Current Affairs September 2017 - Finance

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News 1 - ICEX launched World’s First Diamond Futures Contracts

The Indian Commodity Exchange (ICEX) launched the world's first diamond futures contracts to provide exporters with a hedging tool. ICEX has launched 1-carat diamond futures contract for delivery in November and followed by contracts with monthly settlements. It has over 103 registered members.

India is a global diamond-polishing hub where 14 out of every 15 rough diamonds in the world are polished. The Managing Director (MD) and Chief Executive Officer (CEO) of ICEX is Sanjit Prasad.

News 2 - Axis Bank offers 12 EMIs off on ‘affordable housing’ loan bouquet

Axis Bank has announced the addition of a unique home loans to their already strong ‘affordable housing’ segment. Shubh Aarambh Home Loans will enable borrowers applying for loans up to Rs. 30 lakhs to avail additional benefit of 12 EMIs waiver.

The customer with regular repayment gets 12 EMIs waived − four EMIs each after 4^th, 8^th and 12^th year from the date of first disbursement.

The effect of EMI waiver shall be given in the form of reduction in tenure.

News 3 - Freyr Energy tied up with Axis Bank

Solar energy services company Freyr Energy has tied up with Axis Bank to offer term loans ranging from ₹5 lakh to ₹50 lakh for tenures up to five years. These will be given for solar rooftop installations in Telangana and Andhra Pradesh.

The loans will be given to MSMEs and self-employed individuals to install Freyr rooftop solar plants for industrial and commercial purposes.

Freyr has installed over 800 solar systems across 14 States in India and Ghana.

News 4 - NTPC inked Rs 3,000-cr Term Loan Agreement with ICICI Bank

NTPC signed a term loan agreement for Rs.3000 Crore with ICICI Bank Ltd. The loan has a door-to-door tenure of 15 years and will be utilised to part finance the capital expenditure of NTPC.

NTPC commissioned 3,845-mw capacity and added 2,190 mw to its commercial capacity during 2016-17.

The installed capacity of the group is 51,671 mw as on 31 July and has over 28,000 mw of capacity under construction. The CMD of NTPC is Gurdeep Singh.

News 5 - Ujjivan SFB Received Scheduled Bank Status from RBI

Ujjivan Small Finance Bank Limited has been included in the Second Schedule to the Reserve Bank of India Act, 1934 and thus has attained the status of a Scheduled Bank. It has 65 full-fledged brick and mortar branches.

Ujjivan SFB had commenced its operations as a Small Finance Bank (SFB) from February 2017.

It is a wholly owned subsidiary of Ujjivan Financial Services Limited. The MD and CEO of Ujjivan SFB is Samit Ghosh.

News 6 - Fincare Small Finance Bank commenced Banking Operations

Karnataka-based Fincare Small Finance Bank commenced its operations with about 25 operational branches across Gujarat, Tamil Nadu, Karnataka and Andhra Pradesh.

The bank had received final small finance bank (SFB) licence from the Reserve Bank of India (RBI) in May 2017. The Managing Director and Chief Executive Officer of the bank is Rajeev Yadav.

The bank had a loan portfolio of Rs. 1,314 crore at the end of March and 9 lakh clients.

News 7 - Karnataka Bank bagged IDRBT Banking Technology Excellence Awards 2016-17

Karnataka Bank has bagged “Best Bank Award among Small Banks for use of Technology for Financial Inclusion” in the 13^th IDRBT Banking Technology Excellence Awards 2016-17.

The Karnataka Bank Limited is a major banking institution based in the coastal city of Mangaluru in Karnataka. It currently has a network of 770 branches, 1380 ATM's and 110 e-lobbies/mini e-lobbies.

The tag line of the bank is "Your Family Bank across India". The MD & CEO is Shri Mahabaleshwara M. S.

News 8 - RBI included HDFC Bank in 'too big to fail' List

The Reserve Bank of India (RBI) has designated HDFC Bank Ltd as Domestic Systemically Important Banks (D-SIBs). The ‘too big to fail’ lenders are referred to as D-SIB. RBI had classified State Bank of India and ICICI Bank Ltd as D-SIBs in August 2015.

The RBI has adopted a system by which banks are plotted into four buckets based on a lender’s systemic importance scores in ascending order. The banking regulator prescribes higher capital requirements in terms of additional Common Equity Tier 1 (CET 1) capital for such entities. Banks with assets that exceed 2% of GDP will be considered part of this class of lenders.

News 9 - RBI gives nod to DBS Bank to operate as wholly owned subsidiary in India

The Reserve Bank of India (RBI) has approved DBS Bank Ltd to offer banking services in India through the wholly owned subsidiary (WOS) model.

