Banking Awareness of 15 and 16 April 2022

By PendulumEdu | Last Modified: 16 Apr 2022 18:07 PM IST
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Topic: Indian Economy/Financial Market

1. 10th and 11th Editions of Status Paper on Government Debt have been released by government.

  • They give detail about the overall debt position of the Government of India.
  • They increase transparency by providing detail of the debt operations during the year 2019-20 and 2020-21.
  • The government is releasing the Annual Status Paper on Government Debt since 2010-11.
  • The Debt Management Strategy (DMS) is based mainly on three pillars: low cost, risk mitigation and market development.
  • Details of Government Debt:
    • Government total net liabilities stood at 59.2% of GDP till March 2021. It was 49.1% of GDP at the end of March 2020.
    • General Government Debt (GGD)-GDP ratio has increased from 73.7 % to 87.8 %.
    • Out of the total liabilities of the government, 94.7 % are in domestic currency.
    • The share of marketable securities in internal debt has decreased as compared to last year.
    • In 2020-21, the Interest Payments to Revenue Receipts (IP-RR) ratio of the Centre has reached at 41.6 %.

Topic: MoUs/Agreements

2. Telangana government and Thailand government signed MoU for growth of SMEs and startups.

  • The MoU is for cooperation in the field of SMEs (small and medium enterprises) and startups.
  • The MoU is for promoting bilateral trade and investment through innovation eco-system enabler T-Hub, Telangana State GlobalLinker and Thaitrade.com of Thailand.
  • This MoU has been signed on the occasion of the 75th anniversary of diplomatic relations between India and Thailand.
  • This is the first such agreement between an Indian state and the Government of Thailand.

Topic: Reports and Indices

3. The World Bank has lowered its forecast of India’s GDP growth for FY 23 from 8.7% to 8%.

  • World Bank has recently released its ‘South Asia Economic Focus Reshaping Norms: A New Way Forward’ report.
  • According to this report, the South Asia region will grow at 6.6 percent in 2022 and by 6.3 percent in 2023.
  • Russia’s war on Ukraine has impacted commodity prices and increased supply and financial sector bottlenecks.
  • Due to the labour market's incomplete recovery and inflationary pressures, household consumption in India is restricted.
  • The Green tax will be a new source of government revenue in the South Asian region.
  • The current account deficit will widen due to the merchandise trade deficit increase and the rise of commodity prices.
  • Industrial production in Bangladesh and Pakistan is above pre-pandemic levels and it has increased by more than the world average.

Topic: Reports and Indices/Rankings

4. Indira Gandhi International Airport, Delhi has become world’s 3rd busiest airport.

  • A report based on data provided by the United Kingdom-based data provider, Official Airline Guide (OAG), has been prepared.
  • According to the report, Delhi airport has climbed six points to third place, surpassing China's Guangzhou airport.
  • However, Atlanta International Airport in the United States remains at the top of the list, followed by Dubai International Airport.
  • According to another OAG report, Indigo Airlines of India is one of the world's largest airlines for the month of March and ranked sixth among the top ten largest airlines.
  • Here is the list of the top 5 busiest airports:

Ranks

Airport

Country

1

Atlanta Hartsfield-Jackson International Airport

USA

2

Dubai International airport

UAE

3

Delhi Airport

India

4

Guangzhou Airport

China

5

Dallas/Fort Worth International Airport

USA

Topic: Infrastructure and Energy

5. The Indian renewable energy sector added a total of 14,077 MW of new capacity in FY22.

  • This is the highest ever annual new capacity addition by the Indian renewable energy sector.
  • The renewable power sector added new capacities of 7,356 MW and 8,711 MW in FY21 and FY20, respectively.
  • The largest yearly capacity addition was recorded at 11,754 MW and 11,320 MW in FY18 and F17, respectively.
  • The solar energy sector contributed 12,761 MW (91%) to total renewable energy addition in FY22.

Solar power capacity addition in FY22

12,761 MW

Ground-mounted power capacity addition (FY22)

10,148 MW

Rooftop power capacity addition (FY22)

2,206 MW

Off-grid power capacity addition (FY22)

407 MW

 

  • The renewable energy sector has achieved a total grid-connected power capacity of 110 GW as of March 31, 2022.
  • Center has fixed target of achieving 175 GW renewable power installed capacity by 2022-end.
  • The target of 175 GW includes 100 GW from solar power, 60 GW from wind power, 10 GW from biomass power and 5 GW from hydropower.

Topic: Agriculture

6. Indonesia removes the ban on agricultural imports from India.

  • It has approved the registration of Indian food testing labs for three years.
  • Earlier, agricultural imports from India were banned by Indonesia as India did not register its food safety testing laboratories before the March 24 deadline.
  • Indonesia imports mainly sugar, wheat, rice, maize, chili, groundnut and onion from India.
  • It accounted for about 30% of sugar exports from India last season (ended on September 30, 2021).
  • During April-January of FY22, it accounted for about 50% of groundnut exports from India.

