Current Affairs search results for tag: economicsbusiness

1. Bengaluru based Neo-banking platform Open acquires Finin

Tags: Economics/Business

• Bengaluru based, Google-backed business-focused Open has acquired consumer neobanking startup Finin for $10 million in a cash-and-stock deal. 
• Open, is Asia’s first neobanking platform for SME (Small and Medium Enterprises) and startups.
• It operates an SME banking platform and also provides banks with infrastructure to launch their own digital banks.
• Launched in 2019, Finin is among the first consumer-focused neobanking startups in India. The startup, which had raised about $1 million from Unicorn India Ventures and others, will see key executives, including the founder and chief executive Suman Gandham, move to Open.
• Finin offers a savings account that allows consumers to save and invest their money.
• Founded in 2019 by Suman Gandham and Sudheer Maram, Finin is backed by Unicorn India Ventures and Archana Priyadarshini.

Neo-banking A neobank (also known as an online bank, internet-only bank, virtual bank or digital bank) is a type of direct bank that operates exclusively online and they don't have any physical branches. Their services may be accessed by clients through their respective computers or mobile devices. The range of services provided by neobanks is not as broad as that of their traditional banks. A large portion of the income of neobanks is mainly made up of transaction fees received when customers pay with their debit card. These are the 10 neo-banks in India: YOLO, FREE, 811 BY KOTAK, DIGIBANK BY DBS, FREO MONEY, INSTANT PAY, NiYo, WALRUS, YoNo BY SBI and OPEN.

2. 12,892 companies removed from Registrar of Companies in 2020-21

Tags: Economics/Business

• According to the Union Minister of State for Corporate Affairs Shri Rao Inderjit Singh, 12,982 companies' licences have been cancelled by the Registrar of Companies in 2020-21.
•  Under section 248(2) of the Companies Act 2013, the Registrar of Companies has the power to remove a company from its list of companies and cancel its license.

3. ADB reduces India’s expected growth rate for 2021-22.

Tags: Economics/Business

• The Asian Development Bank has released its Asian Development Outlook Report   
• The Asian Development Bank (ADB) has marginally lowered its growth projection for the Indian economy to 9.7% in 2021-22, from 10% estimated in September.
• The bank cited the lower than expected 8.4% growth in the July to September quarter and expects supply chain factors such as chip shortages and rising semiconductor prices to continue to suppress growth.
• Asian Development Bank Headquarter : Mandaluyong City, Manila, Philippines
• President of ADB : Masatsugu Asakawa of Japan
• It was established in 1966. 

4. WPI Inflation at 13 months high

Tags: Economics/Business

• Wholesale Inflation in India increased to 14.2% in the November month 2021 as compared to 2.29% in November 2020.
• This was the eight successive month, that saw wholesale inflation inflation in double digits.
• This was also the highest wholesale inflation since 1991. 

Highlights of the November Data

Core Inflation: It moved to a record high of 12.3% in the month of November 

It indicates that the manufactures are passing on the higher input cost to the consumers.

Fuel and power inflation has also increased to an all time high of 39.8% due to the increase in the oil prices like petrol, diesel etc.

Primary food inflation also increased to a 13 month high of 4.9% in November due to the increase in the prices of vegetables, eggs, fish meats and spices.

The WPI inflation data is released by the Ministry of Commerce and Industry, Government of India.

Inflation  It refers to the continuous increase in the price of goods and services over a period of time. Inflation is measured in India on two indexes.CPI and WPI. Consumer Price Index(CPI) :  It is also called retail inflation. A Consumer Price Index (CPI) is designed to measure the changes over time in the general level of retail prices of selected goods and services that households purchase for the purpose of consumption.  Such changes affect the real purchasing power of consumers’ income and their welfare.  The CPI measures price changes by comparing, through time, the cost of a fixed basket of commodities.  However, over the years, CPIs have been widely used as a macroeconomic indicator of inflation, and also as a tool by the Government and RBI for targeting inflation and monitoring price stability. CPI is also used as deflators in the National Accounts.       The CPI data is released by the Central Statistical Office (CSO) and the Base Year is 2010.