DBS became the second foreign bank to operate through the WOS model in India after State Bank of Mauritius. Foreign banks operating through a WOS will be treated at par with local banks and will be allowed to acquire private lenders in India. The model will also allow the banks to open branches more freely, subject to some regulations.

News 10 - IRDAI approves IPO of Reliance General Insurance

Reliance General Insurance Co Ltd has received in-principle approval from the Insurance Regulatory and Development Authority of India (IRDAI) for its initial public offering (IPO).

RGI is a 100% subsidiary of Reliance Capital, which plans to dilute about 25% of its holding in the insurer. The valuation of the company is expected to be about Rs. 7,000 crore. The company’s gross direct premium stood at Rs. 3,935 crore in the year ended March, 2017, while profit before tax stood at Rs. 130 crore.

News 11 - RBI released 2017 list of Domestic Systemically Important Banks

In addition to the SBI and ICICI Bank, which continue to be identified as Domestic Systemically Important Banks (DSIBs), the Reserve Bank of India has also identified HDFC Bank as a D-SIB, under the same bucketing structure as last year.

The additional Common Equity Tier 1 (CET1) requirement for D-SIBs has already been phased-in from April 1, 2016. It will become fully effective from April 1, 2019. The additional CET1 requirement will be in addition to the capital conservation buffer.

(For further details − https://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=41556)

News 12 - Exide Life Insurance joined Punjab & Maharashtra Co-operative Bank

Exide Life Insurance announced a partnership with Punjab & Maharashtra Co-operative Bank Ltd (PMC Bank) to offer its protection and savings products to the customers of PMC bank. With this tie up, Exide Life Insurance consolidates its leadership in the co-operative bank segment.

In a span of 32 years, the Bank expanded its network to 127 branches across six states. Its wide network will facilitate greater brand awareness for Exide Life Insurance and the latter’s stronghold in insurance portfolios will aid PMC Bank with higher customer engagement.

News 13 - SEBI gave nod to SBI Life Insurance for launching IPO

SBI Life Insurance has been given approval from Securities and Exchange Board of India for an IPO (Initial Public Offering) of up to Rs 8,400 crore ($1.3 billion). Nevertheless, the final nod for the launch period of the IPO is subjected to an approval from the Registrar of Companies. State Bank of India will sell off 8 crore shares and BNP Paribas Cardif will sell off 4 crore shares, because IPO will include 12% of the insurer’s equity capital summing up to 120 million secondary shares.

SBI Life Insurance is a joint venture life insurance company between State Bank of India and BNP Paribas Cardiff.

News 14 - PNB and BSNL join hands to roll out open mobile wallet Speedpay

Punjab National Bank and state-run owned BSNL joined hands to roll out open mobile wallet Speedpay across 10 states in the country.

Under the agreement, BSNL will expand Speedpay services in Punjab, Chandigarh (UT), Haryana, Jammu and Kashmir, Himachal Pradesh, Uttar Pradesh, Bihar, West Bengal, Jharkhand and Uttarakhand. PNB's Speedway wallet will operate like any other mobile wallet for paying bills; recharging phone besides its users will be able to deposit and withdraw money from authorised retail outlets. In addition, Speedway users will be able to operate Internet banking services from the application.

News 15 - ICICI Lombard received SEBI approval for IPO

ICICI Lombard General Insurance Co Ltd has received approval from the Securities and Exchange Board of India (SEBI) for its initial public offering (IPO).

ICICI Lombard General Insurance Co. plans to raise Rs 6000 crore through the initial public offer. The general insurer has appointed Bank of America Merrill Lynch, ICICI Securities Ltd,

IIFL Holdings Ltd as lead merchant bankers. SEBI has approved proposals of IPOs from 24 different companies so far this year.

News 16 - Bharat Financial Inclusion inked exclusivity agreement for merger with IndusInd Bank

Bharat Financial Inclusion signed an exclusivity contract with IndusInd bank for a possible merger of the two companies.

The agreement is considered to have been made for an all-stock deal. The swap ratio is likely to be set at 1.5 shares of Bharat Financial Inclusions for every one share of IndusInd bank.

The implied price is likely be set at 10-12% premium over the prevailing market price of Bharat Financial Inclusion. Bharat Financial has 1,408 branches and a loan book of Rs. 10,971 crore.

News 17 - SEBI Advisory Committee to discuss Trading Hours Extension

The Secondary Market Advisory Committee set up by the Securities and Exchange Board of India (SEBI) is likely to discuss a proposal for extending stock market trading hours.

