Banking Awareness of 24 and 25 March 2023

Topic: MoUs/Agreements

1. SAEL Industries and Asian Development Bank (ADB) has signed an agreement for a loan of up to ₹754 crore.

• The loan agreement is to promote agricultural waste-to-energy plants in India.
• ADB’s funding will be used for the construction of five biomass power plants in Rajasthan.
• These five biomass power plants will be constructed in the districts of Bikaner, Churu, Hanumangarh, Jhunjhunu, and Sikar.
• Due to burning of crop stubble by farmers to remove paddy residue, fine particulate matter (PM 2.5) levels and air pollution rise.
• SAEL Industries has developed a business model. In this model, crop residues are used as fuel in waste-to-energy projects.
• Asian Development Bank (ADB):
  • It is a regional development bank established in 1966.
  • Members: 68 countries
  • Headquarters: Mandaluyong, Philippines
  • Current President: Masatsugu Asakawa

Topic: Banking System

2. Canara Bank sold its stake in Commercial Indo Bank LLC (CIBL).

• Canara Bank sold its stake in CIBL to State Bank of India (SBI) for ₹121.29 crore.
• Canara Bank entered into the agreement for sale on 11 November, 2022.
• CIBL is a joint venture in Russia between SBI and Canara Bank. SBI’s stake is 60% and Canara Bank’s stake is 40%. It was incorporated in 2003.
• Canara Bank:
  • It was founded in July 1906. It is headquartered in Bengaluru.
  • Lingam Venkat Prabhakar is its CEO.
  • The government has merged Syndicate bank with Canara bank.

Topic: RBI

3. RBI allowed use of national currencies of Tanzania and India for the settlement of bilateral trade.

• Both the countries will be able to trade using local currencies (Indian Rupee and Tanzanian Shilling).
• RBI has allowed authorized banks in India to open special rupee Vostro accounts of correspondent banks of Tanzania.
• Tanzanian banks will open special rupee Vostro accounts in India by approaching authorized Indian banks.
• Authorized Indian banks will approach RBI for its approval of Tanzanian banks.
• This arrangement of Vostro accounts now applies to 18 countries.
• Bostwana, Fiji, Germany, Guyana, Israel, Malaysia, Mauritius, Myanmar, New Zealand, Oman, Russia, Seychelles, Singapore, Sri Lanka and United Kingdom are some other countries.

Topic: Taxation

4. Tax rate on royalties and technical fees of foreign firms have been doubled from 10% to 20%.

• Withholding tax rate on royalties and fees for technical services earned by non-resident companies has been raised from 10% to 20%.
• This step is a part of the 64 amendments moved to the Finance Bill 2023 by the FM Nirmala Sitharaman.
• Foreign companies will now be required to avail tax treaty shelter to reduce the withholding tax rate.

Topic: Indian Economy/Financial Market

5. Lok Sabha passed Finance Bill 2023 after Finance Minister moved more than 60 amendments.

• Government proposed 64 amendments to the Finance Bill 2023.
• Finance Minister requested RBI to bring payments for foreign tours through credit cards within the ambit of Liberalised Remittance Scheme.
• Under the amendments, securities transaction tax (STT) on options and futures trades has been hiked by up to 25%.
• As part of the amendment, long–term capital gains treatment with indexation benefits for debt mutual funds have been removed.
• Investments in mutual funds in which not more than 35% is invested in debt funds will now be deemed to be short-term capital gains. 
• This proposal will apply to investments made on or after April 1, 2023.
• Indexation benefits will be provided to debt funds held for more than three years.
• Finance Bill 2023 also contains amendments for setting up of a GST Appellate Tribunal (GSTAT). It proposes GSTAT with one Principal Bench and a number of state benches.
• Government has extended tax holiday for banking units in IFSC from 100% in first five years and 50% in next five years to 100% for entire 10-year period.
• Any bond listed on an exchange and issued by an IFSC unit will subject to a lower withholding tax of 9%.

