1. IRDAI set up a panel headed by Thomas M Devasia to develop rural insurance
Tags: Economy/Finance Person in news
Insurance sector regulator, Insurance Regulatory and Development Authority of India (IRDAI) has set up a 24-member committee to develop and suggest an affordable and comprehensive cover for the rural population.
The panel will be headed by Thomas M Devasia who is a member of the IRDAI.
The committee will recommend a regulatory framework for proposed cover which will be a benefit based// parametric structure, called Bima Vistaar.
The insurance regulator has also asked the committee to develop and suggest constitution and operation of a preferably, women centric distribution channel called Bima Vahak to focus on reaching untapped/ rural areas and recommend the regulatory framework.
Insurance Regulatory and Development Authority (IRDAI)
It is the regulator of the Insurance sector in India. It was set up in 1999. It was made a statutory body in April 2000 under the Insurance Regulatory and Development Authority act 1999.
IRDAI was set up on the recommendation of the RN Malhotra committee on Insurance reform. The Malhotra committee was set up in 1993.
Headquarters: Hyderabad
Chairperson: Debasish Panda
2. BSE launches electronic gold receipts
Tags: Economy/Finance
BSE has become the first stock exchange in India to launch Electronic Gold Receipts (EGR). The EGR are expected to help in better price discovery of the yellow metal. The exchange has introduced two new products of 995 and 999 purity during the Muhurat trading on Diwali and trading will be in multiples of 1 gram and deliveries in multiples of 10 gram and 100 gram.
What is EGR
Here Gold will not be bought and sold in physical form. Here first gold will be deposited into a registered vault. The investor will deposit gold in 10 grams and 100 grams.
The vault will issue a receipt which can be used by the investor for trading purposes on the BSE platform. This receipt will be called Electronic Gold Receipts (EGR).
How to get the delivery of Gold?
After trading if an investor wants to convert the receipts into physical gold then it has to contact the authorized vault across India. There are vaults in 22 locations in India and the gold will be delivered door to door from these vaults by agencies Brink’s India and Sequel Logistics.
Gold can be delivered in 10 grams and 100 grams. 10-grams gold delivery can be in the form of a bar or coin and 100 grams of gold will be only delivered in a bar.
Who can invest in EGR?
EGRs will cater to all market participants. It means that buyers and sellers on the exchange will include individual investors, as well as commercial participants along the value chain like importers, banks, refiners, bullion traders, jewellery manufacturers, and retailers.
BSE
It was earlier known as Bombay Stock Exchange. It was set up in 1875 as ‘The Native Share & Stock Brokers' Association in Bombay (now Mumbai). It is the first stock exchange to be set up in Asia.
In 2017 BSE became the 1st listed stock exchange of India.
BSE has launched India INX, India's 1st international exchange, located at GIFT CITY IFSC in Ahmedabad.
BSE's popular equity index - the S&P BSE SENSEX - is India's most widely tracked stock market benchmark index.
3. CCI fines Google Rs 936 crore for abusing its dominant position in its Play store policy
Tags: Economy/Finance
The Competition Commission of India (CCI) has fined search engine giant Google Rs 936.44 crore for “abusing its dominant position with respect to its Play Store policies”. This is the second time that Google has been fined by the CCI. Last week Google was fined Rs 1,337.76 crore by the CCI for abusing its dominant position in the Android mobile device market.
The CCI found Google of following discriminatory policy regarding the listing of an app on its play store . Google play store is the official online store for Android devices. The Android operating system has been developed by Google and almost 96% of smartphone’s in India run on Android operating system.
What is the issue ?
If any company which has developed an android app and wants to get listed at the playstore then it has to pay a fee to google. The app developer has to use the Google Play Billing system(GPBS) only to pay the fees to Google.
App developers that do not use GPBS are not allowed to list their products on Google Play Store.
This was found by CCI as violative of the competition principle as Google was abusing its market dominance position to keep payment competitor’s like Unified Payment Interface (UPI), wallets and other apps out of the market .
