oxford Covid-19 Government Response Tracker
(OxCGRT), New Delhi fared better than the United States, Germany, Italy, Spain,
South Korea and Britain.
• The Stringency Index of the OxCGRT measures how the governments reacted to
the pandemic as it spread around the globe.
• The data for the same is collected and updated in real-time by Oxford University.
• Data is collected based on 11 indicators ,
1. government’s efficiency in closing down schools
2. cancelling public events
3. closing public transport
4. aunching public information campaign
5. curbs on internal travel and international travel
6. fiscal measures
7. monetary measures
8. investment in healthcare
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9. investment in vaccines
10. testing policy
11. contact tracing.
• The Reserve Bank of India and the Finance Ministry took steps to support the
poor and the salaried class. The government also released a Rs 15,000 crore
special Covid-19 package to arm states to deal with the virus.
• According to Oxford tracker India has been a relatively better performer on the
various indices an indication that the response was swift in dealing with the
pandemic while other countries were slow to adopt measures.
• The index only measures the governments' response to the crisis and not how
effectively they implemented the policies.
2. RBI circular on loan moratorium challenged in Supreme Court
The public interest litigation (PIL) was filed in the Supreme Court against the
Reserve Bank of India’s March 27 circular on the three-month moratorium
permitted for loan repayments due to the economic impact of the COVID-19
pandemic. The Reserve Bank of India, on March 27, had permitted all lending
institutions to allow a three-month moratorium on repayments of all kinds of
installments, including for credit cards, for all term loans outstanding between
March 1, 2020 and May 31, 2020.A similar three-month deferment for all working
capital loans to help borrowers tide over the coronavirus related economic
hardships was also permitted.
Keypoints-
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• It seeks the Supreme Court’s directions to ensure that customers are not
charged accrued interest for the moratorium period.
• The catch in this relief was that interest would continue to accrue during the
three-month moratorium, which would additionally have to be borne by a
customer if he/she chose to avail of the benefit.
• The PIL points out that during such difficult times, the state must not look to
enrich itself, and has also sought SC directions to both the RBI and the
government to consider even extending the moratorium period for loan
repayment for longer.
3.Karnataka Bank gets RBI nod to reappoint Mahabaleshwara M S as MD and CEO for 3 yrs
Private sector lender Karnataka Bank said it has received RBI nod for reappointment of
Mahabaleshwara M S as MD and CEO for next three years. The regulator has also
approved for reappointment of P Jayarama Bhat as part time (non executive) chairman.
Karnataka Bank
HQ- Mangalore
Tagline- Your Family Bank Across India
4. Fiscal deficit at 5.07% of GDP in February, likely to increase in March
According to a report released by government, India’s fiscal deficit stood at 5.07% of
gross domestic product (GDP) in February.This could make it difficult for the
government to meet its revised fiscal deficit target of 3.8% of GDP for FY20.
Keypoints-
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• As per data from the Controller General of Accounts (CGA), India’s fiscal deficit
touched Rs 10.36 lakh crore at the end of February.
• Amid the brunt of the Covid-19 impact and the lockdown, government revenues
are likely to take a substantial hit in March of GDP for FY20.
• With regard to states, who are at the forefront of the battle against the virus
spread, the report showed a sharp fall in their aggregate treasury holdings by
nearly Rs 32,000 crore in March to Rs 1.87 lakh crore.
• As per the report, the states received about Rs 90,000 crore as tax devolution for
March and around Rs 29,000 crore for various schemes in FY20.
• The Centre also released an additional Rs 1.44 lakh crore to the states for the
same period, according to the recommendations of the 14th FC.
Source- ET
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5.TRIFED in Collaboration with UNICEF & WHO organized a Webinar for
Promotion of Digital Campaign for SHGs
TRIFED organized a Webinar for Virtual training to its Trainers and Self Help Groups
(SHGs) on basic orientation on Covid-19 response and key preventive measures to
ensure tribal gatherers carry on their work safely. It was aimed to reach more than
18,000 participants and would cover tribal regions across all the 27 States. To ensure
tribal gatherers carry on their work safely, TRIFED has collaborated with UNICEF and
WHO for developing a digital communication strategy for promoting a digital campaign
for Self Help Groups (SHGs) involved in this work, highlighting the importance of Social
Distancing.
