Banking, Financial and Economic Awareness
1. Govt nods sale of its stake in five CPSEs
- The union cabinet has approved the sale of its stake in five CPSEs viz. Bharat Petroleum Corporation Limited (BPCL), Shipping Corporation of India (SCI), Container Corporation of India (CONCOR), North Eastern Electric Power Corporation Limited (NEEPCO) and Tehri Hydro Development Corporation India Limited (THDC).
- Cabinet Committee on Economic Affairs (CCEA) approved the strategic disinvestment of these CPSEs.
- The government will finance the social sector and development programmes with the resources obtained through strategic disinvestment.
- Numaligarh Refinery in Assam will be taken out of BPCL before the sale of the government’s stake of 53.29 % stake in the CPSE.
- The Govt. will sell its shareholding of 74.23% in THDCIL and 100% in NEEPCO besides the transfer of management control to NTPC.
2. SEBI approves strict disclosure norms on loan defaults
- The Securities and Exchange Board of India (SEBI) has tightened the disclosure norms for listed companies on loan defaults.
- The listed company companies should disclose the default (non-repayment of principle or interest on loans beyond 30 days) within 24 hours.
- SEBI has revised its regulations for portfolio managers (PM) under which the net worth requirement for PM has been increased from 2 crore to 5 crore. The existing PM should meet the requirement within a time span of 36 months.
- SEBI has also approved the reduction in time taken for issuance of shares on the right basis from 55 days to 31 days.
- The Business Responsibility Report has also been extended from top 500 to top 1000 companies.
- Business Responsibility Report:
- Business Responsibility Report is a disclosure by a listed company to its stakeholders.
- It provides information about the company- its performance and processes, and information regarding principles and core elements of Business Responsibility Reporting.
3. Cabinet approves Industrial Relation Code Bill
- The union cabinet has approved the introduction of Industrial Relations Code Bill 2019 in the Parliament.
- The code is the third of the four broad labour codes (subsuming 44 labour laws). The Code on Wages has been approved by the Parliament while Code on Occupational Safety, Health and Working Conditions Bill will be placed in the Budget session by the Labour Ministry. The fourth code, i.e. Code on Social Security, is in the pre-legislative state.
- The code on Industrial Relations contains the simplified and significant provisions of three central labour acts- Trade Unions Act, 1926, Industrial Employment (Standing Orders) Act, 1946, and Industrial Disputes Act, 1947.
- The bill provides for setting up of a 2-member tribunal and defines the Fixed Term Employment.
- The govt. officers have been given the power of adjudication of disputes related to penalty as fines so as to reduce the burden on the tribunal.
4. Union Cabinet approves two years’ deferral on spectrum fee payment
- The Union Cabinet headed by Prime Minister provided a major relief to the telecom operators by approving the deferral on spectrum dues payment for the next two years-2021 and 2022.
- The number of payment installments has been increased from 16 to 18.
- The decision will provide a relief of Rs. 42,000 crore to the major telecom operators – Bharati Airtel, Vodafone Idea and Reliance Jio.
- The decision will reduce the burden of the telecom sector that is debt-ridden with over Rs. 7 lakh crore.
5. Chit Funds (Amendment) Bill, 2019 passed in Lok Sabha
- The Chit Funds (Amendment) Bill, 2019 has been passed by Lok Sabha, which seeks to amend Chit Funds Act, 1982.
- The bill proposed to increase the maximum chit amount by three times-
- For firms managed by an individual, it has been increased from Rs.1 lakh to Rs. 3 lakh
- For those managed by 4 or more partners, it has been increased from Rs. 6 lakh to Rs. 18 lakh.
- The bill also proposed to increase the commission of foreman to 7%.
- Terms like ‘chit amount’, ‘dividend’ and ‘prize amount’ have been substituted with ‘gross chit amount’, ‘share of discount’ and ‘net chit fund’ respectively.
- The bill also introduced words like “fraternity fund”, “rotating savings” and “credit institution”.
- Chit Funds:
- It is a saving scheme in which a particular number of subscribers contribute a certain amount in installments.
- The gross chit amount is placed for an auction or as a tender depending on the type of chit fund. The winning bidder will receive the prize amount (chit amount- discount).
- The discount is redistributed among the subscribers as a dividend.