The CCI noted Google forced app developers to use in-app payment systems because selling in-app digital goods made an important means for these developers to monetise their work.
The regulator has issued a cease-and-desist order, suggesting eight corrective measures including providing access to third-party billing payment processing systems on its Play Store.
The CCI has given 30 days to implement the corrective measures and modify its conduct.
4. Sangeeta Verma appointed as the acting chief of Competition Commission of India
Tags: Economy/Finance Person in news
The government of India has appointed Sangeeta Verma as the acting chairperson of the Competition Commission of India (CCI) on 25 October 2022.
Sangeeta Verma who was a member of the CCI will take charge on 26 October 2022 after the retirement of the full-time Chairperson Ashok Kumar Gupta on 25 October 2022.
According to the government order she will remain in office for “a period of three months or till appointment of regular Chairperson or till any further orders, whichever is the earliest”.
Ashok Kumar Gupta had taken over as the CCI chairperson in November 2018.
Competition Commission of India (CCI)
The Competition Commission of India (CCI) was established under the Competition Act, 2002 for the administration, implementation and enforcement of the Act.
It was constituted in March 2009.
The following are the objectives of the Commission.
- To prevent practices having adverse effects on competition.
- To promote and sustain competition in markets.
- To protect the interests of consumers and
- To ensure freedom of trade.
Members of the CCI
It consists of 7 members; one Chairperson and six other members.
The members are appointed by the government for five years and are re -eligible for appointments.
However the members have to retire after attaining the age of sixty-five years.
First Chairperson of CCI: Dhanendra Kumar
Headquarters: New Delhi
5. CASHe and IRCTC to launch Travel now pay later facility for ticket booked on IRCTC app
Tags: Economy/Finance
The Digital lending app CASHe has signed an agreement with the Indian Railways Catering and Tourism Corporation (IRCTC), to provide ’travel now pay later’ (TNPL) payment option on tickets booked on IRCTC Rail Connect app.
Under this facility a person booking a rail ticket through IRCTC Rail Connect app can book their ticket and pay the ticket amount later in Equated Monthly Installments((EMI) of three to six months. This facility will be available to salaried professionals.
Digital Lending and CASHe
Here the loan is not provided by the CASHe. It is a lending service provider which acts as an intermediary between the banks and NBFC regulated by RBI and the borrower. The loan will be provided by Bhanix Finance and Investment Limited . It is a Non-Banking Financial Company (NBFC) regulated by RBI.
CASHe is just an online platform which brings the lender and the borrower online together.
Indian Railway Catering and Tourism Corporation Ltd (IRCTC)
It is a Central Public Sector Enterprise under the Ministry of Railways, Government of India.
IRCTC was set up on 27th September, 1999.
It’s Headquarters: New Delhi
It is involved in the business of
- Catering & Hospitality at Railway station
- Internet Ticketing
- Travel & Tourism
- Packaged Drinking Water (Rail Neer)
Chairman and Managing Director :Smt. Rajni Hasija
6. Myanmar joins North Korea and Iran in the Financial Action Task Force black listed countries
Tags: Economy/Finance International News
The international Money laundering and terrorist financing watchdog Financial Action Task Force (FATF) has put Myanmar on the "black list" and has called on members to apply enhanced due diligence to business relations and transactions in Myanmar. Myanmar joins the ranks of Iran and North Korea who are already in the Black list of the FATF.
Money laundering is a process where the money generated through criminal activities like smuggling ,organised crime etc is integrated with the legal financial system so as to hide the origin of these money.
FATF‘s Grey or Black list
Countries which has weak anti -laundering and anti-terrorist regulatory frameworks are put into Grey list. It basically warns the country to improve its anti-money laundering system.
Black List
Countries which refuse to act and refuse to take concrete steps to combat money laundering are put in High-Risk Jurisdictions subject to a Call for Action or black list. Currently Iran, North Korea and Myanmar are in the list.
Implications for Myanmar
It will become extremely difficult for Myanmar to secure loans from international financial institutions like International Monetary Fund, World Bank, Asian Development Banks.
