FINANCIAL AWARENESS FOR RBI GRADE B EXAM

Specially compiled for Bankersadda by Mr. A.K. Gupta, Ex- Chief Manager, PNB

MARCH 2013
1. BRICS development bank initiative: Brazil, Russia, India, China and South Africa (known as BRICS) have announced to establish a development bank. One of the driving forces behind the development of the BRICS bank is the desire to increase investment in infrastructure. Financial inclusion likely to be part of banking code: According to K.C. Chakrabarty, Deputy Governor, RBI is exploring the possibility of enshrining financial inclusion in the Code of Banks Commitments to Customers. The Code, which is voluntary, sets minimum standards of banking practices for banks to follow when they are dealing with individual customers. It provides protection to customers and explains how banks are expected to deal with them. Financial Exclusion: Out of the 6 lakh habitations in the country, only about 36,000 have a commercial bank branch. Just about 40 per cent of the population across the country has bank accounts. The proportion of people having any kind of life insurance cover is as low as 10 per cent and the proportion having non-life insurance is abysmally low at 0.6%. People having debit cards comprise only 13%, and those having credit cards only a marginal 2% of the population. IRDA introduces credit rating norm for selecting foreign reinsurers: In the reinsurance business, multiple insurance companies share the risk by purchasing insurance policies from other insurers to limit the total loss the original insurer would face in the case of a disaster. According to the new IRDA norms, insurers should place their reinsurance business outside India with only those insurers who have a credit rating of at least BBB with Standard & Poors, or an equivalent rating by any other international agency for the past five years. CAD will show progress in Q4: According to Prime Ministers Economic Advisory Council Chairman C Rangarajan, Indias current account deficit is expected to show some improvement in the last quarter of this fiscal on account of likely uptick in exports. CAD widened to a historic high of 6.7 per cent of GDP in December quarter to $32 billion on account of surge in oil and gold imports, besides weak exports. It was at $20 billion (4.4 per cent of GDP) in the corresponding quarter of last fiscal. CAD is the difference between inflow and outflow of foreign funds. Create single investor class for foreigners: According to Financial Sector Legislative Reforms Commission (FSLRC), has advocated for a single unified investor class to be called qualified foreign investors (QFI), which will reduce uncertainty, compliance costs and time taken for foreigners to invest in India. Currently, multiple investment vehicles such as foreign institutional investors (FIIs), foreign venture capital investors (FVCI) and qualified foreign investors (QFI) are in place in India. Italys finance system stable, but risks remain: According to IMF, Italys finance system remains stable, but remained at risk from continuing weakness in the economy. Cyprus rescued: Cyprus has been pulled back from the brink of a likely banking sector default. Check firms raising public money promising high returns: The Securities and Exchange Board of India has urged the Centre to set up a single regulator to monitor companies, which raise public funds in lure of high returns. 10. SEBI does away with physical filing of KYC documents to KRAs: To streamline the process of Know Your Client procedures, market regulator SEBI has done away with the submission of physical documents by investors to the KYC Registration Agencies (KRAs) in favour of the electronic format only. The intermediaries, including mutual funds, would need to submit scanned copies of investor documents to the KRAs and retain the physical documents with themselves. However, the physical documents would need to be submitted, whenever KRAs demand them. 11. Food will be last in chain of schemes for direct transfer: According to K.V. Thomas, Union Minister for State for Consumer Affairs, Food and Public Distribution, food items will be the last to be brought under the Direct Cash Transfer scheme.

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12. Cards top customer complaints in banks: The Banking Ombudsman Annual Report for 2011-12 released in January shows at least 14,492 bank customers had cardrelated complaints during this period, 9,350 of which

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pertained to ATM/debit cards alone. At least half the cases came from three major banks SBI, ICICI Bank and HDFC Bank. 13. One super regulator proposed: The Financial Sector Legislative Reforms Commission (FSLRC) headed by Justice (retd) B.N.Srikrishna has recommended that regulatory bodies such as SEBI, the Forward Markets Commission, the Insurance Regulatory and Development Authority and PFRDA should be subsumed into a new unified regulatory agency. However, for the time being, Reserve Bank of India should not be brought under the 'unified regulator'. 14. Reliance Ind paid $78.8-m fine for falling gas output over 3 years: Penalty is for failing to meet its commitments under the production sharing contract over the last three years (2009-10 to 2011-12). 21. Unsafe water kills 1,800 kids every day worldwide: UN report: According to a UN Report, nearly 2,000 children around the globe, under the age of five, die every day from diseases linked to unsafe water, poor sanitation and hygiene, with 24 per cent of the deaths occurring in India alone. 22. TRAI asks TV channels to restrict ad duration: The Telecom Regulatory Authority of India (TRAI) has made it mandatory for broadcasters to restrict the duration of advertisements in their channels to a maximum of 12 minutes of any given hour. 23. Govt issues norms for setting up of manufacturing zones: To promote manufacturing in the country, the Government has issued norms for setting up of National Investment and Manufacturing Zones (NIMZs) with a host of benefits. There will be exemption from capital gains tax on sale of plant and machinery of a unit located in a NIMZ. The tax break will be granted in case of re-investment of sale consideration within a period of three years for the purchase of new plant and machinery in any other unit located in the same NIMZ or another NIMZ. Besides, NIMZs will be eligible for viability gap funding, which cannot exceed 20 per cent of the project cost. The developers of NIMZs will be allowed to raise funds through external commercial borrowings (ECBs) for developing the internal infrastructure of NIMZs. Soft loans from multilateral institutions will be explored for funding infrastructure development in NIMZ. Assistance would be provided for negotiating non-sovereign multilateral loans by providing back-to-back support. NIMZs are conceptualised as integrated industrial townships of at least 50 sq km (5,000 hectares) with latest infrastructure. At least 30 per cent of the total land area would be devoted to manufacturing units. The National Manufacturing Policy, aims at enhancing the share of manufacturing in GDP to 25 per cent within a decade and creating 100 million jobs. 24. Govt receives proposals from 4 PSUs for Navratna status: These are Engineers India Ltd, Rashtriya Chemicals and Fertilisers Ltd, National Hydro Power Corporation (NHPC) Ltd and Mazagaon Dock Ltd. The coveted tag empowers the Board of a central PSU to take investment decisions of up to Rs 1,000 crore in a joint venture project or wholly-owned subsidiary. At present, there are 14 Navratna CPSEs such as NMDC and Oil India Ltd; and 7 Maharatna companies including BHEL, GAIL and CIL. 25. 30 banks ready for change to risk-based supervision system from April 1: The new system will bring in a uniform methodology to check the health of the banking system, as against the CAMELS framework used at present which follows a compliance-based and transaction-testing approach.

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For details contact 01125274157, 01165476949 or email at akg.bti@gmail.com 15. RBI Governor for corrective steps to prevent money laundering: According to Dr D Subarao, banking systems in India are largely safe. However, there is a need for some corrective action and based on the findings of the investigation, these will be taken. The countrys three largest private banks ICICI bank, HDFC Bank and Axis Bank were accused of indulging in money laundering both within and outside by an online portal, Cobrapost. 16. Current fiscals exports will be lower than last years: According to Commerce and Industry Minister Anand Sharma, Indias exports in the current year may fall below last years figure and trade deficit could rise to $196 billion. Exports had declined for eight straight months starting May 2012 mostly due to contraction in demand in the EU and the US. 17. To improve cover, IRDA looking at two-year policies: To plug the problem of a large number of vehicles running without cover, the Insurance Regulatory Development Authority is pitching to make motor third party insurance policies valid for two years, from the existing one-year term. 18. ING Vysya Life is now subsidiary of Exide Ind: Exide Industries has bought out three other partners holding 50 per cent stake in ING Vysya Life Insurance Co Ltd (IVL) 26 per cent of ING Group, 16.32 per cent of the Hemendra Kothari Group and 7.68 per cent from the Enam Group. ING Vysya Life Insurance Co has now become a wholly-owned subsidiary of Exide. 19. Moneylender-free village: Canara Bank has taken move by declaring Kunjupannai village in Nilgiris district a moneylender free village. The bank, in the first phase, extended credit to around 90 people. The advance was only to swap their debt, and the maximum loan per individual did not exceed Rs 20,000 and was given at 4 per cent. 20. Life insurers to have standard form for policyholders: To bring about uniformity and transparency in policies sold by life insurers, the Insurance Regulatory and Development Authority (IRDA) has asked all life insurers to adopt a standard Application form for policyholders seeking insurance cover. Further, it requires insurers, agents and brokers to sign on the recommendations they make to the customers, thereby putting the onus of selling the insurance product on them. The regulation applies to all individual policies issued by life insurance companies irrespective of segment and type of product.

26. SIDBI signs tripartite MoU with Egyptian body, World Bank: Small Industries Development Bank of India (SIDBI) has signed a tripartite Memorandum of Understanding (MOU) with Social Fund for Development (SFD) Egypt and the World Bank. According to Sushil Muhnot, Chairman & Managing Director, SIDBI, under the MOU, SIDBI and its associates will provide consultancy for three year period to SFD and establish credit guarantee system for micro, small and medium enterprises in Egypt.

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27. Cyprus Parliament rejects bank levy plan of Eurozone ministers: The Cypriot Parliament rejected a bank levy plan agreed by the Eurozone finance ministers as part of a 10 billion ($13 billion) bailout package for the cashstrapped nation. The plan was to impose a one-off levy on all bank accounts on the island. The compromise formula spared small savers up to 20,000 from the proposed bank levy and to impose a one-time levy of 6.75 per cent on deposits between 20,000 and 100,000. Deposits above that level are to be charged 9.9 per cent as agreed by the finance ministers. The bank levy plan is intended to raise a revenue of 5.8 billion. 28. SEBI issues colour codes, product labelling for mutual funds: Market regulator SEBI has issued a framework on product labelling with colour coding for mutual funds, that would help investors assess the risk associated with the schemes. The guidelines would be effective from July 1, 2013, for all existing and forthcoming schemes. Product labels carrying details about the schemes would be disclosed on the front page of initial offering application forms. Besides, the labels would have to be placed in common applications forms and advertisements. A blue colour coded box would indicate low risk, yellow would signify a medium risk, while brown represent schemes with high risk. 29. Discoms being rated for first time: For the first time, the State Electricity Distribution Utilities (Discoms) have been rated on the basis of seven parameters including financial status, meeting regulatory norms and others. The 'integrated ratings' are on annualised basis and spread from A+ to C (A+ is best and C is the minimum). It would provide a tool to banks and financial institutions to calculate their business risks. Ratings would cover year-onyear comparison of AT&C losses, regulatory environment, payments of subsidy and cross subsidy, quality of accounts, assets created, automated pass-through of fuel cost, shortterm power purchase, debt servicing and RPO compliance, among others. Out of the 39 Discoms rated, Gujarat's four utilities scored the best rating of A+. The worst rated utilities are from UP. loans of about Rs 54,000 crore in sectors such as power, coal, iron, steel and road transport. The real problem is in roads and power sectors. There are 68 new projects in the road sector and 40 in the power sector. 33. Deadline for new format cheques extended to July: RBI has extended the deadline for mandatory use of new format cheques to July 31, 2013.