Keypoints-
• The target of this Digital Campaign is to reach up to 50 lakh tribal gatherers to
ensure their safety.
• UNICEF is providing the necessary support to the SHG Centers in the form of
Digital Multimedia content.
• To start with, 15,000 of these SHGs will be promoted as Van Dhan Social
Distancing Awareness cum Livelihood Centers’ through a digital training
program.
6. Government of India sanctions Rs. 15000 crores for India COVID-19 Emergency
Response and Health System Preparedness Package
Government of India (GoI) has announced significant investments to the tune of
Rs.15000 crores for 'India COVID-19 Emergency Response and Health System
Preparedness Package'. The funds sanctioned will be utilized for immediate COVID-19
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Emergency Response (amount of Rs.7774 crores) and rest for medium-term support (1-
4 years) to be provided under mission mode approach.
7. Bengaluru’s Jana Small Finance Bank launches digital banking platform
Jana Small Finance Bank, a scheduled commercial bank, has launched DIGIGEN - a
digital banking platform where customers can digitally open a Savings Account and
Fixed Deposit instantly.
DIGIGEN onboarding is a hassle-free, three-step process to open an account. DIGIGEN
also offers a host of other exciting features, including online bill payment, instant money
transfer and airport lounge access on debit card, to name a few.
8.Forex reserves up nearly $2 billion to $476.5 billion: RBI
The Reserve Bank said the country’s foreign exchange reserves have risen by nearly
USD 2 billion to USD 476.5 billion as of April 10. The reserves, which are being pointed
out as one of the biggest assets in the fight against challenges posed by the COVID-19
pandemic, had stood at USD 474.66 billion.
Keypoints-
• RBI said net foreign direct investment was USD 2.9 billion as compared to USD
1.9 billion in the year ago period.
• Similarly, the net foreign portfolio investment in equities was also higher at USD
0.4 billion in the April 1-9 period as against an inflow of USD 0.2 billion in the
year-ago period.
• Portfolio debt investment recorded an outflow of USD 0.7 billion as against net
outflow of USD 0.9 billion a year ago.
• The 34.6 per cent contraction in exports has happened.
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• Merchandise imports also fell by 28.7 per cent in March across the board, barring
transport equipment.
9. Kotak Bank to raise ₹8,000 cr via promoter stake sale
Kotak Mahindra Bank (KMB) may raise Rs 8,000 crore via equity dilution,.This amount
would be raised through a 4% stake sale, given that the lender’s market capitalisation is
at Rs 2 lakh crore.
Sector experts say that the fund-raising is targeted mainly at dilution of the promoter’s
stake in order to comply with regulatory requirements. RBI had allowed KMB a six-
month timeline – up to August – to reduce promoter shareholding to 26%.
10. NIRDPR and UNICEF training community leaders online to combat COVID-19
More than 28.33 lakh community leaders are being trained through online programmes
to practise social behaviours required to control the transmission of COVID-19 cases in
villages. NIRDPRs Communication Resource Unit (CRU) and UNICEF are working
closely with the governments of Telangana, Andhra Pradesh and Karnataka in
preparedness and responses to contain the pandemic.
11. India's subsidies to renewables drops 35 per cent from FY17 to FY19: Report
A study by the International Institute for Sustainable Development (IISD) and the
Council on Energy, Environment and Water (CEEW) India's renewable
energy subsidies fell 35 per cent from 2017-18 to 2018-19, while its oil and gas
subsidies increased by 65 per cent,
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Keypoints-
• The study named Mapping India's Energy Subsidies 2020, emphasises that the
health and economic crisis caused by Covid-19 will influence subsidy
expenditure.
• The crash in world oil prices and the government's economic stimulus packages
will be key factors shaping the energy sector in the future.
• The authors of the report note that there were already signs that support for
renewable energy would increase again, but with the shocks from Covid-19, it is
now critical to stay on track.
