Banking Awareness of 8 and 9 March 2024

Topic: Corporates/Companies

1. Corporate Affairs Ministry (MCA) has revised upwards threshold criteria for merger filings under Competition law.

• In case of assets, the de-minimis threshold has been revised upwards from Rs 350 crore to Rs 450 crore.
• In case of turnover, the de-minimis threshold has been revised upwards from Rs 1,000 crore to Rs 1,250 crore.
• Combinations which come under this threshold will be exempted from merger filing.
• Until now, de-minimis (small target exemption) is available to transactions in which the asset value is not more than Rs 350 crore or revenue is not more than Rs 1,000 crore.
• Presently, not all Merger and Acquisition (M&A) transactions need to be notified to the Commission (merger filing).
• Combinations would be used to describe M&As that satisfy the asset and turnover standards outlined in Section 5 of the Competition Act.
• The only M&As that need to be approved by the Commission and notified before they can be completed are those that meet the criteria for a combination.
• Simultaneously, the Ministry has increased the jurisdictional thresholds that require notification to and approval from the Competition Commission of India (CCI) prior to the completion of transactions.  

Topic: Taxation

2. The list of payments received by IFSC entities for TDS relief has been expanded by the IT Department.

• Receipts from 14 different types of units established at the International Financial Services Centre (IFSC) have been made free from Tax Deducted at Sources (TDS) according to the Income Tax Department.
• The revised norm will take effect on April 1.
• In addition to others, the units include banks, custodians, insurance intermediaries, financing companies, broker dealers, investment advisors, trade finance services, and fintech.
• Professional fees, commissions, dividend income, interest revenue from external commercial borrowing, brokerage income, referral fees, investment advice fees, credit rating fees, trusteeship fees, and technical fees are just a few examples of the receipts.
• Nevertheless, meeting certain conditions will be necessary in order to avoid the need for TDS.
• The payee must provide the payer with a statement-cum-declaration in Form No. 1 detailing prior years that are pertinent to the assessment years in question.
• Another condition is that after receiving a copy of Form No. 1 from the payee, the payer is not permitted to deduct tax from any payments paid to or credited to the payee.

Topic: Banking/Financial/Govt Schemes

3. The benefits under the RoDTEP scheme has been extended by the centre to EOUs, units in SEZs and AA holders.

• Export oriented units (EOUs), units in special economic zones (SEZs) and Advance Authorisation (AA) holders will have these benefits.
• The extension of Remission of Duties and Taxes on Exported Products (RoDTEP) benefits to additional sectors is currently till September 30, 2024.
• These additional and uncovered sectors form approximately 25% of India’s exports.
• RoDTEP scheme is a scheme for refunding embedded taxes and duties on exported products.
• It was started in January 2021. It has provided support of Rs 42,000 crore to more than 10,500 export items.
• In the current fiscal year, budget of the scheme is Rs 15,070 crore.
• RoDTEP has been announced for over 8,500 products.
• Under this scheme, Central and State duties, taxes and levies on input products are refunded to exporters. Presently, RoDTEP rates range from 0.3% to 4.3%.

Topic: MoUs/Agreements

4. RBI and Bank of Indonesia has signed Memorandum of Understanding (MoU).

• The MoU is for setting up a framework to promote the use of local currencies for cross-border transactions.
• With the help of this framework, exporters and importers would be able to pay in their respective currencies.
• This would facilitate the development of an Indian Rupee (INR) and Indonesian Rupiah (IDR) foreign exchange market.
• Under the MoU, all current account transactions and permissible capital account transactions are covered.
• RBI Governor Shaktikanta Das and Bank Indonesia Governor Perry Warjiyo signed the MoU.

Topic: Banking/Financial/Govt Schemes

5. In the current year, enrollment under PMFBY has increased by 27%.

• In the last 8 years, 56.80 crore farmer applications have been enrolled under the Pradhan Mantri Fasal Bima Yojana (PMFBY). 23.22 crore farmers have received claims.
• Pradhan Mantri Fasal Bima Yojana is a demand-driven scheme for farmers.
• During 2021–22 and 2022–23, the number of farmer applications has grown by 33.4% and 41% year-on-year, respectively.
• In 2023-23, the enrolment under the scheme increased by 27%. 42% of the total farmers insured under the scheme in FY 2023–24 are non-loaned farmers.
• Around Rs 500 was paid as claims to farmers under PMFBY for every 100 rupees of premium paid.
• PM Fasal Bima Yojana was launched in 2016. It is the third largest scheme globally in terms of premium.
• The PMFBY is successfully fulfilling the objectives of farmers, especially in natural calamity-hit seasons.
• The Department of Agriculture & Family Welfare is monitoring the implementation of PMFBY.