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For details contact 01125274157, 01165476949 or email at akg.bti@gmail.com 30. India is fourth largest energy consumer in the world: According to a Report by US Energy Information Administration (EIA), India has emerged the fourth largest energy consumer of the world after the US, China and Russia, but its per capita energy consumption remains lower than that of developed countries. 31. Revised Food Bill proposes uniform 5 kg per head foodgrain subsidy: Nearly 67 per cent of population will get 5 kg of foodgrain per month at subsidised prices, once the National Food Security Bill (NFSB) gets approval from Parliament. The price for providing foodgrains will be initially valid for the first three years of implementation of the Act and after that it will be linked to Minimum Support Price. There is no change of entitlement for 2.43 crore poorest of poor families under the Antyodaya Anna Yojana, which is 35 kg per household per month. The Bill aims to cover 75 per cent of rural population and 50 per cent of the urban population. 32. NPAs - Real problem is road, power sectors: According to Finance Minister P. Chidambaram, over 215 projects are stalled, with an investment of Rs 7 lakh crore, and bank

34. Basel-III to increase pressure on Indian banks to raise capital: According to a Standard & Poor's Ratings Services report, higher capital requirement under Basel-III would increase the pressure on Indian banks to raise capital. Banks may need Rs 2.6 lakh crore of additional capital by 2018 as they strive to meet Basel-III requirements. Indian banks will require minimum additional capital of about Rs 69,100 crore to meet the Reserve Bank of Indias 8 per cent requirement for the common equity tier-1 and capital conservation buffer ratio. 35. Bill in Lok Sabha to set up 20 more IIITs: The new IIITs would be set up under the public-private partnership mode, with the HRD Ministry, the State Governments where these are to be established and the industry being partners. The establishment of each IIIT is expected to cost Rs 128 crore, with the Centre bearing 50 per cent of the cost and the State Government concerned 35 per cent. The remaining 15 per cent would be borne by industry partners. 36. Near 20% rural wage hike pushing up inflation: According to Assocham, near 20 per cent annual increase in rural wages is building up price pressure on food articles such as cereals, rice and wheat. 37. Public sector banks yet to recover loans of Rs 1 cr and above worth Rs 68 K cr: 7,295 individual borrowers or companies, who took loans of Rs 1 crore and above, had an outstanding of Rs 68,262 crore from about 27 public sector banks as of March, 2012. 38. India has too many labour regulations: According to Raghuram Rajan, Chief Economic Adviser in the Finance Ministry, India has the least number of workers protected under law in the world even as the countrys labour market has too many regulations. 39. BRIC output to exceed GDP of US, European nations by 2020: According to the 2013 Human Development Report, prepared by United Nations Development Programme (UNDP), the combined output of BRIC countries including India will surpass the aggregate GDP of US, Canada and other European nation by 2020. Indias position in Human Development Index was 136 out of 187 countries in 2012. It ranked 134 in 2011. 40. Agricultures share in GDP may fall to 13.7% in FY13: on account of higher growth in the non-farm sectors. The contribution of agriculture and allied sector to the Gross Domestic Product of the country declined from 14.6 per cent in 2009-10 to 14.5 per cent in 2010-11 and further to 14.1 per cent in 2011-12. 41. SBI Life launches eShield: SBI Life has launched eShield, an online term insurance plan. It can be purchased directly through the companys Web site. The minimum entry age is 18 and the maximum is 30 years. The annual premium for a life insurance cover of Rs 1 crore is Rs 6,360.

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42. IRDA forms panel to review insurance broker norms: Insurance Regulatory and Development Authority (IRDA) has constituted a committee headed by Suresh Mathur, Senior Joint Director, IRDA, to review the entire insurance brokers regulations, 2002. At present, there are 345 insurance brokers who were issued licence by the regulator. The licence is valid for three years from the date of issue. capita availability of milk has also increased to 290 grams per day, which is comparable with world per capita availability of 289 grams per day. Money laundering by 3 top private banks: According to Cobrapost, online portal, executives at some branches and insurance affiliates of the countrys top three private sector banks ICICI Bank, HDFC Bank and Axis Bank, had offered to convert politicians black money (or tax-evaded income) into white (legitimate income). SBI chief pitches for FDs of 3 days: SBI Chairman has advocated the minimum tenure of fixed deposits at three days so that companies find it worthwhile to park shortterm surplus funds with banks. Further, 2 per cent interest be paid on their current accounts. At present, firms prefer parking surplus funds with the liquid/money market schemes of mutual funds because of the flexibility of no lock-in period and redemption in 24 hours. Minimum net-owned funds of Rs 50 lakh must for money transfer business: According to the Reserve Bank of India, Indian agents intending to get into the money transfer business will need to have minimum net-owned funds of Rs 50 lakh. Further, collateral equivalent to three dayss average drawings or $50,000, whichever is higher, may be kept by the Overseas Principal in favour of the Indian Agent with a designated bank in India. RBI asks urban cooperative banks to implement CBS by Dec 31: RBI has asked Urban Co-operative Banks (UCBs) to implement core banking solutions (CBS) in all their branches by December 31, 2013. KYC norms to be enforced on jewellery trade: The Government has expanded the purview of the anti moneylaundering law to enforce know your customer (KYC) norms for retail purchases of gold and precious stones. All dealers in precious metals and stones will have to comply with KYC requirements for transactions beyond a limit (likely to be Rs 50,000). Currently, tax collection at source of one per cent is applicable on jewellery sales above Rs 5 lakh. Factory output rises 2.4% in January: The Index of Industrial Production (IIP) of 2.4 per cent in January 2013 was better than the one per cent growth seen in same month last year. High food prices push up retail inflation to 10.91% in Feb: This is higher than the annual consumer price index (CPI) inflation of 10.79 per cent recorded in January. Govt to launch Rs 10 plastic notes in 5 cities: The government and the RBI have decided to introduce one billion pieces of Rs 10 notes in polymer/plastic on a field trial basis in five cities Kochi, Mysore, Jaipur, Bhubhaneswar and Shimla with varied geographical locations and climatic conditions. While the primary objective of introduction of polymer notes is to increase its life, it could also help in combating counterfeiting. Rajya Sabha passes SEBI Bill for appointing SAT head: The Bill seeks to include the criterion of appointing a retired High Court judge having held the position for seven years for heading the Securities Appellate Tribunal (SAT), a statutory body that adjudicates on appeals against orders passed by SEBI. As per the existing criteria, only a serving or retired Supreme Court judge or Chief Justice of a High Court can head the Tribunal. Subsidy on rice and wheat under targeted public distribution system (TPDS) touches Rs 80,491 cr: The subsidy on rice was Rs 36,540 cr as of March 6, 2013, while, that on wheat was Rs 43,951 crore. World Bank sees 6% plus growth for India in 2013-14: According to World Bank Chief Jim Young Kim, India had made an extraordinary contribution to the global economy,

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BRIEF PROFILE Mr. A. K. GUPTA

1. Shri A.K. Gupta is a post graduate in commerce, LL.B, CAIIB, PG Dip in Personnel Management and IR, PG Dip in Marketing and Management, PG Diploma in Training and Development, Cert in Industrial Finance; Ex- Chief Manager, Punjab National Bank with an experience of more than 28 years as a banker; Experience of more than 12 years in training in the banks training college (Principal for 5 years); helped thousands of bankers in their banking career; Has been examiner with Indian Institute of Banking & Finance (IIBF, Mumbai) for about 5 years; Remained associated with number of management institutions at MBA level including Masters of Finance, University of Delhi, International Management Institute Conducted programmes in the area of Asset Liability Management and Credit risk management for top management executives in the rank of Chief General Manager/General Manager/DGM/ AGMs of SIDBI, Central Bank of India, Dena Bank, Punjab & Sind Bank Was a student of University of Manchester for 3 months for an advanced programme in Development Banking.

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43. No plans to list public sector general insurers now: The Centre has no immediate plans to list any of the four nonlife public sector general insurance companies. All the four non-life public sector insurance companies have been incurring underwriting losses over a period of time. 44. Jorge Mario Bergoglio elected as Pope Francis I: Argentinas Jorge Mario Bergoglio was elected Pope Francis I, becoming the churchs first Latin American pontiff after a conclave to elect a leader of the worlds 1.2 billion Catholics. 45. Direct benefit transfer scheme will go pan-India by year end: According to Finance Minister P. Chidambaram, the direct benefit transfer scheme will be implemented across the country by end of the year. 46. PFRDA allows subscribers lump sum withdrawal on exit: as against the current practice of phased withdrawals every year. Under the Deferred withdrawal facility, the subscribers at the time of exit from NPS can exercise the option to defer withdrawal of eligible lump sum withdrawal and stay invested in the NPS. However, no fresh contributions will be accepted and also no partial withdrawals will be allowed during such a period of deferment. The subscriber can withdraw the deferred lump sum amount at any time before attaining the age of 70 years by giving a withdrawal application or notice. 47. Indias demand for milk likely to touch 210 mt by 202021: According to National Dairy Development Board (NDDB) Chairman Amrita Patel, with increased income levels, Indias demand for milk is expected to go up to 200210 million tonnes by 2020-21. Indias milk production has been growing at over 4 per cent annually compared to the growth in world milk production which is 2.75 per cent. Per

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with its share in the global economy almost doubling in five years (2005-2010). India is World Bank groups largest client. Between 2009 and 2013, the group had extended around $25.5 billion loans to India. This includes $12 billion from the International Bank for Reconstruction and Development, $8.3 billion from the International Development Association and $5.2 billion in investments from the International Finance Corporation. 59. Exports growth perks up in Feb as markets in EU, US look up: Exports posted a growth of 4.25% to $26.26 billion in February 2013 while Imports grew at a slower pace of 2.6% to $41.18 billion. In the April-February 201213 period, exports dropped four per cent to $265.95 ($277.1 billion). Imports in the same period grew marginally at 0.25 per cent to $448.04 billion ($446.9 billion). Trade deficit, as a consequence, increased to $182.1 billion ($169.8 billion).

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For details contact 01125274157, 01165476949 or email at akg.bti@gmail.com 65. Panel set up to prepare blueprint for womens bank: A six-member committee under the chairmanship of M. B. N. Rao, former Chairman and Managing Director of Canara Bank, has been set up to prepare a blueprint for the first allwomans bank. The other members of the committee are: M. D. Mallya, Ex-CMD, Bank of Baroda; Jayshree Vyas, Managing Director, SEWA; Arundhati Bhattacharya, MD and CEO, SBI Caps; Usha Ananthasubramaniam, Executive Director, Punjab National Bank; and K. Ramakrishna, Chief Executive, Indian Banks Association. The bank is expected to start functioning from November. 66. International debit/credit cards only on demand: At present, almost all banks issue cards that have international acceptability. To minimise misuse of such cards, RBI has asked banks to withdraw this automatic facility and replace it by on-demand facility by June 30, 2013. From July 1, 2013, cards issued in India will not function abroad unless it has been activated specifically for international withdrawals and payments to parties abroad at the specific request of the accountholder. 67. Four regulators to jointly supervise financial conglomerates: The four financial sector regulators in the country have signed a Memorandum of Understanding (MoU) for co-operation in the field of consolidated supervision and monitoring of financial groups identified as financial conglomerates. The regulators which have signed the MoU are: Reserve Bank of India, Securities and Exchange Board of India, Insurance Regulatory and Development Authority, and Pension Fund Regulatory and Development Authority. Financial conglomerates undertake a range of financial activities, including commercial banking, insurance, investment banking, equity broking, and pension business. Some examples of banking conglomerates are: State Bank of India, Punjab National Bank, Canara Bank, Bank of India, and Bank of Baroda (public sector banks); ICICI Bank, HDFC Bank, Axis Bank and Kotak Mahindra Bank (private sector banks); and Standard Chartered Bank, Citibank and HSBC (foreign banks). 68. Inflation indexed bonds to be first introduced for institutional investors: However, no decision has yet been taken as to whether indexation should happen with wholesale price index (WPI) or consumer price index. Inflation indexed bonds, which found mention in recently announced 2013-14 Budget, are seen as an attempt to raise household savings and wean away Indians from gold. 69. Cabinet approves Bill for time-bound services to citizens: All services provided by both the Centre and the State Governments will be extended to citizens in a timebound manner under the Bill. The Bill envisages penalty of up to Rs 50,000 against a Government official failing to provide his or her duties. It lays down an obligation upon every public authority to publish a citizens charter, stating the time within which specified goods will be supplied and services be rendered and provides for a grievance redressal mechanism for non-compliance of its provisions. The Bill also mandates a public authority to establish a call centre, customer care centre, help desk and peoples support system to ensure the time-bound delivery of services.

