Banking, Financial and Economic Awareness of 08 and 09 March 2020

1. India gives fresh proposal on subsidies at WTO

• India has given a fresh proposal on fisheries subsidies at World Trade Organisation (WTO).
• Earlier, India has demanded exemption from the prohibition of subsidies to vessels for all developing countries.
• India’s fresh proposal says that large scale industrial fishing vessels, as well as larger developing countries having per capita gross national income of more than 5000 dollars for three consecutive years, should not be given exemption from prohibition.
• Larger developing countries having per capita gross national income of more than 5000 dollars for three consecutive years should also have over 2% share in global marine capture and contribution of agriculture, forestry and fishing sectors in the economy of such countries should be less than 10%
• The revised proposal is aimed at ending negotiations during the next WTO ministerial meeting at Kazakhstan in June 2020.

2. India’s forex reserve increase to 481.5 billion dollars

• India’s forex reserve has increased to 481.5 billion dollars till February 28.
• Since September 2019, the forex reserve has increased for 23rd consecutive weeks. In September 2019, the forex reserve stood at 428.5 billion dollars.
• Forex reserves have been increasing due to low prices of Brent crude and low trade from China and other countries.
• Prices of Brent crude and trade from China and other countries have decreased due to fears about the spreading of Coronavirus.
• Recently released RBI data shows that reserves have increased due to an increase in foreign currency assets.

3. Recommendations of Insolvency Law Committee

• Insolvency Law Committee has recommended Rs 50 lakh threshold for initiation of insolvency proceedings against companies.
• The committee has also recommended Rs 5 lakh threshold for initiation of insolvency proceedings against Micro, Small and Medium Enterprises (MSMEs).
• Recommendations of the Insolvency Law Committee are intended to lower the burden of National Company Law Tribunals (NCLTs).
• Currently, cases under Insolvency and Bankruptcy Code (IBC) exceed the time limit of 330 days provided by the government.
• Insolvency Law Committee will submit its recommendations to the Finance Minister.

4. Government invites EoI for privatisation of BPCL

• The government has invited Expressions of Interest (EoI) for the privatisation of Bharat Petroleum Corporation Ltd (BPCL).
• The EoI has been invited from parties having a net worth of 10 billion dollars.
• BPCL is one of the largest companies involved in oil marketing and oil refining in India. Its refining capacity is nearly 15 % of the total refining capacity of India.
• The government holds 52.98% equity stake in BPCL. Disinvestment of the government’s stake in BPCL will help the government in achieving Rs 2.1 lakh crore disinvestment target for the fiscal year 2020-21.
• Deloitte Touche and Tohmatsu are the government’s transaction advisor for the disinvestment of BPCL.
• Strategic sale of BPCL, stake sale in Container Corporation of India and Shipping Corporation of India were approved by union cabinet in November 2019

Multiple Choice Questions (MCQs)

1. Where will World Trade Organisation (WTO) ministerial meeting be organized in June 2020?

1. Turkmenistan
2. Kazakhstan
3. Pakistan
4. Afghanistan
5. Iran

2. In February 2020, India’s forex reserves have increased from 428.5 billion dollars in September 2019 to

1. 481.5 billion dollars
2. 491.5 billion dollars
3. 501.5 billion dollars
4. 511.5 billion dollars
5. 521.5 billion dollars

3. How much threshold limit was recommended by the Insolvency Law Committee recently for the initiation of insolvency proceedings against companies?

1. Rs 50 lakh
2. Rs 100 lakh
3. Rs 150 lakh
4. Rs 200 lakh
5. Rs 250 lakh

4. The government has recently invited Expressions of Interest (EoI) for the privatisation of Bharat Petroleum Corporation Ltd (BPCL). Government’s equity stake in BPCL currently stands at

1. 32.98%
2. 42.98%
3. 52.98%
4. 67.98%
5. 59.98%

Correct Answers:

1. B

2. A

3. A

4. C

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