Banking Awareness of 15 and 16 April 2022

Topic: Indian Economy/Financial Market

1. 10^th and 11^th 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 75^th 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:

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.

• 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.

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.

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%.

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