60. Norms issued for unit-linked insurance products: According to the guidelines notified by IRDA, Independent rating agencies will now be allowed to evaluate unit linked insurance funds of insurance companies to help policyholders better assess and compare insurance products. The information will give policyholders clarity on operational practices, fund management quality, and organisational strength of life insurers. IRDA has asked life insurers to disclose the reduction in yield (refers to the lowering of return of a fund on account of the various charges) on a monthly basis to customers of unit linked products. The regulator has capped the reduction in yield at 4 per cent for policies with five-year tenure, 3 per cent for 10-year tenure and 2.25 per cent for more than 15 years. For a premium paying term of 5 years, commission for agents cannot exceed 15 per cent in the first year, 7.5 per cent in the second year and 5 per cent from the third year onwards. If a premium payment is discontinued by the policyholder, the regulator has prescribed a minimum guaranteed interest rate at 4 per cent on such premiums parked in the discontinued fund. 61. 17 lakh in race for 1,500 officer posts in SBI: Despite being the best bank employer, in terms of perks and growth opportunities, SBI went beyond the ritual notification to advertising extensively. SBI is offering for the post a maximum salary of up to Rs 69,000 a month in Mumbai, while it would be around Rs 50,000 in other places. 62. Govt to bear up to 8% interest on short-term loans of fertiliser cos: Government will make a special banking arrangement (SBA) of Rs 5,000 crore allowing fertiliser firms to raise short term loans through a consortium of public sector banks against the subsidy payments that are pending. 63. Committee to suggest steps to cut transaction cost of exports: According to exporters, the quantum of transaction cost is about 7-10 per cent of the total value of Indian exports. This amounts to $15 billion. 64. Sanjiv Misra takes over non-executive Chairman of Axis Bank: Sanjiv Misra, former Secretary, Department of Expenditure, Ministry of Finance, has taken over as the Non-Executive Chairman of AXIS Bank Ltd.

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70. Govt targets 60 cr Aadhaar registrations by 2014-end: So far 28.78 crore Aadhaar numbers have been generated. 71. About 30% people were below poverty line in 09-10: About 30 per cent of people in India were below the poverty line in 2009-10 that was based on the monthly per capita consumption expenditure (MPCE) of Rs 673 for rural areas and Rs 860 for urban areas. 72. Share of Indias goods exports rises to 17.7% of GDP: Despite a slowdown in global demand for goods, the share of Indias merchandise exports has increased to 17.7% cent in 2011-12 from 13.9% in 2009-10. 73. CVC gets over 7,200 corruption complaints in 2012: CVC acts as an advisory body and only tenders its advice in individual cases of corruption on a reference made by Central Government ministries, departments or organisations under its purview. 74. Credit card frauds rise to 1,590 in Dec quarter: involving an amount of Rs 948.64 lakh. 75. Rise in Gross NPAs of PSBs: The gross non-performing assets (NPAs) of the public sector banks (PSBs) has increased from Rs 71,080 crore as on March 2011 to Rs 1,12,489 crore as on March 2012. As on December 2012, the gross NPAs of the public banks rose to Rs 1,55,839 crore. As of December 2012, gross NPA (GNPA) ratio stood at 3.69 per cent, GNPA ratio in agriculture at 5.20 per cent, GNPA ratio in retail loans at 2.73 per cent and GNPA ratio in corporate lending stood at 3.41 per cent. ONGC earned a net profit of Rs 25,122 crore in 2011-12. BSNL, on the other hand, suffered losses of Rs 8,850 crore in the same period. Parekh panel for hiking banks sectoral cap for power sector: To channelise liquidity into the power sector, a proposal is being mooted for increasing the sectoral exposure limit of commercial banks and financial institutions to the power sector to 20 per cent. MNREGA workers to get more wages: From April 1, the maximum daily wage of Rs 214 has been fixed for Haryana, while Bihar, Sikkim, Tripura, Nagaland and Arunachal Pradesh will get the minimum of Rs 135. The MNREGA wage rate is linked to the Consumer Price Index for Agricultural Labour (CPIAL) from April 1 every year. Insurance Information Bureau signs MoU with Korean body: IIB collects transaction-level data of policies and claims under health, motor and other lines of business and has been generating reports on the basis of the analysis of the collected data and assists IRDA through provision of inputs. Over Rs 22,636 cr lying in inoperative accounts in EPFO: Over 3.5 lakh cases pending in consumer courts: Of these, 94,330 cases are pending in State Commissions and 2,47,733 cases in District Fora. Maximum number of cases are pending in Uttar Pradesh, Maharashtra, Rajasthan and Gujarat. Senior citizens feel the pinch as banks reduce extra interest on fixed deposits: SBI and PNB, reduced the premium on senior citizens fixed deposits from 50 basis points to 25 basis points. Impose limit on global transactions of cards: In order to check frauds, the RBI has asked banks to impose a monetary limit for international transactions on credit and debit cards. A monetary limit of $500 be imposed by the issuing bank on all global cards which have not been used in the past.

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76. ONGC retains top slot among PSUs, BSNL worst performer: ONGC has retained the top position in the coveted list of 10 most profit-making PSUs, while BSNL was the biggest loss-making state-run company in 2011-12.

APRIL 2013
1. Who are members of BRICS?: Brazil, Russia, India, China and South Africa 2. What is Code of Banks Commitments to Customers?: The Code, which is voluntary, sets minimum standards of banking practices for banks to follow when they are dealing with individual customers. 3. What is likely to be included in the part of Code of Banks Commitments to Customers?: Financial Inclusion. 4. In India, what is the proportion of people having any kind of life insurance cover?: 10 per cent. 5. In India, what is the proportion of people having any kind of non life insurance cover?: 0.6%. 6. How much percentage of Indian population has credit card? 2% 7. Which country was recently rescued from the brink of a likely banking sector default?: Cyprus 8. In which area highest number of complaints were reported to the Banking Ombudsmans?: Card related complaints. 9. The Financial Sector Legislative Reforms Commission (FSLRC) was headed by: Justice (retd) B.N. Srikrishna 10. What is the recommendation of FSLRC regarding regulatory bodies: Bodies like SEBI, the Forward Markets Commission, the Insurance Regulatory and Development Authority and PFRDA should be subsumed into a new unified regulatory agency. However, for the time being, Reserve Bank of India should not be brought under the 'unified regulator'. 11. ING Vysya Life is now subsidiary of which company: Exide Industries. 12. According to a UN Report, how many children around the globe, under the age of five, die every day from diseases linked to unsafe water, poor sanitation and hygiene?: 2,000 (24 per cent of the deaths occurring in India alone).

13. The National Manufacturing Policy, aims at enhancing the share of manufacturing in GDP to: 25 per cent within a decade. 14. Market regulator SEBI has issued a framework on product labelling with colour coding for: mutual funds. A blue colour coded box would indicate low risk,

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yellow would signify a medium risk, while brown represent schemes with high risk. Who is the largest energy consumer in the world?: US, followed by China, Russia, India. How much food grain is to be given at subsidized price as per revised Food Bill?: 5 kg per head RBI has extended the deadline for mandatory use of new format cheques to: July 31, 2013. The contribution of agriculture and allied sector to the Gross Domestic Product of the country declined from 14.6 per cent in 2009-10 to 14.5 per cent in 2010-11 and further to 14.1 per cent in 2011-12 and may fall to ____in FY13: 13.7% What is the name of online insurance plan introduced by SBI Life?: eShield Urban cooperative banks to implement CBS by: Dec 31, 2013. Minimum net-owned funds for money transfer business: Rs 50 lakh. Further, collateral equivalent to three dayss average drawings or $50,000, whichever is higher, may be kept by the Overseas Principal in favour of the Indian Agent with a designated bank in India. Rs 10 plastic notes to be issued in: Kochi, Mysore, Jaipur, Bhubhaneswar and Shimla. Committee to suggest steps to cut transaction cost of exports: According to exporters, the quantum of transaction cost is about 7-10 per cent of the total value of Indian exports. This amounts to $15 billion. Panel set up to prepare blueprint for womens bank to be headed by: M. B. N. Rao, former Chairman and Managing Director of Canara Bank. International debit/credit cards to be issued only on demand and not automatically with effect from: July 1, 2013. Four regulators to jointly supervise financial conglomerates are: Reserve Bank of India, Securities and Exchange Board of India, Insurance Regulatory and Development Authority, and Pension Fund Regulatory and Development Authority. 27. As per Bill for time-bound services to citizens approved by Cabinet, what is the penalty for not providing service in stipulated time: up to Rs 50,000. 28. Number of persons below poverty line in 2009-10: About 30%. It is based on the monthly per capita consumption expenditure (MPCE) of Rs 673 for rural areas and Rs 860 for urban areas. 29. Share of Indias goods exports in GDP in 2011-12: 17.7% of GDP 30. Which state gives maximum wages under MNREGA: Haryana; From April 1, the maximum daily wage of Rs 214 has been fixed for Haryana, while Bihar, Sikkim, Tripura, Nagaland and Arunachal Pradesh will get the minimum of Rs 135. 31. The MNREGA wage rate is linked to: Consumer Price Index for Agricultural Labour (CPIAL). 32. Who is the Secretary in the Department of Financial Services (DFS): Rajiv Takru 33. The Deputy Governor of RBI appointed in Jan 13: Urjit Patel. 34. Who is chairman of 14th Finance Commission: Dr Y.V. Reddy 35. What is the mandate for 14th Finance Commission: Besides the tax-sharing formula between the Centre and the States, the panel has been mandated to look into the pricing of public utility services such as drinking water, irrigation and power and public transport so as insulate them from policy fluctuations through statutory provisions. 36. India Mortgage Guarantee Corporation is subsidiary of: National Housing Bank (NHB). 37. Per capita availability of milk has increased to: 290 grams per day, which is comparable with world per capita availability of 289 grams per day 38. Who has been appointed as President of Asian Development Bank Board?: Takehiko Nakao 39. Which bank has discontinued Free Accident Insurance recently?: SBI will discontinue a free accident insurance cover given to its home and car loan customers from July 2013. 40. Direct Benefit Transfer Scheme will be expanded to how many districts from July 13: 78