Foreign investors and financial institutions will avoid dealing with Myanmar and its financial institutions like banks.
The cost of doing business with international customers will increase for Myanmar which will adversely affect its trade and investment.
Credit rating agencies will downgrade Myanmar’s rating which will raise the cost of borrowing for Myanmar's companies and banks in the international market. It means they will have to pay very high interest rates to borrow money.
FATF
The Financial Action Task Force was set up in 1989 on the recommendation of the Group of 7 Countries.
Function of FATF
- The Financial Action Task Force (FATF) is the global money laundering and terrorist financing watchdog.
- The inter-governmental body sets international standards that aim to prevent these illegal activities and the harm they cause to society.
- The FATF reviews money laundering and terrorist financing techniques and continuously strengthens its standards to address new risks, such as the regulation of virtual assets.
- India’s anti Money laundering law Prevention of Money Laundering Act (PMLA) 2002 is modelled on the standards of FATF.
- Total member countries of FATF is at present 39.
- India became a member in 2010.
Headquarters: Paris, France
President: T Raja Kumar (Singapore national)
7. PM Modi launches Rozgar Mela to provide 10 lakh jobs by the Central government and its department
Tags: Economy/Finance National News
Prime Minister Narendra Modi launched Rozgar Mela on 22 October 2022 virtually, to provide 10 lakhs jobs in the coming months. The Prime Minister said that keeping in mind the 75 years of independence, the central government is giving appointment letters to 75,000 youngsters under a programme.
During the ceremony, appointment letters were handed over to 75,000 newly inducted appointees. These new recruits will join 38 ministries/departments of the central governments.
The appointees will join the government at various levels viz. Group – A, Group – B (Gazetted), Group – B (Non-Gazetted) and Group – C. The posts on which appointments are being made include Central Armed Force Personnel, Sub Inspector, Constable, LDC, Steno, PA, Income Tax Inspectors, and MTS among others.
The Prime Minister said that keeping in mind the 75 years of independence, the central government is giving appointment letters to 75,000 youngsters under a programme.
8. Russian Gazprombank opens account with UCO bank
Tags: Economy/Finance
The Russian bank Gazprombank has opened a Special Vostro Account with the Kolkata based UCO bank. UCO bank was the first Indian bank to get permission from the Reserve Bank of India (RBI) to provide such a facility to settle international trade in Indian rupees.
Why UCO bank has been chosen
Gazprombank is the third largest bank in Russia and has been set up by the world's largest gas producer and exporter Gazprom. Gazprom has not been included into the Specially Designated Nationals list of the United States but only faces sectoral sanctions.
The United States imposes sanctions on companies or banks which deal with the companies included in its sanctions list. A company which faces US sanctions finds it very difficult to conduct business in the world as the world financial market is dominated by American financial institutions.
UCO banks have minimal international presence and there will be little or no impact on its business even if the United States imposes sanctions on it.
Earlier when sanctions were imposed on Iran by the United States, UCO bank was chosen by the government to conduct trade with Iran.
Special Vostro Account
The Indian government is keen to promote Indian rupee for settlement of International Trade and to lessen dependence on the American dollars. RBI on 11 July 2022 permitted the use of a special Vostro account for settlement of international trade (export and Import) in India Rupee.
Under this mechanism foreign banks of a country will open a special Vostro account with an Indian bank.
Suppose the Indian bank is SBI and foreign country is Russia and the Russian Bank is Gazprombank. An Indian businessman buys gas from a Russian company for Rs 200. The amount will be deposited in the Gazprombank account with SBI.
A Russian company buys Rs 125 worth of Tea from an Indian company.
Then Rs 125 will be deducted from the Rs 200 deposited in the Gazprom bank account with the SBI.
RBI says that the balance Rs 75 amount can be invested in the government securities.
Here the whole trade is being conducted in Indian Rupee and the settlement is also being done in Indian Rupee.
What is Nostro and Vostro bank account?