WPI Wholesale Price Index(WPI) A wholesale price index (WPI) is an index that measures and tracks the changes in the price of goods in the stages before the retail level. This refers to goods that are sold in bulk and traded between entities or businesses (instead of between consumers). The commodities which are included in the WPI are grouped in  4 major groups  All Commodities                               weight% All commodities                                 100% Primary articles                   22.62%  Fuel and Powers                13.15%  Manufactured Products    64.23%  A separate fourth Index, Food Index has been made which has a weightage of 24.38 % in the WPI index.  It includes: The Food Index consisting of 'Food Articles' from Primary Articles group and 'Food Product' from Manufactured Products group. Primary Articles : It includes both Food article and Non Food articles  Food articles includes wheat,rice,pulses, vegetables,etc Non-food articles include crude oil, minerals, natural gas, oil seeds etc. Fuel and Powers: It includes coals, diesel, petrol, electricity etc. Manufactured products include:      It includes industrial products like chemical products, textile, paper products etc. The base year of the WPI is 2011-12. The WPI data is released by the The Office of the Economic Adviser, Department for Promotion of Industry and Internal Trade, under the Ministry of Commerce and Industry. NOTE  Whenever government refers to:  Core Inflation :      It refers to the increase in prices of the Manufactured Products  of the WPI. Food Inflation : It refers to the increase in the price of the commodities  included in the food Index  of the WPI. Imported Inflation : It refers to the increase in the imported goods and service which is used in India for production purposes. For e.g if the price of crude oil increases in the international market and it is imported in India and made diesel . The price of diesel will also increase and the transporter will also increase their prices . The vegetable which is transported in the truck ,price will also increase .

5. NSE launches Digital Index

Tags: Economics/Business

• NSE Indices the subsidiary company of National Stock Exchange (NSE) has launched Nifty India Digital Index.
• The Nifty India Digital Index is a sector specific index which aims to track the performance of a portfolio of stocks that broadly represent the Digital theme within basic industries like software, e-commerce, IT enabled services, industrial electronics and telecom services companies.
• The Nifty Digital Index will include stocks of 30   largest companies in the chosen   basic industries sectors.
• The index is expected to act as a benchmark for asset managers and be a reference index tracked by passive funds in the form of Exchange Traded Funds (ETFs), index funds and structured products.
• The base date for the index is April 01, 2005 and base value is 1000. Index reconstitution will be done on a semi-annual basis.

What are Stock Market Index/Indices It is a statistical tool which reflects changes in the financial market .Stock market indices are indicators that reflect the performance of the market as a whole or of a certain segment of the market. A stock market index is created by selecting certain stocks of similar companies or certain stocks that meet a set of predetermined criteria. These shares are all already listed and traded on the exchange. Share market indices can be created based on a variety of selection criteria, such as an industry, a segment, or market capitalization, among others. Each share market index measures the price movement and the performance of the shares that constitute that index. This essentially means that the performance of any stock market index is directly proportional to the performance of the underlying stocks that make up the index. In simpler terms, if the prices of the stocks in an index go up, that index, as a whole, also goes up. And if they plummet, so does the index. Types of Index   There are different types of Indices based on the kind of stocks which are selected to create indices. Some of the important ones are as follows :  Benchmark Indices :  They statistically represent the overall market performance  In India there are two benchmark Indices  BSE Sensex : It consist of 30 companies listed on the Bombay Stock Exchange  Nifty : It consists of 50 companies listed on the National Stock Exchange . 2. Indices created based on market capitalization of companies, such as BSE Midcap and BSE Smallcap. 3. Sector-specific indices like Nifty FMCG, Nifty Bank Index.

6. Economics/Business

Tags: Economics/Business

1. Contribution of Manufacturing of MSME sector

In a statement to the Rajya Sabha the Union Minister for Micro Small and Medium Enterprise(MSME) Narayan Rane gave information about the contribution of the MSME sector in Indian Economy:

• The  share of the MSME manufacturing in All India manufacturing gross value output during the year 2018-19 and 2019-20 were 36.9% and 36.9% respectively.
• The share of export of specified MSME related products to All India exports during 2019-20 and 2020-21 was 49.8% and 49.4% respectively.

2. City Union Bank Launches payment keychain “On the Go”

• Private sector lender City Union Bank (CUB), in collaboration with the National Payments Corporation of India (NPCI) and manufacturing partner Seshaasai, has unveiled ‘On-the-Go’ contactless wearable keychains for debit cards.
• The device would enable customers to make fast payments up to ₹5,000 in all RuPay enabled point-of-sale devices without entering a PIN,
• For payments above ₹5,000, customers would need to tap and then enter the PIN.

Headquarters of City Union Bank :Kumbakonam, Tamil Nadu.