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MAY 2013
1. RBI plans open market operations: According to Deputy Governor, H.R. Khan, RBI is looking at conducting open market operations (OMO) after assessing the Government's cash balance. Liquidity within the banking system still remains tight as the daily liquidity borrowings by banks under the RBI's Liquidity Adjustment Facility is close to about Rs 1 lakh crore. Banks to fund road developers if at least 80% land is tied up: Till now, lenders had been insisting that the developers take complete control of the land before getting funds. As on March 2012, banks had lent Rs 114,000 crore to the road sector, which is 18.5 per cent of the total bank exposure to infrastructure. MFI lending rose 13% last fiscal: According to Microfinance Institutions Network data, the gross loan portfolio of microfinance institutions (MFIs) has increased 23 per cent in 2012-13 compared to negative of 14 per cent in 2011-12. The loan disbursals during the year grew by 13 per cent compared to the previous year. Tamil Nadu now has the largest number of microfinance institutions among all States, while in terms of branch network, West Bengal tops. Andhra Pradesh, West Bengal, Tamil Nadu, Karnataka and Maharashtra accounted for 64 per cent of the gross loan portfolio. FinMin, IRDA in talks to raise LIC's equity investment cap: The Finance Ministry has been pitching for an increase in the equity investment limit to 30%. The IRDA, in February 13, raised the equity investment cap for all insurance companies, including LIC, from 10% to 15%. House panel for separate body to monitor public deposits: A Parliamentary panel has suggested that the Finance Ministry set up a co-ordination body to monitor public deposits till any regulatory action on the basis of recommendations given by Financial Sector Legislative Reforms Commission is finalized. The body should consist of representatives of the Reserve Bank of India (RBI), the

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Securities and Exchange Board of India (SEBI), the Ministry of Corporate Affairs and State Governments. At present, NBFCs are regulated by RBI, while chit funds are regulated by State Governments. Nidhi funds fall under the Ministry of Corporate Affairs domain, and the Collective Investment Scheme is governed by SEBI regulations. 6. UIDAI launches 3 Aadhaar-enabled services, permanent enrolment centres: After the launch, people in need of an Aadhaar number can go to permanent enrolment centres, where they will get not just e-Aadhaar numbers for Rs 10, but can also get a unique identity number to any new addition in the family, besides updating biometric or demographic data by paying Rs 15. The Aadhaar Kendras will be located in Common Service Centres or Government Buildings in block/mandal/tehsil/taluka or municipal ward offices. Three Aadhaar-enabled services have been launched, including e-KYC, OTP (one-time pin) authentication and Iris authentication. The e-KYC service will enable individuals to authorise service providers to receive electronic copies of their proof of identity and address. This service can be deployed by agencies to verify a residents identity and address. Only demographic information (name, address, date of birth, gender, photograph and mobile number) that is collected during Aadhaar enrolment will be shared, at the request of, and/or with the consent of the number holder. However, the information will be available only for a few seconds to the service provider to avoid misuse. 7. SBI ties up with Spanish bank: State Bank of India has entered into a tie up with Spanish bank Banco Bilbao Vizcaya Argentaria, SA (BBVA) to develop business operations in Latin America and Spain. BBVA is the second largest bank in Spain. 8. Overseas offices of Indian Insurance companies: According to the guidelines issued by the Insurance Regulatory and Development Authority (IRDA), Indian insurance companies can open offices overseas subject to following conditions (a) minimum of three years of operation; (b) minimum net worth of Rs 500 crore in case of life insurers and Rs 250 crore in case of general insurers, and Rs 750 in case of reinsurers; (c) good financial health and profits for three years in the last five years from the date of application to the regulator, with prescribed solvency ratios. 9. Nabard suggests three-way joint venture for womens bank: According to Nabard, the womens bank, mooted in the Union Budget for FY2014, should be floated as a joint venture between the Government, five-six major public sector banks and a development financial institution. The Government should hold 26 per cent stake in the proposed bank, which will be run by women exclusively for women, while public sector banks and Nabard will together hold 74 per cent. The objective of the proposed bank, as outlined by the budget, will be to lend mostly to women and womenrun businesses, support women self-help groups and womens livelihood, employ predominantly women, and address gender related aspects of empowerment and financial inclusion. 10. Developers gear up to tap ECB route for affordable housing: The Reserve Bank of India has allowed developers and housing finance companies to raise a maximum of $1 billion for affordable housing. Besides saving on interest cost, the window gives developers an alternative route to raise funds at a time when they are facing a liquidity crunch with little or no access to project finance through domestic sources. The all-in costs including hedge costs through this route works out to be below 10%.

11. American Express rolls out unique rewards plan for mid-sized firms: In a first- of- its-kind initiative, American Express has come up with a reward programme that seeks to provide reward points to companies as against the individual users of its cards. Under this programme, reward points earned on corporate spends such as travel and entertainment will accrue to the company and not the employees who are spending. 12. Shashi Kant Sharma is new CAG: Shashi Kant Sharma has assumed charge of the Constitutional post at the CAG office. He will have tenure up to September 24, 2017. Prior to becoming CAG, Sharma was Defence Secretary. 13. Local goods sans excise at duty-free shops: As per Govts decision to promote brand India, excise-free India-made goods will be available at duty-free shops (DFS) in international airports in the country. Prior to this, indigenous goods were sold in the arrival halls of international airports in the country, but were not dutyfree, unlike imported goods. A passenger arriving from abroad or leaving the country will now have the choice to buy either duty-free imported goods or duty-free indigenous goods within his overall permissible baggage allowance. 14. Govt moves away from PPP model for roads: The Highway Ministry appears to have dumped the public private partnership (PPP) model, after no bids were received under this model after 2012-13. With many projects awarded in 2011-12 and 2010-11 on a PPP basis also yet to take off, the Ministry has decided to go for EPC (engineering procurement construction) contracts instead, where only the design and construction parts are contracted out. In the EPC model, the Government funds a highway, with private firms designing and building the road. This is unlike the PPP model, where the private sector

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has to fund the road-building. Earlier, the Government had promoted two models of public-private partnership (PPP) for building highways. The two PPP models were buildoperate-transfer (BOT)-toll and BOT-annuity. 15. Loans for affordable housing to get cheaper: Loans for low-cost housing are set to get cheaper as housing finance companies have been given easier access to overseas funding. The National Housing Bank (NHB) will draft guidelines to ensure a cap on interest rates for affordable housing loans, which will be financed through overseas funding. 16. Despite fall, rupee doing better than other global currencies: The Indian rupees has declined 1.5 per cent against the US dollar in 2013 compared to South Africas rand which has declined 11.1 per cent, Russian ruble which depreciated by 2.1 per cent. But Brazils Real has appreciated 0.6 per cent and Chinas renminbi by 1.7%. 17. States role crucial in inflation control: According to Reserve Bank of India Governor D. Subbarao, States have a critical role to play in inflation management as they are important stakeholders in eliminating supply constraints in the economy. States could address the supply constraints by increasing productivity in agriculture, improving infrastructure especially rural infrastructure, streamlining public distribution system and addressing governance concerns to create enabling environment for investment. 18. Firms violating minimum public holding norm will face backwash: According to SEBI Chairman U. K. Sinha, companies which do not meet the minimum public shareholding norm of 25 per cent by June this year will face consequences. The deadline for Government companies, which must have a minimum public shareholding of 10 per cent, is August 2013. Despite these norms being laid down three years ago, there are over a 100 companies that have not moved towards compliance. 19. A bank should have only one broking licence: According to a panel set up by IRDA, a corporate bank should be allowed to have only one insurance broking licence. While functioning of banks as insurance brokers would help increase insurance reach, there could be conflict of interest when a bank forms a broking firm as they are also promoters of some insurance companies. The broking arm of banks should be an independent, account unit to be manned by exclusive staff trained by institutes imparting insurance related education. On sub-broking, the committee said it should be allowed for all insurance products and not merely retail personal products. Small banks such as cooperative banks and regional rural banks should be allowed as sub-brokers. There should be a cap of Rs 1 lakh premium on policies to be procured by the subbrokers. The panel is in favour of bancassurance channel, as compared to the agency channel. Banks accounted for 11.25 per cent of total new business premium collected by life insurers during 2011-12. The share was 36 per cent for private life insurers and 1.51 per cent for Life Insurance Corporation. 20. Peoples confidence in Indian banks intact: According to a survey by strategic consultant, Gallup, despite allegations of involvement in money laundering, 70 per cent respondents in India have confidence in Indian banks. 21. Withholding tax on rupee-denominated infra bonds lowered to 5%: From June 1, foreign investors will have to pay 5 per cent withholding tax on interest earned on rupeedenominated long-term infrastructure bonds issued by Indian companies and Government securities. Earlier, the rate was 20 per cent. The new norms will be applicable for interest earned by foreign institutional investors and qualified foreign investors between June 1, 2013 and May 31, 2015. Withholding tax is like tax deducted at source for non-resident investors. In the 2011-12 Budget, the rate of withholding tax on interest payments on borrowings of infrastructure debt funds was reduced from 20 per cent to 5 per cent to enhance resource availability for infrastructure development. 22. China signs pacts with India to bridge trade deficit: China may soon resume imports of oilmeal and buy more pharmaceuticals, marine products and buffalo meat in a bid to narrow the widening trade gap between the two countries. Indias trade deficit with China widened to $40.8 billion in 2012-13 from $39.4 billion in 2011-12, despite a 10 per cent contraction in total trade during the year. 23. RBI cuts time to bring back export earnings: In a bid to attract dollars into the country in the face of rising current account deficit (CAD), RBI has brought down the realisation period of sale proceeds for exporters from 12 months to nine months from the date of export. 24. FinMin feels let down by S&P rating: International rating agency Standard & Poors (S&P) has reaffirmed a negative outlook and rating of BBB (minus) for India whereas the Finance Ministry expected a rating of stable outlook. This is due to the fact that Indias GDP is likely to grow by more than 6% higher than many other economies in the Asia Pacific, except China. The Wholesale Price Index-based inflation (WPI) for April was at 4.89 per cent, the lowest in 40 months. At the same time, retail inflation in April was 9.39 per cent. A fiscal consolidation road map has been laid down, which intends to gradually reduce the fiscal deficit to three per cent in 2016-17. The fiscal deficit for 2012-13 is likely to be around five per cent and 4.8 per cent for 201314. The countrys current debt is largely dominated in local currency. Indicators such as short-term external debt, external debt-to-GDP ratio, debt service ratio, maturity and yield profile of Government debt are well within the comfort zone, and better than many peer group countries. During 2006-12, Indias debt/GDP ratio decreased by 12 per cent.

CORRESPONDENCE COURSE

CAIIB NEW/JAIIB
For details contact 01125274157, 01165476949 or email at akg.bti@gmail.com 25. No need for unified regulator for housing finance companies: According to R.V. Verma, Chairman and Managing Director of National Housing Bank (NHB), the business model of specialised HFCs was different from that of banks and it calls for specialised regulation focusing on innovation, personalisation and efficiency in both services and pricing. Earlier, the SBI Chairman Pratip Chaudhuri had pitched for a single regulator for all housing loans to bring down the regulatory arbitrage between banks and HFCs. Currently, RBI regulates the housing loans provided by banks while NHB is the regulatory body for home loans disbursed by HFCs. There are nearly 57 HFCs together accounting for a little over 30 per cent of the Rs 7 lakh crore housing loan market. 26. Design banking products for rural people: According to Prakash Bakhshi, Nabard Chairman, with tiny landholdings in rural India growing, there is a need to develop banking products for farmers that will help in capital formation. NABARD Chairman, inaugurated the new campus of Bankers Institute of Rural Development (BIRD). 27. Bankers call for more awareness campaigns on ponzi schemes: According to bankers, Financial literacy and investor awareness campaigns need to be initiated to caution depositors from investing in schemes floated by shady companies. Financial market regulators such as the

