Banking Awareness of 23 and 24 January 2024

By Priyanka Chaudhary | Last Modified: 24 Jan 2024 18:26 PM IST
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Topic: Reports and Indices

1. According to Indian Startups Deal Report 2023, highest number of funding transactions in 2023 has been seen in the fintech and SaaS sectors.

  • The fintech and software-as-a-service (SaaS) sectors recorded highest number of funding transactions for the second straight year in 2023 as per the same report.
  • At the time of 2021 funding peak, e-commerce recorded the highest number of secondary deals.
  • E-commerce was followed by fintech and media and entertainment during the 2021 funding peak.
  • The report tracks 252 secondary deals in 117 start-ups valued at $500 million and above during the last three years.
  • Fintech remained at the top during all three years. SaaS was common in both 2022 and 2023.
  • In 2023, 13 secondary deals were tracked across 117 start-ups. 84 secondary deals were tracked in 2022. 155 secondary deals were tracked in 2021.
  • As per the report, start-up funding declined 62% year-over-year in 2023, at ₹67,000 crore.
  • It was at ₹1.8 lakh crore in 2022 and ₹2.42 lakh crore in 2021.
  • The number of deals in 2023 declined 72% as against deals in previous years.
  • Primary funding round deals were at 1,444 in 2023 as against 5,000 deals in 2022, the report said.
  • Biggest funding round of $500 million was raised by Peyush Bansal-led Lenskart from Abu Dhabi Investment Authority.
  • In a secondary round, an existing shareholder sells shares to a third-party.
  • Indian Startups Deal Report 2023 is a report of private market intelligence platform Private Circle.

Topic: Taxation

2. Indian Paper Manufacturers Association (IPMA) wants increase in basic customs duty on paper and paperboard imports.

  • It wants increase from current 10% to 25% as India’s WTO-bound rate is 40%.
  • India’s paper industry wants increase in import duty on paper in coming budget to ensure level playing field for domestic manufacturers.
  • A 43% increase in import of paper and paperboard has been seen in the first half of FY24 and the 25% increase was seen in volume terms in FY23.
  • Due to increase in imports of paper, the paper industry is facing problem of underutilisation of capacity.
  • According to the Department for Promotion of Industry and Internal Trade (DPIIT), only 553 of the 900-plus paper mills in India are presently functioning.
  • In export-dependent economies such as Indonesia and China, paper manufacturers enjoy significant incentives.

Topic: Taxation

3. At the end of FY23, direct tax-to-GDP ratio increased to an all-time high level of 6.11% as per Central Board of Direct Taxes (CBDT) data.

  • The data also shows that the cost of collection has decreased to lowest level since FY15.
  • As per the data, previous highest level of direct taxes-to-GDP ratio was 6.3% in 2007-08.
  • In the last 22 financial years, ratio has crossed 6% level for the third time.
  • As countries become richer, the overall level of taxation (as a share of GDP) of countries significantly increases.
  • Wagner‘s law says that the size of the government — proxied by the tax (and expenditure) share to GDP — increases as the associated country‘s income level also increases.
  • CBDT showed that between FY14 and FY23, the net direct tax collections increased by more than 160% to more than ₹16.64-lakh crore in FY23.
  • The size of nominal GDP increased by about 140%. It also increased the direct tax-to-GDP ratio.
  • The cost of collection decreased from 0.57% of total collection in FY24 to 0.51% in FY23.
  • Tax-to-GDP ratio shows the total tax revenue as a percentage of GDP.
  • It shows the share of a country’s output collected by the government by means of taxes.
  • It can be considered a measure of the degree to which a government controls resources of the economy.

FY

Direct Tax to GDP ratio

(in %)

Buoyancy Factor

Cost of direct tax collection (in %)

2014-15

5.55

0.86

0.59

2015-16

5.47

0.80

0.61

2016-17

5.53

1.10

0.66

2017-18

5.86

1.59

0.61

2018-19

6.02

1.29

0.62

2019-20

5.23

-1.21

0.66

2020-21

4.78

NA

0.76

2021-22

5.97

2.52

0.53

2022-23

6.11

1.18

0.51

Source: CBDT

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Topic: Reports and Indices

4. HSBC Flash India Composite PMI Output Index reached to a 4-month high level of 61.0 in January 2024.

  • In January 2024, the HSBC Flash Services PMI reached at 61.2.
  • The HSBC Flash Manufacturing PMI increased to 60.5 in January 2024.
  • The first ever HSBC Flash India PMI data released on 24 January 2024.
  • The HSBC Flash India Composite PMI Output Index is a seasonally adjusted index.
  • It measures the month-on-month change in the combined output of India’s manufacturing and service sectors.
  • The latest composite figure indicate the sharpest rate of growth since September 2023. It has increased from 58.5 in December 2023.

