Topic: Reports and Indices
1. The assets acquired by ARCs crossed a book value of above ₹10 lakh crore.
- According to a RBI report, as of March-end 2024, the book value of the assets that 27 Asset Reconstruction Companies (ARCs) had acquired from lenders had surpassed ₹10 lakh crore for the first time.
- A report by the RBI states that as of March-end 2024, the book value of the assets that these ARCs have acquired is ₹10,25,429.
- According to the RBI's Report on Trend and Progress of Banking in India 2023-24, as of March-end 2023, the book value of the assets acquired by 28 ARCs was ₹8,39,126 crore.
- ARCs issued security receipts (SRs) of ₹2,83,330 crore at the end of March 2024, compared to ₹2,46,290 crore at the end of March 2023.
- For the second year in a row, the acquisition cost of ARCs as a percentage of their book values of assets decreased to 27.63 percent in 2023–2024 (down from 29.35 percent in 2022–2023).
- The percentage of SRs fully redeemed increased from 32.8% in previous year to 37.5% of previous years’ outstanding SRs during 2023-24.
- The asset sales to gross non-performing assets (GNPAs) ratio decreased from 9.7% in previous year to 5.8% in 2023-2024.
- In comparison to 60.6 percent a year ago and 62.5 percent at the end of March 2022, banks and financial institutions (FIs) subscribed for 59.1 percent of the total security receipts (SRs) issued at the end of March 2024.
Topic: Regulatory Bodies/Financial Institutions
2. NFRA has imposed a penalty of ₹2 crore on Deloitte Haskins & Sells.
- Along with Deloitte Haskins & Sells, NFRA has imposed penalties on two chartered accountants.
- These penalties have been imposed for lapses in the audit of Zee Entertainment Enterprises Ltd (ZEEL) during the financial years 2018-19 and 2019-20.
- NFRA has prohibited A B Jani, Engagement Partner, from accepting any audit work of a corporate for 5 years.
- It has imposed a penalty of ₹10 lakh on him for his professional misconduct.
- NFRA has also imposed a penalty of ₹5 lakh on Rakesh Sharma, Engagement Quality Control Review (EQCR) Partner.
- It has debarred him from carrying out any audit work of a corporate for three years.
- NFRA had suo-motu examined audit file for statutory audit of Zee Entertainment Enterprises Ltd for FY’2019-20 and FY’2018-19.
- It was assessed whether the auditor committed any professional misconduct as defined under Companies Act, 2013.
- National Financial Reporting Authority (NFRA) is India’s only independent audit regulator.
Topic: Indian Economy/Financial Market
3. India’s current account deficit declined slightly to 1.2% of GDP in second quarter of FY25.
- The reasons for decline are increase in net services receipts, private transfer receipts, and net inflows under FPI and non-resident deposits.
- In absolute terms, the India’s current account deficit stood at $11.2 billion against $11.3 billion in the year ago quarter.
- In Q2FY25, merchandise trade deficit increased to $75.3 billion against $64.5 billion in the year ago quarter, as per RBI’s statement on “Developments in India’s Balance of Payments during the Second Quarter”.
- As per RBI’s statement on “Developments in India’s Balance of Payments during the Second Quarter”, net services receipts increased to $44.5 billion from $39.9 billion.
- As per RBI, services exports have increased on a year-on-year (yoy) basis across computer services, business services, travel services and transportation services.
- Net outgo on the primary income account declined to $9.5 billion in Q2FY25 from $11.6 billion in Q2FY24.
- Net outgo on the primary income account mainly reflects payments of investment income.
- Private transfer receipts increased to $31.9 billion in Q2FY25 from $28.1 billion in Q2FY24.
- Private transfer receipts primarily represent remittances by Indians employed overseas.
- Net foreign direct investment (FDI) outflow increased to $2.2 billion in Q2FY25 against an outflow of $0.8 billion in Q2FY24.
- Net inflows under foreign portfolio investment (FPI) increased to $19.9 billion in Q2FY25 from $4.9 billion in Q2FY24.
- Net inflows under external commercial borrowings (ECBs) to India stood at $5 billion in Q2FY25.
- Non-resident deposits (NRI deposits) recorded net inflows of $6.2 billion in Q2FY25.
Topic: Indian Economy/Financial Market
4. India with an inflow of $129 billion emerged as the topmost recipient of remittances in 2024.
- India received the highest remittances in 2024, followed by Mexico, China, Philippines and Pakistan.