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Reserve Bank of India (RBI) and Securities and Exchange Board of India (SEBI) should launch awareness campaigns. (IDA) window for a long-term tenure of 25 years. Through this borrowing guaranteed by the Central Government NHB will refinance mortgage loans for people in the lower income segment at affordable rates. Standardisation of life insurance products likely by August: Under the IRDAs use and file process, life insurers filing products based on standard parameters will automatically be deemed to have been approved after 15 days of intimating the regulator. In FY13, NRI deposits climb 19%: Non-resident Indians (NRIs) placed deposits aggregating $14.18 billion in the financial year ended March 2013, an increase of 19 per cent over the previous year. NRE deposits with the banking system jumped 85 per cent (rising by $15.81 billion in FY13 compared to $8.53 billion in FY12). The attractiveness of NRE deposits lies in the fact that banks quote the same interest rate on these as on domestic deposits. Panel set up to evolve composite development index of States: The Centre has set up an expert committee for evolving a composite development index for States. This expert committee will be headed by Raghuram Rajan, Chief Economic Advisor to the Finance Ministry. This panel will consider backwardness of the States in terms of measures like distance of the State from the national average under criteria such as per capita income and other human development indicators. The present criteria for determining backwardness are based on density of population, terrain and length of international borders. Need to bring down gold demand: According to Dr C. Rangarajan, Chairman to the Prime Ministers Economic Advisory Council, India needs to reduce its gold demand from about 1,000 tonnes a year to 700 tonnes. This is necessary as increased gold imports are adversely impacting the current account deficit (CAD). The demand for gold can be reduced by taming inflation and enhancing the real rate of return on financial products. Gas consumers in 20 districts to get subsidy transferred to bank accounts: Nearly 76 lakh consumers across 20 districts in eight States and two Union territories would get their subsidy for domestic cooking gas directly in their bank accounts starting June 1. The process is linked to Aadhaar number. Consumers need to provide their Aadhaar numbers to their LPG distributor as well as the bank where they hold their account. FinMin notifies scheme to encourage service tax payment: In an effort to boost revenue, the Finance Ministry has notified Service Tax Voluntary Compliance Encouragement Scheme. This will be a one time scheme. It aims to cover nearly 10 lakh service tax assessees who have stopped filing tax returns. This scheme will be for non-filers too. The assessees concerned will have to give a truthful declaration of all pending dues between October 1, 2007 and December 31, 2012. Under the scheme, the assessee will be given an opportunity to pay half of the dues by December 31 this year while remaining amount can be paid by June 30, 2014. There will be no interest, penalty or any proceeding. However, if dues remain as on July 1, 2014, the assessee will have to pay with interest by December 31. This scheme will not cover any assessee against whom any inquiry or investigation is pending by the issue of search warrant or summon or by way of audit. Wholesale inflation falls to 41-month low in April: The wholesale price index (WPI)-based inflation for April dropped to a 41-month low of 4.89 per cent. The April 2013 WPI inflation had the slowest pace since November 2009 when it had touched 4.78 per cent. Retail inflation for April had come in at 9.39 per cent, lower than the 10.39 per cent level in the previous month. Banks prodding student borrowers to furnish PAN: To prevent student borrowers from doing a vanishing act after

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28. India could face 200 mt coal shortfall by end of 12th Plan: According to Planning Commission, India will still face a shortfall of about 200 million tonnes of the fuel source by the end of the 12th Plan Period and India would have to depend on imported coal, unless it is able to tap other natural resources to a greater extent for power production. Indias coal demand is estimated to go up from 640 million tonnes (mt) in 2011-12 to about 980 mt by the end of the 12th Plan (2012-17), by which time its production could reach 795 mt. 29. No gas supplies for multiple connections: Households that have more than one unverified cooking gas connection under one roof will not get refills from June 1. 30. High fiscal deficit forces S&P to affirm negative outlook on India: The agency has reaffirmed Indias sovereign rating at BBB (minus). The outlook on the long-term rating remains negative. A negative outlook implies a one in three chance of a rating downgrade in the next 12 months. 31. House panel wants ban on unrealistic deposit schemes: In the light of the Saradha group scam, Parliaments Standing Committee on Finance has called for a complete ban on all deposit schemes which promise abnormal returns. 32. Cooperative societies more bankable for poor: According to a RBI study, Cooperative societies are seen by the poor as more approachable than banks. 33. NHB gets first-ever $100 m credit line from World Bank: The World Bank Group has approved a $100 million concessional loan to the National Housing Bank (NHB) for a low-income housing programme. The soft loan is being provided under the international development assistance

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completing higher education, banks are encouraging them to apply for permanent account number (PAN) at the time of taking loans. By asking for PAN, banks will be able to track down those who have defaulted on loan repayments. Exports rise in April, but trade deficit widens: Indias goods exports grew for the fourth straight month in April at 1.68 per cent to $24.16 billion, but gold imports more than doubled during the month widening the trade deficit. Retail inflation falls in April to 9.39%: Retail inflation fell for the second month in a row to 9.39 per cent in April on the back of easing vegetable and edible oil prices. The consumer price index (CPI)-based inflation for March stood at 10.39 per cent in March and 10.91 per cent in February. 23 major Central PSUs to invest around Rs 1.42 lakh cr: The Prime Minister Office (PMO) has set a target of approximately Rs 1.42 lakh crore for capital expenditure and investment plans of 23 Central public sector enterprises (CPSEs), and will monitor these on a quarterly basis. These companies include ONGC, Oil India, GAIL, Indian Oil, SAIL, NMDC, PowerGrid, NHPC, NTPC, and Coal India besides others. Exports rise in April, but gold imports widen trade deficit: Indias goods exports grew for the fourth straight month in April at 1.68 per cent to $24.16 billion, but gold imports more than doubled during the month widening the trade deficit. Gold imports during the month rose 138 per cent to $7.5 billion from $3.1 billion in April 2012. With an improvement in the US economy and rise in exports to new markets such as Latin America, Africa and CIS, the Commerce Department has set an export target of $325 billion for 2013-14 which will be about eight per cent higher than $300.6 billion in 2012-13. Imports during April increased 10.96 per cent to $41.95 billion, while trade deficit increased 21 per cent to $17.78 billion. India, Iran to push for trade to cross $25 b in 4 years: Currently, Indo-Iran trade cooperation amounts to $15 billion. Retail FDI: Local sourcing applies only to initial investments: According to Commerce & Industry Minister Anand Sharma, foreign investors in multi-brand retail will have to compulsorily put in half of their total initial investments into creation of new back-end infrastructure facilities, but for additional investments in the future they would be exempt from such a condition. The FDI policy stipulates a minimum initial investment of $100 million in multi-brand retail half of which is to be channelised into back-end infrastructure such as processing, distribution, design improvement, quality control, packaging, logistics, storage, warehouse and agriculture market produce infrastructure. GST regime to exempt at least 96 items from tax: The Centre and States have agreed to have a common exempted list for at least 96 goods under the proposed Goods and Services Tax (GST) regime. At present, 96 items are in the exempted category of goods for Value Added Tax (VAT), while the Centre has exempted 243 items from Central excise. SBI signs pact with Korea bank to support SMEs: State Bank of India has signed a memorandum of understanding with Industrial Bank of Korea to support the business activities of Korean small and medium enterprises entering or already operating in India. Currently, there are 480 Korean SMEs operating in India. Govt may scale down export target of $500 b for this fiscal: The doubling of exports by 2013-14 projected two years ago was based on the economic conditions prevalent at that time. Exports in 2012-13 fell 1.76 per cent to $300.6 billion compared to $306 billion the previous year, as orders from the European Union and China dried up. 51. Brazils Azevedo is next WTO chief: Current WTO Director-General Pascal Lamy, who is from France will leave office on August 31. 52. Indian exports to Iran may touch $5 b in 2013-14: Indias exports to Iran in 2012-13 jumped 39.4 per cent to $3.36 billion from $2.41 billion in 2011-12 after the two countries put in place a Rupee payment mechanism payment for part of the oil purchased from Iran is deposited in a Rupee account in Indias UCO Bank. This money is then used to make payments to Indian exporters to Iran thereby avoiding payments in dollars and through foreign banks.

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53. SBI not looking at group consolidation for now: According to SBI Chairman, SBI was not looking at consolidation of any of its associate banks with itself for now. However, there was good economic logic in going for consolidation of its associate banks with SBI. 54. Business correspondents help extend banking service to over 2 lakh villages: The financial inclusion plan (FIP) 2010-13, which was introduced by various banks in April 2010, has so far provided banking services to 2.11 lakh villages. Before this, the number of villages having banking facility was 67,694. The number of business correspondents, which was 34,532 before the implementation of FIP, went up to 1.52 lakh as at endDecember 2012. And, various banks opened 5,694 rural branches. The number of basic savings bank deposit accounts has gone up from 73.45 million in 2010 to 171.43 million as at end-December 2012. 55. Factory Asia is Indias next target: According to Chief Economic Advisor Raghuram Rajan, India aims to enter the coveted Factory Asia league. Factory Asia refers to the model of regional production networks connecting different Asian economies, producing parts and components that are then assembled, with the final product shipped largely to advanced economies. This phenomenon began with economic liberalisation in China in the late 1980s, aided by rapid development of production networks. The group comprises, among others, China, Japan, South Korea and Indonesia. India has moved up in country ranking by manufacturing nominal gross value-added. From 14th place in 1980, it moved up to 10th in 2011. 56. Transparency in pricing of retail loans: RBI has said that practice of variation in rates of interest on borrowers with same risk profile may be reflective of opaqueness in the system. Banks should have a management oversight on such practices and also frame policies that ensure pricing of loans, especially retail loans, is transparent, realistic, and related to the risk perception of the borrowers. 57. Cabinet panel okays PSU exchange traded fund launch: The Cabinet Committee on Economic Affairs has approved the setting up of a Central Public Sector Enterprises (CPSE) Exchange Traded Fund (ETF). The move will help the Government in its disinvestment programme. This ETF would comprise CPSE stocks (from among the listed CPSE stocks). Each stock would have a fixed weightage in the basket. 58. Govt plans to set up Rs 5,000-cr inclusive innovation fund: India plans to set up a dedicated Rs 5,000-crore fund to boost scientific innovations that can improve the life of the common man. The Union Government will initially contribute Rs 100 crore to this fund to be called India

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Inclusive Innovation Fund. The remaining amount to the fund will come from scheduled banks, insurance companies, corporates and high networth individuals as well as bilateral and multilateral institutions. 59. Strong regional demand to drive growth in Asia: The newly appointed President of the Asian Development Bank (ADB), Takehiko Nakao, has expressed hope that Asian countries will continue to enjoy growth based on strong demand in the region. 60. World Bank sees India growing at 6.1% this fiscal: Growth is expected to increase further to 6.7 per cent in 2014-15. The World Banks optimism stems from positive data points in the recent months in the areas of manufacturing, inflation and better export numbers. 61. Inflation-indexed bonds: RBI will issue inflation-index bonds (IIBs). However, there will be no special tax sops for investments in these bonds. IIBs are aimed at weaning investors from investing in gold and real estate and channelling public savings into financial instruments. These bonds will have a fixed real interest rate and a nominal principal value that is adjusted against inflation. Each retail investor can invest from Rs 10,000 to Rs 2 crore in the primary issuances of IIBs that will have tenure of 10 years.

