Banking, Financial and Economic Awareness of 26 and 27 May 2020

By PendulumEdu | Last Modified: 31 May 2020 19:04 PM IST

Main Headlines:

1. Centre notifies contribution to PM CARES Fund part of CSR

The Central government has notified that all the contributions to the PM CARES Fund will be considered as part of Companies’ Corporate Social Responsibility (CSR).
Earlier, contributions made to PM’s National Relief Fund or any other fund set up by Centre or State for relief and funds for the welfare SCs, STs, OBCs, minorities and women were considered part of CSR activities.
The list has been expanded in the wake of coronavirus and now includes promotion of health care, expenditure related to preventive health care and sanitation and disaster management along with a contribution to PM CARES Fund.
The notification will come into force on March 28, 2020.
It is mandatory under Companies Act 2013 for a company with a net worth of at least ₹500 crore, or turnover of at least ₹1,000 crore or a net profit of at least ₹5 crore, to spend 2% of its average net profit made during the last three consecutive 3 years on CSR.
PM CARES Fund:
- It was created as a public charitable trust to deal with an emergency situation like caused by COVID-19 pandemic.
- Prime Minister is the ex-officio chairman of this fund while Minister of Defence, Minister of Home Affairs and Minister of Finance are ex-officio trustees of the Fund.
- Contributions made to the fund qualifies for tax exemption under section 80G of Income Tax Act 1961.

(Source: DD News)

Public Sector Banks (PSBs) have decided to provide emergency credit to business including Micro, Small and Medium enterprises (MSMEs) at a lower rate of 7.5%, much below the capped interest rate of 9.25%.
With the RBI announcing cut in repo rate, it will be easy for the banks to implement the scheme.
The Guaranteed Emergency Credit Line (GECL) scheme for business enterprises aims to provide cheap and easy working capital credit. The interest rate has been capped at 9.25% for banks and financial institutions and at 14% for NBFCs.
One-year moratorium is also offered under the scheme, but interest has to be paid during this period. The principal has to be paid back in 36 installments after one-year moratorium.
The business with an annual turnover of up to ₹100 crore and Mudra borrowers are eligible for this scheme.
A borrower is liable to get a credit up to ₹5 crore.

From 1 June 2020, the Indian Energy Exchange (IEX) will allow real-time trading of electricity.
Real-time trading of electricity will promote better use of renewable energy particularly wind energy and will also help renewable energy companies to sell the surplus energy in the market.
Auctions will take place 48 times a day under the ‘real time market’ (RTM) product.
The buyers will also benefit especially the distribution companies, which may face sudden shortage of supply due to turbine failure or any other operational fault.

(Source: The Hindu BusinessLine)

An Android mobile app called ‘3F Akshaya’ has been launched for oil palm farmers through which farmers can access all services related to oil palm farming.
The app has been rolled out by 3F Oil Palm Agrotech, an Indian private company.
The app will provide information on optimizing cost and increasing farmer’s income using the best cultivation practices.
The farmers can also place orders for fertilizers, micronutrients, etc. through the app.

(Source: The Financial Express)

Tata BlueScope Steel has launched smart steel structures that have high strength, are ready-to-install, weather proof and thermally efficient.
These steel structures have been designed to fulfil the demand for quick-to-install and high-quality health infrastructure.
These building solutions are made of high strength Colorbond and Zincalume steel and can be used by anyone, including state governments, hospitals, corporates, etc.
These smart steel structures can be assembled on the site and can be easily dismantled, packed and shifted to other sites.
These can be used in the form of quarantine wards, testing labs, etc. and are easy to sanitize.