Banking, Financial and Economic Awareness of 23 and 24 April 2020

By PendulumEdu | Last Modified: 24 Apr 2020 18:36 PM IST

1. Broking firms move High Courts against the decision of MCX

Broking firms have moved High Courts against the decision of Multi Commodity Exchange of India Limited (MCX).
The firms have moved High Courts as MCX has decided to settle its crude futures contract for April with negative pricing of (-) Rs 2,884 per barrel.
Motilal Oswal Financial Services and Religare Securities are among the broking firms that have moved to High Courts.
Negative pricing of (-) Rs 2, 884 per barrel means a loss of Rs 435 crore to investors
Broking firms have requested the MCX to delay the decision for settlement until investors recover funds.
MCX was set up in 2003. It is Mumbai based. It is the first listed exchange of India. Its CEO is P.S. Reddy.

Central government has stopped Dearness Allowances (DA) and Dearness Relief (DR) to its employees and pensioners, respectively.
DA and DR have been stopped till July 2021. The DA and DR due from January 1, 2020, will not be paid.
The government will also not pay additional installment with respect to DA and DR due from July 1, 2020 and January 1, 2021. As a result, the government will save Rs 37,530 crore rupees.
Government pays DA to serving employees and DR to pensioners at 17% of their basic pay or basic pension.
Government calculates DA and DR as per the rate of retail inflation for Industrial Workers. Government revises DA and DR two times in a year from January 1 and July 1.

IMD and the South Asian Climate Outlook Forum have agreed that rainfall will remain normal during 2020.
The main reasons for normal rainfall are weak La Nina and weak negative Indian Ocean Dipole (IOD).
La Nina refers to cooling that occurs in east equatorial pacific region. Simultaneously, there is warming in the west side. IOD is warmer in East Indian Ocean.
Spatial distribution of rainfall has not been predicted yet. Rainfall over central India has shown an increasing trend.
15^th session of South Asian Climate Outlook Forum was recently held in Thiruvananthapuram. It was formed in 2010.
IMD was formed in 1875. Ministry of Earth Sciences is its parent organisation. It has four regional offices (Mumbai, Kolkata, Nagpur and Pune).

Among Best Large Workplaces in Asia 2020, Great Place To Work Institute has ranked Ujjivan SFB at 5^th place.
In 2019, Ujjivan SFB was ranked at 16^th place.
The bank's improved ranking is as per the Trust Index Score and Culture Audit Score.
Culture Audit Score is decided as per write-ups on 15 best practice areas of the bank.
Trust Index Score is decided as per the feedback of employees.

SIDBI has launched a scheme for providing financial support to MSMEs.
Under the scheme, banks, NBFCs and MFIs will be provided financial support to giver term loans to MSMEs with 90 days tenor.
Earlier, RBI has announced Rs 15,000 crore worth liquidity support for MSMEs.
The scheme will support banks operational for at least three years and earning profit for minimum two of previous 3 years.
Minimum operational limit of three years applies to NBFCs also. Additionally, NBFCs should also have a registration with RBI as Investment and Credit Company, Rs 20 crore worth minimum net owned funds BBB rating on March 31, 2020.
NBFCs should be registered as a society, trust or section 8 companies.

Against the target of Rs 25,000 crore, RBI has received Rs 12,850 crore worth bids during Targeted Long-Term Repo Operations (TLTRO) 2.0.
TLRTO 2.0 was aimed at providing liquidity to NBFCs and MFIs. But, shortfall in bidding means that banks do not want to lend to NBFCs and MFIs of small size.
RBI has relaxed limits and allowed banks to put in money in the primary and secondary issuances of NBFCs and MFIs of small size. But, RBI has said that money should be put in investment grade bonds only.
With the help of TLTRO, RBI provides liquidity to banks. It refers to term repos having 1 and 3 year tenors at policy repo rate. LTRO was introduced by RBI in February 2020.