FINANCIAL AWARENESS CAPSULE 2015

JANUARY FINANCIAL NEWS 2015

Fiscal deficit hits 99% of full-year target in
April- November period: The deficit in the first
eight months of the financial year touched Rs. 5.25
lakh crore, against the Budget target of Rs. 5.31 lakh
crore. The Government managed to collect just 43.4
per cent of estimated receipts, while its expenditure
was 59.8 per cent.
Core sector output hits 5-month high in Nov:
These sectors have a weightage of 38 per cent in the
Index of Industrial Production (IIP). The output of the
core industries grew 6.7 per cent in November. The
eight core industries are coal, crude oil, natural gas,
refinery products, fertilisers, steel, cement and
electricity.
Post offices to issue ATM-cum-debit cards for
savings account holders: The Centre has amended
the Post Office Savings Bank General Rules
accordingly. This facility, however, will be available
only in post offices that are on core banking solution
(CBS) platform. Currently, 676 post offices are on CBS.
Banks, LIC told to make claim forms available
online: The Finance Ministry has asked public sector
banks and Life Insurance Corporation (LIC) to make
available on their Web sites claim forms for the Rs.
30,000 life cover promised under the Pradhan Mantri
Jan Dhan Yojana (PMJDY). LIC should settle claims
within 15 days of the receipt of the form.

Cabinet clears land acquisition ordinance:

The amendments will strengthen the provisions to
protect the interests of the 'affected families' and
also reduce procedural difficulties in acquiring land
required for 'development'. The ordinance proposes a
fast-track process for defence and defence production,
rural infrastructure (including electrification), housing
for poor (including affordable housing), industrial
corridors and infrastructure projects (including
projects taken up under the public- private
partnership mode). The ordinance does away with the
clauses on compulsory social impact assessment and
approval of 80% of people whose land is being
acquired.
Single window to view various bank accounts:
Banks, such as ICICI Bank and HDFC Bank, are
offering customers the facility to view their balances
across accounts with different banks on a single page
so that they can choose which one to make payments
and investments from. This facility, cannot be used to
make transactions in other bank accounts. Banks will
not be able to see each other's data.

Jan Dhan may be extended to insurance,

pension sectors: At present, penetration of
insurance and pension in India is very low. Insurance
penetration (premiums measured as a percentage of
GDP) is just about 4 per cent. As per RBI, with revised
targets for opening of basic bank accounts in place,
banks will have to ensure opening of at least one
account in each household by January 26, 2015. As
on December 24 2014, banks have achieved the 10
crore account opening mark under the PMJDY and
have issued 7.75 crore RuPay cards. The timeline for
providing banking services in villages with populations
below 2,000 may be advanced from March 2016 to
August 2015.

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Centre rules out further tightening of KYC

norms for Participatory Notes: PNs are
instruments issued by registered foreign institutional
investors to overseas investors who wish to invest in
the Indian stock markets without registering
themselves with the Securities and Exchange Board of
India.
President signs ordinances on coal, insurance:
The Coal ordinance is required for the whole eauction process to go on smoothly. The insurance
ordinance intends to hike foreign direct investment to
49 per cent in the sector, besides other things. A
higher limit could bring up to $8 billion for the fundstarved insurance industry, which needs Rs. 60,000
crore in the next five years.
Rs. 1 paper notes to make a comeback:
Government is keen to start printing Rs. 1 notes after
a gap of almost two decades. The Government has
notified 'Printing of One Rupee Currency Notes Rules,
2015', which will come into effect from January 1,
2015. Due to higher cost and for freeing capacity to
print higher denomination notes, printing Rs. 1 note
was discontinued in November 1994, followed by Rs. 2
in February 1995, and Rs. 5 in November 1995. The
new one rupee note will have the signature of the
Finance Secretary. Apart from the one rupee note, all
other paper currency ( Rs. 2, Rs. 5, Rs. 10, Rs. 20, Rs.
50, Rs. 100, Rs. 500 and Rs. 1,000) have the
signature of the RBI Governor, as these are issued by
the Reserve Bank of India, whereas Rs. 1 is issued by
the Government of India.
Jan Dhan cover: Life Insurance Corporation of India
(LIC) has has asked the IBA which is the nodal
agency for the Jan Dhan scheme to provide the
latest and complete data of all eligible members under
the Jan Dhan scheme so that LIC is in a position to
inform the Centre about the premium required under
the scheme. LIC is bound by the Insurance Act, which
prohibits it from providing any cover without receipt
of premium. As per Jan Dhan guidelines, life cover be
given only to the head of a family and that Aam
Aadmi Bima Yojana (AABY) beneficiaries be excluded.
Bharat Ratna conferred on Vajpayee, Malaviya:
The Centre has conferred the country's highest civilian
award - the Bharat Ratna - on veteran BJP leader and
former prime minister Atal Bihari Vajpayee, 90, and
noted freedom fighter and educationist Pandit Madan
Mohan Malaviya. Both leaders share a birthday on
December 25.
RBI gives more time for old currency note
exchange: RBI has extended the deadline for the

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public to exchange pre-2005 currency notes to June

30, 2015.
Non - cooperative borrowers: Borrowers unwilling
to repay bank loans despite the ability to do so run
the risk of being classified as non-cooperative. The
move will ensure that companies classified as noncooperative will not get fresh funds. A noncooperative borrower is one who deliberately
stonewalls legitimate efforts of lenders to recover
their dues. The central bank's cut-off limit for
classifying borrowers as non-cooperative would be
those having aggregate fund-based and non-fund
based facilities of Rs. 50 million ( Rs. 5 crore) from the
bank/FI concerned.
Tougher norms must for FDI in existing
pharma projects: As per the Parliamentary
Standing Committee on Commerce, the conditions
imposed on Foreign Direct Investments (FDI) in
brownfield projects need to be made more stringent
as they are insufficient to counter the dangers posed
by take-overs of domestic companies.
Constitution Amendment Bill on GST: The
Constitution
Amendment
Bill
to
enable
implementation of the Goods & Services Tax regime
has been introduced in Lok Sabha. The Bill is the first
legislative step towards implementation of the new
indirect tax reforms from April 1, 2016. The new
system intends to subsume various Central levies
(barring Customs duty) into Central GST (CGST) and
State levies into State GST (SGST). This will help in
creating a unified national market.
Meeting fiscal deficit target a challenge: The
Finance Ministry's Mid-Year Economic has forecast a
GDP growth of 5.5 per cent for fiscal year 2014-15
and an average retail inflation (based on the
consumer price index)of 5.3 per cent for the JanuaryMarch 2015 quarter, 5.4 per cent in April- June and
5.8 per cent in January-March 2016. As per the
Report, the gross non-performing assets (GNPA)
position of the Indian banking system compares
favourably
with
developed
and
developing
economies. For example, the share of GNPAs in total
advances stands at 3.2 per cent in the US, 2.9 per
cent in Germany, 8.2 per cent in Spain, and 5.1 per
cent in Italy. Among the emerging economies, in
Brazil GNPAs were at 2.9 per cent of total assets and
in Russia, at 6 per cent. For India, the GNPA ratio is
expected to be around 4.1 per cent of total advances
in fiscal year 2014-15. However, if macro-economic
conditions deteriorate, the GNPA ratio may increase to
around 4.5 per cent under a medium stress scenario
and 5.1 per cent under severe stress, by March 2015.

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PF trustees retain 8.75% interest rate for

2014-15: The trustees of retirement funds belonging
to about eight crore depositors have decided to retain
the interest rate at 8.75 per cent for 2014-15.
New power Bill in Lok Sabha will boost
supply, increase competition: Power consumers
will soon have the option of selecting their electricity
supplier, with the Government proposing to amend
the Electricity Act. A concept of multiple supply
licensees has been proposed in the amendment by
segregating carriage from content. Carriage will
continue to be a regulated activity and it has been
proposed that tariff for retail sale of electricity will be
capped by the regulator with one of the supply
licensee proposed to be a Government controlled
company.
In a first, SEBI orders imprisonment for not
paying penalties: For the first time ever, capital
market regulator Securities and Exchange Board of
India (SEBI) has ordered civil imprisonment of Vinod
Hingorani, Non-Executive Chairman of Adam Comsof
and Kolar Biotech for six months for failure to pay
penalties of around Rs. 1.64 crore (including interest)
levied under three SEBI notices from last July
demanding payment.
Time period for altering birth date: A
Government employee can give a request to change
his date of birth in official record only within 5 years
of joining. Further, it must be established clearly that
a genuine bona fide mistake had occurred in recording
birthday. The date of birth so altered would not make
him ineligible to appear in any School or University or
Union Public Service Commission examination in which
he had appeared, or for entry into Government
service on the date on which he first appeared at
such examination or on the date on which he
entered Government service.
GST Constitution Amendment Bill gets Cabinet
nod: The Union Cabinet on Wednesday approved
Constitutional Amendment Bill for Goods & Services
Tax (GST). The Government intends to introduce GST
from April 1, 2016. The Bill needs to be approved by a
two-third majority of the house. After this, it needs to
be endorsed by at least half of the State Assemblies
(15). The new regime would replace a number of
indirect taxes currently being levied by the Central
and State Governments. Once the new tax system
comes into place, there will be three indirect taxes
apart from the customs duty (only on imported
goods). There will be a Central GST, which will
subsume Central Excise Duty, Additional Excise
Duties, Service Tax, Additional Customs Duty

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(commonly known as Countervailing Duty or CVD),

Special Additional Duty of Customs (SAD) and Central
Surcharges and cesses. Then there will be State GST.
This
will
subsume
State
VAT/Sales
Tax,
entertainment tax (unless it is levied by the local
bodies), Luxury Tax, Taxes on lottery, betting and
gambling, tax on advertisements, State Cesses and
Surcharges. The third one will be Integrated GST
(IGST) on inter-State transactions of goods and
services. There is an agreement on subsuming entry
tax in GST. At the same time, petroleum products will
be part of GST with 'nil' rate. While alcohol will be out
of GST, tobacco will be within its purview.
RBI slaps Rs. 50-lakh penalty on ICICI Bank,
Rs. 25 lakh on BoB: RBI has imposed monetary
penalty of Rs 50 lakh on ICICI Bank and Rs 25 lakh
on Bank of Baroda and cautioned State Bank of India,
Axis Bank and State Bank of Patiala for violating KYC
norms.
GSLV Mark-III lifts off successfully from
Sriharikota:
The
Indian
Space
Research
Organisation (Isro) has successfully tested its
Geosynchronous Satellite Launch Vehicle-Mark III
(GSLV-Mark III), carrying a crew module, to be used
in manned space missions.
LS clears Companies (Amendment) Bill: The Lok
Sabha has cleared the Companies (Amendment) Bill.
The Companies (amendment) Bill has brought in 14
Amendments to the company law enacted last year.
Through these amendments, four categories of
changes are being introduced - some with intention
of improving the ease of doing business; some to
correct existing drafting errors; some to tackle the
oversight issues and lastly some to address the
oppressive provisions in the law. The amendments
propose (a) restricting hearings by special courts to
serious offences; (b) Only those "fraudulent" actions
that squarely fell under the definition of a "fraud"
would invite "bail restrictions"; (c) the condition of
minimum capital for private and public companies to
be removed; (d) 'special resolution' replaced with
'ordinary resolution' for approval of related-party
transactions by minority shareholders. This means
companies will require the consent of 50 per cent of
the minority shareholders present, instead of 75 per
cent (under the current Act); (e) prohibition on
public inspection of the board resolutions filed with
the Registrar of Companies. The Companies Act,
2013, was notified in August last year by the United
Progressive Alliance government. Of the 470 sections
in the Act, 283 sections and 22 sets of rules
corresponding to these sections have been
implemented so far.

