1. Anil Ambani resigns as director as per SEBI order
Tags: Economy/Finance
Reliance Group Chairman Anil Ambani has resigned as the director of Reliance Power Ltd. and Reliance Infrastructure Ltd., following market regulator Securities and Exchange Board of India order restraining him from associating with any listed company.
SEBI in February 2022, barred Reliance Home Finance Ltd., industrialist Anil Ambani and three other individuals from the securities market for allegedly siphoning off funds from the company.
Anil Ambani was accused of using Reliance Home Finance ltd fund to pay off his own loans .
The regulator also restrained Ambani and three others from "associating themselves with any intermediary registered with SEBI, any listed public company or acting directors/promoters of any public company which intends to raise money from the public till further orders."
Concept Clearing
Listed Companies
A company which has its securities (shares, bonds, debentures, warrants etc) listed on a recognised stock exchange is called as listed companies . It means an investor can buy the company's shares, bonds ,debentures ,warrants etc from the stock exchange where the company is listed .
Intermediaries registered with SEBI :
They are Stock brokers,Merchant Bankers , Mutual Funds etc. registered with SEBI.
Siphoning of funds . It means that the funds which were borrowed by the company from any banks or financial institutions were used by the company for purposes unrelated to the business of the company, which could lead to serious loss to the company and the lenders.
SEBI (Securities Exchange Board of India )
Securities Exchange Board of India(SEBI) was set up on 12 April 1988 and it was given statutory status by the SEBI Act 1992 on 30 January 1992.
It comes under the Ministry of Finance , Government of India.
It is the regulator of the Capital market and Commodities market in India.
Capital markets include securities markets and Secondary markets like stock exchanges.
Chairman of SEBI :Madhuri Buch
Headquarters of SEBI: Mumbai
2. RBI launches Innovation Hub in Bengaluru
Tags: Economy/Finance
The Governor, Reserve Bank of India (RBI), Shri Shaktikanta Das inaugurated the Reserve Bank Innovation Hub (RBIH) on March 24, 2022 in Bengaluru, Karnataka.
The RBI has set up the RBIH as a Section 8 company under Companies Act, 2013, with an initial capital contribution of ₹100 crore to encourage and nurture financial innovation in a sustainable manner through an institutional set-up.
Former Infosys Chairman Kris Gopalakrishnan has been appointed as the Chairman of the Reserve Bank Innovation Hub. It will also include other eminent persons from industry and academia as members.
RBIH aims to create an ecosystem that focuses on promoting access to financial services and products for the low-income population in the country.
The Hub would bring convergence among various stakeholders (BFSI Sector, Start-up ecosystem, Regulators & Academia) in the financial innovation space.
3. Ukraine crisis to reduce World economic growth by 1%-OECD
Tags: Economy/Finance
The Organisation of Economic Cooperation and Development (OECD) has warned that the Russian, Ukrainian war could lead to an increase in Inflation and reduction of economic growth in the world in 2022.
According to OECD, the crisis is likely to see a reduction of world economic growth by 1% and an increase of 2.5% in inflation in 2022.
Ukraine and Russia's contribution to the world economy is around 2% but Russia and Ukraine is a major supplier of energy and other commodities which are used as a major raw material in the world . Russia is a major player in the oil and gas sector, and with Ukraine it is a major supplier of wheat, maize, fertilizers, etc in the world.
Europe, which is heavily dependent on Russian oil and gas imports, is likely to see a decline by 1.4% especially in the eurozone areas and the United States economic growth may decline by 0.9% .
For OECD kindly see March 11, 2022 Post
Euro Zone
It is officially called the euro area. It consists of those European Union countries which have accepted the euro as a common monetary unit (currency).
The European Union consists of 27 countries of Europe. Out of 27 member countries 19 countries have accepted the euro as a common currency.
These countries are Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia, and Spain.
Euro was launched on 1 January 1999. It was used as an accounting unit and for electronic payment for three years.
Coins and banknotes were launched on 1 January 2002 in 12 countries and now total countries included in euro areas is 19.
4. India's first green hydrogen fuel-cell EV launched
Tags: Economy/Finance
The Union Minister of Road Transport and Highways has launched India's first green hydrogen-based advanced fuel cell electric vehicle (FCEV), Toyota Mirai on 16 March 2022 in New Delhi.
Mirai in Japanese means future.