• Although subsidies for electric cars have grown over 11 times since FY2017,
researchers note that continuing to raise ambition on clean transport will be
important to meet India's targets for 30 per cent of new vehicle sales to be
electric by 2030.
12. India is world's most digitally dexterous country: Survey
According to a survey by Gartner, Inc, sixty-seven per cent of digital workers in India
said emerging technologies such as machine learning (ML), artificial intelligence (AI),
Internet of Things (IoT) are increasing their effectiveness at work.
Keypoints-
• The Gartner 2019 Digital Workplace Survey found that India is the most digitally
dexterous country in the world.
• India is followed by the UK and the US, due to having the largest Gen Z
workforce along with the desire to learn new skills using digital technologies in
the workplace.
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• Twenty-seven per cent of the digital workers in India are skilled experts in digital
technology for work purposes, the research and advisory firm.
• Seven out of ten employees in India said that adoption of new digital
technologies will create career opportunities and higher paying jobs.
• Forty-five percent of digital workers in India do not mind having their work habits
tracked and monitored by digital technologies.
• The survey also showed that digital workers not only want formal training but are
also willing to undertake on-the-job (OTJ) and just-in-time (JIT) training to
enhance their digital skills at work.
• In India, 39 per cent of digital workers want to be trained OTJ to keep their
knowledge on AI, ML, IoT up to date.
13. RBI launches latest round of quarterly survey on manufacturing sector
The Reserve Bank of India launched latest 49th round of quarterly survey order books,
inventories and capacity utilisation survey (OBICUS) of manufacturing sector. The
survey provides valuable input for monetary policy formulation,
Keypoints-
• The reference period is January-March 2020.
• The RBI has been conducting the OBICUS of the manufacturing sector on a
quarterly basis since 2008.
• The information collected in the survey includes quantitative data on new orders
received during the reference quarter, backlog of orders, pending orders, total
inventories with a breakup between work-in-progress (WiP) and finished goods
(FG) inventories and item-wise production.
• As per the last survey, capacity utilisation (CU) had declined to 68.6 per cent in
the third quarter of 2019-20 from 69.1 per cent in the previous quarter.
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14. Tata AIA becomes first life insurance company to give additional benefits
related to Covid-19
Tata AIA Life Insurance announced additional benefits for its policyholders and agents
as the first insurance company to do this in India. As part of Tata AIA Life’s initiative, its
individual policyholders will get COVID-19 related additional benefit up to Rs 500,000 at
no additional cost. Further, to extend the Circle of Protection to its own Agents, all
‘active’ Agents of Tata AIA Life Insurance along with their spouse and children will be
reimbursed up to Rs 25,000 in case of hospitalisation due to COVID-19.
15. Hindalco closes $2.8 billion deal to acquire Aleris
The Aditya Birla group’s flagship company Hindalco completed the buyout of Aleris
Corp by its wholly owned subsidiary Novelis Inc at an enterprise value of $2.8 billion (Rs
21,295 crores). The deal marks Novelis’ potential entry into the high-end aerospace
segment.
16. India's GDP to contract by 6.1 per cent in April-June: Nomura
According to Nomura, the Indian economy will contract by 6.1 per cent in the April-June
quarter and is likely to expand only in the December quarter, expecting another 0.75 per
cent cut in rates by the RBI to push growth in 2020.
The economy will grow at 3.2 per cent in the January-March period and contract by 6.1
per cent (June quarter) and 0.5 per cent September quarter, before rising by 1.4 per
cent in the last quarter of the calendar year.
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17. Coronavirus fallout: India's GDP growth rate may fall to 1.1% in FY21, says
SBI Ecowrap
According to SBI Ecowrap, India's GDP growth may fall to 1.1 per cent in FY21 owing to
coronavirus crisis.The nominal GDP for FY21 could be around 4.2 per cent as there is a
possibility of subsidies outstripping tax collection.
Keypoints-
• Similarly, the rate of growth in FY20 is expected to fall to 4.1 per cent from 5 per
cent estimated by several agencies before the coronavirus outbreak.
