Banking, Financial and Economic Awareness

Main Headlines:

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.

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.

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.

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.

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.

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.