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Ministry tweaks norms for fraud reporting by

auditors: As per the Companies (amendment) Bill,
while the auditors will have to report on every fraud
coming to their notice in their ordinary course of
audit work, only frauds beyond a specified threshold
need to be reported to the Union Government. For
other frauds, the reporting has to be done to the
audit committee of a company. The threshold limit
will be defined by the Corporate Affairs Ministry
subsequently.

assigned India 'BBB+' sovereign rating which is a shade

better than what has been assigned by the big three
global credit ratings agencies. Global credit rating
agencies, Standard & Poor's and Fitch have a 'BBB-'
(stable outlook) the lowest investment grade
rating sovereign rating on India. Moody's too has
lowest investment grade rating on the country of
"Baa3" (stable outlook).

Finance panel submits report to President:

The Fourteenth Finance Commission, a constitutional
body headed by former Reserve Bank of India
Governor YV Reddy, has submitted its report to the
President of India. The recommendations relate to the
period April 1, 2015 to March 31, 2020. Besides
spelling out the formula for devolution of Central
taxes, the Finance Commission report is said to have
made some observations on Goods and Services Tax
(GST). It has considered the impact of the proposed
GST on the finances of the Centre and States and the
mechanism of compensation in case of any revenue
loss.
For infra sector, 5:25 rule comes as a breath of
fresh air: RBI has relaxed norms for structuring of
existing long- term project loans to infrastructure and
core industries. The 5:25 scheme envisages banks to
refinance or sell out their long-term project loans
after every five years so that both the borrower and
the lender do not face any difficulty. For banks to
avail such a facility, the loan tenure cannot be more
than 25 years.
Vistara gets permission to fly: Tata-Singapore
Airlines (SIA) joint venture airline Vistara has been
granted flying permit in India by aviation regulator
Directorate General of Civil Aviation (DGCA).
Exports back on growth track in November:
Rise in shipments of engineering goods, gems &
jewellery, pharmaceuticals and ready-made garments
propped up exports (year-on-year) by 7.27 per cent
to $25.96 billion in November 2014. Trade deficit,
however, touched an 18- month high of $16.86 billion
as imports rose 26.79 per cent during the month to
$42.82 billion. Non-oil items such as gold, fertilisers,
coal and electronic goods mostly accounted for the
rise in imports. Gold imports rose 571.28 per cent to
$5.6 billion in November 2014 from $835 million in
the same month last year as the government relaxed
import restrictions.
ARC gives India positive rating with stable
outlook: The Europe-based ARC Ratings SA (ARC) has

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WPI inflation hits zero in Nov: A steep fall in

global crude oil prices and lower vegetable prices saw
wholesale price index-based inflation reach the 'zero'
level in November. It was only in July 2009 that
there was disinflation. After that, this is the lowest
inflation figure in over five years.
NPCI links 10 cr Aadhaar cards to bank
accounts: The National Payments Corporation of
India (NPCI)- managed National Financial Mapper
has crossed the milestone of getting 10 crore bank
accounts seeded with Aadhaar numbers. This allows the
Government department/agencies to reach out to
beneficiaries of direct benefit transfer schemes. The
Mapper rides on the Aadhaar Payment Bridge (APB)
system, which went live on January 2013.Through
the APB, the NPCI links the Government departments
and other State agencies like oil marketing companies
and their sponsor banks on the one side and
beneficiary banks & the end beneficiary on the other
side.
October factory output contracts 4.2%: The
manufacturing sector index fell 7.6 per cent.
Manufacturing accounts for over 75 per cent in the
IIP. However, Consumer Price Index (CPI)-based
inflation cooled to 4.4 per cent in November from
5.52 per cent in October because of easing food
prices.
Indirect tax collections rise a modest 7.1% in
Apr- Nov period: The Finance Ministry will be

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required to achieve 47 per cent of the Budget target

for indirect taxes, comprising customs and excise
duties and service tax, in just four months (DecemberMarch).
Life Insurance Council bats for reduction in
service tax: Life insurers have asked for parity with
other financial products such as mutual funds and
fixed deposits, which do not attract service tax on
maturity. Currently, life insurance products, attract a
service tax of 2 per cent on maturity proceeds for
policyholders holding PAN cards and 20 per cent
those without PAN cards. Life insurers are mandatorily
required to invest 50 per cent of their overall
investments in Central and State Government
securities.
SBI launches first homegrown economic index:
SBI, will use its loan book to give indicators on the
domestic manufacturing activity from the New Year.
The SBI Composite Index will have both monthly and
yearly indices. The short-term report, to be released
in the first week of every month, will forecast the
state of the economy two months down the line. The
annual index will make year-on- year forward
predictions. Similar economic forecasts published by
British lender HSBC, with global business survey
compiler Markit, are the HSBC India Services
Purchasing Managers' Index (PMI), HSBC India
Manufacturing PMI and the Markit India Business
Outlook.
Court tells RBI to get tough with banks: The
Supreme Court has asked the Reserve Bank of India
(RBI) to demand responsible behaviour from banks
while communicating with customers.
In Q2, current account deficit rises to 2.1% of
GDP: India's current account deficit (CAD) - a
measure of the country's external vulnerability widened to $10.1 billion in the second quarter of
2014-15 from $7.8 billion in the preceding quarter.
The CAD rose to 2.1 per cent of the GDP in the second
quarter against 1.7 per cent in Q1.
Coal Ministry proposes minimum floor price of
Rs. 150/tonne for blocks to be auctioned: The
Coal Ministry has proposed a minimum floor price Rs.
150 per tonne for blocks to be put up for auction and
Rs. 100 per tonne as the minimum reserve price for
allocation to Central and State Government companies.
Financial inclusion: RBI Deputy Governor for
'PPP' model: According to RBI Deputy Governor HR
Khan India should adopt a "PPP" model for driving its
financial inclusion agenda. There is a need to "plan"
well, pursue what has been planned and ensure there

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is a "pause" to see if it is working well. This PPP

model is different from the commonly-known 'publicprivate partnership' that the Government is looking to
encourage in various economic activities.
Commerce Ministry launches new portal to
give exporters info on FTAs: The trade portal will
provide exporters with information on preferential
tariffs and rules of origin in such markets.The 'India
Trade Portal' will also have other information of
importance to exporters such as technical barriers
faced by trade in different markets. India has signed
a number of FTAs with various countries and regional
blocs over the last few years, but exporters have not
been able to utilise them well because of lack of
knowledge about what the agreements offered. The
portal has been developed by the Federation of
Indian Export Organisations (FIEO).

From April 1, Central PSUs to make 20%

of purchases from small units: The government
will make it mandatory for all Central public sector
undertakings (PSUs) to make 20 per cent of their
purchases from medium, small and micro enterprises
(MSMEs) from April 1, 2015. The Centre had, in an
order in 2012, issued directions to all Central PSUs to
procure a minimum 20 per cent of products and
services from MSMEs, 4 per cent of which had to be
from enterprises owned by the Scheduled Castes and
Scheduled Tribes (SCs/STs).
White label ATMs can accept international
cards: RBI has said white label ATM (WLA) operators
can now accept international cards - credit, debit or
prepaid - and also source cash from multiple banks.
WLA operators (or non- bank ATM operators) can
accept the cards issued under card payment network
schemes. The RBI also permitted the facility of
Dynamic Currency Conversion for the use of
international cards at WLAs. WLA operators will be
restricted to converting the amount requested by the
international cardholder to his or her home currency
using a base exchange rate provided by the
authorised dealer. In addition, the RBI has allowed
operators to tie up with commercial banks for cash
supply at WLAs. Earlier, the cash supply had to be
managed only through a sponsor bank, which limited
the scope of cash management for the operators.RBI
has so far authorised seven companies to set up WLAs
- Tata Communications Payment, Prizm Payment,
Muthoot Finance, Vakrangee, BTI Payments, Srei
Infra Finance and RiddiSiddhi Bullions.

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Panel set up to clarify tax laws: The Government

has set up a High Level Committee to interact with
trade and industry to ascertain where clarity on tax
laws is required. Former Chief Economic Advisor Ashok
Lahiri will serve as its Chairman.

its guarantor UBHL, failed to repay loans taken by the

carrier.
Legal recognition of hallmarked jewellery,
precious metals in the offing: The Bureau of
Indian Standards Act (BIS Act, 1986) will enable
hallmarking of precious metals and jewellery, including
gold, by providing 'legal recognition' through amending
the Act. Hallmarking of gold jewellery, which assures
customers of its purity, was introduced in 2000;
jewellers are required to get licences from the BIS
and get goods hallmarked by one of 300 BISauthorised centres.
HSBC manufacturing index at 21-month high:
Led by the consumer goods segment, India's factory
output registered its fastest growth and a 21-month
high in November. The purchasing managers' index
(PMI) for November stood at 53.3, up from 51.6 in
October. The PMI is a measure of factory production
and based on responses of purchasing executives of
around 500 manufacturing companies. A score above
50 shows expansion, and anything less indicates a
contraction.

RBI announces norms for trade receivables

discounting
system:
Trade
Receivables
Discounting System (TReDS), will be like an exchange
where an MSME that has some receivables pending
from a large corporate will be able to trade the bill.
So, if an MSME has to realise Rs. 100 from a
corporate, it can exchange the bill with one of the
participating entities on the exchange for, say, Rs. 95.
The buyer of the bill will then recover the Rs. 100
from the corporate concerned. The MSME will benefit
because its credit cycle is shortened and it will get a
better price on the bill due to competition.
Centre relaxes FDI rules in construction: The
minimum built-up area requirement for FDI in
construction projects has been reduced to 20,000
square meters from 50,000 sq.m. For services plots,
the minimum area requirement, earlier at 10
hectares, has been dropped completely. Minimum
capital requirement has also been halved to $5
million from $10 million. For encouraging investments
in affordable homes, the Centre has exempted the
conditions of minimum floor area as well as capital
requirement if an investee/joint venture company
commits at least 30 per cent of the total project cost
for low-cost housing.

Centre invites suggestions from public to help

improve banks' performance: With bad debts
rising and profit margins depleting, the Centre will
use suggestions from public to help improve the
performance of public sector banks (PSBs).
Government is considering reducing its stake in public
sector banks to 52 per cent. Currently, regulation
prescribes a minimum of 51 per cent government
shareholding in public sector banks, however
informally it has been kept at 58 per cent.
Modi takes over project-monitoring panel as
investments worth $300 bn stuck: Prime
Minister Narendra Modi has taken direct control of a
project- monitoring body to fast-track investments
worth almost $300 billion and revive manufacturing in
the country.
Govt notifies draft rules for e-auction of coal
mines: The government has prepared rules for eauction of 92 cancelled coal mines in the first phase,
fixing a floor price of Rs 150 per tonne for sectors like
steel, sponge iron, cement and captive power.
Banks as insurance brokers' provision goes into
cold storage: Neither the Insurance Laws
(Amendment) Bill, 2008, mentions it, nor is the
finance ministry considering this proposal with any
seriousness. Earlier, finance ministry had asked banks
that they would be required to become insurance
brokers so that they could distribute products of
multiple companies through their branch network.

