Banking Awareness of 12, 13 and 14 February 2022

Topic: Committees/ Commissions/Taskforces

1. Finance Ministry reconstitutes GoM on GST for casinos, racecourse and online gaming.

• Finance Ministry has reconstituted Group of Ministers (GoM) on GST for casinos, racecourse and online gaming without changing its Terms of Reference (ToR).
• Meghalaya Chief Minister K Sangama will be convenor. The reconstituted GoM includes Finance Minister of Uttar Pradesh, Suresh Khanna and Finance Minister of Gujarat, Kanubhai Patel.
• Finance Minister of West Bengal Chandrima Bhattacharya is also part of the reconstituted GoM.
• The GoM was constituted on 24 May 2021. Its composition has been changed for the second time.
• GST rate for online games is 28% if they involved betting or gambling. However, GST rate on games not involving betting or gambling is 18%.

Topic: Corporates/Companies

2. DRHP of LIC IPO filed with Securities and Exchange Board of India (SEBI) on 13 February 2022.  

• Draft Red Herring Prospectus (DRHP) of Life Insurance Corporation of India (LIC) initial public offering (IPO) has been filed with SEBI on 13 February 2022.
• LIC has 66% market share in New Business Premiums. Its embedded value as on 30 September 2021 is Rs 5,39,686 crore (about INR 5.4 trillion).
• Indian Embedded Value (IEV) is a measure of future cash flows in life insurance companies.
• Government is likely to get over ₹1-lakh crore from LIC IPO. It plans to sell 5 % of its holding in LIC through the IPO.
• Up to 10% of LIC IPO issue size would be reserved for policyholders. Some portions will be reserved for anchor investors.
• As per DRHP, not more than 50% of the Net Offer shall be allocated to Qualified Institutional Buyers (QIBs). 5% of the portion available for QIBs shall be allocated to mutual funds only.
• Kotak Mahindra, Citi Bank, Axis Bank, Nomura, Bofa Securities, Goldman Sachs, ICICI Securities, JM Financial and JP Morgan will manage the IPO. Deloitte and SBI Caps are pre-IPO transaction advisors.
• Department of Investment and Public Asset Management (DIPAM) Secretary said that the IPO is 100% offer for sale (OFS) by the Government of India.
• DIPAM Secretary also said that no fresh issue of shares will be made by LIC. He said that for filing valuation about 31.6 cr shares are on offer representing 5% equity.

Topic: Agriculture

3. APEDA’s shipments account for 49% of overall shipments of agricultural products.

• Cereals and fresh horticulture items comprise 59% of APEDA’s share in agricultural product exports.
• Cereal preparations and miscellaneous processed items 23% of APEDA’s share in agricultural product exports. Animal products account for 18% of APEDA’s share.
• APEDA has been designated as secretariat for National Programme for Organic Production.
• It celebrated its 36^th Foundation Day on 13 February 2022. It was founded in 1986.
• Export of agricultural products has increased from 0.6 billion dollar in 1986 to 20.67 billion dollar in 2020-21.
• The target that is given to APEDA in financial year 2021-22 is 23.7 billion dollars. More than 70 % of the target has been achieved till January this year.
• Agricultural Products Export Development Authority (APEDA):
  • It is a government organization established in 1986. It is responsible for the promotion of the export of agro products.
  • It works under the Ministry of Commerce and Industry. Its headquarters are located in New Delhi.

Topic: Appointments

4. Debashis Mitra and Aniket Sunil Talati appointed as ICAI President and Vice President respectively.

• Debashis Mitra and Aniket Sunil Talati have been appointed as ICAI President and Vice President respectively for the year 2022-23.
• Mitra will now represent ICAI in committees set up by Indian government.
• He will represent ICAI in Government Accounting Standards Advisory Board (GASAB) and Audit Advisory Board. Both of them are constituted by the Comptroller & Auditor General (CAG) of India.
• He is also a board member of IRDAI, Insurance Advisory Committee and a member of SEBI’s Primary Market Advisory Committee.
• Institute of Chartered Accountants of India (ICAI):
  • It was established in 1949 as a statutory body by the Chartered Accountants Act, 1949.
  • It regulates the Chartered Accountancy profession in India. It is headquartered in New Delhi.

Topic: Indian Economy/Financial Market

5. IIP based industrial growth declines to 0.4% in December.

• Index of Industrial Production (IIP) based industrial growth declined to 0.4% in December 2021.
• This is the slowest growth in 10 months. In November 2021, IIP based industrial growth stood at 1.3%. In December 2020, it stood at 2.2%.
• As per data released by National Statistical Office (NSO), manufacturing output contracted by 0.1% in December 2021.   
• Mining output in December 2021 increased by 2.6%. Power generation increased by 2.8% in December 2021.
• During April-December period of the current fiscal, IIP grew 15.2%. It contracted 13.3% in the same period last year.   
• Eight core industries form 40.3% of the overall weight of the IIP. In March 2020, industrial production had contracted 18.7%. It contracted 57.3% in April 2020.

Topic: Regulatory Bodies/ Financial Institutions

6. Resolution professionals (RPs) to preserve electronic records for minimum eight years.

• Resolution professionals (RPs) have been mandated by IBBI to preserve electronic records which give a complete account of CIRP for minimum of 8 years.
• Physical copies of records that give a complete account of the corporate insolvency resolution process (CIRP) have to be preserved for minimum of 3 years.
• RPs cannot reject requests of Committee of Creditors (CoC) members (representing at least 33% voting rights).
• Insolvency and Bankruptcy Board of India (IBBI) has officially said that RPs have to place proposals moved by CoC members in the meeting of CoCs.

Topic: Miscellaneous

7. Government working to tighten MGNREGA scheme to plug leakages.

• Government is working to tighten Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme to plug leakages.
• Government has allocated Rs 73,000 crore for 2022-23. This is 25% lower than Rs 98,000 crore provided in Revised Estimate (RE) for the current fiscal.
• The allocation for next fiscal has been kept the same as the budget estimate (BE) for the fiscal ending in March 2022.
• In the last two years, the RE for the scheme has been higher than the BE significantly. Government allocated Rs 1.11 lakh crore in 2020-21. In 2014-15, the allocation used to be Rs 35,000 crore.

Topic: RBI

8. FPI limit to invest in local debt market increased from Rs 1 lakh crore to Rs 2.5 lakh crore.

• The limit for FPIs to invest in the local debt market has been increased from Rs 1 lakh crore to Rs 2.5 lakh crore under VRR with effect from April 1.
• Voluntary Retention Route (VRR) was introduced by RBI to assist Foreign Portfolio Investors (FPIs) in investing in debt markets of India.
• The investments under VRR are free from macro-prudential and other regulatory controls applicable to FPI investments in debt markets.
• Under VRR, FPIs are required to maintain a minimum percentage of their investments in India for the period of their choice.
• The increase in limit will attract additional funds and help prevent sudden shocks in the form of outflow of investment.

Topic: Taxation

9. Union government reduces agricultural infrastructure development cess on crude palm oil.  

• Union government has reduced agricultural infrastructure development cess on crude palm oil from 7.5% to 5%.
• The reduced rate has become effective from 13 February. It will help widen the gap between crude and refined oil.
• The validity of the new duty on crude palm oil (CPO) and other crude oils has been extended by Finance ministry to September 30.
• In December 2021, Centre had reduced import duty on RBD palmolein and RBD palm oil by 5.5%. 

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