Banking Awareness of 25, 26 and 27 September 2024

Topic: Taxation

1. A Group of Ministers (GoM) has been set up by the Goods and Services Tax (GST) Council to make decisions regarding the the future of compensation cess.

• The GoM is headed by Minister of State for Finance Pankaj Chaudhary.
• The GoM has 10-members. It will give its report to the GST Council by December 31.
• The GoM's mandate is to propose taxes to replace the compensation cess upon its elimination.
• Under the GST regime, government levies compensation cess on luxury, sin and demerit goods over and above the 28 per cent tax.
• Government uses the proceeds from the cess to compensate states for GST revenue loss.
• Originally, the cess was planned to last until June 2022, or five years after the GST was implemented.
• In order to pay back the loan and interest, the GST Council had previously decided to extend the compensation cess levy until March 2026.
• The future of the compensation cess would now be recommended by the 10-member GoM.

Topic: Reports and Indices

2. The NBFC sector continues to show resilience under the Scale-Based Regulations (SBR) framework, according to RBI report.

• By December 2023, the NBFC sector had maintained double-digit lending growth, sufficient capital levels, and a low default percentage, according to the RBI report.
• RBI report is titled ‘Peeling the Layers: A Review of the NBFC Sector in Recent Times’.
• Following the introduction of SBR in October 2022, there has been a noticeable decline in the gross non-performing asset (NPA) ratio.
• It dropped from a range of 4.4% to 10.6% in December 2021 to 2.4% to 6.3% by December 2023.
• Prompt Corrective Action (PCA) norms being extended to government-owned NBFCs will strengthen the industry even more.
• A number of significant NBFCs have been recognized by the RBI as belonging to the Upper Layer of the SBR structure.
• All corporations on the Upper Layer List have completed or started taking action to comply with the listing requirement as of right now, with the exception of Tata Sons.

Topic: Indian Economy/Financial Market

3. Government will borrow ₹6.61 lakh crore during October-March.

• Bonds worth ₹6.61 lakh crore will be sold by the government during October-March period of current fiscal.
• Overall borrowing for fiscal is likely to be less than ₹ 14.01 lakh crore (total budget estimates).
• ₹7.4 lakh crore were borrowed by the government during April-September period.
• ₹6.61 lakh crore, or 47.2%, of the gross market borrowing of ₹14.01 lakh crore scheduled for FY 2024–2025 is expected to be borrowed in the second half.
• It is intended to borrow this sum by issuing dated securities, such as sovereign green bonds worth ₹20,000 crore.
• Government bonds with maturities ranging from one year to fifty years are referred to as dated securities.
• Similar to equity, these are tradable on the market and carry interest.
• In the second half, there will be 21 weekly auctions for borrowing.
• The combined amount of the three-, five-, and seven-year bonds will be 23.5% of the entire amount borrowed.
• The bonds with maturities of 10 and 15 years would account for 24.8% and 13.2% of the total, respectively.
• Bonds with terms of 30 years, 40 years, and 50 years would have respective shares of 12.1%, 15.9%, and 10.6%.
• With the maximum duration of 364 days, the government will grossly borrow ₹2.47 lakh crore using treasury bills.
• Every week, the government plans to sell treasury bills worth ₹19,000 crore.
• These bills are interest-free. These are redeemed at face value after being issued at a discount.
• The Ways and Mean Advances for the October–March period have been set by the RBI at ₹50,000 crore.

Topic: Banking System

4. SBI filed petition under Section 7 of IBC against toll road subsidiary of Reliance Infra.

• SBI has filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 against KM Toll Road Private Ltd (KMTRPL).
• SBI has filed petition before the National Company Law Tribunal, Mumbai, for a claim amount of ₹233.44 crore (including interest).
• KM Toll Road Private Ltd (KMTRPL) is a wholly owned subsidiary of Reliance Infrastructure.
• Section 7 of IBC deals with initiation of corporate insolvency resolution process (CIRP) by financial creditors.
• Under Section 7, a financial creditor may file an application for initiating Corporate Insolvency Resolution Process (CIRP) against a corporate debtor before the adjudicating authority in case of a default.
• A financial creditor may file application either by itself or jointly with other financial creditors, or any other person on behalf of the financial creditor.

Topic: Reports and Indices

5. India climbed to 39th place in the Global Innovation Index 2024.

• India has secured 39th place among 133 global economies in the Global Innovation Index (GII) 2024.
• India was ranked 40th in last year’s Global Innovation Index.
• India also ranks first among the 10 Central and Southern Asian economies.
• Major cities like Mumbai, Delhi, Bengaluru, and Chennai are listed among the world’s 100 S&T clusters.
• India has also achieved the 7th rank globally in intangible asset intensity.
• The World Intellectual Property Organization has released the Global Innovation Index.
• The Global Innovation Index is a tool for governments to assess the innovation-led social and economic changes in their respective countries.
• Switzerland, Sweden, the United States, Singapore and the United Kingdom are the most innovative economies in the world.
• The United States scored best in the world in nine of the 78 GII innovation indicators.
• China, Turkey, India, Vietnam and the Philippines are the fastest innovative economies.
• China reached the 11th position and is the only middle-income economy in the top 30 of the ranking.

