Banking, Financial and Economic Awareness of 29 November 2019

1. Long term ratings and short term ratings of non-fund based limits, fund based limits and commercial paper of Shapoorji Pallonji and Company (SPCPL) lowered

• Investment Information and Credit Rating Agency (ICRA) has downgraded commercial paper of Rs 2,500 crore from A1+ to A1.
• It has also downgraded long term and short term ratings of non-fund based limits and fund based limits of SPCPL. The ratings are given in the following table:

• Investment Information and Credit Rating Agency (ICRA):
  • ICRA was established in 1991.
  • ICRA provides ratings to long-term, medium-term, and short-term debt instruments.
  • ICRA ratings help investors consider credit risk associated with debt instruments before making a decision about investment.

2. Yield on auction of Treasury bills of 364-day tenure went down toat 5.1389 percent

• The yield on 364-day Treasury bills stood at 5.1389 percent. It is below the repo rate (5.15 %).
• The yield on 364-day Treasury bills also went down below the repo rate nearly 2 years ago in April 2017.
• This shows that banks are risk-averse. They are not willing to invest in Industry and are investing their excess funds in Government securities (G-Sec).
• Treasury bills:
  • Government of India issues borrowing instruments for a period extending upto one year (91 days, 182 days and 364 days).
  • These instruments do not pay interest and are known as Treasury bills or T-bills.
• Repo rate:
  • Repo rate is defined as the rate at which RBI buys securities from banks and lends money to them.
  • RBI revises the Repo rate to keep a check on inflation. In October 2019, RBI changed the repo rate from 5.40 % to 5.15 %.

3. Reliance Industries Limited (RIL)achieves Market capitalization (m-cap) of Rs 10 lakh crore

• Reliance Industries Limited (RIL) has become the first Indian company to achieve Market capitalization (m-cap) of Rs 10 lakh crore.
• Reliance Industries is followed by Tata Consultancy Services (TCS) with Rs 779,501 crore M-cap.
• RIL and TCS are followed by HDFC Bank with Rs 692,853 crore m-cap and Hindustan Unilever with Rs 451,482 crore m-cap.
• Market capitalization meansthe total market value of the listed shares of a company that are kept by shareholders.
• Reliance Industries LimitedCEO: MukeshAmbani
• Tata Consultancy Services CEO: Rajesh Gopinathan
• HDFC Bank CEO: Aditya Puri
• Hindustan Unilever CEO: Sanjiv Mehta

4. Industrial Relations Code Bill, 2019 introduced in Lok Sabha

• The bill contains proposal for combining The Trade Unions Act, 1926, The Industrial Employment (Standing Orders) Act, 1946, and The Industrial Disputes Act, 1947.
• The Bill has kept the threshold for retrenchment of employees as unchanged, i.e. 100 in case of economic difficulty and the government can change this number through notification. 
• The bill proposes compensation of 15 days of average pay. Earlier, the bill proposed compensation of 45 days of average pay.
• As per the provisions of the bill, trade unions will be recognized if they are supported by 75 % or more workers, and the workers should give a 14-day notice before strikes.
• The bill also proposes the establishment of the re-skilling fund and an Industrial Tribunal.
• Industrial Relations Code Bill, 2019,is part of the central government’s efforts to arrange existing central labour laws in four codes.
• The other three codes are Code on Wages, 2019, Occupational Safety, Health and Working Conditions Code and Social Security Code.

5.  Advisory Committee on National Accounts Statistics (ACNAS) recommends revision ofbase year for national accounts

• ACNAS has recommended that base year for national accounts should be revised from 2011-12 to 2020-21.
• ACNAS has earlier recommended that base year should be revised from 2011-12 to 2017-18.
• Advisory Committee on National Accounts Statistics (ACNAS):
  • ACNAS consists of experts from Reserve Bank of India, central and state governments, academia and other domain experts.