Topic: Banking System
1. Banking Laws (Amendment Bill, 2024) has been passed by Lok Sabha.
- With relation to deposits, objects in safe custody, and safety lockers, the bill provides for the simultaneous and consecutive nomination of up to four individuals.
- For these cases, just one nomination is currently allowed under certain restrictions.
- Depositors will get the successive or simultaneous nomination facility.
- Locker holders will get only successive nomination.
- The bill includes provision to raise the threshold for an individual's beneficial interest shareholding from Rs 5 lakhs to Rs 2 crore.
- The bill includes clauses that would move the deadlines for banks to submit their statutory reports to the RBI to the last day of the month, quarter, or two weeks.
- The second and fourth Fridays are currently the deadlines for regulatory reporting.
- As per the bill, the tenure of directors (excluding the chairman and whole-time director) in co-operative banks will be increased to 10 years from 8 years.
- A director of a central co-operative bank will be allowed to serve on the board of a state co-operative bank.
- The Bill will amend the Reserve Bank of India Act, 1934, the Banking Regulation Act, 1949, the State Bank of India Act, 1955, the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980.
Topic: Reports and Indices
2. India’s Services PMI declined marginally to 58.4 in November 2024.
- It stood at 58.5 in October 2024. The services sector has seen record job creation since 2005.
- This was driven by strong sales and growing export orders from Asia, Europe, and the US.
- Input costs increased to 15-month high. Output prices increased at a near 12-year peak.
- Total sales growth remained strong. New export orders grew up at quickest rate in three months.
- The HSBC India Composite Output Index stood at 58.6 in November. This was slightly lower than 59.1 of October 2024.
- The HSBC India Composite Output Index combines data from both manufacturing and services.
- Services has a 53 per cent contribution in Gross Value Added (GVA).
Topic: RBI
3. Lending restrictions on NBFC Navi Finserv have been removed by RBI.
- On October 17, restrictions on Navi Finserv and three other NBFCs were imposed for violation of lending norms.
- RBI has removed restrictions placed on Navi Finserv Limited, with immediate effect.
- RBI’s action was based on material supervisory concerns observed in the pricing policy of Navi and other NBFCs.
- Pricing policy was in violation of regulations provided in the Master Direction on regulatory framework for microfinance loans and on NBFC-scale based regulation.
- Pricing policy was not in conformity with provisions laid down under Fair Practices Code issued by RBI.
Topic: RBI
4. Limit for UPI Lite payments has been increased by RBI.
- RBI has increased the UPI Lite wallet limit to ₹5,000 and per-transaction limit to ₹1,000.
- This has been done in a bid to encourage wider adoption of digital payment systems.
- As part of its monetary policy in October 2024, RBI had informed of its intention to adjust these limits.
- At present, there is a limit of ₹500 per transaction and an overall limit of ₹2,000 per UPI Lite wallet.
- UPI Lite allows users to do fast, one-click transactions without the requirement to enter the PIN.
- In September 2022, RBI launched the UPI Lite feature to ease the UPI transaction process.
- The UPI Lite feature is enabled by the National Payments Corporation of India (NPCI).
Topic: Reports and Indices
5. According to the World Bank International Debt Report 2024, India's total external debt climbed by $31 billion to $646.79 billion in 2023.
- Interest payments rose from $15.08 billion in 2022 to $22.54 billion in 2023, according to the report.
- Short-term debt stocks fell slightly to $126.32 billion in 2023, while long-term debt stocks increased 7% to $498 billion.
- The report states that in 2023, the external debt stock as a percentage of exports was 80%, while debt servicing accounted for 10% of exports.
- According to the report, net stock inflows were higher in 2023 at $46.94 billion, while net debt inflows for the year totalled $33.42 billion.
Topic: Indian Economy/Financial Market
6. 10-year government bond yield dipped to a 3-year low.
- The benchmark 10-year government yield has reached 6.6928%.
- It has fallen to its lowest level in nearly three years amid expectations that the domestic central bank would ease interest rates.
- Data has revealed that India’s economic growth has slowed more than expected in the September quarter after that the bond yields have declined.
- India’s domestic output fell to a seven-quarter low of 5.4% last quarter.