It is powered by Hydrogen fuel cell battery and is capable of providing a range upto 650 km in a single charge, with refuelling time of five minutes.
Hydrogen is considered as the most environment friendly fuel where there is zero carbon emissions. It discharges water from its tail pipe or exhaust.
Toyota Motor company of Japan has a joint venture with Kirloskar in India and the company is called as Toyota Kirloskar Motor ltd.
5. Farmers debt increased by 53% in the last 6 years
Tags: Economy/Finance
The Government of India has informed the Lok Sabha on 15 March 2022 that the farmers’ debts in the country have increased by 53% over the past six years.
In 2015-16 the total debt of the farmers to the scheduled commercial banks was Rs 12 Lakh crores which jumped to Rs 18.4 lakh crore in 2020-21.
The number of such loan accounts increased from 6.9 crore to more than 10 crore.
The growth of farmers’ debt burden is highest in Maharashtra, an increase of 116% in the outstanding amounts due over the six-year period. The state also has the highest agricultural loan in the country with a total loan amount of Rs 5.5. Lakh crore. The State also consistently has the largest number of farmer suicides, as recorded by the National Crime Records Bureau.
Other States which saw significant increase in farmers’ debt burden include Odisha (76%), Tamil Nadu (68%), Andhra Pradesh (65%) and Gujarat (64%).
The state which saw the highest drop in the farmer debt was Karnataka, posting a 37% drop.
Concept Clearing
Scheduled Commercial Banks
Scheduled banks are those banks in India which are included in the second schedule of the Reserve Bank of India act 1934. These banks are all allowed to participate in the clearing house. They can participate in government business (buying and selling of government securities etc). They have to maintain Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) etc.
Commercial means these banks work for profit and earning profit is their main aim.
Which type of banks comes under the Scheduled Commercial Bank category in India?
Public sector banks ; Banks in which the government of India holds 51% or more equity shares are called public sector banks. for e.g SBI, BOB, Canara Bank, PNB etc.
Private Sector Banks : Banks in which the non-government person (private persons)holds 51% or more equity shares are called public sector banks. for e.g HDFC Bank, ICICI bank, Yes bank, IDBI bank, Kotak Mahindra, Karnataka bank etc.
Foreign Banks : Banks in which foreigners hold 51% or more equity shares in the banks. For e.g Citibank, HSBC bank, Standard Chartered Banks etc.
6. RBI stops Paytm Payment Bank to onboarding new customers
Tags: Economy/Finance
The Reserve Bank of India has directed Paytm Payments Bank to stop the onboarding of new customers with immediate effect. The RBI has not specified any reason for its actions.
RBI has also directed the bank to appoint an IT (Information Technology) audit firm to conduct a comprehensive system audit of its IT system.
RBI’s action has been taken under Section 35A of the Banking Regulation Act, 1949.
Paytm Payment banks joins a list of financial lenders and companies like Mastercard, HDFC banks, Diner Cards and American Express who have been punished by RBI for system glitches and non compliance in their IT system.
RBI wants to develop a failsafe payment system in India where transactions are mainly done in digital mode.
Paytm Payment Bank
Paytm Payment Bank is a joint venture between Vijay Shekhar Sharma who holds 51% stake in the bank and one 97 communications which holds 39% share in the bank.
The bank started its operation in November 2017.
Headquarters : Noida, Uttar Pradesh
Chairman of the Bank : Vijay Shekhar Sharma
It was the first bank in India to start 24x7 NEFT service in India.
It was included in the second schedule of the RBI act 1934 last year.
Banking Regulation act 1949
The Banking Regulation act 1949 gives power to the RBI to regulate banks in India.
Under the Section 35 A of the Banking Regulation Act 1949, the RBI can give directions to banks:
in public interest or
to prevent the affairs of any banking company being conducted in a manner detrimental to the interests of the depositors or
in a manner prejudicial to the interests of the banking company; or to
secure the proper management of any banking company generally.
Concept Clearing
What is customer onboarding in banks
The process by which a customer establishes a relationship with the bank and provides all of the necessary information for the bank to open an account is called onboarding
The bank processes the request and initiates the KYC(Know Your Customer ) verification process by collecting relevant information and performing background checks to validate data.
Once the documentation and regulatory requirements are taken care of, the bank opens the accounts of the customer and provides normal banking service to the customer .
RBI is keen to promote customer onboarding process digitally so as to reduce fraud in the banking sectors.