United Bank of India names United Breweries

a wilful defaulter: The defaulter tag comes after
the group's grounded airline, Kingfisher Airlines and
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This move was resisted by banks from those PSBs

that were promoters of insurance companies.
Following this, the directive was not implemented. At
present, banks are permitted to sell products of only
one life, one non-life and one standalone health
insurer.
100 million Aadhaar numbers linked to bank
accounts: It would enable these individuals to
digitally receive subsidies and benefits under
government schemes. Issuance of Aadhaars crossed
the 720 million-mark as on December 12, 2014.
Gems & jewellery, SME, 3 other sectors to
come under 'Make in India': The government has
identified 25 sectors, including pharmaceuticals,
automobiles, textiles, aviation, mining, chemicals,
which have potential to make India a leader in their
respective fields.
Swachh Bharat: Centre to spend Rs 2 lakh cr
in 5 yrs: The government would set up a 'Swachh
Bharat Kosh' to provide tax and fiscal incentives.
Urban India generates about 68.8 million tonnes of
municipal solid waste per year, which means about
1.88 lakh tonnes every day. Solid waste generated in
rural areas is around 0.4 mt per day. In India, 68 per
cent of rural households have no access to toilets, 88
per cent of total diseases in rural areas is due to lack
of clean water, sanitation and improper solid waste
management. The government proposes to spend Rs
1.34 lakh crore to construct toilets (11.11 crore toilets
in rural areas) and about Rs 62,000 crore will be
spent in 4,041 cities. He added 2.47 lakh panchayats
will be given Rs 20 lakh each for the next five years to
keep their villages clean.
Retail inflation slows to 4.38% in November:
Consumer Price Index (CPI)-based inflation fell to
4.38 per cent in November from 11.16 per cent in the
corresponding period last year, the fourth consecutive
monthly fall and the lowest since the government
started releasing data in this regard (February 2012).
Bandhan now closes in on Grameen Bank:
Bandhan, the country's largest microfinance company,
is competing closely with Bangladesh's Nobel Prizewinning Grameen Bank to become South Asia's largest
micro credit provider. It is already the largest nondeposit taking microfinance institution (MFI) in the
world. Grameen Bank, founded by Muhammad Yunus
in 1976 (founder and institution were jointly given the
Nobel Peace Prize in 2006), has been operating as a
full-fledged bank since 1983.
Irda asks insurers to disclose guarantee
scheme details: IRDA has clarified that insurance

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companies can promote claim settlement guarantee

only if they file it along with the product during file
and use.
Cabinet nod to cut govt stake in PSBs to 52%:
Public sector banks (PSBs) will be able to raise up to
Rs 1.6 lakh- crore from markets as the Union Cabinet
has allowed the dilution of government equity in
these lenders up to 52 per cent. Other decisions of
Cabinet include setting up of Debt recovery tribunals
at Chandigarh, Bengaluru, Ernakulam, Dehradun,
Siliguri and Hyderabad.
LS passes Bill for regularisation of e-rickshaws:
The Lok Sabha has passed the Motor Vehicles
Amendment Bill, 2014, paving the way for
regularisation of e-rickshaws, banned by the high
court on safety grounds. The government has also
decided to provide low interest loan at 4% p.a. to
rickshaw pullers belonging to poor, backward, and
minority communities to buy e-rickshaws.
Taxpayers can approach AAR for tax liabilities
on deals above Rs 100 cr: The Central Board of
Direct Taxes (CBDT) has notified that resident
taxpayers who plan transactions valuing Rs 100 crore
or above can approach the Authority for Advance
Rulings (AAR) for determination of their tax liabilities
under such transaction.
HDFC Bank to welcome back its former
employees: India's second-largest private-sector
lender, HDFC Bank, has decided to take the idea of
hiring back former employees a step ahead by
introducing a new employee recruitment programme,
Khoj.
Wi-Fi service launched at New Delhi railway
station: Service is free for half-an-hour, after which
passengers will be charged Rs 25 for 30 minutes and
Rs 35 for an hour.
Karnataka becomes first state to have green
growth strategy: A consortium of institutions led by
the Bangalore Climate Change Initiative - Karnataka
(BCCI-K) in partnership with Seoul-based Global
Green Growth Institute (GGGI), has conducted a
study in Karnataka for green growth strategy which
details what can be done in adapting to the climate
change and how the state can play its part in reducing
carbon emissions.
Disclose asset, income details of chairman, CIC
tells Sebi: The Central Information Commission
(CIC) has directed the Securities and Exchange Board
of India (Sebi) to reveal the details of assets and

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liabilities of its chairman, UK Sinha.

RBI asks banks to use standardised norms for
mobile banking: To improve the penetration of
mobile banking, RBI, has asked banks to provide
customers multiple options for easy registration,
reducing the need to visit a branch. The time taken
between registration and activation of mobile banking
services should be minimal.
AP to clear farm loans of up to Rs 50,000 in
Phase I: There are over 8.2 mn agriculture accounts
in operation in Andhra of which 4.2 mn accounts have
been considered for the waiver in the first phase. The
first phase of loan clearance involves 2.6 million
farmers who were grouped into 2.2 million family
units. Crop loans and tied-loans (loans given to cane
and tobacco growers) would get the first priority.

Cabinet approves amendments to Regional

Rural Banks Act, 1976: The Union Cabinet, has
approved the amendments in the Regional Rural
Banks (RRBs) Act, 1976
to enhance authorized and issued capital to
strengthen their capital base and to bring flexibility in
the shareholding between Central Government, State
Government and Sponsor Bank. The term of the
non-official directors appointed by the Central
Government will be fixed not exceeding three years.
RRBs are jointly owned by Government of India, the
concerned State Government and Sponsor Banks with
the issued capital shared in the proportion of 50
percent, 15 percent and 35 percent respectively. As
per provisions of the Regional Rural Banks Act, 1976
the authorized capital of each RRB is Rs. five crore
and the issued capital is maximum Rs one crore.
RBI releases final charter of customer rights:
The guidelines cover a right to fair treatment,
transparency, suitability, privacy, grievance redressal
and compensation. The banking regulator has also
communicated that the customer should not be
subjected to unfair business or marketing practices.

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In case of a violation of the charter, the affected

customer can escalate the matter through the chief
customer relations officer of the service provider
concerned, which can be further escalated to the
banking ombudsman, if necessary. In a bid to
address the mis- selling complaints, RBI has also
stated that the products offered should be
appropriate to the needs of the customer and should
be based on an assessment of the customer's
financial circumstances and understanding. The
customers' personal information should be kept
confidential unless the customer gives a go ahead for
it to be shared. Customers have the right to
protection from all kinds of communications,
electronic or otherwise, which infringe upon their
privacy. Banks will also be held accountable to
facilitate the redress of grievances stemming from its
sale of third-party products.
RBI doubles limit of prepaid instruments to Rs
1 lakh: RBI has allowed PPIs to issue cards with
balance of up to Rs 1 lakh. Earlier, the limit was Rs
50,000. A card can now be issued to the dependant or
family member only if the account is fully KYC
compliant. But only one card per beneficiary can be
introduced. For such PPIs, the maximum cash out
allowed per month is Rs 25,000 and Rs 10,000 per
transaction. Banks can also issue rupee denominated
cards to foreign travelers and to NRIs by overseas
branches of banks in India directly or by cobranding
with the exchange houses/money transmitters. The
maximum amount to be loaded on these cards is Rs 2
lakhs but the cash withdrawal from these cards is
restricted to Rs 50,000 every month. The validity of
gift cards has been increased from one year to three
years.
UP has 3rd highest employable population: As
per India Skills Report 2015, released jointly by
Wheebox, PeopleStrong and LinkedIn Uttar Pradesh
has been ranked third for having the highest
employable population in India. The report, places
Delhi on top, followed by Odisha, Uttar Pradesh,
Kerala, Bihar, West Bengal, Maharashtra, Andhra
Pradesh, Puducherry and Tamil Nadu.

FEBRUARY FINANCIAL AWARENESS

Fiscal deficit exceeds full-year target in 9
months: The Central government's fiscal deficit has
exceeded the Budget estimate for the full financial
year in the first nine months (April-December) of the
current fiscal year. The fiscal deficit is the difference
between the government's income and expenditure.
Data released by the Controller General of Accounts
show that the deficit during the April- December

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period was over Rs. 5.32-lakh crore as against the

Budget estimate of Rs. 5.31-lakh crore.
NITI Aayog replaces Planning Commission:
'NITI Aayog', the body which replaces the 'Yojana
Aayog' (Planning Commission), will have a threetiered structure headed by the Prime Minister. NITI
stands for National Institutions for Transforming
India. The body will have a Governing Council
comprising State Chief Ministers and Lt Governors of
Union Territories. Regional Councils will address
specific issues and contingencies impacting more than
one State or a region. There will also be a full-time
organisational framework headed by the PM. The
three layers will be formed for a specified tenure.
Govt to release new series of CPI: For presenting
a more accurate and realistic price situation, the
Government will release next month a new series of
Consumer Price Index (CPI) with 2012 as Base Year
for computing the retail inflation rate. The first series
(Revised) would be compiled for January, which will
be released on February 12. Further, from January
2016 onwards, inflation rates would be compiled
using the actual CPI of the revised series.

Shift to new base year lifts GDP growth in

FY14 to 6.9%: The Indian economy recorded 6.9
per cent growth in 2013-14, almost 50 per cent
higher than the 4.7 per cent estimated earlier. The
growth estimate was revised on account of the CSO's
move to adopt 2011-12 as the base year for
computation of national incomes. In January 2010,
the base year had been fixed as 2004-05. The CSO
has decided to adopt the international practice of
presenting industry-wise estimates as 'Gross value
added at basic prices' (GVA). With this move, 'GDP at
market prices' will be the basis for ascertaining GDP.
The earlier concept, which relied on 'GDP at factor cost'
has been done away with.
Now, over 98% households have a bank
account: As per the Finance Ministry, the Pradhan
Mantri Jan Dhan Yojana has enabled over 98 per cent
of the households in the country to have a bank
account.
Bombay High Court ruling on "Brand"
treatment: The Bombay High court has ruled in the
case of Tata Sons that a "Brand" is a commodity. The
court has upheld the Tax department's decision to
collect sales tax from the Tatas for the royalty it
charges from Group subsidiaries for using the Tata

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Brand Name. The Group firms pay 0.25% of their

revenues for using the Tat Brand name.
ECB
launches
1
trillion
bond-buying
programme to revive euro zone economy: The
ECB said it would purchase sovereign debt from this
March until the end of September 2016, despite
opposition from Germany's Bundesbank and concerns
in Berlin that it could allow spendthrift countries to
slacken economic reforms.
Centre launches National Heritage Yojana: The
Centre has launched the National Heritage
Development and Augmentation Yojana (HRIDAY)
under which 12 cities from the country have been
sanctioned funds for the first phase. Prime Minister's
constituency Varanasi got the highest allocation at
Rs.89.31 Core. The scheme seeks to promote an
integrated, inclusive and sustainable development of
heritage sites, focusing not just on maintenance of
monuments but on advancement of the entire
ecosystem including its citizens, tourists and local
businesses.
RBI working on comprehensive consumer
protection norms for NBFC sector: The central
bank will also soon align the private placement norms
specified for NBFCs with that of the stipulations in the
new company law enacted in 2013. Under the new
company law, private placement cannot be
undertaken with more than 200 persons in a financial
year. As per the RBI specified norms, private
placement by NBFCs cannot exceed 49 persons in a
year.
PM'S green signal to flagship scheme "Housing
for All": Prime Minister gave green signal to the
Ministry of Housing and Poverty Alleviation's Flagship
Scheme "Housing for all by 2022". It will cover urban
poor living in slums, urban homeless and new
migrants to urban areas in search of shelter. It would
cover metros, small towns and all urban areas. The
first priority under the new scheme would be on
towns and cities along the banks off Ganga and its
tributaries. A large portion of the programme is to
be financed in a public-private partnership mode by
leveraging land and other resources in urban areas.
RBI asks banks to put up loan details online:
RBI has asked banks to enhance transparency on
customer loans. This includes displaying on their
website the interest rate range of loans granted to
different categories of individual borrowers in the
past quarter. The banks should also provide the
average interest rates for such loans. The total fees
and charges applicable on various types of loans to
individual borrowers should also be displayed on

