Financial Awareness at a Glance (04 June – 10 June 2018)

Dear readers,

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. India ranks at 136 positions in Global Peace Index

  • India has moved one notch higher to the 136th position among 163 countries in the 2018 Global Peace Index.
  • The index was prepared by an Australian international think-tank Institute for Economics and Peace (IEP).
  • Iceland topped the index followed by New Zealand (ranked 2nd), Austria (3rd), Portugal (4th), Denmark (5th).
  • Syria remains the least peaceful country in the world, a position it has held for the past five years. Afghanistan, South Sudan, Iraq and Somalia round up the list of five least peaceful countries.
  • Four most peaceful regions are Europe, North America, Asia-Pacific, and South America; however, all these regions recorded deteriorations.
  • Region-wise, South Asia experienced the largest increase in peacefulness, with Bhutan, Sri Lanka, India, and Nepal all improving.
  • India’s GPI rank was 137th out of 163 countries in 2017, when the year 2016 was assessed. In 2018, India’s rank moved up to 136, when the year 2017 is assessed.

About Global Peace Index (GPI)

  • GPI was launched in 2007 as a measure of world peace.
  • The Index is composed of 23 indicators, ranging from a nation’s level of military expenditure to its relations with neighbouring countries and the percentage of the prison population in 163 countries.

Source: The Indian Express

2. MK Jain appointed RBI Deputy Governor

  • IDBI CEO Mahesh Kumar Jain has been appointed as fourth deputy governor for a three-year term.
  • The fourth deputy governor’s post has been vacant since SS Mundra retired in July 2017.
  • As per the RBI Act, the central bank should have four deputy governors –– two from within the ranks, a commercial banker and an economist –– to head the monetary policy department.

Note:

  • Mahesh Kumar Jain was appointed as the CEO of IDBI Bank in 2017 and was previously CEO at Chennai based Indian Bank between November 2015 and March 2017.

 Source: The Economic Times

3. RBI hikes repo rate by 25 basis points to 6.25%

  • On 6th June, the six-member monetary policy committee (MPC) of the Reserve Bank of India (RBI) increased the repo rate by 25 basis points to 6.25%.
  • The MPC arrived at the unanimous decision as the outlook for inflation had become ‘uncertain’ following a surge in international crude oil prices.
  • This is the first-rate hike in four-and-a-half years; the last was in January 2014.
  • The outlook for GDP growth for 2018-19 has been retained at 7.4% as projected in the April policy.
  • GDP growth is projected to be in the range of 7.5-7.6% in H1 and 7.3-7.4% in H2, with risks evenly balanced, the RBI said.
  • The reverse repo rate under the LAF stands adjusted to 6.0%.
  • The marginal standing facility (MSF) rate and the Bank Rate to 6.50%.
  • Cash Reserve Ratio (CRR) remains unchanged at 4%.

Current Rates:

  • Repo rate – 6.25%.
  • Reverse Repo rate – 6.0%.
  • MSF rate – 6.50%.
  • Bank rate – 6.50%.
  • CRR – 4%
  • SLR – 19.5%

Source: The Hindu

4. RBI to set up PCR to curb bad loans

  • The Reserve Bank of India (RBI) said it would set up a Public Credit Registry (PCR)—an information repository that collates all loan information of individuals and corporate borrowers.
  • A credit repository will help banks distinguish between a bad and a good borrower and accordingly offer attractive interest rates to good borrowers and higher interest rates to bad borrowers.
  • The move is based on the recommendations of a committee it set up last year, headed by M. Deosthalee. The committee submitted its report in April.
  • The public credit repository will address information asymmetry, improve access to credit and strengthen the credit culture among consumers.

Note:

  • Setting up the public credit registry will help improve India’s rankings in the World Bank’s ease of doing business index.

Source: livemint

5. Sarita Nayyar appointed WEF Managing Board

  • The World Economic Forum (WEF) said it has appointed Sarita Nayyar to its Managing Board.
  • In addition to her role as the Chief Operating Officer (COO) for the World Economic Forum LLC, Nayyar will help lead the international expansion of the Forum’s centre for the Fourth Industrial Revolution Network.
  • She will also lead the Forum’s international expansion with new centres opening in India, Japan and China.

Note: The WEF signed a memorandum of understanding (MoU) with the government of Maharashtra to set up the centre in the satellite city of Navi Mumbai.

Source: The Economic Times

6. RBI amends Gold Monetisation Scheme to make it more attractive

  • The Reserve Bank of India (RBI) has made changes in the Gold Monetisation Scheme (GMS) to make it more attractive.
  • The revamping of the scheme is aimed at enabling people to open a hassle-free gold deposit account.
  • According to the RBI, the short-term deposits should be treated as bank’s on-balance sheet liability.
  • “These deposits will be made with the designated banks for a short period of 1-3 years (with a facility of rollover).
  • Deposits can also be allowed for broken periods (e.g. 1 year 3 months; 2 years 4 months 5 days; etc.),” it said.
  • The interest rate payable in the case of deposits for maturities with broken periods should be calculated as the sum of interest for the completed year plus interest for the number of remaining days, it added.
  • In 2015, the government launched the GMS with the objective of mobilising the gold held by households and institutions in the country.

 Source: The Times of India

7. FDI in India rises to $61.96 billion in 2017-18: Government

  • According to Department of Industrial Policy & Promotion (DIPP), Foreign direct investment in India increased to USD 61.96 billion in 2017-18.
  • FDI inflows stood at $60 billion in the previous fiscal. The figure includes equity inflows, reinvested earnings and other capital.
  • Department of Industrial Policy and Promotion (DIPP) Secretary Ramesh Abhishek said that during the four years of the Modi government, foreign inflows jumped to $222.75 billion from $152 billion in the previous four-year period.
  • However, according to a UNCTAD report yesterday, foreign direct investment (FDI) to India decreased to $40 billion in 2017 from $44 billion in 2016, while outflows from India, the main source of investment in South Asia, more than doubled.

Note:

  • The main sectors that received maximum foreign inflows include services, computer software and hardware, telecommunications, construction, trading and automobile.
  • Major sources of foreign inflows include Mauritius, Singapore, Japan, the Netherlands, the US, Germany, France and the UAE.

Note:

  • Foreign inflows are crucial for India, which needs huge investments to overhaul its infrastructure such as ports, airports and highways to push growth.
  • It helps improve the country’s balance of payments situation and strengthen the rupee value against other global currencies, especially the US dollar.

Source: The Times of India

8. Sudha Balakrishnan appointed first CFO of RBI

  • Sudha Balakrishnan has been appointed the first-ever chief financial officer (CFO) of the Reserve Bank of India (RBI).
  • Before joining RBI, she was a vice president with the National Securities Depository Ltd (NSDL), India’s first and largest depository,
  • She will be the 12th executive director of the RBI and will have a three-year term.

Her role –

  • As CFO, Balakrishnan will also be in charge of the dividend RBI pays to the government, which is crucial in the final budgetary calculations.
  • Under the RBI Act, 1934, the central bank is required to pay the government its surplus after making provisions for bad and doubtful debts, depreciation in assets and, contribution to staff and superannuation fund among others. RBI follows a July to June financial year.

 Source: The Economic Times

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