7. World bank to provide $125 million loan to West Bengal
Tags: Economy/Finance
The Government of India, the Government of West Bengal, and the World Bank signed a $125 million loan to support efforts to help poor and vulnerable groups access social protection services in the state of West Bengal on 10 March 2022.
The West Bengal Building State Capability for Inclusive Social Protection Project will provide social assistance, care services, and jobs support to the poor, especially the vulnerable groups such as women, tribal and scheduled caste households, and the elderly, as well as households in the state’s disaster-prone coastal regions.
The loan will be provided by the World Bank’s subsidiary, International Bank for Reconstruction and Development (IBRD)
Important Full Form Exam
IBRD: International Bank for Reconstruction and Development
8. SEBI raises investment limit through UPI to Rs 5 lakhs in debt securities
Tags: Economy/Finance Popular
Securities Exchange Board of India has increased the investment limit for payment through Unified Payment Interface (UPI) for retail investors buying debt securities in the public issue of a company to Rs 5 lakh.
At present the limit is Rs 2 lakhs.
The new rule will come into effect from 1 May 2022.
Concept Clearing
Debt Securities.
Company needs funds for its business. It can raise the fund by taking loans (borrowing) from banks. Loans taken from banks will not be called debt securities.
Another option for the company is to approach the market also known as the financial market, to borrow. When it approaches the financial market it issues certain papers to the lenders promising to pay interest for a certain time period and also return back the principal amount after a certain time.
This paper creates debt to the company . These types of paper are also called debentures,bonds etc. As it can be freely bought and sold in the market it is also called as debt securities.
Public Issue
When the company approaches the market and asks money from the public by issuing its shares or debentures etc it is called a public issue.
SEBI chairperson : Madhuri Puri Buch
For SEBI kindly see our 28 February 2022 post also.
9. RBI launches 24x7 helpline DigiSaathi
Tags: Economy/Finance Popular
Reserve Bank of India has launched a 24x7 helpline , ‘DigiSaathi’ to address the queries of digital payment users across products.
DigiSaathi will assist users with their queries on digital payments via website & chatbot facility and through toll-free calls where users can dial or call out the options / products for which the information is required.
Automated responses on information related to digital payment products and services are available in Hindi and English through multiple options like – (a) toll-free number (1800-891-3333), (b) a short code (14431), (c) website www.digisaathi.info, and chatbots.
Governor of RBI: Shaktikanta Das
Headquarter of RBI: Mumbai.
10. Reserve Bank of India launches UPI123Pay
Tags: Economy/Finance Popular
To make digital payment more accessible to the people, the Reserve Bank of India has launched UPI123Pay for people who do not have a smartphone .
UPI 123 Pay has been designed to make Unified Payment Interface (UPI) digital payment system more user friendly through feature phones .
Feature phones are normal phones which do not have internet connection and in India around 40 crore people use feature phones .
UPI123Pay includes four distinct options :
App-based Functionality:
An app would be installed on the feature phone through which several UPI functions, available on smartphones, will also be available on feature phones.
Missed Call:
This will allow feature phone users to access their bank account and perform routine transactions such as receiving, transferring funds, regular purchases, bill payments, etc., by giving a missed call on the number displayed at the merchant outlet. The customer will receive an incoming call to authenticate the transaction by entering UPI PIN (Personal Identification Number).
Interactive Voice Response (IVR):
UPI payment through pre-defined IVR numbers would require users to initiate a secured call from their feature phones to a predetermined number and complete UPI on-boarding formalities to be able to start making financial transactions without internet connection.
Proximity Sound-based Payments:
This uses sound waves to enable contactless, offline, and proximity data communication on any device.
This is not the first time that UPI facilities are being made available through a feature phone . UPI facility can be used through a Unstructured Supplementary Service Data(USSD) service.
Under this service the user has to dial *99# to receive a set of menus before initiating instructions. It was complicated and difficult to use and the new UPI123Pay is more easy to use .
UPI (Unified Payment Interface)
UPI was launched by NPCI(National Payment Corporation of India ) in 2016 . It provides an instant fund transfer system from one bank account to another through a mobile phone .
It is operational 24x7 and 365 days.
The maximum fund transfer limit is Rs 2 lakh per transaction.
Important for Exam
UPI :Unified Payment Interface
USSD: Unstructured Supplementary Service Data
Governor of RBI: Shaktikanta Das
Headquarter of RBI: Mumbai.