- The growth rate of remittances in 2024 is estimated to be 5.8 per cent as compared to 1.2 per cent registered in 2023.
- The remittances to low-and middle-income countries (LMICs) are expected to reach $685 billion in 2024.
- In the past decade, remittances increased by 57 per cent, while FDI declined by 41 per cent.
- The gap between remittances and Foreign Direct Investment (FDI) is likely to widen further in 2024.
- Remittance flows to South Asia are expected to register the highest increase in 2024.
Topic: Indian Economy/Financial Market
5. Government to cut fiscal deficit to 4.5% in FY26.
- The Government will focus on improving quality spending and strengthening social security.
- The government will bring down the fiscal deficit to 4.5 per cent of the GDP in FY26.
- Finance Minister Nirmala Sitharaman will present the Budget for 2025-26 on 1 February.
- Under the Fiscal Responsibility and Budget Management Act, of 2003, the Union Government is committed to following the glide path of fiscal consolidation.
- Gross Tax Revenue (GTR) has been estimated ₹38.40 lakh crore with an implied tax-GDP ratio of 11.8 per cent.
- Total non-debt receipt of the Centre was estimated at about ₹32.07 lakh crore.
- The fiscal deficit was planned to be financed through G-securities and T-Bills and other sources.
Topic: Committees/Commissions/Taskforces
6. RBI has formed 8-member committee to develop a framework for the ethical use of AI in financial sector.
- To develop a Framework for Responsible and Ethical Enablement of Artificial Intelligence (FREE-AI) in the Financial Sector, RBI has constituted an eight-member committee.
- The committee will be headed by Dr. Pushpak Bhattacharyya. He is serving as a Professor in the Department of Computer Science and Engineering at IIT Bombay.
- The committee will assess the current level of adoption of AI in financial services in India and at the global level.
- This committee will also identify potential risks associated with AI.
- This committee will also give recommendations on evaluation, mitigation, and monitoring framework.
- The committee will give its report within 6 months from the date of its first meeting.
- The other seven members of the committee are Debjani Ghosh, Balaraman Ravindran, Abhishek Singh, Rahul Matthan, Anjani Rathor, Sree Hari Nagaralu, and Suvendu Pati.
Topic: Miscellaneous
7. Manmohan Singh, the former prime minister, died on December 26, 2024, at the age of 92.
- Under then-prime minister PV Narasimha Rao, he served as finance minister.
- He is considered the architect of the 1991 economic reforms that marked the beginning of the liberalisation of the economy.
- From 2004 to 2014, he served two terms as prime minister of the UPA government, which was led by the Congress.
- After 33 years of service, he retired from the Rajya Sabha in April 2024.
- On September 26, 1932, he was born in a village in the Punjab province of undivided India.
- From 2004 until 2014, he was the 13th Prime Minister of India.
- Following the 2004 general elections, he took the oath of office as prime minister on May 22.
- On May 22, 2009, he took the oath of office for a second term.
- A seven-day national mourning period for the former prime minister has been announced by the Union government.
- The Mahatma Gandhi National Rural Employment Guarantee Act was one of the major decisions made by Manmohan Singh while he was prime minister.
- In 2005, his government also introduced the Right to Information Act.
- His government introduced the National Food Security Act in 2013.
- His book "India's Export Trends and Prospects for Self-Sustained Growth" was an early analysis of India’s inward-oriented trade policy.
- In addition, he chaired the University Grants Commission and served as 15th governor of the Reserve Bank of India.
- The Padma Vibhushan, India's second-highest civilian honour, was bestowed to him in 1987.
- He was the fourth longest-serving prime minister after Jawaharlal Nehru, Indira Gandhi and Narendra Modi.
Topic: Banking System
8. Profitability of Indian banks has improved for the sixth consecutive year in 2023-24.
- As per a report released by RBI, the non-performing assets (NPAs) have declined to a 13-year low of 2.7 per cent.
- The financial position of Indian banks has stayed robust with the sustained expansion in loans and deposits.
- India’s macro fundamentals have boosted the performance and soundness of the banking and non-banking financial sectors.
- The gross non-performing assets (GNPA) ratio has fallen to its lowest of 13 years at 2.7 per cent in March 2024 and 2.5 per cent in September 2024.
- In 2023-24, the asset quality of non-bank finance companies (NBFCs) has also improved.
- Strong credit expansion by NBFCs has further strengthened their balance sheets.
- The net profit of the scheduled commercial banks increased by 32.8 per cent to 3 lakh 49 thousand 603 crore rupees.
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