JUNE 2013
1. S.K. Roy has been appointed as the new Chairman of Life Insurance Corporation. 2. Indian Railways has decided to start offering train tickets via mobile SMS. The services of IRCTC, the subsidiary of Indian Railways will come into effect from July 2013. The fees will be around 0.15 to 0.25 US dollars. 3. China has developed the Fastest Computer of the World Called Tianhe-2. Tianhe-2 is a supercomputer developed by China's National University of Defense Technology. 4. Retirement fund body Employees' Provident Fund Organization (EPFO) has launched its e-Passbook service. It will help PF subscribers to access their accounts online. Active subscribers, whose electronic challan-cum-return is already uploaded, can download their e-Passbook every month. 5. A survey conducted by United Nations Conference on Trade and Development (UNCTAD) revealed that India was the third most attractive destination for investment in the world after China and the United States. 6. Muthoot Finance got in-principal approval from the Reserve Bank of India (RBI) for establishing as well as operating White Label ATMs (WLAs). 7. An On-site Passenger Complaint Redressal System (OPCRS) is being developed by Railways to launch an SMSbased service for immediate response to passenger complaints regarding housekeeping service in coaches. 8. The Government has announced that growth in Indias gross domestic product (GDP) in 2012-13 crashed to 5%, the lowest in 10-years. 9. Due to higher revenue receipts and higher non tax revenue collection, fiscal deficit for 2012-13 has come to 4.89 per cent of GDP against revised estimate of 5.2 per cent. The government in the Budget had proposed to lower fiscal deficit to 4.8 per cent of GDP in 2013-14 and reduce it gradually to 3 per cent by 2016-17. 10. As per RBI, overseas direct investment by Indian companies more than trebled to USD 7.64 bn in April 2013, from USD 1.89 bn in March 2013. 11. As per a new index of financial inclusion released by ratings and analytics firm CRISIL, southern states have emerged on top on financial inclusion parameters, while the East and some of the developed states of the West - including Gujrat and Maharastra are below the national average. As per the index, Puducherry topped the list, followed by Chandigarh and Kerala. 12. The first-ever Dalit industries-focused social impact fund, DICCI SME Fund has been launched. The venture capital fund, initiated by the Dalit Indian Chamber of Commerce & Industry (DICCI), aims to raise Rs 500 crore which would be deployed over the next 10 years to finance Dalit entrepreneurs. The fund, approved by Sebi, was launched 13. 14. with an initial contribution of Rs 10 crore by the Small Industries Development Bank of India. The Govt has raised import duty on gold by two percent from 6% to 8% to discourage imports. As per 68th round of National Sample Survey Organisation (NSSO), the percentage of Indians employed in agriculture hasslipped below 50%; Male unemployment in urban areas has risen to 3.2%. India has slipped to 70th position in terms of foreign money lying with the Swiss banks and accounts for a meager 0.10% of total global wealth held in the Switzerland banking system. As per United Nations population report, India would pip China as the worlds most populated country in the world by 2028. The Global Innovation Index (GII) 2013, has ranked India as 66th most innovative nation among 142 economies. Switzerland topped the list, followed by Sweden, United Kingdom, Netherlands and the US. India is projected to replace China as the world's largest cotton producer by 2022 on account of higher growth in output over the next decade. As per Organisation for Economic Cooperation and Development (OECD), India has probably surpassed Japan to become the world's third largest economy after the US and China, even as it lowered country's economic growth projection for 2013 to 5.3%. By early 2030s, the BRIICS' (Brazil, Russia, India, Indonesia, China and South Africa) combined GDP should roughly equal that of the OECD (based on current membership). As per Ministry of Statistics and Programme Implementation, monthly per capita expenditure (MPCE), measured in terms of uniform reference period, for urban areas rose by 17% from Rs 2,399.24 in 2011-12 to Rs. 1,785.81 in 2009-10. However, rural MPCE rose faster by 19% to Rs. 1,278.94 from Rs 9,27.70 during the same period. Due to robust increase in business in the last two years, the Finance Ministry has allowed 15 of the 19 nationalised banks to create up to three additional positions in the rank of general manager. The ministry has also relaxed the guidelines for promotion of officers, who do not have sufficient work experience in rural/semi-urban areas, and specialist officers, who do not have sufficient experience in field operations. The Railway Board hopes to complete installation of biotoilets in all 40,000-plus coaches of the Indian Railways by 2019.

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26. Huge costs, particularly relating to employee benefits and provisioning for non-performing assets, might delay the merger of the five associate banks with State Bank of India. 27. The consumer price index (CPI)-based inflation for May was, however, lower than retail inflation of 9.39 per cent in April. 28. Fitch revises Indias rating outlook to stable from negative mainly because of a lower-than-estimated fiscal deficit and reform initiatives by the Government. 29. April industrial growth revised upward to 2.3%. Electricity generation growth has been revised to 4.2%.

24. The headline inflation for May dropped to a 42-month low of 4.7 per cent. 25. A total of 29 Axis Bank accounts, including 12 salary accounts of Mumbai police personnel, were hacked in April and May. A sum of Rs 13 lakh was withdrawn through ATMs in Greece from 29 accounts.

VARIOUS RATES AT GLANCE Bank Rate 10.25% CRR 4.0% SLR 23.0% Repo Rate 7.25% Reverse Repo Rate 6.25% MSF Rate 10.25%

JULY 2013
1. SEBI GETS MORE TEETH The Securities Law Amendment Ordinance 2013 was promulgated on July 18, 2013 to amend the -- the Securities and Exchange Board of India (Sebi) Act, the Securities Contracts Regulation Act (SCRA) and the Depositories Act, for providing more powers to the capital markets regulator for enforcement against illegal Collective Investment Schemes and to curb insider trading. Owing to new and innovative methods of raising funds from investors, such as art funds, time-share funds, emu /goat farming schemes, there has been regulatory gap /overlap regarding types of instruments / fund raising. At the same time, SEBI receives complaints against unapproved fund raising activities of certain companies that claim that they do not come under the purview of SEBI Collective Investment Scheme regulations. With the amendments in force now, SEBI would have powers to regulate any pooling of funds under an investment contract involving a corpus of Rs.100 Crore or more, attach assets in case of noncompliance and Chairman SEBI would have powers to authorize the carrying out of search and seizure operations, as part of efforts to crack down on ponzi schemes. Main provisions of the amending Ordinance are given below: 1. Collective Investment Schemes: To tackle the growing menace of ponzi schemes being floated as Collective Investment Schemes (CIS), any money collection of Rs 100 crore or more will be classified as CIS operation. Sebi has been given powers to crack down on illegal investment schemes floated by individuals as well. Till now it had power to probe against companies. However, all government-notified schemes would be out of the Collective Investment Scheme framework. 2. Disgorgement: Sebi has been given powers to pass disgorgement orders for amount equivalent to wrongful gains or to losses averted by contravention of regulations. Thus, powers have been granted to Sebi in order to recover wrongful gains made in contravention of law. The amount disgorged shall be credited to 3. Investor Protection and Education Fund established by the Board. Recovery: If a person fails to pay the penalty imposed by Sebi or fails to comply with any direction for refund of money or any disgorgement orders, the recovery officer appointed by Sebi can proceed to recover such an amount. The recovery can be done through modes including attachment and sale of the persons movable or immovable properties, attachment of bank accounts, arrest of the person and his detention in prison, or appointment of a receiver for the management of the persons properties. The properties and bank accounts that can be attached would also include those transferred to the names of his spouse or minor child, or sons wife or sons minor child. These provisions would continue to apply even after attainment of majority by a minor child or sons minor child during the attachment procedures. Power to seek information: SEBI can seek information from other domestic and foreign regulators retrospectively from March 6, 1998. For seeking information from outside the country, Sebi can enter into an arrangement, agreement or understanding with relevant foreign authorities with the prior approval of the central government. Further, Sebi can now ask for information or records from any person, banks, authorities, boards or corporation, if the regulator is of the opinion that such details could be relevant to any investigation or inquiry being undertaken by it. Besides, SEBI would have powers to seek information, such as telephone call data records, from any persons or entities in respect to any securities transaction being investigated by it. Search: The regulator can now enter and search buildings, places, vessels, vehicles and aircraft of defaulters. Its officers can also break open the lock of any door, box, locker, safe almirah, etc to get information from suspected entities. Sebi can also

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access the documents maintained in the electronic format. 6. Special Court: For speedy trial of offences under various Sebi regulations, Central Government can set up as many special courts as may be necessary. Such courts would consist of a single judge to be appointed by the central government with concurrence of the Chief Justice of the High Court within whose jurisdiction the judge to be appointed is working. The judge would need to hold the office of a Sessions Judge or an Additional Sessions Judge immediately before such appointment. Till the time a Special Court is established, any offences committed under Sebi Acts would be tried by a Session Court. 7. Settlement: Any person against whom any proceedings have been or may be initiated by Sebi under certain sections, may file an application to Sebi proposing for settlement of such proceedings for the alleged defaults. After taking into account the nature, gravity and impact of defaults, Sebi can accept or reject such a settlement on payment of an amount to be decided by the regulator, subject to various terms and conditions. However, no appeals can be made against Sebis decision in these matters. The settlement provision has been made applicable retrospectively with effect from April 20, 2007. Government believes that these amendments would give SEBI the legal backing to clamp down on unscrupulous entities that are using newer methods to take gullible investors for a ride. Fraud on banks, more by the rich: According to Dr K. C. Chakrabarty, Dy Governor, RBI, an analysis of the frauds reported in the banking system over the last two decade shows that the number of frauds had not gone up significantly, but the quantum has increased manifold. The number of reported frauds in the banking system over the last 10 years was 1,76,547, and valued at Rs 31,400 crore. In the last 25 years, a mere 61 fraud cases (involving Rs 50 crore or more in each case) accounted for a whopping Rs 13,000 crore, through 208 bank accounts. Instead of transaction-related frauds (like credit/debit card, and so on), loans-related frauds are major area of concern. Govt to extend barcoding, labelling norms to all major exports: As of now, barcoding and labelling is mandatory for export of grapes and pharma products. It would improve quality and prevent spurious goods. IRDA bancassurance norms may be delayed: The Insurance Regulatory and Development Authority (IRDA) guidelines for tie-ups of insurance companies with banks for distribution of products may be delayed as the feedback to the regulator reflects divergent views from various stakeholders. Under the current bancassurance (distribution of insurance products through banks) model, a bank is allowed to become corporate agent of only one insurer it can sell insurance products of one life, one general insurer and a standalone health insurer. But after becoming a broker, banks can sell products of multiple insurance companies. In the Budget, the Finance Minister had allowed banks to become insurance brokers, selling the policies of several insurance companies. According to current IRDA guidelines, a broker has to set up a separate subsidiary with a separate share capital for distribution of insurance products. However, the insurance regulator is considering amending this regulation to allow banks to distribute insurance through their existing branches without setting up a separate subsidiary. IRDA favours banks acting as brokers as banks which have a fiduciary responsibility under broking guidelines will represent the customer rather than the insurance company under the present corporate agent set-up. So, it is expected to bring down any chances of mis-selling. However, RBI believes that banks assuming the role of insurance brokers may lead to a conflict of interest. Where the bank promotes an insurance company, it may also expose the bank to reputational risks. The life insurance industry has made a representation to the insurance regulator, stating that a bank should be allowed to sell policies of five companies, with not more than 25 per cent share per insurer. 7. Infra debt funds thrown open to pension monies: To provide a boost to infrastructure, the PFRDA has allowed domestic pension funds to invest in infra debt funds set up as mutual funds. The decision gives IDFs much-needed access to long-term funds. The PFRDA move will also open a new investment avenue for pension fund managers and may help National Pension System (NPS) subscribers earn higher returns. Funds can be parked in the funds provided the IDFs are rated investment grade by at least two credit rating agencies. 8. I-T Dept letters to 35,000 non-filers: The Income-Tax Department has sent 35,000 letters to another batch of non-tax filers on July 22, urging them to disclose their true income and pay due taxes. These persons were part of the around 12 lakh non-filers identified as a result of data matching exercise. With this latest batch, the department has now issued letters in 2,10,000 high priority cases. 9. Net Banking Transactions: NetCore Solutions has recently launched 2FA (second factor authentication), a software that will recognise your missed call and pave your way for entry into the Net banking facility. When a customer logs into Net banking with his password, a separate screen pops up with a landline number. One has to give a missed call from their mobile to the landline number within two minutes. NetCore software receives the missed call and matches it with the customers mobile number registered in the banks database to provide access. NetCore clientele includes Axis Bank, ICICI Bank, Kotak Bank, IDBI Bank, Standard Chartered Bank, HDFC, IndusInd Bank and Development Credit Bank. Banking regulator Reserve Bank of India recently made it mandatory for all banks to implement 2FA for all online transactions. 10. To curb Re volatility, RBI tightens fund flow: The central bank on 23rd July said individual banks can tap its liquidity adjustment facility (LAF) only up to 0.5 per cent of their deposits. Given that aggregate deposits in the banking system stood at Rs 70,90,000 crore in the fortnight ended June 28, the system as a whole will be able to access from the RBI only Rs 35,450 crore a day. On July 16, the RBI had set a limit of Rs 75,000 crore on the amount banks could collectively borrow from it at 7.25 per cent interest. Before this, banks had unlimited access to funds from the RBI, provided they had excess government securities to pledge. Further, RBI has asked banks to maintain a minimum daily cash reserve ratio balance of 99 per cent of the requirement against 70 per cent earlier. 11. 30% sourcing from SMEs not possible: Walmart has told Govt that it can at best source about 19.5 per cent from the SMEs. According to the FDI policy for multi-brand retail trading, at least 30 per cent of the value of procurement of manufactured/processed products should be sourced from Indian small industries. 12. Corruption hurts foreign investments: According to the FICCI and E&Y report titled Bribery and corruption: Ground reality in India, several reports place India among the top three countries globally as an attractive investment destination, but in terms of ease of doing business India still has a long way to go. Corruption invariably increases