The key word to understand Nostro and Vostro is that Nostro means Ours and Vostro means Yours in Latin.
Nostro account
It is a bank account which is opened by a bank with a foreign bank in the foreign country’s currency.
Vostro accounts
It is a bank account which a bank holds of other foreign bank in local currency.
Explanation
Nostro and Vostro accounts are the same bank account but two terms are used to explain it.
E.g. suppose SBI goes to London and opens an account with HSBC bank branch in London. While opening the account SBI has to deposit some money in its account. The money will be in pound sterling which is the currency of Britain.
SBI will tell HSBC that “our” account is with you. HSBC will say to SBI “Yours” account is with us. It is the same bank account but HSBC and SBI are using different terms to describe it.
Here SBI has used the word Ours, it means the SBI account with HSBC is a Nostro account.
HSBC has used the word ‘Yours’ so for HSBC the SBI account is Vostro account.
Thus the Gazprombank account with UCO bank is a Vostro account because UCO banks is saying to Gazprombank that ‘your’ account is with us.
UCO Bank
It was founded by Ghansyham Das Birla as United Commercial Bank ltd. on 6 January 1943 at Kolkata (then Calcutta).
It was nationalized in 1969 and its ownership passed into the hands of the Government of India.
Its name was changed to UCO Bank in 1985.
Its overseas branches are in Singapore and Hong Kong.
Headquarters: Kolkata
Managing Director (MD) and Chief Executive Officer (CEO) : Soma Sankara Prasad
Tagline: Honours Your Trust
9. Atul Kumar Goel re-elected as the President of Indian Bank Association
Tags: Economy/Finance Person in news
The Indian Bank Association (IBA) has announced on 21 October 2022 that Atul Kumar Goel has been re-elected as the President for 2022-23.
He was elected as the President of the IBA for 2021-22.
Atul Kumar Goel is currently the Managing Director (MD) and Chief Executive Officer (CEO) of Punjab National Bank.
Normally a public sector bank chief is made the President of IBA.
Indian Bank Association
It is a representative body of banks in India to promote and develop in India sound and progressive banking principles, practises and conventions and to contribute to the developments of creative banking.
It helps the government in formulating Human Resources policy for the banking sector.
The Indian Banks' Association (IBA) was formed on September 26, 1946 with 22 members. As of April, 2018 the total Membership of the Association is 239.
It includes Public sector Bank. Private Sector Banks, Foreign Banks, Co-operatives, Regional Rural Bank, and All India Financial Institutions.
Current Chairman: Punjab National Bank’s MD &CEO Atul Kumar Goel is the chairman of the Indian Banks' Association (IBA)
Headquarters of IBA: Mumbai
10. HDFC gets best housing finance company award under the PMAY-CLSS scheme
Tags: Economy/Finance Awards
India's leading housing finance company HDFC Ltd has been awarded as the best performing housing finance company under the Credit Linked Subsidy Scheme (CLSS) of the government's flagship scheme - Pradhan Mantri Awas Yojana (PMAY) at the Indian Urban Housing Conclave 2022in Rajkot, Gujarat.
Union Minister for Housing and Urban Affairs Hardeep Singh Puri, conferred the award on Sanjay Joshi, Senior General Manager and Head CLSS and Affordable Housing, HDFC Ltd.
Since the launch of the subsidy scheme under the PMAY in June 2016, HDFC has provided loans worth Rs 67,000 crore to over 3.13 lakh customers under the scheme .
This is the third time that HDFC has been given this award .
In July 2018, HDFC was awarded as the best performing primary lending institution in the Economically Weaker Section (EWS) and Low-Income Group (LIG) segment .
In March 2019, HDFC was awarded the 'Best Private Sector Financial Institution' for PMAY-CLSS at the PMAY- Affordable Housing Awards 2019.
HDFC Limited was set up as NBFC (Non-Banking Finance Company) in 1977. It is the promoter of India's largest private sector bank HDFC Bank .
HDFC Ltd is based in Mumbai .
Chairman of the HDFC is Deepak Parekh.