(Source: News on AIR)

Topic: Regulatory Bodies/Financial Institutions

6. The Securities and Exchange Board of India (SEBI) fined Jai Anmol Ambani with one crore rupees.

• In the Reliance Home Finance case, Jai Anmol Ambani was penalised for failing to perform appropriate due diligence before authorising general-purpose corporate loans (GPCLs).
• Due to his involvement in the clearance process, Krishnan Gopalakrishnan, the former chief risk officer of Reliance Home Finance, has also been fined Rs 15 lakh.
• Both of them have been asked to pay the fines within 45 days.
• Jai Anmol Ambani is the son of businessman Anil Ambani.
• Anil Ambani, three key officials of his company, and 23 related companies were all imposed a five-year ban from stock market trading by SEBI last month.
• In an investigation carried out by SEBI, a pattern of financial misconduct orchestrated by Anil Ambani and his associates was revealed.

Topic: Reports and Indices

7. Unemployment has decreased sharpest in Haryana: Annual Periodic Labour Force Survey.

• As per the latest annual Periodic Labour Force Survey, the national average unemployment rate reached 3.2 per cent in 2023-24.
• The unemployment rate has decreased from 5.1 per cent in 2022-23 to 3.2 percent in 2023–24.
• Haryana, Tamil Nadu, Chhattisgarh, and Madhya Pradesh have achieved the most substantial reductions in unemployment rates.
• Haryana registered the sharpest drop in unemployment, falling from 9.2 percent in 2022–23 to 3.4 percent in 2023–24.
• Tamil Nadu registered the second sharpest decline, while Chattisgarh remained in the third spot.
• Goa tops the list with an unemployment rate of 8.5 per cent, followed by Kerala at 7.2 per cent and Nagaland at 7.1 per cent.
• Lakshadweep records the highest unemployment rate at 11.9 per cent among Union Territories.
• Madhya Pradesh is the only state where unemployment is below 1 percent.
• The national average worker-population ratio (WPR) stands at 38.7 percent.

Topic: Regulatory Bodies/Financial Institutions

8. New rules have been introduced by the Securities and Exchange Board of India (SEBI).

• The new rules aim to simplify the process of applying for public issues of debt securities.
• Individual investors will have to use the Unified Payments Interface (UPI) for fund blocking starting on November 1st when applying through intermediaries for funds up to ₹5 lakh.
• Investors wishing to apply through intermediaries, such as stock brokers, syndicate members, registrars, or depository participants, for public issuance of debt securities must follow the new regulations.
• In addition, investors must include their UPI ID—which is linked to their bank account—with the bid-cum-application form that they send to intermediaries.
• Additionally, in an effort to shorten the time it takes issuers to access funds, SEBI has adopted additional regulations.
• The minimum subscription period for public issuance of debt securities has been lowered by SEBI from three to two working days under the modified rules.
• Furthermore, the bidding period can now be extended by one working day instead of three in the event of price band or yield modifications.
• The period of time for public comments on draft offer documents has been shortened to one day for issuers whose securities are already listed.
• The time frame is shortened to five days for other issuers.

Topic: Committees/Commissions/Taskforces

9. A committee constituted by the Government for Repairability Index in Electronics.

• A Committee of Experts has been constituted by the Department of Consumer Affairs (DoCA) to prepare a framework for Repairability Index in the Mobile and Electronics Sector.
• This committee of experts constituted under the Chairmanship of Shri Bharat Kheda, Additional Secretary, DOCA.
• DOCA seeks to bring greater transparency to consumers about their products' repairability information and promote a more sustainable technology industry by developing the Repairability Index.
• The move comes following the National Workshop on Right to Repair in Mobile and Electronics Sector held on August 29, 2024.
• Industry stakeholders discussed the need for a repairability infrastructure during the workshop to extend product life and enhance access to repair information and spare parts, especially for discontinued models.
• The Committee will develop policies, guidelines and regulations to support the Repairability Index and integrate it into the existing consumer protection framework.
• The committee is expected to submit its report by November 15, 2024, along with the proposed framework for the Repairability Index.

Topic: Regulatory Bodies/Financial Institutions

10. FPI Outreach Cell launched by SEBI for seamless market access.

• On September 25, a dedicated Foreign Portfolio Investor (FPI) Outreach Cell launched by market regulator SEBI to improve and simplify the experience of such investors accessing the Indian securities market.
• This cell will focus on direct engagement with Foreign Portfolio Investors (FPIs), and assist them in seamless access to the Indian securities market.
• This cell functions under the Alternative Investment Funds and Foreign Portfolio Investors Department (AFD) of SEBI.
• Its main responsibilities include assisting prospective FPIs during the pre-application stage by providing support in documentation and compliance processes.
• This cell will also provide support during the onboarding phase and resolve any operational challenges that may arise during or after the registration process.
• These FPI cells are designed to provide targeted support to foreign investors and streamline their operations, making it easier for them to operate in the Indian financial markets.

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