Topic: MoUs/Agreements

6. NPCI International Payments and Nepal’s Fonepay Payment Service have entered into an agreement.

• The agreement is for cross-border UPI transactions between India and Nepal.
• The agreement will facilitate QR-code based, person-to merchant (P2M) UPI transactions between India and Nepal.
• In the first phase, Indian consumers will be able to make UPI payments across business stores in Nepal to merchants on the Fonepay Network.
• Fonepay is a Payment System Operator (PSO). It is a subsidiary of the F1Soft Group.
• It is regulated by Nepal Rastra Bank (NRB). It is Nepal’s first mobile payment network, which is licensed as a PSO.
• A week ago, NPCI International signed a MoU with Greece-based Eurobank S.A.
• This MoU was signed to streamline cross-border payments between Greece to India using UPI.  

Topic: Reports and Indices

7. ‘Women, Business and the Law 2024’ report has been released by the World Bank Group.

• According to this report, legal rights for women around the world are significantly lower than initially perceived.
• Women enjoy less than two-thirds or 64 per cent of the rights enjoyed by men.
• Earlier, it was estimated that women had 77 per cent of the rights enjoyed by men.
• This report highlights an in-depth analysis of the challenges obstructing women’s entry into the global workforce.
• The index measures performance on legal frameworks across 10 indicators: Safety, mobility, workplace, pay, marriage, parenthood, childcare, entrepreneurship, assets and pension.
• No country in the world ensures equal opportunities for women.
• India’s rank has improved to 113 with a score of 74.4 per cent.  India’s rank had declined from 125 in 2022 to 126 in 2023.
• As compared to men, Indian women have 60 per cent of the legal rights.
• India has performed better than other South Asian countries, where women have only 45.9 per cent of the legal protections enjoyed by men.
• In the indicator evaluating laws impacting women’s pay, India received the lowest score.

Topic: Indian Economy/Financial Market

8. According to NSO data, India's unemployment rate is expected to fall to 3.1% in 2023.

• On 4 March, the latest employment-unemployment indicators report was released by the National Statistical Office (NSO).
• The report showed that India's unemployment rate is expected to decline from 3.6% last year to 3.1% in 2023, reflecting continued improvement in labour markets.
• During the calendar year 2023 (CY23), the unemployment rates in both rural and urban areas are expected to decline to 2.4% and 5.2% respectively from 2.8% and 5.9% in 2022.
• The unemployment rate for rural women (1.9%) in 2023 was lower than that of rural men (2.7%), while in urban areas, the rate was higher for women (7.5%) than men (4.4%).
• The unemployment rate under the so-called 'usual status' for persons aged 15 and above over the one year has seen a decline for the second consecutive year since 2021.
• The latest survey also showed that the labour force participation rate (LFPR) increased significantly to 59% in 2023 from 56.1% in 2022 at the national level.
• Rural LFPR in 2023 was 63.4%, significantly higher than 58.5% in 2022, while its urban counterpart increased from 50% to 51.4% over the same period.

Topic: Corporates/Companies

9. The government will sell a 7% stake in NLC India through offer-for-sale.

• On 6 March, an official said that the government will sell a 7% stake in state-run lignite producer NLC India through the offer-for-sale (OFS) route, including a green shoe option of 2%.
• A green shoe option is a provision in the IPO underwriting agreement that gives the underwriter the right to sell more shares than originally planned.
• Even government sells a 7% stake at the floor price, it will get about ₹2,058 crore.
• The OFS for non-retail investors opened on March 7, while retail investors can place bids on March 11.
• The floor price for the offer has been set at ₹212 per equity share, a discount to the closing price of the company's shares on BSE on March 6 (Rs 226.7 per share).
• The government sold 69,331,830 equity shares of face value Rs 10 each to non-retail investors only on March 7, which is 5% of the total paid-up equity share capital.
• In addition, the government proposes to sell 27,732,732 equity shares, representing another 2% stake, to retail investors and those non-retail investors who choose to put forward their unallotted bids.
• NLC India Limited:
  • It was formerly Neyveli Lignite Corporation India Limited.
  • It is a central public sector undertaking under the administrative control of the Ministry of Coal. It was founded in 1956.

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