Today, we are sharing the next part of our Banking and Finance Awareness Series “Financial Awareness at a Glance “. Go through this now to get all the important insights which took place last week in Banking and Finance Sector in India and world. This will immensely help you in upcoming exams.
Financial Awareness at a Glance
1. Bhanu Pratap Sharma became new Chairman of BBB
- Former bureaucrat Bhanu Pratap Sharma became the new chairman of Banks Board Bureau (BBB)
- Before the appointment, Bhanu Pratap Sharma is the chairman of recruitment and assessment centre at Defence Research and Development Organisation (DRDO).
- He replaces Vinod Rai whose two-year term was completed in March 2018.
- The Union Finance Ministry has reconstituted Banks Board Bureau (BBB) and appointed a new chairman who will have a two-year tenure, same as its predecessor.
Other members of re-formed BBB are –
- Vedika Bhandarkarm (Investment banker)
- Pradeep Kumar (former managing director of SBI) and
- Pradip P. Shah (founder managing director of rating agency Crisil.
- Banks Board Bureau is an autonomous body of eminent professionals and officials for public sector banks (PSBs).
- It was announced by Union Government in August 2015 as part of seven-point Indradhanush Mission to revamp PSBs and started functioning in April 2016.
- Banks Board Bureau is set up by the on the recommendation of P J Nayak committee.
2. RBI strict reporting norms for Liberalised Remittance Scheme
- The Reserve Bank of India (RBI) has tightened reporting norms for the Liberalised Remittance Scheme (LRS) under which individual can transfer up to US $2,50,000 abroad in a year.
- The purpose of tightening of norms is to improve monitoring and also to ensure compliance with LRS limits.
- At present transactions under LRS scheme are permitted by banks which is based on the declaration made by the remitter.
- The main motive behind these norms is to monitor and restrict to obtaining such declaration without independent verification, in absence of a reliable source of information.
About LRS scheme –
- The Reserve Bank of India introduced Liberalised Remittance Scheme (LRS) in February 2004.
- The regulations under LRS scheme are is provided under Foreign Exchange Management Act (FEMA), 1999.
- Under LRS scheme all resident individuals including minors are allowed to freely remit up to a certain amount in terms of US Dollar for current and capital account purposes or combination of both.
- At present, LRS limit for all resident individuals, including minors, is US $2,50,000 (Rs. 1.5 crore) per financial year.
The facility under LRS scheme –
- Under LRS, individuals can make remittances for overseas education, travel, medical treatment, maintenance to relatives living abroad, gifting and donations.
- The remitted money can be used for the purchase of shares and property as well. Individuals can also open, maintain and hold foreign currency accounts with overseas banks for carrying out transactions under it.
3. India at 130 spots in 2018 Economic Freedom Index
- India has been ranked at130 positions among 186 economies in the 2018 Economic Freedom Index.
- The index measures the degree of economic freedom in the countries of the world.
- India with a score of 54.5 jumped 13 places from the 143rd rank in the previous year (2017) with a score of 52.6 points.
- China with 57.4 points was ranked 111th.
- The index is released by top US-based Think Tank, The Heritage Foundation.
- It ranks countries based on a score ranging 0 (least free) to 100 (most free).
- Top 3 countries in the index are – Hong Kong, Singapore and New Zealand.
- Ranking of India’s Neighbours countries are – Bhutan (87), Sri Lanka (111), Bangladesh (128), Pakistan (131) and Nepal (133).
- BRICS nations in the index are: South Africa (77), Russia (107), China (111), India (130) and Brazil (153).
4. ADB projected India’s GDP to grow at 7.3% in 2018-19
- Asian Development Bank (ADB) in it’s Asian Development Outlook has projected India’s economic growth rate to grow at 7.3% in 2018-19
- Also, ADB forecast India’s economic growth rate to grow at 7.6% in 2019-20 fiscal.
- The ADB’s growth projection is in line with that of rating agency Fitch but is lower than Reserve Bank of India’s (RBI) forecast of 7.4%.
5. ICICI Bank becomes first Indian bank to go live on SWIFT’s GPI service
- ICICI Bank became first Indian bank to go live on SWIFT’s (Society for World Interbank Financial Telecommunication System) Global Payment Innovation (GPI), an improved cross-border payments service.
About SWIFT GPI
- SWIFT GPI was launched in May 2017.
- The purpose of SWIFT GPI is to help banks to track their global transactions at all times, keeping full vigil on payments activity.
- It accounts for 10% of cross-border payment traffic on SWIFT network and has enabled more than hundred billion dollars to be transferred across world rapidly and securely every day.