3. RBI to extend UPI to feature ­phone users

The UPI facility will soon be extended to feature phone users. At the moment, the unified payments interface (UPI) — the single largest retail payments system in the country in terms of volume of transactions for small value payments — is available only for smartphones.

• It will help to further deepen digital payments and make them more inclusive, ease transactions for consumers, facilitate greater participation of retail customers in various segments of financial markets and to enhance the capacity of service providers.
• This will be done by leveraging innovative products from the RBI’s regulatory sandbox on retail payments.

4. RBI to mop up surplus liquidity as it ‘rebalances

The monetary policy panel of Reserve Bank of India (RBI) decided to increase the amount of money absorbed through variable-rate reverse repo (VRRR) auctions.

• Variable-rate reverse repo (VRRR)is a tool used by RBI to absorb excess liquidity from the banking system. Since Jan 2021, the Reserve Bank of India (RBI) has been taking out about ₹2 lakh crore from the banking system every two weeks. It has now decided to increase that figure substantially by around 14 Lakh Crore by the next two fortnights till the end of December 2021.

5. Paytm Payments Bank gets ‘scheduled bank’ status from RBI

• Reserve Bank of India(RBI) has included “Paytm Payments Bank Limited”, a subsidiary of One97 Communications, in the Second Schedule to the Reserve Bank of India Act, 1934.
• As per RBI Act 1934, banks satisfying the RBI that its affairs are not being conducted in a manner detrimental to the interests of its depositors, are included in the second schedule.

6. Imports made up 86% of India's gold supply between 2016-2020: WGC

According to the   World Gold Council(WGC)’s ‘Bullion Trade in India’ report:

• Imports made up 86% of India’s gold supply between 2016-2020, and inbound shipments continue to grow despite high import duty.
• In 2020, India imported 377 tonnes of gold bars and dore from over 30 countries, of which 55% came from just two countries — Switzerland (44%) and the UAE (11%).

7. HMD Global to export phones from India

Tags: Economics/Business

To support demand in the Middle East and North Africa (MENA) region, HMD Global, the official licensee of Nokia, has commenced export of its made-in-India Nokia 105.

• Currently exporting to the UAE, the company plans to further extend exports to other markets.
• HMD Global considers India as a strategically important market, not only from a growth potential but also as a key manufacturing hub.
• The Nokia 105 is manufactured by HDM Global's ODM partner based in Sriperumbudur, Chennai.

HMD Global HMD Global(Have My Data Global) Oy, branded as HMD and Nokia Mobile, is a Finnish mobile phone manufacturer. Founder: Jean-Francois Baril Founded: 1 December 2016 Headquarters: Espoo, Finland

8. Imports made up 86% of India's gold supply between 2016-2020: WGC

Tags: Economics/Business

According to the  World Gold Council(WGC)’s ‘Bullion Trade in India’ report:

• Imports made up 86% of India’s gold supply between 2016-2020, and inbound shipments continue to grow despite high import duty.
• Since 2012, India has imported some 6,581 tonnes of gold, averaging 730 tonnes per annum.
• In 2020, India imported 377 tonnes of gold bars and dore from over 30 countries, of which 55% came from just two countries — Switzerland (44%) and the UAE (11%).
• In the last five years, gold dore imports have increased.
• A doré bar is a semi-pure alloy of gold. It is usually created at the site of a mine and then transported to a refinery for further purification..
• There are   32 gold refineries in India.

Major Gold Mines of India- Kolar and Raichur in Karnataka Chittoor in Andhra Pradesh East Singhbhum in Jharkhand  The headquarter of the  World Gold Council is London, United Kingdom

9. Paytm Payments Bank gets ‘scheduled bank’ status from RBI

Tags: Economics/Business

• Reserve Bank of India(RBI) has included “Paytm Payments Bank Limited”, a subsidiary of One97 Communications, in the Second Schedule to the Reserve Bank of India Act, 1934.
• As per RBI Act 1934, banks satisfying the RBI that its affairs are not being conducted in a manner detrimental to the interests of its depositors, are included in the second schedule.
• Every Scheduled bank enjoys two types of principal facilities: it becomes eligible for debts/loans at the bank rate from the RBI; and, it automatically acquires the membership of clearing house (A clearing house is a financial institution formed to facilitate the exchange (i.e., clearance) of payments, securities, or derivatives transactions.)
• This will help Paytm to widen its financial services operations. It will also help Paytm to innovate further and bring more financial services and products to the underserved and unserved population in India.
• Prior to Paytm Payments Bank, India Post Payments Bank had received the scheduled payments bank status from the RBI in 2019 and Fino Payments Bank received the tag earlier this year. 

