Banking, Financial and Economic Awareness

2020-04-04

1. RBI allows financial markets to work for fewer hours

  • RBI has lowered trading hours and financial markets will work for four hours for ten days.
  • New timing will be from 10 am to 2 pm for the period from April 7 to 17. 
  • The reasons for reducing trading hours are operational risks caused by dislocations and staff and IT resources negatively affected by COVID-19 outbreak.
  • The term financial markets mean the market where different type of financial instruments can be sold or purchased.
  • Concept of financial markets: Households can keep their savings with banks. Banks lend money deposited by households to businesses. Households can directly purchase shares from businesses through financial markets. Businesses invest money obtained from sale of shares through financial markets.
  • Different parts or type of financial markets and their usual timings are summarized in following table

Different parts or types of financial markets

(on the basis of financial instrument traded)

Usual Timings

Repo market in government securities

9 am to 2:30 pm

Tri-party repo market in government securities

9 am to 3 pm

Corporate bond repo market or repo in corporate bonds market

9 am to 6 pm

Call money market(also known as short notice/term money market), Commercial paper market, Certificates of deposit,  Government securities market(Central government securities, State development loans and Treasury bills)

9 am to 5 pm

Foreign currency/Indian rupee trades, forex derivatives markets, rupee interest rate derivatives

9 am to 5 pm

 

2. ADB’s estimation of India’s economic growth in FY 2020-21 and FY 2021-22

  • In its Asian Development Outlook 2020 report, ADB has estimated lower economic growth for India in Fiscal Year (FY) 2020-21 and projected recovery in FY 2021-22.
  • As per the report, India’s economic growth in FY 2020-21 will decline to 4%. In December 2019, ADB has projected growth of 6.5%.
  • ADB has estimated that economic growth of Indian economy will recover to 6.2% in FY 2021-22.
  • ADB’s projection for economic growth of India is higher than that of S&P and Moody’s Investors Service.
  • Monetary Policy Committee (MPC) of RBI has not made any projection for economic growth in current fiscal.
  • MPC said that agriculture and allied activities will remain resilient. But, COVID-19 pandemic will have negative effect on other sectors.

3. Indian bank’s new products for farmers, poultry sector borrowers and women members of SHGs

  • Indian bank has started new IND KCC Covid Sahaya Loan for farmers, IND Covid Emergency Poultry Loan scheme for poultry sector borrowers and SHG Covid Sahaya Loan for women members of SHGs.
  • Agro-processing units will be given loan equal to 10 % of working capital under IND Covid Emergency Agro-Processing Loan.
  • Poultry sector borrowers will be given loan equal to 20 % of working capital under IND Covid Emergency Poultry Loan scheme.
  • IND KCC Covid Sahaya Loan will be given to farmers with Kissan Credit Card facility.
  • SHG Covid Sahaya Loan will provide Rs 5,000 to each women member of SHGs.
  • SHGs are informal groups consisting of 10 to 20 members. They can function without registration. But, they are not allowed to have more than 20 members.
  • Kisan Credit Card scheme:
    • It was started in 1998.
    • It was based on NABARD’s model scheme.
    • Farmers holding KCC can take credit from Indian banks.
    • They also get personal accident insurance death, disability of permanent nature and other risks.
  • Indian bank:
    • It was formed in 1907.
    • Its headquarters is located in Chennai.
    • Padmaja Chunduru is currently CEO of Indian bank.
    • After merger of Allahabad Bank on 1 April 2020, Indian bank has become 7th biggest bank of India.

4. World Bank announces 1-billion dollar for Indian health infrastructure

  • World Bank has announced 1-billion dollar or more than 7,500 crore rupees for supporting Indian health infrastructure and fighting against COVID-19.
  • The support will be provided under the project named as India COVID-19 Emergency Response and Health Systems Preparedness Project.
  • The project will be extended to all states and UTs of India. It will strengthen India’s diagnostic systems and capacity of laboratories and diagnostic systems.
  • World Banks’ project will make Indian Integrated Disease Surveillance Programme strong and develop Biosafety Level 3 (BSL-3) laboratories.
  • There are four levels of biosafety laboratories (BSL 1 to BSL 4) on the basis of containment of bacteria, viruses or other disease causing agents they provide.
  • Finances for the project will be provided through International Bank for Reconstruction and Development (IBRD).
  • National Health Mission (NHM), National Centre for Disease Control (NCDC) and Indian Council of Medical Research (ICMR) will manage the project.  

5. RBI allows receiving of money sent by non-residents from abroad into PM-CARES fund

  • RBI has allowed receiving of money sent by non-residents from abroad into PM-CARES fund.
  • Now, non-residents will be able to send remittances into PM-CARES fund through non-resident exchange houses.
  • Non-resident exchange houses are defined as those licensed companies and financial institutions under regulation of authority in the country from which money is being sent.
  • The authority in the country from which money is being sent regulates non-resident exchange houses to obtain funds from remitter or person sending money.

 

Multiple Choice Questions (MCQs)

1.  RBI has recently changed trading hours of financial markets. Now, financial markets will work for

  1. 3 hours
  2. 4 hours
  3. 4.5 hours
  4. 5 hours
  5. 5.5 hours

2.  As per Asian Development Outlook 2020 (ADO) report, India’s economic growth in FY 2020-21 will decline to

  1. 2%
  2. 3%
  3. 3.6%
  4. 4%
  5. 4.3%

3. Which of the following banks have recently started new products for farmers, poultry sector borrowers and women members of SHGs?

  1. Punjab National Bank
  2. Indian bank
  3. Union Bank of India
  4. State Bank of India
  5. None of the above

4. Which of the following authorities will manage COVID-19 Emergency Response and Health Systems Preparedness Project?

  1. National Health Mission (NHM)
  2. National Centre for Disease Control (NCDC)
  3. Indian Council of Medical Research (ICMR)
  4. A and B
  5. A, B and C

5. How much money will be given by World Bank for strengthening of Indian health infrastructure and fighting against COVID-19?

  1. 0.2-billion dollar
  2. 0.5-billion dollar
  3. 1-billion dollar
  4. 1.2-billion dollar
  5. 1.5-billion dollar

 

Solution:

1. B

2. D

3. B

4. E

5. C

 

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