Banking, Financial and Economic Awareness of 16 and 17 July 2021

Topic: Infrastructure and Energy

1. Energy efficiency tools for real estate sector launched by BEE.

• Energy efficiency tools for the real estate sector have been launched by Bureau of Energy Efficiency (BEE).
• BEE launched an online directory of building materials to boost energy efficiency in real estate sector.
• BEE also released Eco Niwas Samhita 2021. Eco Niwas Samhita 2021 is a model code and verification framework for minimum energy performance requirements for building services.
• At the “Aiming for Sustainable Habitat: New Initiatives in Building Energy Efficiency 2021” event, BEE Director General Abhay Bakre said there is a plan for amendment of the Energy Conservation Act.
• A web-based platform ‘The Handbook of Replicable Designs for Energy Efficient Residential Buildings’ was also launched.
• The BEE also launched an online Star Rating tool for energy-efficient homes to improve energy-efficiency and reduce energy consumption.

Topic: Indian Economy

2. India’s goods exports in June 2021 increased 48.34% to $32.50 billion.

• India’s goods exports in June 2021 increased 48.34% to $32.50 billion.
• Sectors such as petroleum products, gems & jewellery, engineering goods, meat products, garments, chemicals and electronic goods have seen a rise in exports.
• Imports in June 2021 have shown a sharp increase of 98.31 % to $41.87 billion. Rise in imports is mostly due to a rise in the inflow of petroleum, chemicals, gold and precious and semi-precious stones.
• This led to a trade deficit of $9.37 billion compared to a deficit of $0.79 billion in June 2020.
• In the April-June 2021 period, cumulative value of exports was $95.39 billion.
• Cumulative value of imports for the period April-June 2021 was $126.15 billion.

Topic: RBI

3. The license of Dr. Shivajirao Patil Nilangekar Urban Co-operative Bank Limited, Nilanga, Dist. Latur, Maharashtra cancelled by RBI.

• The license of Dr. Shivajirao Patil Nilangekar Urban Co-operative Bank Limited, Nilanga, Dist. Latur, Maharashtra was cancelled by RBI.
• RBI said that Maharashtra-based bank ceases to carry on banking business with effect from July 14, 2021.
• RBI has also asked Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra to issue an order for winding up the bank and appoint a liquidator for the bank.
• RBI has cancelled the licence of Maharashtra based bank as the bank does not have adequate capital and earning prospects.
• Additionally, the bank has failed to comply with the requirements of different sections of Banking Regulation Act, 1949.
• RBI has cancelled licence because if the bank is allowed to carry its banking business, it would adversely affect the public interest.
• RBI said that it has cancelled licence as the continuance of the bank is prejudicial to the interests of its depositors and the bank with its present financial position would be unable to pay its present depositors in full.
• The bank is prohibited from conducting the business of ‘banking’ which includes acceptance of deposits and repayment of deposits.

Topic: Corporates/Companies

4. Paytm files for biggest Initial Public Offering in India.

• Paytm has filed the draft red herring prospectus or offer document to raise ₹16,600 crore and this has become the largest Initial Public Offering in India.
• So far, the biggest IPO in India was Coal India's ₹15,200-crore issue in 2010.
• Paytm’s IPO is expected towards November-end. The prospectus gives the first detailed look into Paytm’s financials.
• It also gives detailed look into what Paytm plans to do with the money raised through the IPO.
• As part of the Offer for Sale (OFS), existing shareholders, including Paytm founder and CEO Vijay Shekhar Sharma, Ant Financial, Alibaba group, Elevation Capital, Saif Partners, and BH International Holdings will sell shares.
• Ant Financial’s subsidiary, Antfin (Netherlands) Holding BV, is Paytm’s largest shareholder with 29.6% stake.  
• Vijay Shekhar Sharma is the fourth-largest shareholder with 9.6% stake.
• Paytm:
  • Parent organization: One97 Communications
  • Headquarters: Noida
  • Founder and CEO: Vijay Shekhar Sharma

