Banking and Financial Awareness – 29

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16 Jul, 2013

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New-banking-license

1) How many applications were received by the Reserve Bank of India for new banking licenses in the private sector till 1 July 2013, which was the deadline for submission of applications? – 26 (The 26 applicants include players from the corporate sector, govt.-owned institutions, NBFCs (non-banking financial companies) and micro-finance institutions)

  • 2) Telecom Commission, an inter-ministerial body, on 2 July 2013 gave its approval for raising foreign direct investments (FDI) limit in the telecom sector to 100%. What is the present FDI limit? – 74% (Present FDI limit is 74%, where 49% of investment in a telecom entity can be done through automatic route and FIPB approval is required for raising further stake. This approval of Telecom Commission however needs cabinet approval. This approval is expected to provide fresh funds to telecom operators to lower their financial burden. According to a recent presentation of industry body COAI, the debt of the telecom industry stood at Rs. 1,85,720 crore at the end of 2011-12)

  • 3) Which Indian corporate become the first to sell a long-tenure rupee debt instrument of 50-year to raise money? – Mahindra & Mahindra (M&M recently raised Rs. 500 crore through sale of a 50-year unsecured bond sale programme, thus becoming the first Indian corporate to do so. This bond issue of M&M is indicative of the increasing confidence of investors in corporate India’s long term prospects. The 50-year bonds with bullet redemption will carry an interest rate of 9.55% per annum)

  • 4) The proposal of which private sector bank to raise Rs 2,650 crore through qualified institutional placement (QIP) from overseas was cleared by the Cabinet Committee on Economic Affairs (CCEA) on 27 June 2013? – YES Bank (YES Bank proposes to increase the foreign equity participation upto 60 per cent through a QIP of its equity shares to eligible non-resident investors. The proposal was cleared by the Foreign Investment Promotion Board (FIPB) in April, but since the investment was of more than Rs 1,200 crore, a CCEA nod was required which was given on 27 June)

  • 5) The Cabinet Committee on Economic Affairs (CCEA) headed by Prime Minister Manmohan Singh approved Oil Ministry’s proposal to price all domestically produced natural gas as per a formula suggested by a panel. This resulted in near doubling of natural gas prices to $8.4 from 1 April next year, a move which will cause power tariffs, urea costs and CNG prices to go up. This approval was based on suggestions of a panel headed by – Dr. C. Rangarajan, Prime Minister’s Economic Advisor (This pricing formula for natural gas would come into effect from 1 April 2014, just when Reliance Industries Limited (RIL)’s KG-D6 formula of $4.2/mmBtu runs out. The Rangarajan formula would be applicable for 5 years)

  • 6) Status of the public sector enterprise – Mangalore Refinery and Petrochemicals Limited (MRPL), was upgraded recently. What is its new status? – Schedule ‘A’ enterprise (It was earlier Schedule ‘B’ enterprise and its upgradation reflects its improved profitability and turnover. MRPL can now aspire for ‘Navratna’ status with this upgradation. MRPL is a unit of ONGC)

  • 7) SEBI on 25 June 2013 approved new set of rules, making it mandatory for the companies to buyback at least 50% of their repurchase offers with the objective of safeguarding the interest of public shareholders. What was the existing limit of the mandatory buy-back? – 25% (SEBI also changed the period of buyback and from now buyback is to be completed in 6 months against existing norm of 12 months)

  • 8) The Cabinet Committee on Economic Affairs (CCEA) on 21 June 2013 approved the proposal to allow power producers to pass on higher cost of imported coal to consumers, which is expected to result in an increase in power tariff for consumers by a minimum of 15 to 17 paise per unit. This pass through mechanism will be applicable for thermal power plants commissioned after which year? – 2009 (Capacity of power plants commissioned after 2009 is approximately 78,000 megawatts

  • 9) What was the average monthly per capita expenditure (MCPE) of the poorest of the poor in the country, as stated in a report of 68th round of National Sample Survey Office (NSSO) released on 20 June 2013? – Rs. 521.44 in rural areas and Rs. 700.50 in urban areas (This report also stated that these poorest of the poor persons constitute roughly about 5% of the total population of the country. This effectively means that the poorest of the poor survive on just Rs. 17 per day in rural areas and Rs. 23 a day in urban areas. NSSO’s 68th round of survey is based on samples consisting of 7,496 villages in rural India and 5,263 urban blocks except some remote areas, during July 2011-June 2012)

  • 10) Which financial services company (among those also involved in gold business), became the first company in the country to suspend gold sales across all its businesses? – Reliance Capital (According to a statement made by the company on 21 June 2013, the company suspended sale of gold coins and gold in all other available forms, including as an investment product across all its businesses and subsidiaries. Of late there have been growing concerns over huge gold imports hurting the country’s economic strength)

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