• The lockdown extension could also lead to an economic loss of Rs 12.1 lakh
crore or 6 per cent of the nominal gross value added (GVA) .
• They also estimate the income loss per day of these 37.3 crore workers due to
lockdown is around Rs 10,000 crore, which translates into a loss of Rs 4.05 lakh
crore for the entire lockdown period.
• For causal labourers, this income loss is at least Rs 1 lakh crore.
• The net tax revenue may see a shortfall of nearly Rs 4.12 lakh crores, and
revenue shortfall for states may stand at Rs 1.32 lakh crores.
• The revised fiscal deficit would be at 5.7 per cent of GDP.
18. Smt. Nirmala Sitharaman attends the 2nd G20 Finance Ministers and Central
Bank Governors Meeting
Union Minister for Finance & Corporate Affairs, Smt. Nirmala Sitharaman participated in
the virtual session of the 2nd G20 Finance Ministers and Central Bank Governors
(FMCBG) meeting under the Saudi Arabian Presidency to discuss the global economic
outlook amid evolving COVID-19 pandemic crisis.
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19. Outlook for India’s economy bleak-IMF and Barclays
The International Monetary Fund (IMF) slashed its FY21 growth projection for India to
1.9% from 5.8% projected in January, holding that the ‘Great Lockdown’ to combat the
covid-19 outbreak will throw the world economy into the worst recession since the Great
Depression in 1930s.
Keypoints-
• The coronavirus pandemic came at a time when India’s economy was already
slowing, due to persistent financial sector weaknesses.
• The severe disruption of economic activities caused by covid-19, both through
demand and supply shocks, has overtaken the incipient recovery in the Indian
economy leading to massive job losses.
• IMF in its biannual World Economic Outlook projected the global economy to
contract sharply by 3% in 2020, much worse than during the 2008-09 financial
crisis. For India, it estimated a sharp economic recovery in FY22 at 7.4%.
• However, investment bank Barclays pared its growth forecast for India to 0% for
calendar year 2020 from its earlier projection of 2.5%.
• Barclays said combined with the disruption in several manufacturing and service
sectors, it now estimates that the economic loss in 2020 will be close to $234.4
billion or 8.1% of GDP.
• Rating agency Icra Ltd went a step further, projecting the economic growth at
anywhere between -1% and 1% in FY21, as it expects gross domestic product
(GDP) to contract 10-15% in the June quarter.
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20. HDFC Bank launches Safety Grid campaign for social distancing
HDFC Bank has launched a campaign to encourage and reinforce social distancing
while waiting at shops.
Using the outer grid of HDFC Bank logo, it has created physical markers on the ground
to help people maintain the World Health Organisation (WHO) prescribed social
distance. After a pilot in Kolkata, the Safety Grid campaign has been launched in
Mumbai, Delhi, Bengaluru, Kolkata, Hyderabad, Pune, Chandigarh and Bhubaneswar.
HDFC Bank
HQ- Mumbai
Tagline- We understand your world.
21. Exports plunges by 34.57% in March, 4.78% in FY20
India's exports plunged by a record 34.57 per cent in March due to a steep decline in
shipments of leather, gems and jewellery and petroleum products, dragging the total
exports in 2019-20 down to $314.31 billion. Merchandise exports in March stood at
$21.41 billion, down by 34,57 per cent compared to $32.72 billion in the same month
last year.
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22. Business sentiment worsened in Q4 FY20: NCAER
According to the economic think-tank NCAER’s Business Expectations Survey ,
business sentiments, which were already weak to start with, worsened further in the
fourth quarter of 2019-20 amid the coronavirus crisis.
Keypoints-
• NCAER''s Business Confidence Index (N-BCI), an indicator of business
sentiments across Indian industry, stood at 77.3 in Q4 of 2019-20.
• N-BCI fell from 111.2 in the third quarter of 2019-20 to 77.3 in next three months,
declining by 30.4 per cent on a quarter-on-quarter (q-o-q) basis and by 32.9 per
cent on a year-on-year (y-o-y) basis.