The stock market in India currently opens at 9 am and closes at 3.30 pm.

It is being planned to extend the trading hours up to 7.30 pm in order to align domestic trading with global markets. The 19-member committee is led by Jayanth R. Varma, who is a Professor at IIM Ahmedabad.

News 18 - RBI to introduce Rs. 100 Coin to mark MG Ramachandrans birth centenary

The Reserve Bank of India, RBI, will introduce 100 rupees coin to mark the birth centenary of AIADMK founder Late Dr. M G Ramachandran.

The face of the coin will bear Lion Capital of Ashoka Pillar in the centre with Satyamev Jayate inscribed below on it in Devnagari script. It will also bear the rupee symbol and denominational value of 100.

On the reverse side, the portrait of Dr MG Ramachandran will be in the centre. The standard weight of the coin will be 35 grams.

News 19 - Paytm Payments Bank collaborates with NPCI for RuPay digital card

Paytm Payments Bank (PPB) has collaborated with the National Payments Corporation of India (NPCI) to launch a RuPay-powered digital debit card.

Customers can use the debit card to transact at all merchants who accept credit and debit cards. It will provide a free insurance cover of up to Rs. 2 lakh in the case of death or permanent total disability. As a payments bank, PPB can take a demand deposit of up to Rs. 1 lakh per customer, but it cannot undertake lending activities.

News 20 - ADB, IndusInd Bank Partner to Provide Up to $200 Million for Women in Less Developed States of India

The Asian Development Bank (ADB) has signed a loan of up to $200 million with IndusInd Bank to provide finance to low income women borrowers in rural India. The 7-year senior loan will go toward IndusInd Bank’s microfinance activities.

At least 95% of ADB’s funding for the project will be used to provide credit to women borrowers, and at least 70% of the number of loans will be deployed in India’s less developed states. A capacity building technical assistance of $1 million is expected to be part of the package.

News 21 - India’s Forex Reserves surpassed historic $400 billion for the first time

RBI data reported that India’s foreign exchange reserves surpassed historical $400 billion reserve for the first time. This has mainly happened due to huge inflows through foreign direct investments in projects and portfolio investment in the capital market.

In 2008, India reached $300 billion mark and now after 9 years, reserves have reached $400 billion.

This has also elevated India’s ranking in the forex reserve to sixth position ahead of Taiwan, Brazil and euro zone.

News 22 - FM launched Google’s UPI-based digital payment service Tez

Finance Minister Arun Jaitley launched Google’s Unified Payments Interface, UPI-based digital payment service Tez in New Delhi. Tez will help in turning compulsion for digitisation post-demonetisation into convenience.

Tez by Google and other service providers will make a major change in the digital payments landscape in India. Google Tez supports several local languages including Hindi, Bengali, Gujarati, Kannada, Marathi, Tamil and Telugu. It is an initiation towards ‘Digital India’.

News 23 - BrandZ Top 50 brands Report topped by HDFC Bank

WPP Plc and Kantar Millward Brown released top 50 brands of India, where HDFC Bank topped the list followed by Airtel at 2^nd spot and State Bank of India at 3^rd place. HDFC Bank retained the topmost position for the consecutive second year. According to research agency Kantar Millward Brown, HDFC bank improved its brand value from USD 9.4 Billion to USD 18 Billion since 2014.

According to report, India’s brand values increased by 21%, financial services category increased its value by 26% and auto sector increased by 23%.

News 24 - Amazon in union with Bank of Baroda to offer micro-loans to its clients

Indian arm of the US e-commerce player Amazon in union with Bank of Baroda will offer micro loans of up to Rs. 25 lakh to its marketplace sellers. The loans will be offered on invite-only basis at an annual interest rates varying between 10.45% and 30% for 3-5 days.

Bank of Baroda targets to involve 15 to 20% of Amazon sellers on this programme in the next one year. This deal will help Bank of Baroda in its PSL targets under SME category and help to meet specific needs of SMEs for e-commerce business.

News 25 - Airtel Payments Bank to Integrate UPI digitally

Airtel Payments Bank became first payments bank in India to integrate the Unified Payments Interface (UPI) on its digital platform, to enable transactions on digital platforms. This will ease instant money transfers irrespective of the fact that merchants are in online or offline mode.

Airtel payments bank customers can easily link their bank accounts on BHIM app and make UPI payments or link their Airtel Payments Bank savings accounts to any of their UPI handles. Airtel Payments bank was the first in India to receive a payments bank license from the RBI.

