Banking, Financial and Economic Awareness
1. RBI appoints additional directors on Yes Bank's board
- RBI has appointed R Gandhi and Ananth Narayan as additional directors on Yes Bank's board.
- R Gandhi and Ananth Narayan will remain additional directors for two years after March 26.
- Rama Subramaniam Gandhi (R Gandhi) has earlier served as Deputy Governor of RBI for three years from 2014 to 2017.
- Ananth Narayan is an associate professor and has worked with Standards Chartered Bank.
- RBI has superseded Yes Bank's Board on March 5. Under section 17(4) of the RBI Act, RBI has provided Rs 60,000 crore credit to provide liquidity support to the bank.
- During the reconstitution of Yes Bank's board, the government appointed Sunil Mehta as non-executive chairman. Mahesh Krishnamurthy and Atul Bheda were appointed as non-executive directors.
2. SEBI increases minimum margin rate in the cash market and MWPL in F&O segment
- SEBI has increased the minimum margin rate in the cash market and Market Wide Position Limit (MWPL) in the Futures & Options (F&O) segment.
- Minimum margin rate in the cash market will be raised gradually to a minimum 40% by March 26.
- MWPL in Futures & Options (F&O) segment will be reduced to 50% of current levels in two situations.
- The first situation for reducing MWPL is 15% or more average daily price high-low variation percentage in the previous five trading days.
- The Second situation for reducing MWPL is 40% or more MWPL utilisation percentage in previous five trading days.
- SEBI has also asked stock exchanges and clearing corporations to introduce effective system for keeping a check on market-wide open interest for scrips. Market-wide open interest for scrips should not be more than 95% of lowered MWPL.
- MWPL means the highest number of open positions permitted on F & O contracts of underlying securities.
3. IDFC First Bank MD & CEO sells his shares in bank
- IDFC First Bank MD & CEO has sold his shares having a monetary value of Rs 58 crore on 19 March 2020.
- IDFC First Bank MD & CEO will sell shares having monetary value of Rs 35 crore on 20 March 2020.
- Through the selling of shares, MD & CEO of the bank will repay ESOP loans taken by him.
- Employee Stock Option Plan (ESOP) gives employees ownership shares in organisations.
- MD & CEO of the bank, V Vaidyanathan has taken ESOP loan to obtain shares in bank.
- IDFC First Bank:
- It is headquartered in Mumbai.
- After obtaining banking license from RBI in July 2015, it started functioning in October 2015.
- It was earlier known as IDFC Bank and was renamed IDFC First Bank in December 2018.
4. DPIIT notifies new limits for NRIs stake in Air India
- Department for Promotion of Industry and Internal Trade (DPIIT) has notified an increase in limits for NRIs stake in Air India from 49% to 100%.
- The decision for increasing limits for NRIs stake in Air India from 49% to 100% was taken by the cabinet on March 4.
- The government is carrying out the disinvestment of Air India.
- The investment of foreign airlines in Air India cannot be more than 49% as per the DPIIT notification.
- Substantial Ownership and Effective Control (SOEC) framework also say that the government of a country or its nationals should substantially own a company that carries passengers to foreign destinations.
- Department for Promotion of Industry and Internal Trade (DPIIT):
- It was known as the Department of Industrial Policy & Promotion (DIPP) till 27 January 2019.
- 27 January 2019, the government added internal trade to the mandate of DIPP and renamed it as DPIIT.
- Increasing FDI in India is the responsibility of DPIIT.
Multiple Choice Questions (MCQs)
1. RBI has appointed R Gandhi and Ananth Narayan as additional directors on Yes Bank's board for a period of
- One month
- Three months
- Six months
- One year
- Two years
2. SEBI has decided to gradually increase the minimum margin rate in the cash market to
- 10 %
- 20 %
- 30 %
- 40 %
- 50 %
3. Who is MD & CEO of IDFC First Bank?
- Sunil Mehta
- Mahesh Krishnamurthy
- V Vaidyanathan
- Atul Bheda
- Rajiv Lall
4. How much stake can NRIs own in Air India as per the recent notification from the Department for Promotion of Industry and Internal Trade (DPIIT)?
- None of the above