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banks' websites and should be disclosed at the time

when a loan is processed as well. These instructions
for enhancing transparency in pricing of credit will
come into force from April 1, 2015.
Rating Agency S&P to pay penalty for
misconduct: Credit Rating Agency Standard & Poor's
(S&P) will pay $77 million and be barred for one year
from rating certain commercial-backed mortgage
securities, as part of a major settlement with the US
and State Regulators over "Fraudulent misconduct".
The case marks the first time that the Securities and
Exchange commission has ever levied charges against
one of the big three credit raters.
SEBI does away with mandatory participation
norm for delisting: To ease the process of delisting,
mandatory participation of 25 per cent of
shareholders holding shares in demat mode would not
be applicable if the acquirer and the merchant banker
are able to demonstrate that they have contacted all
the public shareholders about the offer. SEBI has also
amended regulations to issue debt instruments by
incorporating express provisions for enabling
consolidation and re-issuance of debt securities and
call and put options. Consolidation and re-issuance of
debt securities will lead to creation of a larger floating
stock for corporate bonds that are otherwise illiquid.
Companies listed on exiting regional stock exchanges
have been given 18 months to comply with the listing
norms of nationwide stock exchanges. Till such time
the shares of these companies will remain on the
dissemination board of nationwide bourses.

ICICI Bank launched banking services on

Twitter: ICICI Bank, India's Largest Private Bank,
launched its banking services on Twitter, enabling
customers to transfer money through the microblogging website. Customers can send up to Rs.5000
per transaction with a limit of Rs.10000 a day. Online
NEFT charges will apply. Savings account customers
can register their twitter accounts with one time
passwords and link their account numbers. Both
recipients and senders need to have twitter accounts.
Govt launches Venture Capital Fund Scheme for
SCs: The Government has launched a $32 million
(Rs.200 Crore) Venture capital Fund to back
entrepreneurs from the scheduled casts (SC), a social
group representing people from socially backward
strata in the country. The fund would invest up to
Rs.15 Crore in backing such entrepreneurs with a six
year investment horizon. IFCI, which also runs a
separate VC Fund to back SMEs, will act as Sponsor,
Asset Manager to operate the scheme.
SEBI notifies Insider Trading Rules: SEBI has
notified the Prohibition of Insider Trading (PIT)
regulations, 2015, which will replace the present twodecade-old, Framework. Under the new definition, an
insider would now mean a person who is in
possession of or has access to price sensitive
information. The new regulations would tighten the
screws around company officials who communicate
information to a select group of people. The new
rules will come into effect from May 2015.

Govt for use of RuPAY Cards with cash back

offer: The government, which is striving to take
banking to every household in the country and reduce
the number of cash transactions, aggressively
promoting the use of state- backed RuPay Cards by
offering 1% cash-back, in a direct challenge to card
companies such as Visa and Master Card. RuPay is an
Indian domestic card scheme launched by the
National Payments Corporation of India that can be
used at ATMs, POS terminals and e-commerce
websites. Apart from all public sector banks, RRBs and
Co-operative banks issue RuPay Cards in an effort to
promote financial inclusion.
RBI for regulating payment instructions in
bourses: RBI wants an amendment in the Payment
and Settlement Systems (Amendment) Bill to provide
for regulation of the clearing and settlement of
payment instructions in stock exchanges and
commodity exchanges.

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Axis Bank MD's term extended: The board of Axis

Bank has reappointed Shikha Sharma as Managing

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Director and CEO of the bank for a further period of

three years with effect from June 1, 2015. Sharma
had joined the bank in 2009 and is set to complete a
second three-year term in May.
SEBI proposes easier norms for Domestic
Mutual Funds: To make it easier for Domestic
Mutual Funds (DMF) to manage offshore pooled
assets, SEBI proposed to drop the "20-25 Rule" which
requires a minimum of 20 investors and a cap of 25%
investment by an individual investor in a particular
scheme, for certain foreign entities. Besides, SEBI has
suggested to do away with the rule that requires
appointment of separate fund managers for
managing offshore funds.
India's GDP growth rate set to surpass China's
in 2016-17: The International Monetary Fund (IMF)
has become the latest organisation to predict that
India is on track to outpace China in the next few
years and become the world's fastest growing large
economy. The IMF said India is likely to grow 6.5 per
cent in 2016-17, higher than 6.3 per cent for China.
The World Bank had said that India is expected to
outpace China in 2017-18 with growth of 7 per cent
(as against China's 6.9 per cent) on the back of
reform initiatives of the Government.
Supreme Court ruling on promotion quota for
SC/ST bank officers: Public Sector Banks accord
15% reservation for SC and 7.5% for ST candidates.
It is done at the initial level of recruitment and also
for promotion in the clerical cadre. This is allowed also
for promotion from clerical grade to the lowest rank in
the officers grade, commonly known as JMG Scale-I.
But when the promotion comes from Scale-I to higher
cadres, banks have not been making any
reservations. Now the Supreme Court has ordered
the Public Sector Banks to provide for reservations
while carrying out promotions from Scale-I to upward
to Scale- VI.
Banks can spread up only if borrower's credit
profile deteriorates: The RBI has advised banks
that the spread (or the mark up over the base rate)
charged to an existing borrower by banks should not
be increased except on account of deterioration in
the credit risk profile of the customer or change in the
tenor premium. What this means is that if the credit
rating of an existing borrowing unit deteriorates,
then, at the time of the annual renewal of loan limit,
the spread charged over the base rate will be
increased. Otherwise, the interest rate remains
unchanged.
World Bank Chief on India's reform measures:

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According to the World Bank Chief, the measures

taken by the Indian Government such as the
Constitution Amendment Bill for a Goods and
Services Act (GST) would provide an opportunity to
make "Doing Business in India" easier. Centre's move
to gradually eliminate diesel subsidies if made
permanent, will improve the country's fiscal position,
reducing the cost of borrowing and public
investments.
No refund for returns selected for scrutiny:
The processing of a return cannot be undertaken
after notice has been issued under sub-section (2) of
Section 143 of the Income-Tax Act, 1961. It will,
however, be desirable that scrutiny of assessments in
such cases be completed expeditiously. Tax refunds
are issued only after the assessment is completed.
Finmin agrees for commission on DBT: The
Finance Ministry has agreed to banks' long
outstanding demand for commission on Direct Benefit
Transfer (DBT) transactions. The move will boost
lenders' fee income and make account opening under
the Pradhan Mantri Jan Dhan Yojana (PMJDY) viable.
Earlier, a task force headed by Nandan Nilekani,
former chairman of the Unique Identification
Authority of India (UIDAI) recommended a
commission of 3.14% to be paid for all DBTs handled
by banks and business correspondents. Now the
Government is expected to make budgetary provisions
for these expenses.
Banks unlikely to act as insurance brokers:
Most banks that have promoted insurance companies
or have existing joint venture agreements for
insurance partnerships are unlikely to seek a broking
licence whereby they can sell policies of multiple
insurance companies. However, public sector banks
that have not promoted or entered into joint venture
insurance partnerships may be keen (to float an
insurance broking arm) as they will be able to
provide a wider bouquet of products from different
insurers to their customers.
ICICI Bank launches contactless credit - debit
cards: ICICI Bank, India's largest private sector bank
launched the "Country's First Contactless Debit and
Credit Cards", enabling its customers to make
electronic payments by just waving the cards near
the merchant terminal in lieu of dipping or swiping
them. These cards are based on the Near Field
Communication (NFC) technology, which provides
customers the improved convenience of speed.
Moreover, these cards require significantly less time
than traditional cards to complete a transaction.

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Banks promised zero interference: The Finance

Ministry has communicated to all the Central
Ministries and Departments that banks have been
assured that there will be no Government
interference in their decision-making process.
Govt allowed full FDI in medical devices: The
Union Cabinet has approved liberalizing the FDI Policy
for the cash starved medical devices sector. As per the
decision, FDI up to 100% through the automatic route
has been permitted for manufacturing of medical
devices in the country.
Banks not reporting credit information of
individual members of self-help groups:
According to the chief of CRIF High Mark Credit
Information Services, individual members of self-help
groups (SHG) can become eligible for bigger loans
from banks only if the credit history of the intra group
borrowings is captured. As of now, banks report only
credit information pertaining to the groups and not
of individual members. An SHG, as defined by the
National Bank of Agriculture and Rural Development,
is a voluntary association of 10-20 poor people with
mutual affinities same kind of livelihood, similar
community, caste who have a common goal of
social and economic empowerment. Group members
save small amounts of money and lend them to each
other. On satisfactory functioning of the SHG, it can
get loan from the bank.
Govt announces new roadmap for accounting
norms: The corporate Affairs Ministry has
announced a revised roadmap for implementation of
the long awaited Indian Accounting Standards. The
revised roadmap, which does not cover banking and
insurance companies and NBFCs, envisages a two
phased implementation. The new standards will be
mandatory for financial years beginning on or after
April1, 2016, together with comparative information
for the previous year.

Ministry has expanded the ambit of cost auditing by

individual entities that are into coffee, tea and milk
powder business. The requirement of maintaining
cost records would be applicable to certain class of
companies that meet the threshold level of Rs.35
Crore. Such entities have been broadly classified into
regulated and unregulated sectors.
Centre promulgates ordinance for amending
Mining Act: The amendments to the MMDR Act
include auctioning of the mineral concessions. Also
renewals have been done away with and the
concession period has been increased to 50 years
from the current 30 years. At the end of the
concession period, the mining lease will be put up for
auction again. For the existing lease holders, the
mining lease of existing lease holders has been
extended till March 31, 2030 and for merchant miners
it has been extended till March 31, 2020. In order to
ensure there are no delays, the ordinance empowers
the Centre to prescribe deadlines for various
processes and also issue binding directions to States.
Govt. splits CMD post in State-Run banks: The
Government has separated the posts of Chairman
and Managing Director (CMD) in nationalized banks.
It has also appointed Managing Directors (MD) for
four banks, and they have been designated as Chief
Executive Officer (CEO). According to the finance
Ministry, henceforth, in public sector banks, other
than SBI, the Chairman will be a part-time Board
member who would preside over the board meetings
but will not be an executive chairman. The
procedure for selection of part-time chairman would
be announced shortly. The four new MDs and CEOs
are- (1) P. Sriniwas for United Bank of India, (2)
Animesh Chauhan for OBC, (3) R. Koteeswaran for
Indian Overseas Bank and (4) Kishore Kumar Sansi for
Vijaya Bank.

