Banking, Financial and Economic Awareness

2019-12-12

1. Walmart and Flipkart will jointly invest in Ninjacart

  • Walmart and Flipkart have announced joint investment in Ninjacart.
  • The joint investment will help Walmart and Flipkart in directly sourcing fresh produce for wholesale cash and carry stores of Walmart India and Supermart stores of Flipkart.
  • Ninjacart will be able to increase its customer base, reach into new cities, and get exposed to global best practices.
  • Ninjacart is a Bengaluru-based company that supplies fresh produce in India.

 

2. Cabinet approves limited credit guarantee scheme to NBFCs and HFCs

  • Under the scheme, credit guarantee to Non-Banking Financial Companies (NBFCs) and Housing Finance Companies (HFCs) will be limited to lower of the first loss of maximum 10 % of the fair value of assets bought by banks or Rs 10,000 crore.
  • The scheme will be open up till June 30, 2020 or till Rs 1 lakh crore assets are bought by banks.
  • The banks will buy investment grade (BBB+ rated) assets and assets in the SMA-0 category during one year before August 1, 2018.
  • Special Mention Account (SMA-0) loans are loans where principal or interest payment are due for 30 days.

 

3. Code on Social Security Bill tabled in Lok Sabha

  • The Code on Social Security Bill has been presented in Lok Sabha.
  • It universalizes social security benefits and makes Aadhaar compulsory for getting social security benefits.
  • It allows the employee’s state insurance corporation to accept funds from corporate social responsibility funds.
  • It allows the creation of special purpose vehicles to implement programmes for unorganized sector workers.
  • Under the code, the central government may change Employees’ Provident Fund (EPF) monthly contribution for selected workers.
  • If the bill becomes an act, workers employed for a fix-term of less than 5 years will also be paid gratuity.
  • The bill combines 9 central labour acts into one code.

 

4. IBC (Second Amendment) Bill, 2019 approved by Cabinet

  • Union Cabinet has approved IBC (Second Amendment) Bill, 2019 to change existing sections of Insolvency and Bankruptcy Code and add a new section.
  • It has a provision guaranteeing successful resolution applicants from facing criminal proceedings related to crimes by earlier promoters of the company.
  • The changes proposed in the bill will help in the resolution of cases such as Bhushan Power & Steel (BPSL), Kudos Chemie Ltd and SPS Steel Rolling Mills Ltd.
  • In these cases, Enforcement Directorate (ED) has attached properties of companies going through resolution process under the Prevention of Money Laundering Act (PMLA).
  • Insolvency and Bankruptcy Code 2016:
    • It provides for the resolution of insolvency cases within 180 days.
    • The Insolvency and Bankruptcy Code (Amendment) Bill, 2019 was passed on August 01, 2019.
    • It fixed a time-limit of 330 days for completion of the resolution process.

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