• All the four components comprising the BCI -- overall economic condition,
investment climate, firms’ financial position and capacity utilisation -- experienced
deterioration in sentiments on a quarterly basis.
• NCAER further said the Political Confidence Index (PCI) fell from 96.2 per cent in
January 2020 to 73.7 per cent in April 2020, falling by 23.4 per cent on a q-o-q
basis and by 31.3 per cent on a y-o-y basis.
• Six components showed deterioration in sentiments -- managing the exchange
rate, overall economic growth, managing inflation, pushing economic reforms
forward, external trade negotiations and managing government finance.
However, sentiments improved in the case of two components -- managing a
conducive political climate and managing unemployment.
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23. Equitas Small Finance Bank allows customers to open fixed deposits and
savings accounts online
Equitas Small Finance Bank, has said that new customers can 'self-onboard' to open a
savings account or invest in a fixed deposit with no physical contact or branch visits
during the on-going coronavirus lockdown.Customers can open a 'Selfe Fixed Deposit'
online for up to Rs 90,000 by using their Aadhaar Number and PAN.
Features of Selfe FD are Interest up to 7.75 per cent per annum for 1 year, 0.60 per
cent additional interest for senior citizens.
Equitas Small Finance Bank
HQ- Chennai
Tagline- It's Fun Banking
24. Govt-appointed panel proposes institutional framework for valuers, moots
National Institute of Valuers
A government-appointed committee of experts, headed by IBBI (Insolvency and
Bankruptcy Board of India) Chairperson M S Sahoo has proposed an institutional
framework for valuers by way of setting up the National Institute of Valuers. This panel
has also submitted the ''Draft Valuers Bill, 2020''.
Keypoints-
• The corporate affairs ministry sought comments on the bill, which has
recommended setting up of the institute.
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• The panel was constituted to examine the need for an institutional framework for
regulation and development of valuation profession.
• Based on a comprehensive study and analysis of all relevant issues and taking
the inputs of key stakeholders, the committee has submitted its report to the
Government of India, recommending to establish a National Institute of Valuers.
• According to the committee, there should be enactment of an exclusive statute to
provide for the establishment of the institute to protect the interests of users of
valuation services in India and to promote the development of, and to regulate
the profession of valuers and market for valuation services.
• Among others, the panel has suggested measures to ensure a minimum quality
of valuation services across the market.
25. Pandemic to bring Asia's 2020 growth to halt for 1st time in 60 years: IMF
According to the IMF, Asia's economic growth this year will grind to a halt for the first
time in 60 years, as the coronavirus crisis takes an "unprecedented" toll on the region's
service sector and major export destinations.
While Asia is set to fare better than other regions suffering economic contractions, the
projection is worse than the 4.7% average growth rates throughout the global financial
crisis, and the 1.3% increase during the Asian financial crisis in the late 1990s. The
region's export powerhouses were also taking a battering from slumping demand for
their goods by key trading partners such as the United States and European countries.
26. Ajay Mahajan appointed MD & CEO of CARE Ratings
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Ajay Mahajan has been appointed as Managing Director and Chief Executive Officer of
the CARE Ratings company for five years.
27. Vineet Arora appointed MD, CEO of Paytm General Insurance
Digital payments major Paytm has named Vineet Arora as the managing director and
chief executive officer of Paytm General Insurance Ltd.
The appointment, which is subject to regulatory approvals, is a step for Paytm to further
its journey into the insurance sector with an immediate focus on General Insurance.
28. IL&FS sells entire stake in IWPSL to ORIX Corp for Rs 6.05 crore
Infrastructure Leasing and Financial Services (IL&FS) has sold its 100 per cent stake in
IL&FS Wind Power Services Ltd (IWPSL) to ORIX Corporation, Japan, for Rs 6.05
crore. IWPSL, a wholly-owned subsidiary of IL&FS Energy Development Company
(IEDSL), is engaged in providing supervisory and management support services to
seven operating wind power generating special purpose vehicles (SPVs).