News 26 - SEBI permits Realty, Infra Trusts to issue Bonds

The Securities and Exchange Board of India (SEBI) permitted Infrastructure Investment Trusts (InvITs) and Real Estate investment Trusts (REITs) to raise capital by issuing bonds. Earlier, these trusts could only raise funds through equity. SEBI also allowed strategic investors to participate in REITS, in line with InvITs.

Real estate investments trusts are listed entities that primarily invest in leased office and retail properties, allowing developers to raise funds by selling completed buildings to investors.

News 27 - World's Biggest Wealth Fund touched $1 Trillion Value for first time

Norway's sovereign wealth fund, the largest in the world, officially hit the value of $1 trillion for the first time. The fund is managed by Norwegian central bank, Norges Bank.

The fund was launched in 1990 to manage the Norwegian state's oil revenues. The growth in the value of the fund was mainly driven by the appreciation of the world's major currencies against the dollar and a good stock market health. It has stakes in nearly 9,000 companies with 1.3% of the world's market capitalisation and 2.3% in Europe.

News 28 - Peer-to-peer lenders to be treated as NBFCs

The Reserve Bank of India (RBI) has said that peer-to-peer lenders (P2P) will be treated as non-banking financial companies (NBFCs). These P2P companies provide loan facilitation services through online platform.

The P2P companies provide a platform or market for borrowers and lenders. Lenders as well as the borrowers have to register to use the platform. The popular P2P lending platforms in India are LenDen Club, Faircent, Qbera, Lendbox, Rupaiya Exchange and Monexo.

News 29 - FTSE SBI Bond Index Series launched

State Bank of India (SBI), in partnership with FTSE Russell, has launched a new index series at the London Stock Exchange called as FTSE SBI Bond Index series.

It aims to enable investors and market participants to track Indian bond movement.

The index will act as a key benchmark for Indian debt for foreign investors looking to invest in Indian debt market. FTSE Russell is a global data and analytics provider.

News 30 - Masala Bonds to be treated as ECB: RBI

The Reserve Bank of India has relaxed norms for issuance of rupee-denominated overseas bonds, popularly known as masala bonds. The bonds, henceforth, would be treated as external commercial borrowings (ECBs).

It will help to free up more investments by foreign portfolio investors (FPIs).

The masala bonds will no longer form part of the limit for FPI investments in corporate bonds. FPI investment limit for corporate bonds will increase to Rs. 2,44,323 crore from January 1.

News 31 - SBI launched Chatbot

State Bank of India (SBI) has launched a chatbot to handle queries on the bank’s retail products from visitors to its website. The Artificial Intelligence-powered chat assistant was launcjed in association with Artificial intelligence (AI) banking platform Payjo.

The chat assistant, known as SBI Intelligent Assistant, or SIA, will help customers with everyday banking tasks just like a bank representative. The offering is to handle nearly 10,000 enquiries per second, or 864 million in a day − about 25% of the queries processed by Google every day.

News 32 - IBBI registered National E-Governance Services Ltd as Information Utility

The Insolvency and Bankruptcy Board of India (IBBI) registered National E-Governance Services Limited (NeSL) as an Information Utility (IU) under the IBBI (Information Utilities) Regulations, 2017. With this NeSL has become the first IU registered by the IBBI and the registration is valid for five years from the date of registration.

Information Utility stores financial information that helps to establish defaults as well as verify claims expeditiously and facilitates completion of transactions under the Insolvency and Bankruptcy Code in a time bound manner.

News 33 - P-notes investment hits over 7-year low of Rs 1.25 lakh crores

Investments in the domestic capital market through participatory notes, P-notes, hit a seven-and-a-half year low of 1.25 lakh crore rupees at August-end this year. This was because of stringent norms put in place by capital market regulator, SEBI.

Of the total investments in August, P-note holdings in equities stood at 88,911 crore rupees, while the rest were in debt and derivatives markets. P-notes are issued by registered foreign portfolio investors to overseas players who wish to invest in the Indian markets without registering themselves directly. Nevertheless, they do need to go through proper due diligence.

News 34 - 700 new FPIs registered with SEBI in 1^st 4 months of 2017-18

More than 700 new foreign portfolio investors (FPIs), registered with SEBI in the first four months of 2017-18. This follows nearly 3,500 new FPIs registering with SEBI in the previous financial year. The figures indicate that India remains an attractive destination.

According to data from capital market regulator, SEBI, the number of FPIs with the regulator's approval rose to 8,511 at the end of July 2017, from 7,807 at March-end.

Recently, Sebi raised FPIs’ investment limit for government debt, permitted them to invest in unlisted corporate debt as well as securitized debt instruments and allowed direct entry to well-regulated foreign investors to invest in corporate bonds.