General Awareness

BUSINESS AND ECONOMY - June 2020

Jun 2020

Jul 11, 2020

MCX Launches Gold Mini Options

The Multi Commodity Exchange (MCX) launched Gold Mini options after getting approval from the regulatory body Securities and Exchange Board of India (SEBI). The regulatory body approved the launch of the Gold Mini option with 100 grams of gold bars.
The Commodity Exchange said that the Gold Mini operations August 2020, September 2020 and October 2020 contracts are available for trading from 10th July. A maximum of 100 lots can be ordered in a single order.
It is a financial product whose value is linked with metal. In case of Gold Mini there will be 100 gram rods and the price of derivatives contract will be linked to the price of rods. The expiry date for the Gold Mini options is the same as the Gold Mini Future, i.e. the 5th of every month.
Members can order a maximum of 100 lots for a single order. Gold Mini and Silver Kilo options were launched by the stock exchange BSE on 1st June, while NSE started Gold Mini options on 8th June.

IRDAI Removes Rs. 5 lakh Cap on Sum Insured for Arogya Sanjeevani Policies Amid COVID-19

The Insurance Regulatory and Development Authority of India (IRDAI) allowed all general and health insurance companies to increase the sum insured on the Standard Individual Health Insurance Product namely "Arogya Sanjeevani" beyond Rs. 5 lakh.
This decision has been taken in view of the increasing cost of healthcare in the country amid the covid-19 pandemic.
Arogya Sanjeevani, is a product for which all insurers are mandated to offer had a cap of Rs. 5 lakh on the sum insured and the minimum cover for it was of Rs. 1 lakh. The regulator has now allows insurers to offer sum insured as low as Rs. 50,000 with no upper limit. The sum insured has to be in multiples of Rs. 50,000.

Honda to Invest In China's CATL, to Jointly Develop EV Batteries

Japan's Honda Motor Co Ltd will buy a 1% stake in Chinese electric vehicle (EV) battery maker Contemporary Amperex Technology (CATL) and the two will jointly develop EV batteries.
The move comes at a time when auto manufacturers and EV battery makers are joining forces in pursuit of an electric future. CATL, based in Ningde, said last year that it would develop batteries with Honda and also supply batteries to Tesla, Toyota and Volkswagen AG.
Honda and CATL said in a statement that they would develop battery technologies and research a battery recycling business. Honda will launch its first EV with CATL's battery in China in 2022 and will expand the partnership with stable EV battery supply globally in the future.

People's Bank of China Cuts Stake in HDFC Ltd

As per reports, China's central bank has sold at least some of its stake in India's Housing Development Finance Corp.
The People's Bank of China has dropped off the list of investors holding at least a 1% stake in the company as of end-June. The PBOC held about 17.5 million shares, accounting for a 1.01% shares, at end-March. It cannot be ascertained if the Chinese central bank continues to holds any stake in the mortgage lender or not.
PBOC had increased its stake in India's largest shadow lender in the 12 months ended March. India in April tightened rules on investments in its companies from neighboring nations including China in a bid to reduce the risk of opportunistic takeovers amid coronavirus-led share price drops.
It is mandatory for publicly-traded companies in India to disclose shareholdings of more than 1% at the end of every quarter. HDFC's global institutional holders as of the latest statement include the Government of Singapore as well as funds run by Vanguard and Invesco Oppenheimer.

Jul 10, 2020

CBDT Signs a MoU with SEBI for Data Exchange

The Central Board of Direct Taxes (CBDT) and Securities and Exchange Board of India (SEBI) signed a Memorandum of Understanding (MOU) for the data exchange between the two organisations via video conference.
It facilitates sharing of data and information automatically between the two organisations on a regular basis.
On request and suo moto basis, both organisations exchange information available in the databases for doing their functions under various laws.
The MoU comes into force from the date of signing.
CBDT and SEBI are already collaborating through various existing mechanisms.
A Data Exchange Steering Group is constituted and will meet periodically to review the status of data exchange and improve effectiveness of the data sharing mechanism.
The MoU marks a new era of cooperation and synergy between SEBI and CBDT.

India Plans to Enhance Trade with Bangladesh

India is adopting a multi-pronged strategy to enhance trade and business partnership with Bangladesh amid Beijing's recent efforts to woo Dhaka with duty-free access to its products.
While Chinese trade concessions can push Bangladesh into a "dual deficit and debt trap", India is activating various connectivity initiatives for seamless movement of Bangladeshi products to the landlocked north-eastern states and other parts of India.
According to experts who focus on cross-border trade and connectivity issues, there is a major push to connectivity initiatives via sea ports, inland water transport, rail and highways that will enable Bangladesh to connect with Bhutan and Nepal markets too along with India. Both India and Bangladesh are undertaking various measures to restore the pre-1965 rail and other connectivity links.
Bangladesh is India's biggest trade partner in South Asia. Bilateral trade between India and Bangladesh has grown steadily over the last decade. India's exports to Bangladesh in FY 2018-19 stood at $9.21 billion and imports during the same period stood at $1.04 billion.