29. Centre releases 7,300 crore rupees to States & UTs under MGNREGS
Centre has released 7,300 crore rupees to the States and Union Territories
under Mahatma Gandhi National Rural Employment Guarantee Scheme
(MGNREGS) to liquidate pending dues of last financial year but also the wage
dues for the first fortnight of 2020-21. Now the focus should be on creating
durable assets relating to irrigation and water conservation.
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30. MEA announces COVID-19 training programme for SAARC countries
India has launched a capacity building programme for the health officials of SAARC
countries, which comes after New Delhi's initiatives like USD 10 million SAARC COVID-
19 fund, Rapid Response Teams of Doctors to assist the nations in combating the
coronavirus menace.
Ministry of External Affairs (MEA) through its ITEC -- Indian Technical and Economic
Program -- portal is conducting e-ITEC web-based short training, live webinars for the
healthcare professionals in SAARC and other neighbouring countries on COVID-19
management strategies and related aspects.
31. BSNL, SBI partner to launch UPI-based payment platform Bharat InstaPay
BSNL in partnership with State Bank of India launched a UPI-based payment platform,
Bharat InstaPay. Bharat InstaPay will help its partners do digital transactions on a real-
time basis.
Before this service, BSNL vendors had to wait for payment settlement to buy various
telecom services that they sold in market. This used to get further delayed on non-
working days.
32. Andhra Bank, Syndicate Bank chiefs appointed as OSD in different banks
Andhra Bank Managing Director J Packirisamy and Syndicate Bank Chief Executive
Officer Mrutyunjay Mahapatra have been appointed as Officer on Special Duty (OSD) in
the Union Bank of India and the Canara Bank respectively.The development comes
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after some of the public sector banks were merged by the government with effect from
this month.
33. Agri Ministry launches a call centre for agri logistics
The Agriculture Ministry has set up a call centre to ease the difficulties in agri logistics,
particularly the inter-State movement of perishable vegetables and fruits as well as agri
inputs such as seeds, pesticides and fertilisers.
The All India Agri Transport Call Centre, which will coordinate movement of produce
and agri inputs, can be accessed at 1800-180-4200 and 14488 from any mobile or
landline phone.
34. UN releases $2.5m to help cyclone-ravaged Vanuatu
The United Nations has released $2.5m from its emergency humanitarian fund to help
thousands of people affected by Cyclone Harold in the South Pacific island nation of
Vanuatu and offered support to other hard-hit countries.
35. RBI to slap 200 bps penal interest on banks if failed to invest TLTRO funds
within 30 days
If banks fail to invest TLTRO funds within 30 days, then RBI will have to pay a penalty of
200bps. The Reserve Bank warned banks that if they fail to invest 50 per cent of the
funds raised through the targeted long-term repo operations (TLTRO) route in corporate
bonds within a month, they will be fined 200bps extra.
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36. Govt launches Sovereign Gold Bonds Scheme 2020-21
The Government of India, in consultation with the Reserve Bank of India, is going to
launch new series of the Sovereign Gold Bond (SGB) Scheme.
Keypoints-
• The Sovereign Gold Bonds will be issued in six tranches.
• The Bonds, to be issued by the RBI on behalf of the Government of India, will be
sold through Scheduled Commercial banks (except Small Finance Banks and
Payment Banks), Stock Holding Corporation of India Limited (SHCIL), designated
post offices, and recognised stock exchanges such as BSE and NSE.
• Bonds will be tradable on stock exchanges within a fortnight of the issuance on a
date as notified by the RBI.
• The minimum investment limit for Sovereign Gold Bond is 1 gram of gold, while
the maximum limit of subscription is 4 kg for individual, 4 kg for HUF and 20 kg
for trusts and similar entities.
• The tenor of the Bond will be for a period of 8 years with exit option after
completion of five years.
37.Finance Minister Smt. Nirmala Sitharaman attends the Development
Committee Meeting of the World Bank-IMF
The Union Finance Minister, Smt Nirmala Sitharaman, participated in the 101st Meeting
of the Development Committee Plenary through video conference here today. The items
on the agenda included update on World Bank Group Response to the COVID-19
Emergency, and the Covid-19 Debt Initiative: International Call for Action in Support of
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IDA Countries.The Government has announced support measures worth US $ 23 billion
for COVID-19 pandemic.