- The decline in bond yield and swap rate indicate that the central bank may loosen monetary policy via a lower cash reserve ratio (CRR) for banks.
- The market is estimating a cut in the CRR by 50 bps could release over 1.1 trillion rupees ($13 billion) into the banking system.
Topic: Taxation
7. Government has decided to withdraw the windfall tax on Aviation Turbine Fuel (ATF), crude oil, petrol, and diesel.
- It will be a major relief for oil companies like Reliance Industries and ONGC, which have been bearing the burden of this tax since its imposition in July 2022.
- The removal of the tax is expected to boost profits for these companies.
- As per the notification of the Ministry of Finance, the Special Additional Excise Duty (SAED) on the production of petroleum crude and the export of ATF, petrol, and high-speed diesel will no longer apply.
- The windfall tax is reviewed every 15 days based on fluctuations in global crude oil prices.
- The windfall tax was started to get a portion of the excess revenue earned by oil companies due to soaring global crude prices and higher refining margins.
Topic: Summits/ Conferences/ Meetings
8. 29th Confederation of Indian Industry (CII) Partnership Summit held in New Delhi.
- The Confederation of Indian Industry (CII) organized the 29th CII Partnership Summit 2024 on 2-3 December in New Delhi.
- Since 1995, the CII Partnership Summit has been held every year.
- It is being held by the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, Government of India.
- 61 participating countries, 30 global speakers, and 11 international ministers have participated in this summit.
- The summit aims to foster productive partnerships and global cooperation, ensuring a shared vision for a sustainable and prosperous future.
Topic: Indian Economy/Financial Market
9. Government will revise the base year for GDP calculation from 2011-12 to 2022-23.
- Government has constituted an Advisory Committee on National Accounts Statistics (ACNAS) to facilitate the transition.
- The committee has members from central and state governments, the RBI, academia, and research institutions.
- ACNAS will identify new data sources. It will give recommendations on the methodology for compiling national accounts in the revised series.
- To strengthen the statistical system, the government has undertaken following initiatives.
- The establishment of ACNAS
- The standardization of data structures to ensure high-quality reporting across the National Statistical System
- The increased utilization of administrative data
Topic: Indian Economy/Financial Market
10. In the second quarter from April to September, FDI inflows surged by 45 per cent.
- In the April-September quarter, foreign direct investment in India rose by 45 per cent to $29.79 billion.
- FDI inflows were at $20.5 billion in April-September 2023-24.
- In the July-September quarter, inflows grew by about 43 per cent year-on-year to $13.6 billion against $9.52 billion in the same period of last fiscal.
- Total FDI including equity inflows, reinvested earnings and other capital grew by 28 per cent during the first half of this fiscal.
- It has increased from $33.12 billion in April-September 2023-24 to $42.1 billion.
- FDI in services has increased to USD 5.69 billion during the first half of the current financial year.
- FDI inflows in non-conventional energy stood at USD 2 billion.
- During April-September 2024-25, Maharashtra received the highest inflow of USD 13.55 billion.
- Karnataka (USD 3.54 billion), Telangana (USD 1.54 billion) and Gujarat (about USD 4 billion) are other leading states to get FDI.
Topic: Indian Economy/Financial Market
11. In the July-September quarter, Singapore contributed 50% of total FDI into India.
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In the July-September quarter, Singapore made the highest foreign direct investment in India, with 50% of the investments coming from the neighbouring country.
- Data provided by DPIIT shows that FPI inflows into India grew 43% to USD 13.6 billion in the July-September quarter of 2024-25.
- USD 7.5 billion or over 50% of the total FDI came from Singapore.
- Singapore has been a major source of foreign direct investment (FDI) for India.
- In the year 2023-24, Singapore was the largest source of foreign direct investment (FDI) for India, with an estimated inflow of US$11.77 billion.
- From Singapore, the cumulative inflow of FDI from April 2000 to March 2024 is about US$159.94 billion.
- In bilateral trade, Singapore was India's sixth largest global trading partner in 2023-24.
- Its total trade was US$35.61 billion, accounting for about 29% of India's total trade with ASEAN.
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