Either Sell or Advise, Investment Advisors cannot do Both

As per market regulator SEBI, investment advisers can either distribute financial products or advise on them to investors, but cannot do both.
The move will be applicable from October 1. The Securities and Exchange Board of India has amended the Investment Advisers Regulations and covers any person who advises clients on purchase, sale, investment or portfolio management in securities for these entities who is called an investment adviser.
SEBI has stipulated segregation of services. At present, advisers carry out both advisory and distribution services and there is no segregation.
Individual investment advisers can no longer advise and distribute investment products simultaneously. They will have to chose between one of them and seek a registration with SEBI for that.
The segregation isn't limited to individuals alone. Non-individual advisers, including companies and limited liability partnerships, must segregate clients at a group level for investment and advisory services.

CCI Approves Proposed Combination Involving Eros Plc, STX and Marco

The Competition Commission of India (CCI) approved the proposed combination which involves Eros International Plc (Eros Plc), STX Filmworks Inc (STX) and Marco Alliance Limited (Marco).
The proposed combination is a 2 step transaction.
Step-1– The indirectly wholly owned subsidiary of Eros Plc will merge into STX, where STX will continue to be the surviving entity.
Step-2 – The Hony Group will subscribe some shares of the merged entity through Marco, an existing investor in STX.
After this transaction is completed, Eros, STX and Marco are expected to acquire an economic and voting interest in the combined company, directly or indirectly, with certain other rights.

RIL-BP Launch Fuel and Mobility Joint Venture under 'Jio-bp' Brand

BP and Reliance Industries (RIL) announced the commencement of their new fuel retailing and mobility joint venture (JV). The JV will now begin rebranding RIL fuel retail outlets to Jio-BP.
The newly launched JV company is named Reliance BP Mobility (RBML). The new entity will also look to provide electric vehicle charging and other low-carbon solutions over time.
RIL and BP had signed a definitive agreement for the JV in December last year (2019) and had then said that the retail operations would be run under the Jio-BP branding.
The agreement also stated that RIL would transfer ownership of its existing fuel retail network, along with access to its aviation fuel business, to the new entity.
BP has paid RIL $1 billion for a 49 per cent stake in the joint venture, while RIL will hold the remaining 51 per cent.

Tamil Nadu Tops Market Borrowings among States in India

According to data from the Reserve Bank of India (RBI), Tamil Nadu (TN) topped market borrowings among States in India with a collection of Rs. 30,500 crore in the fiscal 2020-21(FY 21).
Tamil Nadu which accounted for 17% of the borrowings done through the issue of bonds (known as state development loans), is followed by Maharashtra Rs. 25,500 crore (14%), Andhra Pradesh Rs. 17,000 crore (9%), Rajasthan Rs. 17,000 crore (9%).

Jul 09, 2020

Cabinet Gives Nod to Setting up Agriculture Infrastructure Fund

The Union Cabinet gave its approval to a new pan India Central Sector Scheme- Agriculture Infrastructure Fund. The scheme will provide a medium and long term debt financing facility for investment in viable projects for post-harvest management Infrastructure and community farming assets through interest subvention and financial support. Under the scheme, one lakh crore rupees will be provided by banks and financial institutions as loans to Primary Agricultural Credit Societies, Marketing Cooperative Societies, Farmer Producers Organisations, Self Help Group, Farmers, Startups and Centre and State agency among others.
The duration of the Scheme is for ten years from fiscal year 2020 to 2029. Under it, loans will be disbursed in four years starting with sanction of 10 thousand crore rupees in the current year and 30 thousand crore rupees each crore in next three financial years.

NSDC Collaborates with Microsoft India to Provide Digital Skills

The National Skill Development Corporation (NSDC), a not-for-profit public limited company joined hands with tech giant company Microsoft India Private Limited, a subsidiary of American software company Microsoft Corporation, to enhance the digital skills of the country's youth. Under this, more than 1 lakh youth will be digitally enabled in the country in the next one year.
As part of the tie-up, Microsoft's learning resource center, Microsoft Learn, will be integrated with NSDC's eSkill India portal to provide access to personalised learning paths and critical technology from entry level to advanced level like AI (Artificial Intelligence), machine learning (ML) and cloud computing so that the youth can be exposed to the nuances of today's digital economy.
Through the portal, e-skilling events, webinars and virtual sessions will be conducted across the country to support students, training partners and higher-education trainees enrolled under NSDC's skill training programs.
The partnership with NSDC is an extension of Microsoft's Global Skilling Initiative. Under this, the company is teaching new digital skills to 25 million people all over the world, which is needed in the coronavirus (Covid-19) economy.