Topic: Committees/Commissions/Taskforces

7. CLC has recommended review of provisions related to resignations of auditors.

  • It recommended to the government to borrow provisions from UK Companies Act 2006 for the purpose of Indian legislation so that auditors can be made accountable for their resignations.
  • The report suggests putting the auditor under explicit obligation for making detailed disclosures before resignation.
  • As per the committee, the auditor should specifically mention whether the reason for her resignation is non-cooperation from the Auditee Company, fraud or severe non-compliance, or diversion of funds.
  • If this is not disclosed in the resignation letter and such information is known after resignation, action may be taken against resigning auditor.
  • Further, CLC has recommended Companies Act (Section 144) should be amended. It has made a total of 24 recommendations in the report. 
  • Company Law Committee (CLC):
    • CLC was formed in September 2019 to give recommendations on the effective implementation of the Companies Act, 2013, the Limited Liability Partnership Act, 2008 and the Rules.
    • Chaired by Ministry of Corporate Affairs (MCA) Secretary Rajesh Verma, CLC submitted its third report in March 2022.

Recommendations of Company Law Committee (3rd Report, March 2022)

    • Prohibiting companies from recording trusts on their register of members & allowing companies to hold general meetings in virtual, physical or hybrid modes
    • Creating electronic platform for maintenance of statutory registers by companies & clarifying provisions relating to Investor Education and Protection Fund
    • Strengthening National Financial Reporting Authority and allowing ertain companies to revert to the financial year followed in India
    • Reviewing & strengthening audit framework & clarifying tenure of independent directors
    • Introducing mechanisms to ensure independence of auditors & standardising manner for auditors to provide qualifications
    • Recognising & providing enabling framework for constitution of Risk Management Committees
    • Revising provisions relating to disqualification & vacation of office of directors & recognising Special Purpose Acquisition Companies
    • Prohibiting conversion of co-operative societies into a company and strengthening incorporation & governance framework for Nidhis

Topic: Indian Economy/Financial Market

8. Government has increased authorised share capital of three general insurance companies.

  • These companies are National Insurance Company Limited, Oriental Insurance Company Limited and United India Insurance Company.
  • The increase in authorized share capital will facilitate capital infusion of ₹5,000 crore in these companies.
  • This includes ₹3,700 crore infused in National Insurance, ₹1,200 crore in Oriental Insurance and ₹100 crore in United Insurance.
  • All of these three general insurance companies are at loss.

Public sector general insurance company

Old authorized share capital

New authorised share capital

National Insurance Company Limited

₹7,500 crore

₹15,000 crore

Oriental Insurance Company Limited

₹5,000 crore

₹7,500 crore

United India Insurance Company

₹5,000 crore

₹7,500 crore

Topic: RBI

9. RBI has given Certificate of Registration (CoR) to 121 Finance under Registration of Factors (Reserve Bank) Regulations, 2022.

  • 121 Finance is the first NBFC to convert from an Investment and Credit Company (ICC) to an NBFC-Factor.
  • A NBFC-Factor is required to ensure that its financial assets in the factoring business account for a minimum of 50% of total assets.
  • NBFC-Factor is also required to ensure that income derived from factoring business is not less than 50% of its gross income. It must keep a minimum Net Owned Fund (NOF) of ₹5 crore.
  • 121 Finance:
    • It is a Digital Factoring company based in Jaipur. Ravi Modani is its founder & CEO.
    • It is India’s first NBFC-Factor after RBI’s Registration of Factors (Reserve Bank) Regulations, 2022 released in January 2022.

Topic: Reports and Indices

10. As per Insolvency and Bankruptcy Board of India (IBBI) data, debt recovery through insolvency cases is just 31%. 

  • Almost half of 3,247 insolvency cases were resolved through liquidation.
  • Out of these, only 14% were resolved through asset sale as per resolution plans approved by lenders.
  • The data covers all cases from the year of implementation of the Insolvency and Bankruptcy Code (2016) to December 2021.
  • Till December 2021, 4946 bankruptcy cases were admitted at various NCLTs (National Company Law Tribunals).
  • Over 10,000 applications are pending for admission or rejection by NCLTs.
  • Despite the fact that a case must be closed within 90 days after admission, 73% of cases were concluded after 270 days.
  • Only 11% of cases were closed within the minimum 90-day term. 16% of cases took 90-270 days.
  • Only 20% of the cases that were referred for liquidation were completed.
  • Operational creditors filed 51% of the applications, financial creditors filed 43% applications and corporate debtors filed 6%.

Bankruptcy applications (Sector-wise)

Manufacturing companies

40%

Real estate firms

20%

Construction and others

11% each

Retail trade

10%

Transport and electricity

3% each

Hotels

2%

 

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Daily Banking Awareness Quiz | 3, 4 and 5 April 2022

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Daily Banking Awareness Quiz | 1 and 2 April 2022

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Daily Banking Awareness Quiz | 29, 30 and 31 March 2022

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