Arvind Panagariya takes charge as NITI Aayog

Vice- Chairman: NITI Aayog, which replaces the
Planning Commission, came into existence on January
1. Panagariya is an Indian-American economist, who
has held the post of Chief Economist at the Asian
Development Bank. He has also worked for the World
Bank, the IMF, the WTO, and UNCTAD in various
capacities.
Govt amends cost record rules: According to the
new norms notified by the Government, corporates
having annual turnover of Rs.35 Crore and above
would be required to mandatorily maintain cost
records. At the same time, the Corporate Affairs

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Banks need to revisit credit exposure

limits of firms: Reserve Bank of India Deputy
Governor Urjit Patel has said that banks may have to
revisit at an opportune time the individual company
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credit exposure limits, as well as sector exposures as

part of their learning for the future for better risk
management practices over the business cycle.
Post Offices to issue ATM-cum- Debit cards:
Post Office savings bank accounts can now be
operated through ATMs. The Centre has amended the
Post office Savings Bank General Rules accordingly.
This facility, however, will be available only in the post
offices that are in Core Banking Solution (CBS)
platform. Currently, 676 post offices are on CBS.
Industrial output at 5-month high; retail
inflation inches up in Dec: Factory output for
November 2014 came in at a five-month high of 3.8
per cent on the back of improved manufacturing
performance. This is a clear positive for the economy
given that the Index of Industrial Production (IIP)
had contracted 4.2 per cent in October 2014.
Manufacturing which has 75 per cent weightage in
IIP grew 3 per cent in November, compared with
a contraction of 2.6 per cent in October. For AprilNovember 2014, IIP recorded 2.2 per cent growth,
higher than 0.1 per cent in same period in the
previous year. Meanwhile, retail inflation for
December 2014 came in at 5 per cent, higher than
the 4.3 per cent in November.
SEBI frames new norms for Municipal
Bonds: To give a boost to the centre's "small cities"
initiative, SEBI proposed a new set of norms for
listing and trading of municipal bonds on stock
exchanges so as to channel household investments into
urban infrastructure development. According to the
Regulator, a municipal authority issuing the bonds
will have to obtain rating from a credit rating agency
registered with SEBI. Also known as "Muni Bonds"
these instruments will have a minimum tenure of
three years.

In a first, Kerala allows mobile towers on govt

land, buildings: The Kerala Government has
decided to allow mobile telecom service providers to
set up towers on government land and buildings. This
is the first time that a State Government is throwing
open its own land, buildings and offices to mobile
companies. It will expand mobile connectivity,
improve the quality of mobile conversations, make
access to the Internet faster and easier, and also
facilitate 4G services. The government will charge 10
per cent of the market value of the land on which the
tower is put up as the lease rent.

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Govt. approves ordinance to ease land

acquisition: The ordinance does away with the
requirement of written consent from 70% of land
owners for PPP projects in the infrastructure and
social infrastructure sectors. Also, social impact
assessment would not be required for such projects.
PPP Projects account for 60% of Rs.18 Lakh Crore
worth of stalled projects.
SEBI's proposed curbs on 'wilful defaulters' is
advantage banks: As per Moody's Investor Service,
Market regulator SEBI's proposal to bar 'wilful
defaulters' from accessing capital markets to issue
debt and most forms of equity is "credit-positive" for
Indian banks. In SEBI's proposal, an issuer, its
controlling/key shareholder, group company or
director on the list of wilful defaulters would be
prohibited from a public issue of equity shares, debt
securities, and preference shares. It would also be
prohibited from controlling any other listed entity.
Currently, wilful defaulters are only prohibited from
issuing convertible debt instruments. They will,
however, be allowed to make a rights issue or a
private placement to qualified institutional investors.
The list itself would be maintained by a central
repository authority, although not SEBI, and banks
would provide wilful defaulters' names to the authority.
Finmin tells banks and LIC on claim forms:
The Finance Ministry has asked the public sector
banks and LIC to make available on their websites,
claim forms for the Rs.30000 life cover as promised
under Jan Dhan Yojna. Also, LIC has been asked to
settle claims within 15 days of the receipt of the form.
The settlement process should not exceed 30 days in
any case.
Regulator red flags high agent attrition in lifeinsurance space: The insurance regulator has
raised concerns over the high rate of agent attrition
in the life insurance industry.
Cabinet Nod for Hiking Stake in IFCI: IFCI was
set up in 1948 as a Statutory Corporation under the
Industrial Finance Corporation Act, 1948. Thereafter,
IFCI Ltd. Was registered under the Companies Act
1956 on March 31, 1993. The current shareholding of
Government of India in IFCI is 47.93%. Therefore
IFCI is not a Government Company under Section
2(45) of the Companies Act 2013. Now the Centre
has approved raising its stake in IFCI Ltd. to 51% by
infusing Rs.60 Crore in the country's oldest Financial
Institution.

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For banks, home loan portfolio is losing sheen:

The retail loan portfolio of banks is seeing a marginal
shift away from housing and towards unsecured and
consumption- based lending. Reserve Bank of India
data show that the pace of growth of home loans
declined to 16.4 per cent in November 2014, from
18.1 per cent in the year-ago period. On the other
hand, growth in consumer durables and other
personal loans improved to 46.8 per cent (32.8 per
cent in the year-ago period) and 16.2 per cent (13.3
per cent), respectively.
Supreme Court Ruling on Tribunals: The recent
trend of setting up tribunals in various sectors to
lighten the High Courts' burden and speed up
decisions suffered a setback when the Supreme Court
struck down the National Tax Tribunal Act on grounds
that "it encroached upon the power of the Judiciary
and the Principle of Separation of Powers".
Jan Dhan: banks want fund to help cover
overdraft defaults: Banks have requested the
Finance Ministry to quickly set up a credit guarantee
fund to cover possible delinquencies in overdrafts
they extend to account holders under the Pradhan
Mantri Jan-Dhan Yojana. With two months to go for
the first set of account holders to become eligible for
an overdraft (OD), the matter has assumed urgency.
PMJDY was launched on August 28 last year, as a
national mission for financial inclusion. Under the
Yojana, banks can provide an OD of up to Rs. 5,000
after six months of satisfactory performance, in terms
of operations, savings, and credit history.

The Reserve Bank of India has cautioned the public

against getting taken in by unscrupulous entities
peddling multi-level marketing (MLM) schemes that
promise high returns. Entities running such chain
marketing or pyramid schemes promise easy or quick
money upon enrolment of members. Income under
such schemes comes primarily from enrolling more
and more members from whom hefty subscription
fees are taken. A portion of the subscription amounts
so collected is distributed among the members at the
top of the pyramid. Any break in the chain leads to
the collapse of the pyramid, and the members lower
down are the ones affected most. Acceptance of
money under money circulation, MLM or pyramid
structures is a cognisable offence under the Prize
Chit and Money Circulation (Banning) Act, 1978.
CBDT
notifies
new
draft
of
income
computation and disclosure standards: The
Central Board of Direct Taxes (CBDT) has come up
with a new draft of 12 income computation and
disclosure standards (ICDS). The Income Tax
Department is looking to prescribe its own set of
standards so as to ensure that income is computed
correctly for income tax purposes.
Number of export documents set to come
down: The paperwork involved in exporting and
importing goods is set to come down significantly
from the next fiscal year. The move will cut down
transaction costs and time for industry and also
improve the country's global ranking in the World
Bank's 'ease of doing business' index. The Revenue
Department is likely to bring down the number of
mandatory documents required for exports to three in
the new fiscal year from the seven cited in the World
Bank's report. The reduction in export documents to
three will put India at par with countries such as the
US, Canada, Singapore and Japan.
E-rickshaws now get legal status: The President
has given his nod to amend the Central Motor
Vehicles Act (CMVA). With this, e-rickshaws and ecarts can be registered by Regional Transport Offices,
and will have to comply with rules regarding display
of registration marks, size of letters and numerals of
the registration mark, transfer of ownership and
validity of certificates and fitness. State governments
will have to register e-rickshaws as per the amended
rules.

Reserve Bank red flags 'quick money' schemes:

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PM launches new domestic lighting scheme:

Prime Minister Narendra Modi launched a scheme for
distribution of LED bulbs, under the domestic
efficient lighting programme, and a National
Programme for LED-based Home and Street Lighting.

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Page 15

Under the scheme, consumers in Delhi will be able to

request for LED bulbs under the Domestic Efficient
Lighting Programme through a new website.
Consumers can register for this scheme either
through the website or by sending an SMS to a
designated
number.
Under
the
programme,
consumers will pay Rs. 130 per LED bulb as compared
to market prices, which range from Rs. 350 to Rs. 600.
Let Department of Posts run a bank: The panel
on leveraging the post office network headed by
former Cabinet Secretary TSR Subramanian, has
stated that large banks suffer from "small customer
fatigue". There is considerable empirical evidence in
this regard as reflected in increasing minimum balance
requirements, high transaction charges and barriers
for cash handling across bank counters. Moreover,
for cultural, social and historical reasons, large banks
find it difficult to motivate their city based employees
to work in rural areas. The panel has suggested for
the Department of Posts (also known as India Post) to
set up a new bank to achieve the government's
agenda of universal financial inclusion.

MARCH/APRIL FINANCIAL AWARENESS

Global Leader: Union HRD Minister Smriti Irani was
named Young Global Leader from India by the World
Economic Forum (WEF).
Stockholm Water Prize: Environmental activist
Rajendra Singh has been awarded with the
prestigious Stockholm Water Prize this year for his
innovative water restoration efforts and courage to
empower communities in Indian villages.

Air to Air Missile: India's indigenously developed

Beyond Visual Range (BVR) air-to-air missile 'Astra' was
successfully tested from a Sukhoi-30 fighter aircraft at
the Integrated Test Range located at Chandipur in
Odisha.
Chillr: A mobile application Chillr that allows
customers to instantly transfer money to any person
in India is a first-of- its kind application that is linked
directly to customers' bank accounts and is exclusively
for customers of HDFC Bank. The maximum
transaction limit is Rs.5000/- per day and Rs. 50000/rupees a month.
Swaraj Bhoomi: Girgaum Chowpatty has been
renamed as Swaraj Bhoomi to honour veteran
freedom fighter Bal Gangadhar Tilak. The Girgaum
beach was called Chau-pati because of four channels
of water that existed there.
SEBI Board approves IFSC guidelines: Sebi has
approved a relaxed set of norms for setting up of
stock exchanges and other capital market
infrastructure in International Financial Services
Centres. Stock exchanges and clearing corporations
would be provided concessions for setting up ventures
in the IFSC. All existing exchanges would be allowed
to set up their subsidiaries in the IFSC under the
relaxed regimes.Gujarat International Finance TecCity (GIFT City) would be the country's first IFSC,
with which top bourses BSE and NSE have already
signed MoUs for setting up international exchanges
there.

Gandhi Peace Prize 2014: Indian Space Research

Organisation (ISRO) won Gandhi Peace Prize 2014.
The Indian space agency successfully launched Mars
Orbiter Mission (MOM) and at a very cost effective
price of 450 crore rupees. Also it was its first attempt
to launch a Mars Orbiter mission.
Pradhan Mantri Kausahal Vikas Yojna: The
Union Cabinet has approved the Pradhan Mantri
Kaushal Vikas Yojana (PMKVY) to provide necessary
skills training to youth across the country. The
PMKVY Scheme will be implemented by the Union
Ministry of Skill Development and Entrepreneurship
through the National Skill Development Corporation
(NSDC).
Dadasaheb Falke Award: Actor Shashi Kapoor has
been awarded with this year's Dadasaheb Phalke
Award, India's highest honour in cinema.

