Banking, Financial and Economic Awareness

2020-04-06

1. Order issued to bring government policy in agreement with amended MM (D&R) Act, 1957

  • The environment ministry has issued an order to bring government policy in agreement with January 2020 amendments in Mines and Minerals (Development and Regulation) Act, 1957 or MM (D&R) Act, 1957.
  • The order was issued on March 28. It allows the bidder, who succeeds in a bid of a mining lease, will get legally acceptable environmental clearance from the previous holder of the lease.
  • Legally acceptable environmental clearance from the previous holder of the lease will be transferred to successful bidders for two years only.
  • New holder of mining lease must file an application and get advance environmental clearance in these two years.

2. People holding life insurance policy given 30 extra days for paying premium

  • People holding a life insurance policy has been given 30 extra days for paying premium.
  • As per the Insurance Regulatory and Development Authority of India (IRDAI), 30 extra days will be available to holders of life insurance policy if their life insurance policy were to be renewed in months of March and April.
  • Earlier, health insurance policies as well as motor third-party insurance were allowed extra time up to April 21 by IRDAI.
  • Insurers have also been given extra time of 15 days for monthly returns filing. They have been given 30 days for filing of quarterly, biannual and yearly returns.
  • On March 31, Rs 105 crore was given to PM CARES Fund by Life Insurance Corporation (LIC).
  • Life Insurance Corporation (LIC):
    • It was formed in September 1956.
    • Government of India completely (100%) owns LIC.
    • It is headquartered in Mumbai.
    • LIC owns 51% stake in IDBI Bank, nearly 9% stake in Axis Bank and 10 % stake in Yes Bank.
    • M R Kumar is its chairman. Chairman and four Managing Directors (MDs) form executive board of LIC. Names of MDs are given below.
      • Vipin Anand
      • T. C. Suseel Kumar
      • Mukesh Kumar Gupta
      • Raj Kumar

3. India’s forex reserves increase

  • During March 20 to March 27, India’s foreign currency assets have increased by $2.5 billion due to the increase in value of India’s gold reserves by $3 billion.
  • During the same period, FPIs have transferred $3.5 billion out of debt and equity markets in India.
  • India’s foreign exchange reserves have increased by $5.7 billion and reached $475.6 billion.
  • Earlier, India’s forex reserves have decreased by $17.3 billion from $487.2 billion on March 6 to $469.9 billion on March 20.
  • Decreasing crude oil prices have lowered import bill and as they form nearly 20% of total import bill. This led to increase in India’s forex reserves.

4. e-way bills to remain valid till April 30

  • As per government order, e-way bills with validity between March 20 and April 15 will remain valid till April 30.
  • On December 18, GST council placed a restriction on input tax credit (ITC) at 10% of eligible credit in case of buyers if invoices were not uploaded by their suppliers.
  • As per order of finance ministry, this 10 % limit will not be applied for ITC taken between February and August. This would be added in September 2020.  

 

Topic of the Day- “Types of money- Narrow money, Broad money, Fiat money, Cryptocurrency”

  • Narrow money: It is a measure of money supply in the economy. It is the sum of currency kept by people with themselves, net demand deposits with banks and saving deposits kept with Post office savings banks.
  • Broad money: It is also a measure of money supply in the economy. But, it consists of more financial items than narrow money. It is the sum of currency kept by people with themselves, net demand and time deposits with commercial banks and total deposits kept with Post office savings banks.
  • Fiat money: The term fiat money refers to notes and coins. Notes and coins are called fiat money because they do not have any value on their own. But, their value is formally authorized by RBI. 
  • Cryptocurrency: It is also known as virtual currency or digital currency. Though cryptocurrency is not legal tender, it is used to carry out financial transactions. Cryptocurrency works according to blockchain technology. Bitcoin was the first cryptocurrency launched in 2009.

 

Multiple Choice Questions (MCQs)

1. As per recent order of Environment ministry, bidder, who succeeds in a bid of a mining lease, will get legally acceptable environmental clearance from the previous holder of the lease for a period of

  1. 6 months
  2. 12 months
  3. 18 months
  4. 24 months
  5. 30 months

2. How much money was given to PM CARES Fund by Life Insurance Corporation (LIC)?

  1. Rs 55 crore
  2. Rs 105 crore
  3. Rs 125 crore
  4. Rs 155 crore
  5. Rs 205 crore

3. During March 20 to March 27, India’s foreign currency assets have increased by 

  1. $0.1 billion
  2. $0.5 billion
  3. $1.1 billion
  4. $1.5 billion
  5. $2.5 billion

4. As per government‘s recent order, e-way bills with validity between March 20 and April 15 will remain valid till

  1. April 30
  2. May 30
  3. June 30
  4. July 30
  5. August 30

5. Which of the following is/are not included in the definition of the term narrow money?

  1. Currency kept by people with themselves
  2. Net demand deposits with commercial banks 
  3. Saving deposits kept with Post office savings banks.
  4. Net time deposits with commercial banks
  5. None of the above

Solution:

1. D

2. B

3. E

4. A

5. D

 

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