NASSCOM Launchpad to Promote Partnership between India and the US

The National Association of Software and Services Companies (NASSCOM) virtually launched the Nasscom Launchpad in New Jersey, USA, as part of its ongoing efforts to promote cross border trade through technology partnerships.
The apex body representing India's $191 billion IT-BPM industry tied up with a start-up hub VentureLink@NJIT and Choose New Jersey, a non-profit, to facilitate partnerships between New Jersey and India, promote technology-based foreign direct investment (FDI) between the two regions and provide a platform for its member companies to use as a home base while exploring opportunities to do business in New Jersey and the greater New York area.
NASSCOM member companies will gain a hand-on understanding of market opportunities within the New Jersey tech ecosystem, assistance with site selection, government regulations, incentives, and tax planning to establish permanent operations in the region while operating out of their home location in India. This initiative would also support collaborative research and development in areas of common interest between the organisations of these regions.
The partnership will also facilitate business partner match making and assistance with introductions with prospective clients.
The initial companies participating in the Launchpad are Batoi Systems Pvt Ltd, Eminenture Pvt Ltd, Mucheo, NeenOpal Inc, ITSYS Solutions. It is expected that during the course of a year around 20 companies will utilize the platform.

AIIB Releases 1st Tranche to L&T Infrastructure Finance for Renewable Energy

Asian Infrastructure Investment Bank (AIIB) released USD 50 million in the first tranche of assistance to L&T Infrastructure Finance Ltd (LTIF), to fund renewable Energy Projects in the country. The released amount is part of a sanctioned USD 100 million External Commercial Borrowing(ECB) loan.
This is the 1st loan of AIIB to a non-banking financial company (NBFC) in India.
The objective of the project is to enhance the supply of renewable energy in India by mobilising private capital.
On completion, the project will increase private capital investment in renewable energy projects in India, which will increase the provision of affordable, clean energy and reduce the level of greenhouse gas emissions.
The loan proceeds will be used to finance large and mid-scale wind and solar power infrastructure projects in India.

Govt. Approves Capital Infusion in 3 State-run General Insurers

The Union Cabinet approved capital infusion of Rs. 12,450 crore in three state-owned general insurance companies to strengthen their capital base and make them more stable.
The 3 general insurance companies are the National Insurance Company, Oriental Insurance Company and United Insurance Company.
The government had in the budget for FY19 announced its decision to merge three general insurance companies – Oriental Insurance Company Limited (OlCL), National Insurance Company Limited (NICL) and United India Insurance Company Limited (UIICL).

Jul 08, 2020

Liberty General Insurance Launches 'Liberty Assure'

Liberty General Insurance launched, 'Liberty Assure', an Industry first service. The auto insurance customers, who avail this service, are not required to pay the 'Compulsory Deductible' cost for each claim. In addition to this no premium will be charged from the buyers to provide this unique cost-effective feature at the time of raising a claim/loss. The service is a part of its existing Private Car Package Policy under the Regulatory Sandbox approval received from the Insurance Regulatory and Development Authority of India (IRDAI).

Fino Payments Bank launches 'Bhavishya' Savings Account for Minors

Fino Payments Bank Limited launched 'Bhavishya', a savings account scheme for minors aged between 10-18 years. The subscription-based savings account aims to inculcate banking and saving habits in children.
The Bhavishya Savings Account can be only opened through the Electronic-Know Your Customer (e-KYC) mode.
The account comes with a free Platinum RuPay Debit card and there is no requirement to maintain any minimum monthly average balance. The annual Subscription charges for the account is Rs. 349 (inclusive of Goods and Service Tax-GST)
The minors should have a mobile number that is different from the parent's number for security reasons.
If the children attain 18 years, the account will be upgraded to a regular savings account, if Re-KYC is submitted with updated information.
The account can be used to get benefits of various government schemes for children such as scholarship and DBT (direct benefit transfer) subsidy amount.

Karur Vysya Bank Ties- up with Star Health Insurance

Karur Vysya Bank (KVB), a Scheduled Commercial Bank joined hands with Star Health and Allied Insurance Co Ltd for bancassurance (selling of life assurance and other insurance products and services by bank).
As per the pact, KVB will market wide range health insurance products of the Star Health through its 780 branches.
In addition, all bank customers will be able to access value-added services like STAR WELLNESS and get telehealth consultation using TALK TO STAR.
Bancassurance is a partnership between a bank and an insurance company, where the bank sells the tied insurance company's insurance products to its clients.