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transaction costs and uncertainty in an economy while lowering efficiency by forcing entrepreneurs to divert their scarce time and money to bribery rather than production. India winning battle against poverty: According to the new estimates of Planning Commission, the poverty ratio has declined to 21.9 per cent in 2011-12 from 37.2 per cent in 2004-05. The percentage of population below poverty line in 2011-12 has been estimated at 25.7 per cent in rural areas and 13.7 per cent in urban areas. The percentage of population below the poverty line in 2004-05 was 41.8 per cent in rural areas, 25.7 per cent in urban areas, and 37.2 per cent in the country as a whole. The new estimates, based on 2011-12 Household Consumption Expenditure estimates by the National Sample Survey Organisation, have been arrived at using the methodology suggested by the Suresh Tendulkar committee in 2009. The Tendulkar panel had redrawn the poverty line at a daily consumption expenditure of Rs 22.42 per person in rural areas and Rs 28.65 in urban areas. The new poverty line pegs daily per capita consumption expenditure at less than Rs 27.20 in villages and Rs 33.33 in cities. Now, for 2011-12, for rural areas the national poverty line using the Tendulkar methodology is estimated at Rs. 816 per capita per month and Rs. 1,000 per capita per month in urban areas. Thus, for a family of five, the all India poverty line in terms of consumption expenditure would amount to about Rs 4,080 a month in rural areas and Rs 5,000 a month in urban areas. In actual terms, there were 26.93 crore people below poverty line in 2011-12 as compared with 40.71 crore in 2004-05. The methodology used here factors in money spent on health and education besides calorie intake to fix the poverty line. The below poverty line ratio in rural areas was highest for Chhatisgarh (44.61%) and least for Goa (6.81%). RBI tightens gold import rules: To further dampen gold imports, the Reserve Bank of India has directed nominated banks/agencies to ensure that at least 20 per cent of every lot of import is exported. Earlier, there was hike in the import duty to 8 per cent from 6 per cent in June to moderate gold demand. Unrelenting import of the yellow metal has been one of the main reasons for the rupee weakening against the dollar. Weak rupee will stoke inflation, fiscal pressures: According to Moodys, steep depreciation of the rupee against the dollar will intensify inflationary and fiscal pressures in India. This will pose additional constraints on the monetary policy response to the current growth slowdown. A.R. Rather, J&K Finance Minister, to head GST panel: The Empowered Committee of States Finance Ministers on Goods and Services Tax elected Finance Minister of Jammu and Kashmir Abdul Rahim Rather as its new Chairman. Banks seek priority sector tag for loans to affordable home builders: Currently, bank loans up to Rs 25 lakh to individuals in metropolitan centres and Rs 15 lakh in other centres for purchase/construction of a family dwelling unit are classified as priority sector loans. Affordable housing projects are those where individual units have a maximum carpet area of 60 sq. m. Further, the cost of the unit should not exceed Rs 30 lakh while the loan amount cannot exceed Rs 25 lakh.

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18. Filing I-T returns back for salaries up to Rs 5 lakh/year: According to Union Finance Ministry, the exemption provided during the last two years for assesses with annual income up to Rs 5 lakh is not being extended for assessment year 2013-14. Earlier, Govt had exempted salaried employees with total income up to Rs 5 lakh, including income from other sources up to Rs 10,000, from the requirement of filing return of income for assessment years 2011-12 and 2012-13, respectively. Further, e-filing of return is compulsory for 2013-14 for persons having total assessable income over Rs 5 lakh. 19. Model PPP schools from 2015-16: The Union Government intends to roll out model schools under publicprivate partnerships (PPP) from the 2015-16 academic session. These schools will provide secondary education. The HRD Ministry, along with the Planning Commission, has finalised the model concession agreement (MCA) for the setting up of 2,500 model schools under the PPP model. Under this arrangement, private players will invest in land and buildings and manage the school. State governments would help in acquiring land. At least 40 per cent of the students in the schools would not be charged any fee. The Union Government will bear the cost of teaching these students at the rate applicable in schools run and owned by the Centre. According to estimates, the operational cost of teaching one student in a central school was around Rs 21,000 a year in 2011-12. However, other students will have to pay the fee prescribed by the PPP schools. 20. Natural gas output will rise by 66% in 4 years: According to Petroleum and Natural Gas Minister M. Veerappa Moily, gas output from all sources is expected to be around 105 million metric standard cubic metres per

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day (mmscmd) in 2013-14. By 2016-17, this is expected to touch 175 mmscmd. The additional gas sources also include ONGCs block in the KG basin (KG-DWN 98/2), where it has projected to pump out 29 mmscmd of gas in 2016-17. 21. RBI gives in-principle nod for all-woman bank: The proposed bank will be the first-ever commercial bank to be floated by the Central Government. The Government will initially pump in Rs 1,000 crore as paid-up capital of the bank. It will lend mostly to women and women-run businesses besides providing support to women self-help groups. To begin with, the bank will have a branch each in eight cities Kolkata, Guwahati, Chennai, Bengaluru, Jaipur, Lucknow, Mysore and Indore. It will be headquartered in Delhi and is expected to be operational by November 2013. The bank, whose key objective is to focus on the banking needs of women and promote economic empowerment, received in-principle approval from RBI on June 27, 2013. Usha Ananthasubramanian, Executive Director, Punjab National Bank, is expected to take charge as the first chief of the new bank. 22. WTO to discuss Indias proposal to hike food subsidy limits: The Agreement on Agriculture allows so-called market distorting subsidies up to a limit of 10 per cent of total production. While such subsidies were negligible in India during the Uruguay Round in the late eighties and early nineties when these rules were being framed, it is now hovering close to the limits set and could be breached soon. The proposal, which is being pushed at the WTO by the G-33 group of developing countries of which India is an active member, calls for an amendment in the WTOs Agreement on Agriculture to loosen disciplines on domestic support, including public stockholding and food aid, in order to enhance food security by supporting poor farmers and consumers. 23. Govt eases FDI norms across board: To boost the sagging economy, the Government hiked foreign direct investment (FDI) limits on 16th July 2013 in a host of sectors. Earlier, Government had allowed foreign investments in multibrand retail and civil aviation. There was no change in FDI norms for information and broadcasting, civil aviation, multi-brand retail and petroleum and natural gas. Foreign investments allowed through the automatic route in petroleum and natural gas, commodity bourses, and power exchanges, while retaining the 49 per cent cap. The widening current account deficit and the falling rupee have prompted the Government to look at ways to attract more foreign investments. A snapshot of the revised investment limits is given below: a. FDI cap in telecom raised to 100 pc from 74 pc; up to 49 pc through automatic route and beyond via FIPB b. No change in 49 pc FDI limit in civil aviation c. FDI cap in defence production to stay at 26 pc, higher investment may be considered in state-of-the-art technology production by Cabinet Committee on Security. d. 100 pc FDI allowed in single brand retail; 49 per cent through automatic, 49-100 per cent through FIPB e. FDI limit in insurance sector raised to 49 per cent from present 26 per cent, subject to Parliament approval f. FDI up to 49 pc in petroleum refining allowed under automatic route, from earlier approval route g. In power exchanges 49 per cent FDI allowed through automatic route, from earlier FIPB route. h. Raised FDI in asset reconstruction companies to 100 per cent from 74 per cent; of this up to 49 per cent will be under automatic route i. FDI limit increased in credit information companies to 74 per cent from 49 per cent FDI up to 49 per cent in stock exchanges, depositories allowed under automatic route k. FDI up to 100 per cent through automatic route allowed in courier services l. FDI in tea plantation up to 49 per cent through automatic route; 49-100 per cent through FIPB route m. No decision taken on FDI cap in airports, media, brownfield pharma and multi-brand retail. Top public sector insurers, GIC to set up new thirdparty administrator: The new company will have a share capital of Rs 200 crore, which will be contributed by the four companies. The four public sector general insurance companies New India Assurance, United India Insurance, National Insurance and Oriental Insurance will pick up about 95 per cent of the equity between them, while GIC will take 5 per cent. Food prices drive WPI inflation to 3-month high: The headline inflation for June 2013 at 4.86% was higher than the 4.70 per cent recorded in May. Core inflation eased to a 42-month low of 2.15 per cent as compared to 2.35 per cent in May. Food inflation rose to 9.74 per cent in June from 8.25 per cent in the previous month. CPI inflation for June came in at 9.87 per cent, higher than 9.31 per cent in the previous month. Global factors to blame for weakening rupee: The exchange rate of the rupee is susceptible to the influence of large capital movements, especially during crisis periods, in view of the large current account deficit. A deficit in the Current Account arises when a countrys total imports of goods, services and transfers are greater than exports. During 2012-13, the CAD rose to $87.8 billion (4.8 per cent of GDP) as against $78.2 billion (4.2 per cent of GDP) during 2011-12. According to Mr G. Padmanabhan, Executive Director, RBI, the rupee came under some pressure primarily on account of external developments. Exports in June dip 4.5%; relief on trade deficit front: Exports in June 2013 dipped 4.56 per cent to $23.78 billion compared with $24.92 billion in June 2012, while imports declined by a smaller 0.37 per cent to $36.03 billion compared with $36.16 billion last year. A steep decline in import of gold and silver to $2.45 billion in June 2013 from $8.4 billion and $7.5 billion in May and April respectively following increase in import duties on gold and other stringent conditions placed on imports by the RBI played a key role in containing trade deficit at $12.2 billion. IIBF starts new courses: Indian Institute of Banking and Finance and Institute of Company Secretaries of India have jointly launched a course on Certified Banking Compliance Professional Course. IDBI offers inflation-indexed bonds to retail investors: IDBI Bank has modified its online investment portal Samriddhi to enable retail investors and high net-worth (HNI) individuals to invest in inflation-indexed bonds (IIBs). The Government introduced such bonds in June to offer investors an alternative to investing in physical assets, such as gold and real estate. Retail inflation jumps to 9.87% in June: Food inflation in June rose to 11.84 per cent from 10.65 per cent last month. IIP contracts 1.6% as manufacturing drags: The manufacturing sector, which accounts for 75 per cent of the IIP, recorded a two per cent decline in May 13 against 2.6 per cent growth in same month last year. Capital goods output declined 2.7 per cent in May against a decline of 8.6 per cent in the same month last year. Banks seek lower tenure for non-resident deposits: To attract more dollars into the domestic market, bankers have requested the Reserve Bank of India to cut the minimum period of investment in Foreign Currency Non j.