Topic: Corporates/Companies

5. Aye Finance has crossed ₹10,000 crore in micro enterprises loan disbursals.

  • Aye Finance, a non-banking financial company (NBFC), has reached this milestone within ten years of existence.
  • This Google parent Alphabet’s investment arm-backed fintech was launched in 2014.
  • It has till now brought over 8 lacs grassroots businesses into the folds of organised lending.
  • It serves the micro SMEs who are deprived of credit from traditional financial institutions.
  • Sanjay Sharma is its Founder and CEO. It is headquartered in Gurgaon.
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Topic: Appointments

6. Kanika Pasricha has been appointed as chief economic adviser of Union Bank of India.

  • She will be the chief economic adviser for three years on contractual basis.
  • The appointment is extendable by a year at a time for a maximum of five years satisfactory performance.
  • She earlier worked as an economist (director)-global research at Standard Chartered Bank.
  • She also worked as economist (chief manager) with ICICI Bank.

Topic: Banking System

7. HDFC Bank is the first bank to cross the milestone of 2 crore credit cards-in-force.

  • HDFC Bank started the credit card business in 2001. It reached the mark of 1 crore cards-in-force in 2017.
  • HDFC Bank is amongst the leading card issuers in the India.
  • It has the largest market share of credit card business. Its market share stood at 28.6% as of March 2023.
  • As per RBI data, HDFC Bank added 3.2 lakh cards in November.
  • HDFC Bank:
    • HDFC Bank is India's largest private sector bank. It is India’s second largest lender after the State Bank of India.
    • It is headquartered in Mumbai. It was founded in 1994. The CEO of HDFC Bank is Sashidhar Jagdishan.

Topic: Indian Economy/Financial Market

8. India has become fourth largest equity market globally.

  • India has surpassed Hong Kong in stock market valuation.
  • India’s stock market has for the first time overtaken Hong Kong’s, with a combined market capitalisation of $4.33 trillion as against Hong Kong’s $4.29 trillion. 
  • Over $21 billion has been invested by overseas funds in Indian shares in 2023.
  • India’s stock market capitalization crossed $4 trillion for the first time on 05 December.
  • India's equity market has been booming because of robust corporate profitability and a steadily expanding pool of regular investors.
  • Since reaching their high in 2021, Hong Kong stocks have dropped by more than $6 trillion.
  • The Hang Seng China Enterprises Index ended a four-year record-breaking decline in 2023, and is already down nearly thirteen percent. It is a metric for Hong Kong-listed Chinese equities.
  • The measure is rapidly approaching its lowest point in over 20 years, but the benchmarks for Indian stocks are trading close to all-time highs.

Topic: Banking/Financial/Govt Schemes

9. PM Modi launched the Pradhan Mantri Suryodaya Yojana.

  • Under this scheme, one crore households will get rooftop solar power systems.
  • The scheme will involve installing solar power systems on rooftops for residential consumers.
  • Rooftop Solar Programme was launched by the government in 2014.
  • It aimed to achieve a cumulative installed capacity of 40,000 megawatts (MW) or 40 gigawatts (GW) by 2022. 
  • The target was not achieved and the government changed the deadline from 2022 to 2026.
  • It aims to expand India’s rooftop solar installed capacity in the residential sector. It provides Central Financial Assistance to eligible projects and incentives to DISCOMs (distribution companies).
  • Due to this scheme, India’s rooftop solar capacity has risen from 1.8 GW as of March 2018 to 10.4 GW as of November 2023.
  • As of December 2023, solar power installed capacity in India is around 73.31 GW according to the Ministry of New and Renewable Energy.
  • As of December 2023, rooftop solar installed capacity is around 11.08 GW.
  • Rajasthan has the highest total solar capacity of 18.7 GW. It is followed by Gujarat with 10.5 GW.
  • In terms of rooftop solar capacity, Gujarat is at the top with 2.8 GW. It is followed by Maharashtra with 1.7 GW.
  • The share of solar power in the country’s current renewable energy capacity is around 180 GW.
  • India aims to reach 500 GW of renewable energy capacity by 2030.
  • India has doubled down on its coal production in recent years.
  • India has increased its solar power capacity from less than 10 MW in 2010 to 70.10 GW in 2023.

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