38. Govt increases loss coverage for micro loan defaults to 75% from 50% earlier
The finance ministry has increased coverage of a lender’s loss in case of loan default
under the Credit Guarantee Fund for Micro Units (CGFMU) scheme to 75%, from 50%
earlier.
Keypoints-
• The amendment to the scheme is aimed at incentivising lending to micro
businesses which are bearing the brunt of the coronavirus outbreak and the
ensuing nationwide lockdown.
• The CGFMU scheme, announced in April 2016, covers micro loans up to Rs 10
lakh extended under the Pradhan Mantri Mudra Yojana.
• Lenders can pay a fee for the portfolio of loans they want to be covered by the
guarantee, which will enable them to provide easier credit while improving
profitability.
• Additionally, in a relief to borrowers, the ministry has clarified that personal
assets of the borrower will not be included in the definition of primary security for
the loan. From the borrower's perspective, it is a relief because if his loan
account turns bad, no collateral will be enforced.
• This means only assets created from the loan can be attached as part of the loan
recovery process and the personal assets of the borrower cannot be enforced as
collateral.
• The ministry has also reduced the burden of defaults the lender had to bear
under the scheme from the first 5% of the amount in default to 3%.
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• Another change in the scheme is the inclusion of loans to SHGs. Loans between
10 lakh and 20 lakh sanctioned to SHGs in the current fiscal will be covered
under CGFMU scheme.
39. Covid-19 impact: S&P slashes India growth forecast to 1.8% for FY21
Standard & Poor’s (S&P) slashed its FY21 growth estimate for India to 1.8% from 3.5%
projected last month on concern that the covid-19 peak in India will come “somewhat
later" than most other countries.
For the Asia-Pacific region, S&P pared its 2020 growth projection to 0.3% with
downside risks from 4.8% earlier, holding that the pandemic will lead to a loss in
household and corporate income of about $2.2 trillion.
40. India's TVS Motor Acquires Legendary British Bike Brand Norton Motorcycles
For Rs 153 Cr
TVS Motor has clinched a $20 million deal to buy British brand Norton Motorcycles.
The move now becomes the latest acquisition of a British auto manufacturer by an
Indian entity, after Tata Motors acquired Jaguar Land Rover more than a decade
earlier.
41. Retail inflation eases to 5.91% in March
Data released by NSO showed, India's retail inflation eased to 5.91% last month from
6.58% in February on a sharp fall in food inflation even as the Covid-19 outbreak is
expected to weigh on inflation numbers for April as factories slow production and data
collection gets hit. Food inflation at 8.76% in March was lower from 10.81% in February,
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Source- ET
42. Bank credit growth slumps to 5-decade low of 6.14% in FY20 over low demand
RBI data showed that Bank credit growth decelerated to an over five-decade low of 6.14
per cent in the fiscal ended March 31, 2020, amid a faltering economy, lower demand
and risk aversion among banks. Bank advances growth in FY20 was the slowest since
the fiscal ended March 1962, when loans had grown by 5.38 per cent.
Keypoints-
• In the week ended March 27, 2020, advances stood at Rs 103.71 lakh crore as
against Rs 97.71 lakh crore as on March 29, 2019,
• During FY20, bank deposits grew by 7.93 per cent to Rs 135.71 lakh crore as
against Rs 125.73 lakh crore.
• The growth in deposits was slowest since FY18, when it had increased by 6.21
per cent. In FY19, credit offtake was 13.29 per cent while deposits grew by 10.04
per cent.
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43. Yes Bank's rescue made smaller private banks more vulnerable- Moody's
According to Moody, the ripple effect of YES Bank rescue will make smaller private
sector banks in India vulnerable as event coincides with the Covid-19 outbreak and
aftermath.
Keypoints-
• The YES Bank moratorium, which occurred amid deteriorating economic
conditions globally following the Covid-19 outbreak, and acute volatility in
financial markets, will undermine depositor confidence in private sector banks.
• Alongside, public trust in public sector banks will remain strong, underpinned by
a perception of strong government protection for them.
