Banking, Financial and Economic Awareness of 12 and 13 March 2020

By PendulumEdu | Last Modified: 30 Mar 2020 10:47 AM IST

1. RBI decides to carry out US dollar sell/buy swap

RBI has decided to carry out a six month US dollar sell/buy swap in order to provide liquidity to the foreign exchange market.
Out of announced six month US dollar sell/buy swap, $2 billion will be offered through the first swap on March 16.
In a dollar sell/buy swap, banks buy dollars from RBI and agree to sell them at the end of the swap period.
Dollar sell/buy swap helps RBI in absorbing excess rupee from the market and prevents depreciation of the rupee.

2. SBI MF becomes compliant with Stewardship Code

SBI Mutual Fund has become compliant with SEBI’s Stewardship Code ahead of April 1 deadline.
On 24 December 2019, SEBI has introduced the Stewardship Code for mutual funds and all types of Alternative Investment Funds (AIFs).
The code requires mutual funds to make and publicly disclose a comprehensive policy for discharging their stewardship responsibilities.
Under the code, mutual funds should review and periodically update their policy for discharging stewardship responsibilities.
Stewardship Code will come into effect on April 1, 2020.
Alternative Investment Funds (AIFs) refer to the investments that are not considered traditional forms of investment such as investment in stocks, bonds or fixed deposits.
There are three categories of AIFs in India. These are as follows:
- Venture capital funds (including Angel Funds), SME Funds, Social Venture Funds and Infrastructure funds are included in Category I AIF.
- Category II AIF includes real estate funds, private equity funds (PE funds), funds for distressed assets, etc.
- Hedge funds, PIPE (Private Investment in Public Equity) Funds are included in Category III AIFs.

3. NCLAT refuses to hear CAIT’s appeal further

National Company Law Appellate Tribunal (NCLAT) has declined to hear Confederation of All India Traders (CAIT) ’s appeal.
CAIT has filed an appeal against the Competition Commission of India (CCI) ’s approval for the merger of Flipkart and Walmart.
NCLAT has said that Flipkart and Walmart merger will not lead to the abuse of dominant position in the market.
CAIT has complained that Flipkart and Walmart merger will create an anti-competitive environment.

4. Yes Bank restructuring plan exempted from CCI review

Ministry of Corporate Affairs (MCA) has exempted Yes Bank restructuring plan from CCI review.
Acquisitions and demergers involving combined asset value of Rs 1,000 crore or turnover of Rs 3,000 crore require approval from CCI. CCI can approve or reject the proposed combination in 210 days.
Under Section 45 of Banking Regulation Act 1949, RBI has powers to make a request to central government for suspending business of a banking company.
Section 45 also empowers RBI to make a scheme for the reconstruction of a banking company or amalgamation with any other bank.

5. Hakuhodo INC acquires AdGlobal360

Japan’s second-largest advertising company, Hakuhodo INC has acquired AdGlobal360.
Deloitte ranked AdGlobal360 as India’s fastest-growing MarTech (Marketing Technology) Company in 2019.
AdGlobal360 was founded in 2009 and is headquartered in Gurgaon. Mandeep Singh is its Founder & Chairman. It has received Deloitte Technology Fast 50 INDIA 2019 Award.
Hakuhodo INC has won Grand Prix at Cannes Lions International Festival of Creativity.

Multiple Choice Questions (MCQs)

1. Recently, SBI Mutual Fund has achieved compliance with SEBI’s Stewardship Code ahead of April 1 deadline. When was Stewardship Code introduced?