Payments Bank Payment Banks in India were set up on the recommendation of the Nachiket Mor Committee on Comprehensive Financial Services for Small Businesses and Low Income Households. They are differentiated or niche banks not Universal banks These banks can accept a  deposit,upto ₹200,000 per customer These banks cannot issue loans and credit cards. Both current accounts and savings accounts can be operated by such banks. Payments banks can issue ATM cards or debit cards and provide online or mobile banking. The minimum capital requirement is ₹100 crore. The foreign shareholding will be allowed in these banks as per the rules for FDI in private banks in India. They cannot offer Time and Recurring Deposits   The bank cannot accept NRI deposits . It cannot form subsidiaries to undertake non-banking activities. 25% of its branches must be in the unbanked rural area The banks will be licensed as payments banks under Section 22 of the Banking Regulation Act, 1949, and will be registered as a public limited company under the Companies Act, 2013. Bharti Airtel set up India's first payments bank, Airtel Payments Bank in 2017. Other Payment banks in India are  Airtel Payment Bank, India Post Payment Bank, Fino payment banks , Paytm Payment Bank, NSDL Payment Bank and Jio Payment Bank

10. RBI to mop up surplus liquidity as it ‘rebalances

Tags: Economics/Business

The monetary policy panel of Reserve Bank of India (RBI) decided to increase the amount of money absorbed through variable-rate reverse repo (VRRR) auctions.

Variable-rate reverse repo (VRRR)is a tool used by RBI to absorb excess liquidity from the banking system. Since Jan 2021, the Reserve Bank of India (RBI) has been taking out about ₹2 lakh crore from the banking system every two weeks. It has now decided to increase that figure substantially by around 14 Lakh Crore by the next two fortnights till the end of December 2021.

While the governor warned that the market should not read the above increase as the pullback in the RBI’s accommodative stance, many in the market had already seen this as the first step towards tightening the liquidity by the regulator. Sucking out the money in the system affects the demand for assets, including financial assets like shares and bonds. 

As per many analysts, this is the beginning of RBI’s imminent exit from unconventional monetary easing.

Why is the RBI reducing liquidity?

The Indian economy was stuck between a rock and a hard place for close to 18 months now. The pandemic, and the lockdowns that followed, have hammered national income and the supply constraints have led to a price rise. 

Inflation, in theory, is a result of too much cash chasing too few goods and services. For instance, since the outbreak of the COVID-19 pandemic, people still had to buy daily essentials like milk, vegetables, and eggs. However, because of the lockdowns, the vendors could not get the supply on time. So that pushed the prices up because people were willing to pay the extra amount for a timely supply.

As the lockdowns in different parts of the country lift, and the economy slowly opens up, the supply constraints may ease and there may be no need for the excess cash in the system.

RBI’s inflation forecast for the rest of the financial year has been raised to 5.7% from its earlier estimate of 5.1%. “At this juncture, RBI’s overarching priority is that growth impulses are nurtured to ensure a durable recovery along a sustainable growth path with stability.

As per the RBI governor’s statement, the endeavor of the Reserve Bank is to put in place an effective liquidity management framework that is consistent with an economy emerging out of the pandemic and having a nascent but strengthening recovery.

RBI Accommodative Stance / Monetary Easing Literally the word accommodative means willing to fit in someone’s wishes or needs. This happens when a central bank (RBI) attempts to expand the overall money supply to boost the economy when the economic growth is slowing down. The major aim is to increase spending.  Accommodative monetary policy is implemented to allow the money supply to rise in line with national income and the demand for money. This is also known as “easy monetary policy” or Loose Credit. When the economy slows down, the central bank (RBI) can implement an Accommodative Monetary Policy to stimulate the economy. It does this by running a succession of decreases in the Interest rates, making the cost of borrowing cheaper. This makes borrowing easier for businesses, which stimulates investment and expansion of operations. The immediate result of monetary easing is generally a boost in stock prices. In the medium term, it promotes economic growth.  However, if this policy remains for too long, it can lead to a situation in which there is a glut of currency or too many money chasing too few goods and services, leading to inflation. For this reason, most central banks alternate between policies of monetary easing and monetary tightening to encourage growth while keeping inflation under control.

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