• As a result, some private sector banks, particularly, small institutions will lose
deposits to PSBs, which will weaken their funding profiles.
• Earlier, PSBs have gradually lost deposit market share to private banks because
the latter offers higher interest rates and better customer service.
44. UNIDO and CUTS look to e-commerce to counter economic impact of COVID-19
The United Nations Industrial Development Organization (UNIDO) and the Consumer
Unity and Trust Society (CUTS) have signed an agreement to empower consumers to
contribute to the global development agenda as well as support their respective
governments in times of global crisis of COVID 19
UNIDO
HQ- Vienna, Austria
45. Fintech startup Setu raises $15 million in Series A funding
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Fintech infrastructure startup, Setu announced that it has raised $15 million as a part of
its Series A funding round, led by Falcon Edge and Lightspeed Venture Partners US
along with existing investors Lightspeed India Partners and Bharat Inclusion Seed Fund.
46.Paytm to offer ESOPs worth ₹250 crore to employees
Paytm (owned by One97 Communications Ltd.) said that it will offer 250 crore in
employee stock option plans (ESOPs) this year to its high performing employees and
new hires.Paytm said this will widen the base of employees having company.
47.MaxLifeIns, YES Bank extended bancassurance tie-up for 5 years
Max Life Insurance and YES Bank have extended their 15 years strategic
bancassurance partnership for five more years. In this regard, the both companies
dedicated the current financial year -FY 2020-21 as the “Year of the Customer”.
As a part of partnership, the products of the life insurer sold through the branches of
Yes Bank. Customers are offered with a broad range of need-based products and
services.
48.World Bank sees FY21 India growth at 1.5-2.8%; slowest since economic
reforms three decades back
According to the World Bank’s ‘South-Asia Economic Focus report ‘, India is likely to
record its worst growth performance since the 1991 liberalisation this fiscal year as
the coronavirus outbreak severely disrupts the economy. India's economy is expected to
grow 1.5 per cent to 2.8 per cent in the 2020-21. It estimated India will grow 4.8 per cent
to 5 per cent in the 2019-20 fiscal that ended on March 31.
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Source- ET
49. Government nod mandatory for FDI from neighbouring countries
The Government of India has reviewed the extant Foreign Direct Investment(FDI) policy
for curbing opportunistic takeovers/acquisitions of Indian companies due to the current
COVID-19 pandemic and amended extant FDI policy as contained in Consolidated FDI
Policy, 2017.
Keypoints-
• Department for Promotion of Industry and Internal Trade, Ministry of Commerce
and Industry has issued amended FDI policy
• The government said firms in neighbouring countries wanting to invest in Indian
companies will now be able to do so only after receiving its approval.
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• According to amendments to India’s consolidated FDI Policy, 2017, while non-
resident entities can continue to invest in India, except in prohibited sectors or
activities, firms in neighbouring countries will have to seek approval and can
invest only under the Government route.
• The decision comes days after China’s central bank, the People’s Bank of China
(PBoC) had raised its shareholding in Housing Development Finance
Corporation (HDFC) to over one per cent during the recent stock market slump.
50. RBI reduces FPI investment limits in G-secs to Rs 2.34 lakh crore for FY21
RBI reduced the general category foreign portfolio investors’ (FPI) investment limit in
central government securities to Rs 2.34 lakh crore for the entire fiscal year 2021 as
compared to the existing limit of Rs 2.46 lakh crore. As a result, the limits have been
brought down by almost $1.5 billion to just above $31 billion.
Keypoints-
• With continuous selling in the central government securities by foreign portfolio
investors (FPIs), general category FPI utilisation of investment limits in G-secs
have fallen to 52.62% compared to the peaks of over 75% at the beginning of
2020.
• In the last 19 consecutive sessions, FPIs have sold Indian bonds including both
G-secs and corporate bonds — worth $8.8 billion.
• At the same time, long term FPI investment limits in G-secs have been brought
down to Rs 1.03 lakh crore from the prevailing limit of Rs 1.15 lakh crore, a
reduction of almost $1.5 billion.