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Resident (FCNR) and Non Resident External (NRE) account to six months from one year now. Rai Bareli to get 2 Central universities: The Union Cabinet has approved the setting up of two universities the Rajiv Gandhi National Aviation University and the Indira Gandhi National University for Women at Rai Bareli. Both the universities will be funded by the Centre. TAPI pipeline will be completed by 2017: According to Minister for Petroleum and Natural Gas, M. Veerappa Moily, the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project is to be completed by 2017. Drawback rate on silver articles slashed: The Finance Ministry has slashed down the drawback rates on silver articles to Rs 1795.5 per kilogram of net silver content in such jewellery. Prior to this change, drawback rate stood at Rs 2,590.80 per kilogram of silver content in the jewellery. This Revenue Department move comes in the backdrop of sharp decline in silver prices in the recent months. Under the duty drawback scheme, the Revenue Department refunds the duty incidence (customs, excise and service tax) on the imported inputs used in the manufacture of exported goods. PMs Monitoring Group clears 4 projects worth Rs 8,000 crore: This is in addition to the 11 power projects cleared earlier involving an investment of Rs 52,300 crore. The Project Monitoring Group (PMG), set up in the Cabinet Secretariat, is a facilitating body for stalled projects serving as a platform to bring together all ministries involved with projects not taking off. Bank funds worth an approximate Rs 7 lakh crore are locked in projects that are stuck due to various reasons. More scholarships for tribal students: The Union Cabinet has approved the proposal to increase the total annual family income ceiling for ST students under the Central sector scholarship scheme of top class education from the existing Rs 2 lakh to Rs 4.5 lakh. This comes into effect from 2013-14. Flipkart nets Rs 1,200 crore in single-largest funding: Flipkart has raised $200 million from its existing investors including South African technology company Naspers Group and private equity firms Accel Partners and Tiger Global. This marks the single-largest round of funding for an Indian e-commerce company. External borrowing: RBI opens automatic route for asset finance firms: RBI has allowed asset finance companies (AFCs) to tap the external commercial borrowing (ECB) window under automatic route. Earlier, AFCs that operated as non banking finance companies (NBFCs) were allowed to avail themselves of ECBs, but only under the approval route. SIDBI to fund banks for lending to small units: The Small Industries Development Bank of India (SIDBI) is planning to give liquidity support to financial intermediaries to encourage them to give loans to micro enterprises. Towards this end, SIDBI has tied up with German development bank KfW for a line of credit aggregating 100 million (about Rs 780 crore). Loan recovery: Mid-size banks too start naming and shaming guarantors: Mid-size public sector banks are naming and shaming the guarantors. Lenders such as Allahabad Bank have started publishing photographs of guarantors in the public notices (newspaper advertisements) they put out for sale of properties mortgaged with them for the loan. State Bank of India, the countrys largest commercial bank, has for some time now been publishing photographs of loan defaulters to shame them into paying up. UCO Bank has also adopted this approach.

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42. FinMin wants LIC to play more active role in entities where it has a major stake: LIC, with around Rs 18-lakh crore worth assets under management, had more than 15 per cent holding in entities such as Corporation Bank, Simplex Realty, Standard Battery and Larsen and Toubro as of March 2013. IRDA guidelines cap the equity limit of LIC in a company at 15%. However, the LIC Act allows the insurer to invest up to 30 per cent in a single company. 43. 2 RRBs merge to form Kerala Gramin Bank: The newly formed bank comes into existence with effect from July 8. The command area of the new bank will be all the 14 districts of Kerala. The headquarters of the new bank will be at Malappuram and is sponsored by Canara Bank. 44. Zone-wise tie up by insurers, banks will be messy: To improve insurance penetration through the banking systems wide branch network, the IRDA (Insurance Regulatory and Development Authority), in its earlier guidelines, had proposed to divide the country into three zones and place a cap on the number of States in which an insurance company can tie up with a bank. 45. However, as per Financial Services Secretary Rajiv Takru, the proposal to have a zone-wise tie-up with banks will result in logistical problems if the zone-wise tie-up is implemented. 46. CIBIL alert on high-risk/very good customers: CIBIL, the countrys largest credit bureau, will soon launch a new service that will alert banks about defaults and on any profile change of an identified set of customers. Likely to be called ALERT, this subscription-based service will help member-banks to retain customers with good repayment record. If a customer with an existing relationship with, say, bank A for a credit card were to look for a home loan from another credit institution, say, bank B, then CIBIL will notify bank A that its existing customer is looking for a new product. 47. Online crop insurance service from United India: The web portal would facilitate insurance agents offer farmers services such as transfer of data on real-time basis and faster settlement of claims. The farmers will be given an identification number that can be used for further renewals. 48. Debt traps India Inc as profits fail to cover interest outgo: An increasing number of Indian companies are finding themselves in a debt trap, with their gross profits not sufficient to cover their interest payments. Of the 600 listed companies (excluding banks and finance companies) that had interest obligations in 2012-13, 85 were unable to meet their interest expenses out of their gross profits (profits before interest, depreciation and tax). 49. 2/3rd of farm suicides take place in 4 cotton-growing States: Last year, 68 per cent of all the 13,754 farm suicides took place in Maharashtra, Andhra Pradesh, Karnataka and Madhya Pradesh. About 70 per cent of cotton farming in these four States is done on dry-land. Agricultural scientists say that dry land is not suitable for water-intensive crops such as cotton. 50. Transport corridor to boost trade with Azerbaijan: The corridor is the ship, rail and road route to move freight from South Asia to Europe through Central Asia, the Caucasus and Russia. The route involves moving goods from India via ship to Iran. From Iran, the freight moves by ship across the Caspian Sea or by truck or rail to Southern Russia. From there, the goods are transported by truck or

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rail along the Volga River through Moscow to Northern Europe. Indias poverty rates will drop by half by 2015: As per a UN report, India was able to reduce its poverty rate from 49 per cent in 1994 to 42 per cent in 2005 and 33 per cent in 2010. If the current pace continues, India will meet the poverty reduction target by 2015. Extreme poverty has been defined as living below $1.25 per day per person. The global goal of reducing extreme poverty by half was achieved by 2010, five years before the deadline. M.S. Raghavan takes charge as IDBI Bank CMD: Prior to this, he was the Executive Director of Bank of India. NSE unveils new index LIX-15: The National Stock Exchange has launched a new index, LIX-15. The index will consist of 15 stocks drawn from the CNX-100 index. These have a minimum free float market capitalisation of Rs 5,000 crore with a turnover ratio (TRO) greater than 100 per cent in majority of the last six months and are individually eligible for the F&O segment. Turnover ratio is the ratio of scrips monthly turnover to average free float for the month annualised. The maximum weight of a single stock has been capped at 15 per cent. LIX-15 will have a base value of 1,500 and a base date of January 1, 2009. Banks told to link core banking solutions, share correspondents: To ensure that beneficiaries of direct benefit transfer (DBT) are able to access real-time banking services, the Finance Ministry wants seamless connectivity between banks core banking solution platforms and business correspondents. Currently, many business correspondents (BCs) operate offline. As a result, sometimes DBT beneficiaries are not upto-date about the funds position in their bank accounts. New online form to make PF transfer claims easier: The revised form, can be presented after verification, either through the present employer or previous employer. Earlier, the form could be submitted after verification only through the present employer. This form can be submitted online as well as in physical form. The facility of online submission of this form will be given shortly after process of collecting the digital signature of the employer is completed. Food Bill: Govt takes ordinance route: The Government has issued the ordinance to implement Food Security Bill. The Bill aims to give legal rights to 67 per cent of the population over a uniform quantity of 5 kg foodgrains a month at Rs 1-3 a kg. The Bill seeks to provide cheaper foodgrains to around 80 crore people at an initial annual cost of around Rs 1.25-lakh crore. Currently, the Government incurs a subsidy burden of about Rs 1-lakh crore in providing subsidised foodgrains to the poor through the public distribution system. The implementation of the Bill would also increase foodgrain requirement by around seven million tonnes to about 61.23 million tonnes.

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57. From Oct, service tax to make LIC policies pricier: While private insurers add a service tax component of about 3% to the premium paid by customers, LIC has not been levying the tax on its popular endowment and money-back plans. From October, however, all LIC policies will attract a separate service tax. IRDA, has mandated that service tax shall not be included in the contractual premium, but collected from policyholder separately. 58. Lack of proper authentication overseas led to cardskimming frauds: RBI has said that money gets siphoned off from accounts in India by fraudsters in overseas locations through cloning of debit cards. This may be because there is no two factor authentication process for securing transactions overseas. 59. Borrowers consent not needed to share credit information: According to RBI, banks and financial institutions need not seek borrowers consent to share credit information with credit information companies. The Credit Information Companies (Regulation) Act provides statutory backing for sharing of credit information by credit institutions with credit information companies (CICs). 60. Financial stability council to suggest ways to regulate spot exchanges: The Financial Stability Development Council (FSDC), chaired by the Finance Minister, will discuss ways to regulate the three electronic-based commodity spot exchanges National Spot Exchange (NSEL), NSPOT and National Multi Commodity Exchange. There are two views on regulation of the spot exchanges. One is by the Forward Markets Commission (FMC) and other by Warehousing Development and Regulatory Authority (WDRA). Spot exchanges provide online trading in commodities as also delivery-based commodity trading.

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These exchanges have got exemption under Section 27 of the Forward Contract Regulation Act to provide one-day forward contracts. 61. FinMin to farmers rescue: The Finance Ministry has directed banks to set internal targets for lending against Negotiable Warehouse Receipts and increase servicing of such receipts. The Food Ministry has recognised over 125 agricultural commodities, 26 horticultural produces and registered over 374 warehouses that can issue such receipts which can be transacted without physical transfer of stocks from the warehouse or used as collateral to raise loans. 62. SBI, PNB too start charging for SMS alerts: SBI, Indias largest lender, will recover Rs 15 (inclusive of service tax) per quarter as SMS alert charges from its customers with effect from the quarter ending June 2013. PNB, Indias third largest public sector bank, will also charge all new as well as existing customers Rs 15 per quarter for SMS alerts for transactions with effect from July 1. 63. New norms for life products: All the existing group and individual products not in conformity with the new regulations shall be withdrawn from August 1, 2013, and October 1, 2013, respectively. 64. External debt up 12.9% in 2012-13: The countrys external debt touched $390 billion in the year ended March 31, 2013, a rise of 12.9 per cent over the previous years debt. Under the UPAs regime, which began in 2004, Indias external debt has jumped 3.4 times, or $277.4 billion. A higher external debt indicates the vulnerability of the countrys economic position. This means, as on the reporting date, the country owes $390 billion to different stakeholders. 65. Basel III norms may restrict banks from extending long-term infra loans: RBI, in its 7th Financial Stability Report, has stated that in the absence of alternative arrangements (such as securitisation, take-out finance), banks may not be able to undertake long-term project financing.

WISH ALL ASPIRANTS GOOD LUCK FOR RBI EXAM

GOOD LUCK & GOD SPEED

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