29 Nov, 2015
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1) RBI Governor Raghuram Rajan was elected as the Vice-Chairman of the Bank of International Settlement (BIS) on 10 November 2015. With this he became the first Indian central bank Governor to become the vice-chairman of BIS. BIS is headquartered in which Swiss city? – Basel
Explanation: BIS is headquartered in Basel, Switzerland, and acts as a coordinating body among central banks to ensure global monetary and financial stability. Its board comprises all central bankers.
- Rajan, who has been a vocal votary for increased co-ordination among central banks, was elected vice-chairman of the entity and will have a three-year term.
- Rajan was appointed RBI Governor amid a currency crisis in 2013 which he was able to tackle soon after he assumed charge. He has been a strong critic of unconventional monetary policies such as quantitative easing and keeping interest rates at near-zero level for long.
2) Which senior ICICI Bank woman officer was appointed by Standard Chartered as the CEO of its India operations, as announced on 17 November 2015? – Zarin Daruwala
Explanation: 50-year Zarin Daruwala was working as the President of wholesale banking business in ICICI Bank till now. She resigned from the post on 17 November after she was hired as the CEO of the Indian operations of Standard Chartered.
- Zarin Daruwala is a chartered accountant and a company secretary. She had joined ICICI Limited in 1989 as a management trainee and worked in almost all verticals in the organisation that later became a bank in 1994.
- Standard Chartered is the oldest foreign bank in India. Daruwala is joining Standard Chartered at a time when the bank is in the news for the wrong reasons. It is axing 15,000 jobs worldwide, and some retrenchment will take place in India as well.
3) Union Govt. is poised to issue long-term government securities (G-secs), which will be the longest tenure securities to be brought out by the government. What will be tenure of these G-secs, as announced by the Reserve Bank of India (RBI) on 19 October 2015? – 40 years
Explanation: The proposal to bring G-secs with 40-year maturity will give it a longer time horizon to fund growth at lower costs. Till date, gilts with the longest tenure were of 30 years.
- One important factor associated with 40-year G-secs would be that these are being brought at a time when the rate of interest is heading south. The move by the government to issue 40-year G-secs is timed with the RBI’s decision to increase debt limit for foreign investors in government securities. This is expected to attract long-term foreign fund managers like pension funds, sovereign funds and insurance companies to buy these papers, market players said.
- A large chunk of investments by these institutions are usually parked in very long-term instruments with maturities of 20, 30, 40 years and more.
- According to RBI data, at present the G-secs with the longest maturity is of 30 years, which is scheduled to be redeemed in June 2045 and has an outstanding maturity amount of Rs. 30,000 crore.
4) Union Govt. on 6 November 2015 imposed how much Swachh Bharat Cess on all services? – 0.5%
Explanation: The Swachh Bharat cess of 0.5% will be imposed on all services now liable to service tax from 15 November 2015. The proceeds from this cess will be exclusively used for Swachh Bharat initiatives.
- Apart from this a 2% regional connectivity cess on international air travel and flights between metros and big cities will also be imposed. The cess for the creation of the regional connectivity fund (RCF) corpus will be levied from 1 January 2016 to enable the regional connectivity scheme to start from 1 April 2016.
5) What will be the total corpus of the new Financial Inclusion Fund (FIF) that was announced by the Reserve Bank of India (RBI) on 15 October 2015? – Rs. 2,000 crore
Explanation: Financial Inclusion Fund (FIF) will be setup to support developmental and promotional activities like financial inclusion and research and transfer of technology. It will be primarily used creating of financial inclusion infrastructure across the country, capacity building of stakeholders and creation of awareness to address demand side issues. The fund will not be utilized for normal business/banking activities.
- Earlier the RBI had two funds – Financial Inclusion Fund and Financial Inclusion Technology Fund for the similar objectives. It has now been decided to merge the two funds. The new fund will be in operation for another three years or till such period as may be decided by the RBI and the Government in consultation with other stakeholders.
- FIF will be administered by the reconstituted Advisory Board constituted by Union Government and will be maintained by NABARD.
6) What is the latest outlook of global Global rating agency Moody’s with regards to the Indian banking system as disclosed by the agency on 1 November 2015? – It will remain stable over the next 12-18 months
Explanation: Thus Moody’s has upgraded its outlook for the Indian banking system to stable from negative. This has been done on account of gradual improvement in operating environment.
- It is worth mentioning that Moody’s has maintained a ‘negative’ outlook for the Indian banking system since November 2011. Negative outlook was kept primarily due to deteriorating asset quality of Indian banks.
- Moody’s in its report, “Banking System Outlook – India: Gradual Improvement in Operating Environment Drives Stable Outlook,” said the stable outlook is based on its assessment of five drivers including improvement in operating environment and stable asset risk and capital scenario.