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SEBI approves listing of Municipal Bonds: To

help in the government's 'smart cities' programme,
Sebi has approved a new set of norms for listing and
trading of municipal bonds on stock exchanges, while
channelizing household
investments for
urban
infrastructure development. After SEBI approval for
such municipal bonds, also known as 'muni bonds',
municipal authorities would raise funds including for

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setting up of smart cities.

India overtakes US as 3rd Steel Producer: India
has overtaken the US to become the third-largest steel
producer in the world with a production of 14.56
million tones (MT) in first two months of the year.
India has been the fourth largest steel producer for
the past five years, behind China, Japan and the US.
Asian Development Bank Report: As per Asian
Development Banks annual publication Asian
Development Outlook, 2015 India is all set to
overtake China's growth rate by clocking 7.8 per cent
GDP in 2015-16 and 8.2 per cent during the following
fiscal on the back of structural reforms and
government's 'pro-investment' attitude.
Rural Banks told to cut jobs: Based on the
recommendations of S.K. Mitra committee on HR
policy for RRBs, the Government has directed regional
rural banks to become slim by cutting jobs and
outsource
non-core
functions
such as
IT
maintenance, cash remittance and housekeeping.
Currently, there are 56 RRBs with 19,400 branches
and a collective business volume of Rs 4.50 lakh crore.
India's GDP growth forecast increased:
International Monetary Fund had increased India's
GDP growth forecast to 7.2% for the current financial
year. Last year, IMF had forecasted a growth rate of
5.6% for the current financial year, and 6.4% for the
next financial year.
UK annual inflation rate drop to zero: UK
annual inflation rate dropped steeply to zero in
February for the first time due to falling prices of
recreational goods, food, furniture and oil. UK
inflation, measured by the Consumer Price Index
(CPI) stood at 0% in February compared to 0.3% in
January.

FDI cap in insurance sector: The Reserve Bank

has notified the decision to raise foreign direct
investment (FDI) cap in the insurance sector to 49%
from existing cap of 26%. As per the notification, FDI
up to 26% will be under automatic route and beyond
26% till 49% will be allowed with the approval of
Foreign Investment Promotion Board (FIPB).
Government to reduce holding in PSBs:
Government has decided to bring down its holding in
public sector banks (PSBs) to 52% in a phased
manner to ensure that capital needs of banks are
taken care of.
Capital Infusion for 9 PSBs: The government has
allocated Rs.7,900-cr for recap of PSU banks.
Digitisation of Women SHGs: NABARD has
started a pilot project to improve the quality of
interface between members and banks for efficient
and hassle free delivery of
banking services. Digitisation will bring transparency,
credibility to operations of SHGs thereby increasing
the comfort of bankers in credit appraisal,
disbursement and monitoring.
15 cr accounts linked to Aadhar: NPCI, the
umbrella organisation for all retail payments system in
India, reached a major milestone of successfully
linking 15 crore bank accounts with Aadhaar number.
NPCI is the nodal agency for all retail payment
systems under the Jan Dhan scheme.
New Investment pattern for PFs: The new
investment pattern mandates up to 50% Investment
in government securities, 45% in debt securities,
15% in equity instruments, 15% in exchange traded
and indexed funds and 5% in real estate assets.

India's foreign exchange reserves: jumped by

USD 4.261 billion to all time high USD 339.991 billion
in the week ended 20th March. The jump was mainly
due to increase in foreign currency assets which was
increased by USD 4.539 billion to USD 314.886 billion
in the same week.

Sec 66A of Information Technology Act: In a

landmark judgement, the Supreme Court has struck
down a provision in the cyber law known as Section
66-A of the Information Technology Act which
provides power to arrest a person for posting allegedly
'offensive' content on websites in order to protect
freedom of expression.

Central Bank of India with maximum bad

loans: According to the data published by the RBI,
Central Bank of India has topped the list of public
sector banks with maximum bad loans including
restructured assets as a percentage of total
advances. As per the list, CBI has 21.5% loans as
either bad assets or has been termed as nonperforming assets (NPAs).

Pragati: Govt. launched ambitious multi-purpose

and multimodal platform PRAGATI (Pro-Active
Governance and Timely Implementation) with the
aim of addressing common man's grievances and
concerns. It will also help in simultaneously
monitoring and reviewing important programmes
and projects of the Government of India as well as
projects flagged by state governments.

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IMF and ADB to support AIIB: China has

received support from International Monetary Fund
and Asian Development Bank to establish a new
multilateral development bank named as Asian
Infrastructure Investment Bank (AIIB), that will
provide project loans to developing countries and will
begin its operations by the end of 2015.
Indian Railways launched RuPay Card: The card
will enable passengers to book their Rail tickets and
do shopping using RuPay pre-paid debit cards. Card
can be availed from either the Union Bank or the
IRCTC. RuPay is India's own card payment gateway
network and provides an alternative system for banks
to provide debit card service.
Bank Board Bureau: The Bank Board Bureau is
being set up which would be responsible for
appointments at state- run lenders. The Board will
work as search committee or appointments board and
will consist of professionals with only one government
representative. The proposed Board would have six
members with at least three former bankers, two
professionals and secretary, department of financial
services as the government representative.

MAY FINANCIAL AWARENESS

Bhartiya Mahila Bank MOUs with insurance
companies: Bhartiya Mahila Bank has entered into
MOUs with the New India Assurance Co. and LIC to
provide insurance cover to its account holders. The
insurance covers are being provided under PM Jan
Dhan Yojana and PM Jeevanjyoti Bima Yojana
schemes. The insurance option is voluntary and comes
at a premium of Rs.12 and Rs.330 respectively. The
age eligibility under the former is 18-70 years and
under the later is 18-50 years. The enrolment period
will be from June 1 to August 31.
Cabinet nod to amend Negotiable Instruments
Act: The Cabinet approved a proposal to amend the
Negotiable Instruments Act so as to clarify on
jurisdictional issues for trying cheques bouncing cases.
The main amendment is the stipulation that the
offence of rejection/return of cheques under section
138 of the negotiable Instruments Act will be
enquired into and tried only by a court within whose
local jurisdiction the bank branch of the payee, where
the payee presents the cheques for payment is
situated.

Service Centres (IFSCs), the first of which has come

up in the Gujarat capital Gandhinagar. Public and
private sector banks authorized to deal in foreign
exchange will be eligible to set up IFSC Banking Units
in IFSCs. Only foreign banks having a presence in
India will be eligible to set up IBUs and specific
permission from the Home-country regulator will be
required. Eligible banks will be permitted to establish
only one IBU in each IFSC. Parent Banks will be
required to provide a minimum capital of $20 million
or equivalent in any foreign currency to enable their
IBUs to start operations in IFSCs.

RBI removes curbs on United Bank of India:

RBI has lifted the restriction on loans to be made by
United Bank with a condition that the bank
maintains its capital adequacy ratio at 9.5% and
keep credit-deposit ratio at or below 70%.
RRBs come under RuPay Cards: National
Payments Corporation of India (NPCI), the umbrella
organization for all retail payments system in the
country, has enabled all 56 regional rural banks
(RRBs) under its Central Payment Systems Network
with RuPay cards and access to National Automated
Clearing House Service.
Foreign Trade Policy 2015-20 notified: The
long- awaited Five-year Foreign Trade Policy has been
notified by the Government. The policy has expanded
the scope of incentive schemes for merchandise and
service exports and it also targeted to almost double
value of exports to $900 billion by 2020. Further to
ensure stability in the policy regime, the Centre has
opted for a mid-term review instead of an annual
review. The Policy also spells out measures for
increased digitization of exports and imports with the
aim to gradually move towards a paperless office
and self- certification by established exporters and
importers.
MEIS and SEIS replacing multiple schemes
introduced: In the new Foreign Trade Policy, the
Government has introduced two new schemes,
Merchandise Exports from India Scheme (MEIS) and
Services Exports from India Scheme (SEIS) by
replacing earlier multiple schemes. The MEIS will be
targeted for export of specified goods to specific
markets and SEIS is meant for exports of notified
services. The rate of rewards under MEIS now ranges
from 2% to 5%, from the 2% to 7% range earlier.
On the other hand, under SEIS, the rate will range
from 3% to 5%, from the 5% to 10 % range earlier.

Guidelines to set up shop in IFSCs: RBI has

issued the operational guidelines for Indian and
foreign banks to set up shop in International Financial
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Govt. mulls new norms for PSB top

appointments: The finance Ministry is seeking to
rework the eligibility norms to appoint MD & CEO for
five large nationalized banks. The age criteria for
eligible candidates are to be relaxed from 55 years to
57 years and also to reduce the requirement for
board level experience from three years to one year.
The move will allow some of the EDs in public sector
banks to be eligible for the post of MD and CEOs for
which separate interviews will be conducted.
Govt revamps new norms on Non-official
Directors: The government has revamped the
procedure for appointment of non-official directors on
the Boards of Public sector Banks, Insurance
Companies and Financial Institutions. Besides,
creating a dedicated web portal, where interested
persons can apply online, the procedure also provides
for setting up of a high level search committee. The
committee will go through the available applications
and would recommend names to the government for
approval. The applicant should have at least a
graduation degree, should be less than 67 years of
age and have 20 years of work experience. Such
directors could be appointed for maximum six years or
two terms.
RBI concern for Public Sector Bank's Board
Members: RBI will attempt to make the
remuneration package of public sector bank board
members as appealing as that of their private sector
counterparts. RBI also conveyed its decision to do
away with the list of issues that PSU banks place
before their board members, giving the top
management more time to deliberate on strategic
issues. At a time when private sector bank directors
are being paid in Lakhs for every board meeting they
attend, the payment in public sector banks is in the
range of Rs.5000 to Rs.10, 000 bands in accordance
with the government guidelines on remuneration. The
difference in pay has made it difficult for PU banks to
attract and retain professional directors on their
boards.
SEBI penalties for no woman on Board: The
deadline for appointing at least one woman director
expired on March 31. Listed companies that have not
appointed a woman director face a fine of Rs.50,
000. If they do not comply by June 30, an additional
fine at the rate of Rs.1000 a day will be imposed till a
woman director is appointed. After September 30, the
fine will go up to Rs.1.42 Lakh plus Rs.5000 a day till
the date of compliance.
Govt announces relief package for farmers:
The Government has announced a relief package for

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the farmers hit by unseasonal rains. The criteria has

been reduced from 50% to 33% crop damage
enabling more farmers to get compensation for their
loss. The compensation amount has been increased
to 15 times. Banks have been asked to restructure
farm loans while insurance companies have
been asked to settle claims of farmers on a priority
basis.
PM launches MUDRA Scheme: The Prime Minister
has launched "MUDRA" scheme. The Micro Units
Development and Refinance Agency Ltd. (MUDRA) has
been registered as an NBFC with RBI and has a corpus
of Rs.20, 000 Crore and can lend up to Rs.50,000 and
Rs.10 lakh to small entrepreneurs. The Microfinance
institutions and NBFCs can avail loans from MUDRA for
on lending to the borrowers. It will provide refinance
to banks and other institutions at 7% rate of interest.
The Government has appointed Jiji Memon as the CEO
of MUDRA, who was a Chief General Manager of
NABARD.
National Consumer Commission Ruling on
ATM fraud: The National Commission, said that
there was a foul play by a third person who
manipulated the ATM machine and unauthorizedly
withdrew money. The Commission concluded that
there was deficiency in bank service. The Commission
further ruled that "A bank can not escape its liability
by claiming the security systems are foolproof. If
there is a flaw or a loophole in the system, the bank
would be liable to make good the loss caused to the
customer".

