Banking, Financial and Economic Awareness of 14 December 2019

1. Bank of Baroda's shares gain more than 4%

• Bank of Baroda's shares gain over 4% after a share purchase agreement was signed between Ansa Merchant Bank and Bank of Baroda.
• The agreement was signed to sell the Trinidad & Tobago businesses of Bank of Baroda.
• In October 2007, Bank of Baroda started its businesses in Trinidad & Tobago.
• Bank of Baroda:
  • It is the third-largest public sector bank in India
  • Chairman: Hasmukh Adhia
  • Tagline: India's International Bank

2. Moody’s forecasts India’s GDP growth at 5.6%

• Moody's has lowered India’s GDP growth forecast to 5.6% for 2019 due to slow consumption demand and employment growth.
• It expects India’s GDP growth to increase to 6.6 % and 6.7 % in 2020 and 2021, respectively.
• On November 8, Moody's had changed India's outlook from stable to negative.
• Gross Domestic Product(GDP):
  • GDP is the total value of final goods and services produced within a country over a period of one year.
  • Currently, the base year for calculation of GDP is 2011-12.

3. Liquidity Support (LS) to NEFT member banks 

• RBI will provide Liquidity Support (LS) to banks who are taking part in the NEFT payment system.
• LS will be an extra collateralized intra-day liquidity facility to help NEFT settlements on a 24x7 basis.
• LS can be availed by banks eligible for the Intra-Day Liquidity (IDL) facility.
• From December 16, National Electronic Funds Transfer (NEFT) will be available on a 24x7 basis.
• National Electronic Funds Transfer (NEFT):
  • It allows the electronic transfer of funds from any branch of bank to account with any other NEFT-enabled branch.
  • It was started in November 2005.

4. Strategic partnership between ZestMoney and Northern Arc Capital

• ZestMoney and Northern Arc Capital have entered into a strategic partnership.
• The partnership is a part of Northern Arc Capital's aim of addressing growing EMI financing demand in India.
• Northern Arc Capital will gradually fund ZestMoney’s various products.
• Northern Arc Capital is a financial services provider.
• ZestMoney is an AI-based EMI financing platform. It provides easy access to loans for improving access to credit in India.

5. Rs 350 crore raised by Magma Fincorp

• Magma Fincorp has raised Rs 350 crore through Non-Convertible Debentures (NCDs).
• FMO issued NCDs on a private placement basis under Voluntary Retention Route (VRR).
• Voluntary Retention Route (VRR) allows foreign portfolio investor (FPI) to invest in Indian debt.
• FMO is a Dutch Development Bank.
• Magma Fincorp is a non-banking financial company. It is based in Kolkata.
• Non-Convertible Debentures (NCDs):
  • They are financial instruments that are not convertible into shares or equities.
  • They are used for raising long-term funds.
  • In comparison to convertible debentures, NCDs provide higher returns.
  • In India, NCDs have a minimum maturity period of 90 days.