- It covers all payment instructions sent across the network, enabling GPI banks to track all their SWIFT payment instructions at all times, and giving them full visibility over all their payments activity.
- SWIFT stands for – Society for Worldwide Interbank Financial Telecommunication.
- A SWIFT transfer is a type of international money transfer sent via the SWIFT international payment network.
- This is a kind of network between banks, which can be used to send and receive messages.
- In fact, it is used by many banks and financial services providers and institutions, and through them, the payment becomes easily and fast.
- For every bank, there is a special swift code that works for its identification.
- The SWIFT network does not actually transfer funds, but instead, it sends payment orders between institutions’ accounts, using SWIFT codes.
- A SWIFT code is an international bank code that identifies particular banks worldwide.
- It’s also known as a Bank Identifier Code (BIC). CommBank uses SWIFT codes to send money to overseas banks. SWIFT code consists of 8 or 11 characters.
6. RBI switches back to GDP model from GVA model to measure the economy
- To forecast the estimate of economic activity in the country, RBI switched back to gross domestic product (GDP) model from the gross value added (GVA) methodology.
- According to the RBI Deputy Governor, Viral Acharya; the RBI switched back to GDP model is mainly to follow the international standards and global best practices.
- The performance of most economies measures in the world in the terms of GDP model.
The difference between two models is
- The GDP model gives a picture of an economy from consumers’ side or demand perspective.
- The GVA model gives a picture of the state of economic activity from producers’ side or supply side.
- From 2015 onwards, Government had started analysing growth estimates using GVA methodology and had also changed the base year to 2018 from January.
7. Christian Sewing is new CEO of Deutsche Bank
- Christian Sewing has been appointed as the new Chief Executive officer of the Deutsche Bank.
- He replaced John Cryan.
- Deutsche Bank established its first branch in India in 1980.
- Deutsche Bank Headquarters in Frankfurt, Germany.
8. SBI launches UK subsidiary with 225 mn pounds capital
- The State Bank of India (SBI) has announced to launch, SBI (UK) Limited (its UK subsidiary) with an initial capital commitment of 225 million pounds from its parent entity.
- Now, SBI has become the first foreign bank in the UK to ringfence its retail division from its wholesale business.
- The UK’s Prudential Regulation Authority (PRA) wants foreign banks to establish UK subsidiaries to protect depositors in the UK from uncertainties in foreign markets.
- SBI operates seven branches in London and five each in Manchester, Birmingham, Wolverhampton, Leicester and Coventry.
9. SBI to invest Rs. 80 Bn in Hydropower project of Nepal
- The State Bank of India (SBI) will invest a total of Rs 80 billion in the Arun III hydropower project of Nepal.
- It has 900 megawatts (MW) electricity production capacities.
- After completion of the project, Nepal will get 21.9% of the total electricity produced in a year.
- The mega project is targeted to be completed by 2022’s September.
- The SJVN (constructing the mega power project) has made an informal agreement with the SBI to acquire the investment as a loan and soon will make the formal agreement.
10. Govt. constituted Jayant Sinha panel for fast-tracking UAV technology
- The central government has constituted a task force under the chairmanship of Minister of State Civil-Aviation Jayant Sinha for fast-tracking the roll-out of Unmanned Aerial Vehicle (UAV) technology.
- It will consist of representatives from the government, Public Sector Undertakings, industry, and sectoral experts.
- The Task Force will focus on research and development, acquisition and commercialization, application and adoption in specific sectors, regulatory framework and preference for Make in India.
- An unmanned aerial vehicle (UAV) is a type of aircraft that operates without a human pilot onboard.
- Remote control aeroplanes and helicopters can also be classified as UAVs when they have particular kinds of performance and remote-control capabilities.
11. Ban Ki-Moon became new Chairman of Boao Forum for Asia
- Former UN Secretary-General Ban Ki-moon has been elected chairman of ‘Boao Forum for Asia’ (BFA).
- He replaced Yasuo Fukuda (former Japanese Prime Minister).
- Chinese Vice Foreign Minister Li Baodong has been appointed BFA secretary-general.
- The Boao Forum for Asia conference was held in Hainan, China.
- The theme of the conference is ‘An Open and Innovative Asia for a World of Greater Prosperity’.
- The BFA is a non-governmental and non-profit international organization founded in 2001.
- The BFA conference held every year.
- The main objective of BFA is to promote regional economic integration and bringing Asian countries closer to their development goals.
- The Federation of Chambers of Commerce of India (FICCI) is one of the founding members of BFA and famous Industrialist Ratan Tata was one of the board members.