Banking, Financial and Economic Awareness

2020-03-21

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  • RBI has superseded Yes Bank's Board on March 5.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

  1. One month
  2. Three months
  3. Six months
  4. One year
  5. Two years

2. SEBI has decided to gradually increase the minimum margin rate in the cash market to

  1. 10 %
  2. 20 %
  3. 30 %
  4. 40 %
  5. 50 %

3. Who is MD & CEO of IDFC First Bank?

  1. Sunil Mehta
  2. Mahesh Krishnamurthy
  3. V Vaidyanathan
  4. Atul Bheda
  5. 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)?

  1. 26%
  2. 49%
  3. 76%
  4. 100%
  5. None of the above

Solution:

1. E

2. D

3. C

4. D

 

 

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