Sahoo Panel recommendations on ECB:

Government appointed Sahoo Panel has recommended
that Indian banks should not be allowed to extend
ECBs to domestic corporate houses out of their
overseas subsidiaries or branches. This norm should
also be applied for guarantees which mean that
Indian banks based abroad should not be allowed to

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Page 19

extend guarantees for ECBs. The Panel has

recommended that the restrictions on borrowers,
lenders, end-uses, amount, maturity, all-in-cost
ceiling must be removed. The Panel does not want
that both lender (Indian bank based abroad) and the
borrower (Indian Company) to face forex risk on the
same loan transaction.
RBI for interoperable cash deposit machines:
RBI is looking to the National Financial Switch (NFS)
which will make them interoperable and allow
customers to deposit cash into their accounts from any
bank's machine. ATMs are already part of the NFS and
now there is proposal from National Payments
Corporation of India (NPCI) to link all cash deposit
machines to the NFS. This will allow any other bank
customers to put in money from any machine.
Panel proposes Small Banks merger with
Large Banks: The Working Group on Consolidation
and Restructuring of Public Sector Banks has
proposed that the small public sector banks with
assets of less than Rs.2 Lakh Crore should be readied
for merger with five large public sector banks. Ahead
of the consolidation, the small PSBs will need to
reorient their portfolio and improve operational
efficiencies over the next one year. Any consolidation
should be driven by market forces and decisions
taken independently by the board of each bank.

Govt proposes change in corruption law for

good officials: The Centre proposes to differentiate
a "Corrupt decision" from an Erroneous decision" to
ensure that its officers take decisions without any
fear. The proposal is to amend section 13 of the
Prevention of Corruption Act, 1988 which defines what
constitutes criminal misconduct by a public servant
and specifies penal provisions, including jail of up to
seven years.
SEBI proposal for venture capital funds: SEBI
proposed to allow venture capital funds to invest up
to 25% of their investible funds in foreign companies
that having "Indian connection". Currently the cap is
fixed at 10%. Indian connection would include
companies having front office overseas but back
office operations in India. Many Indian entrepreneurs
have been setting up their headquarters outside
India with backend or research and development
operations in India. Therefore, there is need to allow
higher overseas investment by VCs more than
existing 10% limit.

RBI allows banks to tie up with e-commerce

companies: RBI has allowed banks to enter into
joint ventures with ecommerce firms to smoothen
payments or appointing them as Business
Correspondents for acquiring new customers.
Integrating e-commerce with their own platforms will
allow banks to work around the two factor
authentication requirement while doing transactions.
Further to ensure reliability of banking transactions in
the mobile space, RBI has asked the TRAI to give
priority to banking transactions over others while
messaging.
Govt allows EPFO to invest in ETF: The
Government has allowed the EPFO to invest 5% of
its corpus in Exchange Traded Funds (ETF) which will
result into an inflow of around Rs.5000 Crore into the
stock markets during this fiscal. As per estimates, the
EPFO's incremental deposits for 2014-15 would be
around Rs.80, 000 Crore. During the current fiscal,
the incremental deposits could be around Rs.1 Lakh
Crore as the body had increased the monthly wage
ceiling for coverage under its social security schemes
to Rs.15, 000 from Rs.6500 in September last year.

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GOVT.
formulates
new
project
"Life
MGNREGA": With an aim to promote self-reliance
and improve the skill base of MGNREGA workers, the
Government has formulated a new project linking the
flagship rural job scheme with skill development
programmes. "LIFE-MGNREGA" is likely to be

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implemented in the middle of July. The project has

been formulated in consultation with Deen Upadhyaya
Grameen Kaushalya Yojana and National rural
Livelihood Mission.
IFSC Banking Units (IBU) by Indian Banks: RBI
has formulated a scheme for the setting up of
International Financial Services Centre (IFSC) Banking
Units (IBUs) by banks in IFSCs as per Foreign
Exchange Management (International Financial
Services Centre) Regulations, 2015. Government of
India has already announced setting up of an IFSC in
Gujarat namely Gujarat International Finance Tec-City
(GIFT) in Gandhinagar, Gujarat.

JUNE FINANCIAL
FINANCIAL AWARENESS
New Service Tax rate from June 1: The new
service tax rate of 14% will come into effect from
June 1. The service tax is currently levied at the rate
12.36%, including education cess.
FDI limit in pension sector hiked to 49%: The
Indian government raised the limit of foreign direct
investment (FDI) in the pension sector to 49% in line
with the FDI cap raised in the insurance sector. The
hike covers FPI, FII, QFI, FVCI, NRI and DR. No
government approval is required till 26%, but the
Foreign Investment Promotion Board (FIPB) approval
would be needed for investment beyond 26% and up
to the cap of 49%. All investments in the pension
sector, however, will have to abide by the pension
sector regulator the Pension Fund Regulatory and
Development Authority (PFRDA).
Private and foreign banks to appoint outsiders
as Internal Ombudsman: New generation private
banks, public sector banks and foreign banks with a
large retail base have been asked to appoint an
outsider as an internal Ombudsman to look after
consumer grievances. The internal Ombudsman, who
will be designated as chief customer service officer
(CSSO), will be the first port of call for grievance
redressal even before approaching the banking
ombudsman. The public sector banks, the private
lenders who will have an internal Ombudsman are
ICICI Bank, HDFC Bank, Axis Bank, Kotak Mahindra
Bank, IndusInd Bank Ltd, Standard Chartered Bank,
Citibank NA and HSBC. These banks have been
selected on the basis of their asset size and business
mix.

deliver superior Omni channel digital experience to

customers at ITPL, Bengaluru. These branches would
primarily be opened in metro cities to offer customers
round-the-clock
banking
services
for
their
convenience and ease and would offer cash
withdrawals, instant cash deposits, cheque deposits,
etc.
GDP to grow further after 7-7.5% last year:
Economists polled by Reuters pegged India's 2014-15
economic growth at 7.4 per cent and 7.8 per cent for
the current year in terms of standard gross domestic
product (GDP). As per new way of measuring GDP,
India's statistics office has overtaken China as the
world's fast-growing major economy, at an annual
7.5 per cent in the fourth quarter of the fiscal year
that ended on March 31.
FDI Cap hiked:: The Government has decided to
increase the limit for foreign investment proposals
needing Cabinet nod and also allowed to treat Real
Estate Investment Trusts (REITs) as eligible financial
instruments under the Foreign Exchange Management
Act (FEMA). The move is expected to boost foreign
inflows into the country. The latest step is expected
to help several companies looking to raise funds via
REITs, which are yet to take off. During the AprilFebruary period of 2014-15, the foreign fund inflows
have grown by 39%, year-on-year, to $28.81 billion.
HDFC among World's top 10 list of consumer
finance firms: Mortgage lender HDFC has emerged
as the only Indian company among the world's 10
biggest consumer financial services firms, after
American Express, Visa and Mastercard. HDFC is
ranked 7th on the list, compiled by business
magazine Forbes, where American Express is placed
on the top.
Public Sector Banks' profiles to improve only in
the medium term: According to Moody's,
improvement in the credit profiles of Indian publicsector banks (PSBs) will be achieved only in the
medium term, given their high levels of impaired
loans and weak capital positions. PSBs represent
more than 70% of total banking system assets in
India. A longer time-frame is needed for the credit
profiles of public- sector banks to improve, because
their asset quality is tied to the slow, multi-year
recovery of corporate balance sheets, and the
lagging recognition of associated credit costs. The
banks are therefore highly dependent on the Indian
government (Baa3 positive) for fresh capital.

AXIS Bank opens 24x7 express branch: Axis

AMFI asks mutual funds to check 'Bonus
Bank, India's third largest private bank, opened its
Stripping' practice: AMFI has asked Mutual fund
first Express Branch, a retail banking initiative to
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houses to check the practice of 'bonus stripping',

which has come under scanner for possible misuse of
the bonus plans of mutual fund schemes for avoiding
paying taxes. The bonus stripping typically involves
an investor buying a bonus plan of a mutual fund
scheme, book a loss on it and then set it off against
capital gains from other sources.
ICICI Bank launches voice password facility
for users: ICICI Bank has launched a service where
customers can make transactions using just their
voice, without using other means of authentication
like a password. The voice recognition service
authenticates customers based on their speech
patterns & allows them to execute banking
transactions through the bank's call centre. Their
voice will now act as the password for banking
transactions through the call centre.

Small banks for merger with large PSBs: A

Finance Ministry appointed Working Group on
Consolidation & Restructuring of PSBs has
recommended Small public sector banks, with assets of
less than Rs.2-lakh crore, should be readied for
merger with five large PSBs. PSBs with less than Rs.2
lakh crore assets (loans plus investments) include
Andhra Bank, Bank of Maharashtra, Dena Bank, PSB,
Vijaya Bank, and United Bank of India. The large
PSBs, with the capability to acquire include Bank of
Baroda, Bank of India, Canara Bank, PNB and UBI.
Ahead of the consolidation, the small PSBs will need to
reorient their portfolio and improve operational
efficiencies over the next one year. The Working
Group has proposed that as a means to improve
profitability by leveraging economies of scale &
avoiding duplication, all PSBs should share
infrastructure, including back-office space, IT
backbone & telecom contracts through a "shared
service organisation." The banks will need to raise
almost Rs.4.50-lakh crore in Tier 1 capital (which
includes Rs.2.40- lakh crore equity capital) by March
2019 under Basel III norms. The Working Group has
suggested that over the next one year all PSBs focus
on four areas - improving risk management
capabilities,
shifting
to
profitability-linked
performance metrics, leveraging technology to
reduce costs, and developing capital-light business
models.
IBA sign wage revision pact: Bank unions have
signed the new wage revision agreement with the
industry body Indian Banks Association (IBA) one of

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the heads of the unions. The pact, is going to benefit

8.5 lakh employees from all the state-run banks, old
generation private banks and some large foreign
banks.
Banks' Gross NPAs rises to 4.45%: The banking
sector's asset quality further worsened in the last one
year, with gross non- performing asset (GNPA) ratio
inching to 4.45% in March 2015, compared to 4.1 per
cent in March 2014. Stressed assets ratio, which is
GNPA plus restructured standard advances for the
system, stood at 10.9 per cent, as at the end of
March, 2015 compared to 10 per cent in March, 2014
and 10.7 per cent in September 2014. GNPAs for
public sector banks as on March 2015 stood at 5.17
per cent, while the stressed assets ratio stood at 13.2
per cent, which is nearly 230 bps more than that for
the system. RBI had taken various steps in the last
one year to tackle the problem of rising bad loans.
For early recognition of stress in the system, banks
have been asked to form joint lenders' forum (JLF) to
initiate the resolution mechanism. According to the
latest data, the capital adequacy ratio of the banking
system has been steadily declining and at the end of
March 2015, it stood at 12.70 per cent as against
13.01 per cent in March 2014. The government has
taken a decision to infuse capital in banks that show
better efficiency in terms of return on equity and
return on assets. As a result, only nine public sector
banks have received capital from the government in
the previous financial year.
Mechanism for banks to check frauds: The RBI
has put in place a new framework to check loan
frauds including by way of early warning signals at
banks and red flagging of accounts, while defaulters
will have no access to further banking finance.
Besides, the central bank will set up a Central Fraud
Registry that can be accessed by all banks to identify
borrowers having committed frauds with any bank in
the past. The CBI and the Central Economic
Intelligence Bureau (CEIB) will also share their
databases with banks.
PM launches 'KISAN TV': To mark the completion
of his government's first year in office, the PM has
launched 'Kisan TV' which would provide information
about best agricultural practices. The government has
made it a 'must carry' channel making it mandatory
for cable and Direct to Home (DTH) operators to
provide it to their subscribers.
World's 50 most valued banks in 2014: Among
other sector-specific lists, there is no Indian entity on
the list of biggest major banks topped by China's
ICBC. For the regional banks, China Construction

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Bank tops the chart, while India's SBI is ranked 22nd,

ICICI Bank is at 29th place and HDFC Bank is at 40th
position. For Oil and Gas sector, Reliance Industries
is ranked 15th globally, while ExxonMobil is on the
top. In Computer Services, Google tops the list and
India's TCS is at 7th place, followed by Coginzant at
9th and Infosys at 10th position.
New Data on Indian Exporters released: India's
statistical office will release new data for the first time
to identify where India's exporters are located and
what they are selling. This move is expected to help
the
government
to
make
more
informed
manufacturing and trade policy decisions in the
context of its 'Make in India' programme and the stiff
$900-billion exports target set for 2020.

