Banking, Financial and Economic Awareness

Topic: RBI

1. RBI asks banks and non-banks to enable interoperability among PPIs issued by them by March 31, 2022.

  • RBI has asked banks and non-banks to enable interoperability among Prepaid Payment Instruments (PPIs) issued by them by March 31, 2022.
  • RBI said that it would be mandatory for PPI issuers to give the holders of KYC-compliant PPIs interoperability.
  • This interoperability should be given through authorized card networks in the case of PPIs in the form of cards and IPI for PPIs in the form of electronic wallets.  
  • RBI circular gives exemption to PPIs for Mass Transit Systems (PPI-MTS). PPI-MTS shall remain exempted from interoperability.
  • PPIs are instruments that facilitate purchase of goods and services against the value stored in/on such instruments.
  • RBI has increased the maximum amount outstanding from Rs 1 lakh to Rs 2 lakh for KYC- compliant PPIs.
  • RBI said that the feature of cash withdrawal would be permitted for fully-KYC PPIs issued by non-bank PPI issuers as well.
  • Maximum limit for cash withdrawal will be Rs 2,000 per transaction with an overall limit of Rs. 10,000 per month per PPI.

Topic: Taxation

2. GST Council expected to consider lowering general rate of interest.

  • During its meeting on May 28, GST Council is expected to consider lowering the general rate of interest.
  • General rate of interest is technically known as general interest charges (GIC). They are levied on late payment of tax or claiming of excess input tax credit (ITC).
  • Presently, these rates vary between 6% and 24%. Finance Ministry has lowered the rates or even waived them off in certain cases.

General Rate of Interest under GST for delayed compliance (in %)

Particulars

Rate

Tax Department to collect

Delayed payment of tax

18%

Excess claim of input tax credit

24%

Assessee to get

Refund withheld

6%

Refund not given within 60 days

6%

Not getting refund as ordered by Appellate Authority

9%

Topic: Corporates/Companies

3. CCI gives approval to acquisition of YES AMC and YES Trustee by GPL Finance and Investments Limited (GPL).

  • Competition Commission of India (CCI) has given approval to acquisition of YES Asset Management (India) Limited (YES AMC) and YES Trustee Limited (YES Trustee) by GPL.
  • GPL Finance and Investments Limited (GPL) will acquire 100% equity shares of YES AMC and YES Trustee.
  • GPL will acquire Yes Mutual Fund and become its sole sponsor. It is registered with the Reserve Bank of India as a non-deposit taking and non- systemically important Non-Banking Financial Company (NBFC).
  • GPL is classified as an investment company. It is part of White Oak Group, an investment management and investment advisory group founded by Mr Prashant Khemka.
  • YES AMC and YES Trustee belong to YES Bank Limited group. YES AMC acts as an asset management company / investment manager to YES Mutual Fund.

Topic: Corporates/Companies

4. Cochin Port Trust awards Rs 122.50 crore annual maintenance dredging contract to DCIL.

  • Cochin Port Trust has awarded Rs 122.50 crore annual maintenance dredging contract to Dredging Corporation of India Limited (DCIL).
  • Dredging Corporation of India has won the second contract this month.
  • On May 13, DCI has won Rs 98 crore maintenance dredging contract at Paradip Port Trust.
  • Dredging Corporation of India was set up in 1976 to provide dredging services to Major Ports of India.
  • Visakhapatnam Port Trust, Paradip Port Trust, Jawaharlal Nehru Port Trust and Deendayal Port Trust own a 73.47 % stake in it.

Topic: Indian Economy

5. Wholesale inflation reaches all time high of 10.49% in April 2021 on YoY basis.

  • As per Commerce Ministry data, wholesale inflation has reached an all-time high of 10.49% in April 2021 on a YoY basis.
  • The rise in WPI inflation is mainly due to the rise in prices of crude petroleum, mineral oils viz petrol, diesel etc, and manufactured products.
  • On a month-on-month basis, WPI inflation increased by 31 basis points as compared to 7.39% in March.
  • In February, wholesale inflation was 4.17%. In January, it stood at 2.51%.
  • Inflation for primary articles increased 3.83% in April over March. Inflation index for fuel and power declined by 1% in April over March.
  • In the case of manufactured products, the inflation index increased 1.65% in April compared to March.
  • WPI Food Index increased from 5.28% in March to 7.58% in April.
  • As per Commerce Ministry, the compilation of WPI for March 2021 has been done at a weighted response rate of 76%. Final figure for February 2021 is based on a weighted response rate of 91%.
  • CPI-based retail inflation decreased to 4.29% in April as per data released by the Ministry of Statistics & Programme Implementation (MoSPI) on May 12. It was 5.52% in March.

Topic: Banking/Financial Schemes

6. Ministry of Commerce may ask RBI to continue Interest Equalisation Scheme for exporters beyond June 30, 2021.

  • Ministry of Commerce may ask RBI to continue Interest Equalisation Scheme for exporters beyond June 30, 2021.
  • Interest Equalisation Scheme allows all eligible sectors to access credit at lower interest rates.
  • Interest Equalisation Scheme was launched in April 2015. Last fiscal, it was extended by a year.
  • Under the scheme, banks provide credit at the lower interest rate to exporters and the differential amount is later reimbursed by the government.
  • In Union Budget for 2021-22, government has made a provision of Rs 1,900 crore for the Interest Equalisation Scheme.

Topic: Reports and Indices

7. International Energy Agency (IEA) releases a special report.

  • International Energy Agency (IEA) releases a special report titled ‘Net Zero by 2050: a Roadmap for the Global Energy Sector’.
  • IEA’s report provides insights before 26th Conference of the Parties (COP26) meet in Glasgow in November. It suggests the need to stop oil, gas projects.
  • The report provides an in-depth study of ways to transition to a net-zero energy system by 2050.
  • It also provides over 400 milestones to guide the global journey to net-zero by 2050.
  • The report calls for annual additions of solar PV to reach 630 gigawatts by 2030. It also calls for annual additions of wind power to reach 390 gigawatts.

Topic: Reports and Indices

8. Nomura India Business Resumption Index (NIBRI) declines to 61.9 for the week ending May 16.

  • Nomura India Business Resumption Index (NIBRI) has declined to 61.9 for the week ending May 16 from 66.1 in the earlier week.
  • After the decline, NIBRI is now at levels last seen in June 2020. The decline is mainly driven by a sharp fall in mobility indicators.
  • Google’s workplace and retail & recreation mobility indices fell by 5pp and 8.4pp, respectively. Apple driving index declined by 3.4pp.
  • Power demand is continuing to decline by 4% week-on-week basis for fourth consecutive week.
  • Labour participation rate declined to 40.5% from 41.3% last week. Unemployment rate increased to 14.4% from 8.7%.
  • Nomura is a Japanese financial holding company.

 

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