Customs Stations to Set Up Turant Suvidha Kendras

All Customs stations would set up Turant Suvidha Kendras (TSKs) by July 15 which will act as the sole physical interface point with Customs officers for physical submission of documents, the CBIC has said. In a communication to all Principal Chief Commissioners of Customs and Central Tax, the Central Board of Indirect Taxes and Customs (CBIC) said that the step is being taken ahead of the pan-India roll out of faceless assessment, which will be done in phases.
In its efforts to make India enter top 50 rank in World Bank's 'Ease of Doing Business' ranking, the CBIC had last year announced reform measure - Turant Customs - for speedy clearance of goods at air and sea ports.
Turant Customs is a comprehensive package which is being implemented in a phased manner.
Faceless assessment (commonly known as anonymised or virtual assessment) enables an assessing officer, who is physically located in a particular jurisdiction, to assess a 'Bill of Entry' pertaining to imports made at a different Customs station, whenever such a 'Bill of Entry' has been assigned to him in the Customs automated system.

Jul 07, 2020

SoftBank to Offload SBG Cleantech

As per reports, Japan's SoftBank Group Corp. is in talks with Canada Pension Plan Investment Board (CPPIB), Mubadala Investment Co. and Brookfield Asset Management Inc. to sell its entire 80% stake in Indian green energy firm SBG Cleantech.
Bank of America (BofA) and Barclays have been appointed to run the stake sale process as well as raise around $500 million through a dollar bond, the people cited above said on condition of anonymity.
Softbank's plan to sell its entire stake comes after a previous attempt where it hired Mizuho Bank to find a 'significant' minority investor. SBG Cleantech is a joint venture between SoftBank and Bharti Enterprises.

Payments Platform Paytm to Acquire Raheja QBE General Insurance

Indian e-commerce payment system Paytm & QorQl Pvt. Ltd, a Healthcare start-up company with majority shareholding of Paytm founder Vijay Shekhar Sharma, is set to acquire Mumbai (Maharashtra)-based private sector general insurer Raheja QBE General Insurance Company Limited in a deal worth around $76 million (or Rs. 570 crore).
Raheja QBE is a joint venture of India's Prism Johnson (51%) and QBE Australia (49% ).
Following the acquisition, Sharma, who owns 51% stake in QorQI, will hold the same stake in Raheja QBE, with the remaining 49% owned by Paytm.
The acquisition will require further approvals other than the approval of Insurance Regulatory and Development Authority of India (IRDAI).

YES Bank Launches a Digital Solution, 'Loan in Seconds'

YES Bank launched a digital solution, 'Loan in Seconds' for instant disbursement of retail loans. It is available for the bank's pre-approved liability account holders. The algorithm evaluates the loan application in real-time and eliminates the need for documentation.
The solution aims to provide customers, hassle-free loans to help them meet their immediate financial needs.
All the eligible customers under the solution will receive communication from the bank with the link to apply for the loan.
Those customers have to verify and accept the final offer.

Government Not Considering Merger of CBDT and CBIC

The government is not considering any proposal to merge the Central Board of Direct Taxes (CBDT) and the Central Board of Indirect Taxes and Customs (CBIC).
The said merger was one of the recommendations of the Tax Administration Reforms Commission (TARC), headed by Parthasarathi Shome.
Reacting to a media report which suggested that a merger of policy making bodies of direct and indirect taxes CBDT and CBIC is on cards, the ministry in a statement said, "The government has no proposal to merge the two Boards created under the Central Boards of Revenue Act, 1963."
The ministry said that the report of TARC was examined in detail by the government and this recommendation of TARC was not accepted by the government.

SBM Bank India and Mastercard to Facilitate Cross Border Transactions and Remittances

Government of Mauritius-promoted SBM Bank India and global payments technology major Mastercard have joined hands to facilitate cross-border payments and remittances services.
The SBM Bank India customers will be able to make real-time domestic business-to-consumer transfers quickly and efficiently using 'Mastercard Send'.
Remittances and payments businesses have become the cornerstone of SBM Bank India's growth strategy.
Neeraj Sinha, Head-Retail & Consumer Banking, SBM Bank (India), said that Mastercard Send is a secured and innovative solution - crafted to modernize domestic and cross-border payments and remittances.
SBM Bank India is the first bank to receive universal banking licence from the RBI to set up and operate as a scheduled commercial bank through the wholly-owned subsidiary mode.
The bank has a network of six branches located in Mumbai, Delhi, Chennai, Bangalore, Hyderabad and Ramachandrapuram.

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