FORD Foundation to be under a watchlist: The

Ministry of Home Affairs has ordered to put Ford
Foundation, one of the most powerful international
funding organizations under a watch list in 'National
interest and security' of the country and has also
decided to take Greenpeace type of action against
Ford Foundation. Putting it on prior permission list,
MHA has ordered that all the funds coming from Ford
Foundation, US, for any agency or NGOs in country
will first need to be cleared by the ministry. The
action has been taken under Section 46 of the FCRA.
Cabinet approves changes to Child Labour
laws: In a major overhaul of child labour laws, the
Cabinet approved a complete ban on employment of
children below 14 years, except for some family
businesses, entertainment and sports activities, while
raising the punishment for violations to up to three
years of jail. Making child labour a cognizable offence,
the fine has also been increased to up to Rs 50,000 for
the employers. The children can be employed only in
non-hazardous family enterprises, TV serials, films,
advertisements and sporting activities (except circus)
with a condition that they would be made to do these

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jobs after school hours.

First BRICS Bank Chief: The ICICI Bank Chairman
K.V. Kamath has been named as the first President of
the BRICS Bank, the multilateral funding agency with
Brazil, Russia, India, China and South Africa.
Simplified Income Tax Return Form: Finance
Minister has announced extremely simplified Income
Tax Return form which will replace the existing 14page ITR which sought information like all bank
accounts and foreign trip details.
WHITLEY Awards: Two Indians Dr. Ananda Kumar
and Dr. Pramod Patil have been awarded with the
prestigious Whitley Awards also known as 'Green
Oscar' for their contribution to wildlife conservation.
Dr. Ananda Kumar was awarded the prize in
recognition
of
his
work
using
innovative
communication systems to enable human elephant
co-existence in Southern India whereas Dr. Patil was
conferred this award for his work to protect the iconic
great Indian bustard in the Thar desert.
Low - value 'Tap and Pay' without PIN: Reserve
Bank of India allowed banks to enable transactions in
contactless cards for values up to Rs 2,000 without
requiring a separate PIN authentication. The move is
expected to hasten acceptance of `tap and pay'
electronic payments at retail outlets, in transport
services and for toll payments. Banks are free to
facilitate their customers to set lower pertransaction limits. The responsibility for authorizing
the contactless payment based on such card-based
limits will lie with the card issuing banks.
Indian Promoter must hold 26% stake in
Insurance Joint Ventures: The Insurance
Regulatory and Development Authority of India has
mandated a minimum 26% equity holding by the
Indian promoter in any insurance company to ensure
that the local investor does not use the liberal foreign
investment and listing policy to dilute accountability.
The regulator insists that the mandatory 26% stake
to be held by the local promoter will ensure that
there is accountability and that the management
does not rest with the foreign company alone in the
event of a single block of holding falling below 25%,
public shareholding limit - when a company goes for
listing. As a result of this move, the insurance
regulator aims to control transfer and dilution of
ownership in insurance companies to prevent
financial investors from flipping investments for short
term gains that may hurt long term prospects.
USTAAD: The Government proposes to launch its

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first scheme for minorities - a national crafts

programme called 'Ustaad' linked to the 'Make in
India' campaign from Varanasi. Although most
programmes being run for minorities had been
initiated by the earlier UPA regime, 'Ustaad' is the
first scheme being crafted by the Najma Heptullahheaded minority affairs ministry. The scheme will
cover centres such as Bhadohi, Murshidabad,
Hyderabad and Moradabad etc. It will be aimed to
help make these traditional crafts more compatible
with modern tastes and markets.
PF Contribution likely on 'Contributory wages':
In a breather to employers, the labour ministry has
proposed that contribution by companies towards
their workers' EPF schemes would be a portion of
'contributory wages' which will not include house rent
and travel allowances. The concept of 'contributory
wages' has been included in the Employees Provident
Funds and Miscellaneous Provisions (Amendment) Bill,
2015, which will soon be placed before the Cabinet
for approval. While the unions wanted that 12 per
cent PF contribution by the employers should be on
total take home salary, the employers were opposed
to the idea as it would have increased their PF
liability and reduced workers' pay.
E-Tourist Visa: Indian Govt. has announced to
provide e- tourist visa to 31 more countries, including
France and Canada. The e-tourist visa has been
launched in Nov. last year for 45 countries from nine
designated Indian airports.
DBS first MNC bank to go for local arm: DBS
has emerged the first off the block among
multinational banks to apply for a subsidiary license in
India. The bank's global chief executive officer
announced the decision to go local in India, citing an
opportunity to scale up business using the digital
platform coupled with the bank's success in lending to
small and medium enterprises elsewhere in the world.
The bank put in an application for subsidiarization
with the Reserve Bank of India. Bank wants to scale
up from being a corporate bank to being a universal
bank.
CCEA raises FDI approval floor to Rs 3000
crore: The Cabinet Committee on Economic Affairs
(CCEA) has raised the threshold for foreign direct
investment requiring its approval to Rs 3,000 crore
from the present Rs 1,200 crore. This decision is
expected to expedite the approval process and result
in increased foreign investment inflow. Presently,
investments up to Rs.1,200 crore are cleared by the
Foreign Investment Promotion Board of the finance
ministry. Those above this limit require approval of

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the CCEA as well. This was done in line with the

govt's effort to boost the Make in India campaign &
increase the flow of foreign investment.
Govt. allows investing 5% of EPFO corpus in
stock markets: In a move that could see over Rs.
7,500 crore of retirement savings of workers going
into the capital markets for the first time, Labour
ministry has notified the new investment pattern for
the Employee Provident Fund Organisation (EPFO).
The new pattern allows the retirement fund body to
invest 5% of its incremental income in Exchange
Traded Funds (ETFs) from the current financial year.
The limit of investment in ETFs, starting from 1%
with effect from April 1 and reaching 5% by the end
of the year, is the lower end of the range
recommended by the finance ministry that had
proposed 5-15% in equities. Worldwide, pension
funds have 52% of their investment in equity with US
at 57%, followed by Australia (54%), UK (50%),
Canada (48%) and Japan (40%), as per the study by
Towers Watson. The EPFO has more than five crore
subscribers across the country and has a corpus of
over Rs 6 lakh crore.
NPCI cuts ATM switch charges by 10%:
National Payments Corporation of India (NPCI) has
cut the switching fee for ATM transactions by 10 per
cent to 45 paise on the surge in transaction volumes
to 270 million per month from 80 million per month
four years ago. The new rate is effective May 1.
Switching fee is charged by the NPCI for routing ATM
transactions through connectivity between banks'
switches. This enables customers to use any ATM of a
connected bank.

Limit for withdrawals at Micro ATMs: Banks

have firmed up the upper limit on withdrawals at
micro automated teller machines (ATMs) at Rs.10,000
as part of rules governing small transactions, especially
under financial inclusion. They will levy an

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interchange fee of Rs.2 for withdrawal up to Rs 2,000

per transaction. The charge will rise to Rs 15 per
withdrawal for amount between Rs.5,001 and Rs.
10,000. Banks will not levy interchange fee for nonfinancial transactions at micro ATMs. The switching
fees have been waived up. The rates and rules are
applicable for cash withdrawals using a card at micro
ATMs. Micro ATMs are similar to point of sale (PoS)
terminals but are called as the handheld devices and
are used by business correspondents to accept
deposits and dispense cash.
IGIA ranked as World's best Airport: Indira
Gandhi International Airport (IGIA) in New Delhi has
been ranked as the world's best airport for the year
2014, under the category of handling 25 to 40
million passengers per annum, as per Airports Council
International (ACI) report.

Powers to regulate govt bonds: The

Government dropped plans for the time being to
strip the RBI of its powers to regulate government
bonds and give them to an independent agency. The
Finance Minister withdrew the proposal from the
Finance Bill, 2015, and said the government, in
consultation with the RBI, will prepare a roadmap to
pursue a separate debt management agency later in
line with the global practice. In his first full year
Budget, the Finance Minister, had proposed to set up
a Public Debt Management Agency (PDMA) and shift
the regulation of government bonds from the RBI to
market regulator Securities and Exchange Board of
India (Sebi). The proposal generated lot of
controversy, with the RBI raising concerns and
questioning the timing of the move. The Persi Mistry
report of 2007, the Raghuram Rajan Committee
report of 2009 have both strongly argued for
separating the debt management functions from the
RBI.

used in mass-transit systems which will also enable

shopping inside the transport hubs. The 'semi-closed'
prepaid instruments will be issued by the mass-transit
operators like the Delhi Metro, and will be regulated
under the Payment & Settlement Systems Act, 2007.
Such instruments should help in automated fare
collection and may also be used at other merchants
who are allied to or are carried on within the
premises of the transit system only. The
responsibility of getting the merchants on board will
be of the operator. Minimum validity for the PPI-MTS
(prepaid payment instrument for mass-transit
system) will be six months. The know-your customer
(KYC) requirements for issuing the instruments have
been left for the issuer to decide.
India crosses a billion telephone numbers in
April:
According to the Telecom Regulatory Authority of
India, the telephone subscriber base was 996.49
million at the end of March, with 969.89 million
wireless subscribers. The number of telephone
connections in India crossed one billion at the end of
April. India is behind China, which had 1.28 billion
mobile subscribers and 246.94 million fixed-line
subscribers at the end of February. Chinese
telephone subscribers account for 94.5 per cent of
the country's population, but in India the coverage is
77-80 per cent because of multiple connections and
inactive users.
Chief of National Human Rights Commission:
Justice
Cyriac Joseph has been appointed as an interim
Chairperson of the National Human Rights Commission.
He succeeds KG Balakrishnan.
Soft Bank Group: Nikesh Arora has been appointed
as
the
President
of
Japan's
multinational
telecommunications and internet company Softbank
Corp. Before that, he was Vice Chairman of the
company and the CEO of SB Group US, Inc.

RBI issues draft norms for Mass Transport Pre

paid cards: The Reserve Bank issued draft
guidelines for pre- paid payment instruments to be

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