Topic: Miscellaneous

6. Subsidy of two hundred rupees on twelve cylinders per year extended for one year for beneficiaries of the Ujjwala Yojana.

• The Cabinet Committee on Economic Affairs has extended the subsidy of Rs 200 per LPG cylinder under Pradhan Mantri Ujjwala Yojana for one year.
• As on March 1, 2023, the total number of beneficiaries of Pradhan Mantri Ujjwala Yojana is nine crore 59 lakh.
• Public Sector Oil Marketing Companies Namely Indian Oil Corporation Limited, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited are giving this subsidy from 22 May 2022.
• The average LPG consumption of Pradhan Mantri Ujjwala Yojana consumers has increased by 20 percent from 3.01 refills in 2019-20 to 3.68 in 2021-22.
• Cabinet Committee on Economic Affairs (CCEA) has fixed MSP for Raw Jute at ₹5,050 per quintal for the 2023-24 season.
• CCEA has fixed the Minimum Support Price (MSP) based on the recommendations of the Commission for Agricultural Costs and Prices (CACP).

• The new MSP of raw jute is in line with the principle of fixing the MSP at a level of at least 1.5 times of all India’s weighted average cost of production.

• Pradhan Mantri Ujjwala Yojana was launched in May 2016 with the objective of providing LPG gas in rural areas and to the underprivileged. Under this, free LPG connections are provided to poor women.

Topic: Miscellaneous

7. Tamil Nadu government will focus on bringing large technology companies to newly announced tech cities.

• These new tech cities will come up in Chennai, Hosur and Coimbatore.
• These tech cities will come up in the IT corridor of Chennai.
• On March 22, India's first PM Mega Integrated Textile Region and Apparel (PM MITRA) Park for the textile industry has been launched at E. Kumaralingapuram in Virudhunagar district of Tamil Nadu.
• With an MoU inked between the State and the Center, Tamil Nadu Chief Minister MK Stalin and Union Textiles Minister Piyush Goyal jointly launched the park.
• The PM Mitra Mega Textiles Park will give a boost to the local economy of Virudhunagar, an aspirational district in Tamil Nadu.
• Under the Virudhunagar PM Mitra project, infrastructure work will be done with an estimated Rs 2,000 crore, which includes a central subsidy of Rs 500 crore.
• With an investment of over Rs 70,000 crore, the PM Mitra Park will significantly enhance the textile industry by creating a large number of job opportunities and giving "new work" to an estimated 20 lakh people.
• A total of 11 MoUs were exchanged between state authorities and companies on investment commitments in the PM Mitra project in Tamil Nadu.
• The mega textile park will be set up on 1,052 acres of land at E Kumaralingapuram in Virudhunagar district.
• The proposed project site is owned by the State Industries Promotion Corporation (SIPCOT).

Topic: Committees/ Commissions/Taskforces

8. Finance Minister has proposed to set up a committee to look into the issue of pensions.

• As per the proposal, the committee would be set up under the finance secretary.
• The committee would also evolve an approach that addresses the needs of employees while maintaining fiscal prudence.
• The committee would be set up to improve the New Pension System (NPS) to deal with the concerns of employees and maintain fiscal prudence.
• FM Nirmala Sitharaman said that the new approach to NPS will be designed for adoption by both central and state governments.
• Rajasthan, Chhattisgarh, Jharkhand, Punjab and Himachal Pradesh have reverted to the old pension scheme (OPS).
• Under the OPS, retired government employees get 50% of their last drawn salary as monthly pensions.  
• National Pension System (NPS) has been implemented for all government employees joining the central government on or after January 1, 2004. This excludes government employees in the armed forces.
• As per the PFRDA, 26 state governments have notified and implemented NPS for their employees.
• Since 1 May 2009, NPS has been made available to every Indian citizen on a voluntary basis.
• On June 1, 2015, the Atal Pension Yojana was launched.

Read Banking Awareness PDF - 24 and 25 March 2023