Banking, Financial and Economic Awareness of 30 and 31 August 2020

1. Resolution of Reliance Home Finance and Reliance Commercial Finance not to be transferred to NCLT

• RBI has rejected a proposal to transfer the resolution of Reliance Home Finance and Reliance Commercial Finance to NCLT.
• It has been reported that RBI is satisfied with the progress in the resolution of two companies outside insolvency laws.
• In May, Bank of Baroda had requested RBI and sought resolution of two companies through NCLT under Section 227 of IBC.
• Bank of Baroda is the lead bank in the consortium of 20 lenders. Section 227 of IBC allows RBI to refer a financial service provider or a non-banking finance company to NCLT for resolution.
• The asset size of the financial service provider or a non-banking finance company should be Rs. 500 crore or more.
• Lenders have also invited bids for resolution plans for Reliance Home Finance and Reliance Commercial Finance. Bids for Reliance Home Finance are being invited till September 15.
• JM Financial ARC, Edelweiss ARC, UGRO Capital and UV ARC are some of 13 investors who had submitted an expression of interest for Reliance Commercial Finance.
• Reliance Commercial Finance (Reliance Money) is a wholly-owned subsidiary of Reliance capital. It is a non-banking finance company. Reliance Home Finance is a listed housing finance company.
• Insolvency and Bankruptcy Code (IBC) 2016 provides for the resolution of insolvency cases within 180 days. The Insolvency and Bankruptcy Code (Amendment) Bill 2019, was passed on August 01, 2019. It fixed a time-limit of 330 days for completion of the resolution process.
• NCLT is a quasi-judicial body. It was formed under Companies Act, 2013, on 1 June 2016.

2. Cash Sterion launched by Godrej Security Solutions (GSS)

• Cash Sterion, a Plasma Ion Technology (PIT) based product, has been launched by Godrej Security Solutions (GSS).
• Cash Sterion will help banks in sterilizing currency notes during counting on counting machines. Cash counting machines can be put inside the Cash Sterion.
• Cash Sterion can be used by jewelry shops, courier services and cash-in-transit (CIT) companies, who fill cash in the ATMs.
• For the launch of Cash Sterion in India, GSS has partnered with Korea’s SMI. GSS is a division of Godrej & Boyce Manufacturing Company.
• Plasma Ion Technology is an air purification technology patented by Sharp Electronics Corporation, Japan. In this technology, positive (H⁺) and negative (O₂⁻) ions bind to airborne virus and decompose the protein of virus. As a result, virus gets suppressed.

3. Sunil Alagh to be chairman of Advisory Board formed by Vikas Multicorp

• Sunil Alagh, former MD of Britannia Industries, has been appointed as chairman of Advisory Board formed by Vikas Multicorp.
• Earlier, he has served as a Non-Executive Independent Director for United Breweries and a member of the Board of Directors for IL&FS.
• Vikas Multicorp is a specialty chemical firm that plans to enter food protection and personal hygiene segment of the FMCG industry with an investment of Rs 100 crore.
• Brands in aluminum foil and tissues such as ‘Homefoil’, ‘Chapatiwrap’, ‘Cleanwrap’ & ‘Mistique’ were acquired by Vikas Multicorp.

4. India criticizes EU, Taiwan for violating due procedures in appointment of panelists

• India has criticized EU and Taiwan for violating due procedures in the appointment of panelists by trying to persuade WTO Director-General for the selection of panelists.
• However, EU and Taiwan say that they are right in asking WTO Director-General to compose panel as a minimum 20 days period for mutual agreement on panelists is over.
• As per the WTO principle, the selection of panelists should be made by mutual agreement between parties.
• Earlier, Dispute Settlement Body of WTO had agreed to form dispute panels against India’s import duties on cell phones and other ICT products.
• The EU and Taiwan have complained that India’s duties on ICT products violate its commitments under the IT Agreement-1 of December 1996.
• Current Director-General of WTO, Roberto Azevêdo will retire on 31 August 2020.
• Headquartered in Geneva, Switzerland and established on 1 January 1995, WTO is an intergovernmental organization that regulates international trade between nations.

5. Banks ordered to refund charges collected on electronic transactions

• Finance Ministry has ordered banks to refund charges collected on electronic transactions after 1 January 2020.
• Finance Ministry has also said that banks will not collect charges on electronic transactions in the future.
• The notification for no collection of charges on transactions through RuPay card, BHIM - UPI, UPI QR Code and BHIM- UPI QR code was issued by the Central Board of Direct Taxes (CBDT) last year.
• The provision for no collection of charges on the electronic transaction has been added to the Payment and Settlement System, PSS Act.

6. 8^th East Asia Summit Economic Ministers’ Meeting

• Virtual meeting of 8^th East Asia Summit Economic Ministers’ Meeting was organized on 28 August, 2020.
• Vietnam’s Minister of Industry and Trade Tran Tuan Anh chaired the virtual meeting.
• Economic Ministers from 10 ASEAN members participated in the meeting. India’s Commerce and Industry Minister, Piyush Goyal, US Trade Representative Robert Lighthizer and economic ministers from China, Japan, South Korea, Russia, Australia and New Zealand also took part in the meeting.
• At the meeting, the ministers agreed for an ASEAN Digital Integration Index. It will map readiness among ASEAN members for an integrated digital economy.
• Earlier, the International Monetary Fund has said that global GDP for 2020 will contract by 4.9%.
• In April, WTO has said that global trade volume growth in 2020 would decline by 13-32%.
• Association of Southeast Asian Nations (ASEAN) has 10 members. They are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. It was formed in 1967. Its secretary-general is Lim Jock Hoi.

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