Topic: Banking System

5. Increase in share of outstanding loans linked to external benchmarks.

• Share of outstanding loans linked to external benchmarks increased from 2.4 % during September 2019 to 28.5 % during March 2021.
• Outstanding loans (linked to both fixed and floating interest rates) in personal and MSME segments stood for 35% of the outstanding loans at end of March 2021.
• All scheduled commercial banks (excluding regional rural banks) were mandated by RBI to link all new floating rate personal/ retail loans and floating rate loans to micro and small enterprises (MSEs) to an external benchmark effective from October 1, 2019.
• This was extended to medium enterprises with effect from April 1, 2020.
• Policy repo rate or 3-month T-bill rate or 6-month T-bill rate or any other benchmark market interest rate published by the Financial Benchmarks India Private Ltd (FBIL) could be an external benchmark.
• Internal benchmark linked loans (Benchmark Prime Lending Rate, base rate and MCLR) together comprised 71.5 % of outstanding floating rate rupee loans as of March-end 2021.
• Increase in the share of outstanding loans linked to external benchmarks contributes to improvement in monetary policy transmission.
• Monetary policy transmission is a process through which changes in the Central bank’s policy rate are transmitted to the real economy.

Topic: Regulatory Bodies/Financial Institutions

6. IBBI introduces changes in Corporate Insolvency Resolution Process (CIRP) regulations.  

• Insolvency and Bankruptcy Board of India (IBBI) has introduced changes in Corporate Insolvency Resolution Process (CIRP) regulations. 
• Stricter eligibility criteria for the appointment of insolvency professionals (IP), interim resolution professional (IRP) and resolution professional (RP) has been introduced.
• IP would not be eligible to be appointed as an IRP for a CIRP of a corporate debtor if he or any other partners or directors of such insolvency professional entity represent any other stakeholder in the CIRP process.
• IRP and RP can now appoint other professionals that may be necessary to assist in the discharge of RP’s duties.
• An IRP will be required to disclose any change in name and address of corporate debtor during 2 years preceding insolvency commencement date.

Topic: Corporates/Companies

7. Amazon India launches 'Spotlight North East' storefront on its marketplace.

• Amazon India has launched 'Spotlight North East' storefront on its marketplace.
• The store will help showcase unique local products and hidden gems from the region and showcase them to millions of Amazon customers across India.
• Customers will be able to find out unique products from the region such as Chakshesang Shawls from Nagaland, Muga Silk from Assam, different types of weaves like the Moirang Phee from Manipur, varieties of teas and spices like the Mizo Chilli.
• The launch of ‘Spotlight North East’ programme was announced by Amazon India during its Smbhav event in April.
• ‘Spotlight North East’ programme aims to bring 50,000 local artisans, weavers and small businesses from the North East region online by 2025.
• During the next five years, Amazon will bring over 5,000 unique craft-based products, GI products and other local products on its India marketplace.

Topic: Committees/Commissions/Taskforces

8. IFSCA sets up expert group to suggest road map for longevity finance hub.

• International Financial Services Centres Authority (IFSCA) has set up an expert group to suggest a road map for a longevity finance hub.
• Setting up of expert Committee is part of IFSCA’s efforts to develop a Longevity Finance Hub in GIFT IFSC.
• The expert committee will recommend an approach towards the development of Longevity Finance Hub and provide a road map for the same.
• The expert committee is being co-chaired by Kaku Nakhate and Gopalan Srinivasan.
• In a statement, IFSCA said that there are one billion people in the silver generation (aged 60 years and older) with a combined spending power of USD 15 trillion.
• The statement said that it is estimated that there will be more members of the silver generation than people under 20 by 2040.
• This demographic change will throw open new challenges and opportunities especially in the areas of wealth management, health, insurance, and other investment products.
• International Financial Services Centres Authority:
  • It was established on April 27, 2020 to regulate all financial services in International Financial Services Centres (IFSCs).
  • It is headquartered at Gandhinagar in Gujarat.

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