Banking, Financial and Economic Awareness of 11 and 12 June 2020

1. RBI discusses steps for strong governance in commercial banks

• In its discussion paper, RBI has discussed steps such as putting a limit on tenure of CEOs and a written and formal conflicts of interest policy for strong governance in commercial banks.
• The steps were discussed in discussion paper titled as Governance in Commercial Banks in India.
• The tenure of a promoter holding CEO position will be fixed at 10 years or less than 10 years and non-promoter CEOs tenure will be fixed at 15 years.
• The fixing of tenure of CEOs or whole-time directors will ensure stronger governance and separation of ownership from bank management.
• The RBI paper has also discussed a written and formal conflicts of interest policy and objective compliance process for its implementation.
• RBI paper also talks about a risk governance framework with three lines of defence.

2. Union Bank of India's new organisation structure

• After merger of Andhra Bank and Corporation Bank into Union Bank of India, the new organisational structure of combined bank has been announced.
• New organisational structure consists of eighteen zonal offices and 125 regional offices.
• The merger of Andhra Bank and Corporation Bank into Union Bank of India became effective on April 1, 2020.
• The bank will set up 4 new zonal offices at Chandigarh, Jaipur, Mangalore and Visakhapatnam and two new zonal offices will be in South India.
• Out of the 125 regional offices, 32 regional offices are being established new.

3. IRDAI advises inclusion of telemedicine in health insurance

• Insurance Regulatory and Development Authority of India (IRDAI) has advised insurers that telemedicine consultation should be included in health insurance.
• The telemedicine practice guidelines issued by the Medical Council of India on March 25 allowed doctors to offer healthcare services via telephone.
• Medical Council of India is a statutory body. It is headquartered in New Delhi. It was formed in 1934. Its current President is Dr. Jayshreeben Mehta.

4. Five Indian pharmaceutical companies face anti-competitive practices case in US

• The names of five Indian pharmaceutical companies have appeared in an anti-competitive practices case in US.
• The companies facing case are Glenmark Pharmaceuticals, Sun Pharmaceuticals, Lupin, Aurobindo Pharmaceuticals and Wockhardt.
• They are among other 26 drug manufacturers facing anti- competitive practices case in US.
• As per the allegations, the drug manufacturers allocated customers and divided market on the basis of fair share and acted on the concept of artificial price increases.
• Indian drug manufacturers are alleged to have colluded to decide on prices of products such as creams, gels, lotions, and ointments.

5. India's sovereign rating and outlook by S&P remains unchanged

• India's long term sovereign rating and outlook by S&P has remained unchanged at BBB- and stable.
• India's short term sovereign rating by S&P has remained at A-3.
• BBB- rating from S&P Global Ratings is lowest investment grade rating.
• S&P has estimated India's real GDP growth at 8.5% in FY22.
• It predicted strong recovery in the nest fiscal year after sharp contraction in current fiscal.
• The big three credit rating agencies are S&P, Moddy’s and Fitch Group.

6. Customs duty on bamboo imports increased

• Customs duty on all imports of bamboo has been increased from 10% to 25%.
• The customs duty has been increased to promote use domestic bamboo as part of the Aatmanirbhar Bharat scheme.
• The new customs duty will be applicable uniformly to all bamboo imports.
• The increase in customs duty will help farmers and MSME agarbatti manufacturers and prevent rate-related disputes.
• Import of Bamboo sticks from China and Vietnam has been a cause of unemployment in India.
• In May 2020, government has organized bamboo conclave through video conference.
• Bamboo is an evergreen flowering plant.
• Government had launched National Bamboo Mission in 2006-07.
• It was restructured in 2018. The restructured National Bamboo Mission is under implementation since 2019-20.
• Customs Duty is the tax imposed by the government on import and export of goods to protect domestic industries and ensuring economic stability.

Read Banking Awareness PDF - 11 and 12 June 2020