7) Which private sector bank on 27 October 2015 claimed that it has become the first bank to set up its IFSC banking operations at the highly-ambitious Gujarat International Finance Tec City (GIFT City)? – Yes Bank
Explanation: Yes Bank disclosed that it has started operations from its IFSC banking unit at the Gujarat International Finance Tec City (GIFT). It also claimed that it is the first bank to start operations in GIFT City by setting up an IBU (IFSC Banking Unit).
- GIFT City is being developed as India’s first International Financial Services Centre (IFSC). It is being conceptualised as a global financial and IT services hub and is being designed to be at or above par with globally-benchmarked financial centres like those at Shinjuku (Tokyo), Lujiazui (Shanghai), La Defense (Paris) and London Dockyards.
- GIFT City project, spread over 886 acres, including a 261-acre SEZ on the outskirts of Gandhinagar, is expected to involve investments of Rs 78,000 crore when completed by 2026.
8) Reliance Capital Asset Management (RCAM) on 21 October 2015 announced takeover of which global financial giant’s mutual fund business in India with which it becomes the exclusive fund manager for the government’s ambitious Central Public Sector Enterprises (CPSE) Exchange Traded Fund? – Goldman Sachs
Explanation: Reliance Capital Asset Management (RCAM) will acquire Goldman Sachs Asset Management India (GSAMI), which is the Indian mutual fund entity of global financial giant Goldman Sachs. The deal will be an all-cash deal of Rs. 243 crore and with this RCAM will acquire all 12 onshore mutual fund schemes of GSAMI with total asset under management of Rs. 7132 crore.
- The acquisition would also make Reliance MF the exclusive fund manager for the government’s ambitious Central Public Sector Enterprises (CPSE) Exchange Traded Fund. GSAMI was given the mandate last year to manage CPSE ETF through which the government has so far raised Rs. 4,000 crore by selling part of its stake in ten central PSUs as part of its disinvestment programme.
- RCAM is part of the Anil Ambani-led Reliance Group.
- Goldman Sachs had entered the Indian mutual fund industry in 2011 with acquisition of Benchmark Mutual Fund for Rs. 120 crore.
- With this, Goldman Sachs becomes the latest foreign player to exit the Rs. 13 lakh crore Indian MF market. In last few years, a number of global players have exited the Indian mutual fund business. Standard Chartered sold its mutual fund business in India to IDFC in 2008, Fidelity sold its mutual fund to L&T Finance in 2012, while last year HDFC MF acquired Morgan Stanley’s fund business here. Besides, Birla Sunlife has acquired ING Mutual Fund, Kotak MF has bought PineBridge Mutual Fund and Pramerica has taken over Deutsche Bank’s mutual fund business in India.
9) Indian Railways on 27 October 2015 received Rs. 2,000 crore from Life Insurance Corporation (LIC) as part of long-term funding tied-up with the state-run insurer to restart the investment cycle. LIC is altogether providing how much amount of long-term fund to Railways for capacity augmentation? – Rs. 1.5 lakh crore
Explanation: LIC handed over the first cheque of Rs 2,000 crore to Indian Railways Finance Corporation (IRFC) towards financial assistance as per the agreement signed earlier in March 2015.
- The investment by LIC, to be made through bonds issued by railway entities such as IRFC, would be channelised in capacity augmentation projects. The bonds will come with a five year moratorium on interest and loan repayment.
- Railways over the years, has failed to execute a large shelf of its sanctioned projects due to non-availability of sufficient resources.
- With significant time and cost over-runs on key projects plaguing revenue realisation, rail minister Suresh Prabhu had announced a new source of funding – Extra Budgetary Resources-Institutional Finance (EBR-IF) – in this year’s rail budget. The LIC funding is expected to be the main source of EBR-IF.
10) Which company on 27 October 2015 became the first corporate to sign the revised listing agreement with the BSE as mandated under SEBI’s newly introduced Listing Regulation? – Reliance Industries Limited (RIL)
Explanation: During September 2015 the Securities and Exchange Board of India (SEBI) came out with new listing regulations and a six-month deadline for all companies in which it prescribed the listing agreement.
- Earlier, the listing agreement was a bilateral agreement between the stock exchange and the company, and market regulator SEBI didn’t have regulations on this. Thus, each company’s agreement with the stock exchange could be at a variance and lacking the full force of SEBI’s rigour.
- With the signing of the agreement with BSE, RIL is the first listed company to conform to new listing norms of the SEBI.
- SEBI’s new listing regulations were notified on 2 September 2015 and the same are effective from 1 December 2015.
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