General Awareness

BUSINESS AND ECONOMY - October 2020

Oct 2020

Dec 25, 2020

China asks Pakistan for Additional Guarantees for $6 bn Loan for Rail Project

China has sought additional guarantees before sanctioning a USD 6-billion loan for the Main Line-1 (ML-1) railway line project in Pakistan, due to the country's weakening financial position.
China has also proposed a mix of commercial and concessional loans to fund the rail project, going against Islamabad's wishes of 'cheapest lending'.
The issue of additional guarantees was raised during the third joint ML-1 Financing Committee Meeting held ten days ago (December 13), The Express Tribune newspaper reported, quoting official documents.
The ML-1 project includes dualisation and upgrading of the 1,872-km railway track from Peshawar to Karachi and is a major milestone for the second phase of the China-Pakistan Economic Corridor (CPEC).

LG and Magna Announce Joint Venture in Electric Car Gear

South Korea-based LG Electronics Inc and automotive supplier Magna International Inc are launching a joint venture that will make key components for electric cars.
The joint venture, tentatively called LG Magna e-Powertrain and valued at $1 billion, will manufacture e-motors, inverters and onboard chargers, according to LG Electronics.
The deal expands a wave of consolidation among suppliers aiming to capture a growing market for electric vehicle, e-axle systems, which combine electric motors, power controls and driving gears in one unit.
LG Electronics is an affiliate of South Korea's fourth-largest conglomerate, with interests ranging from electronics, including smartphones, to home appliances. LG Group's major affiliates include LG Display Co Ltd, which counts Apple Inc as its customer, as well as LG Chem Ltd, whose wholly owned LG Energy Solution subsidiary provides EV batteries to Tesla Inc.

Cabinet Approves 100% FDI in DTH Sector

The Union Cabinet approved revised guidelines for Direct-to-Home (DTH) broadcasting services, allowing 100 per cent foreign direct investment (FDI) as well as increasing the licence period to 20 years.
Under the revised guidelines the licenses will be issued for a period of 20 years, compared to 10 years at the moment, and will be renewed for a 10-year period. The license fee has been revised from 10 per cent of gross revenue (GR) to 8 per cent of adjusted gross revenue (AGR), which will be calculated by deduction of GST from GR.

Google Invests in Glance and VerSe Innovation

Google has invested in two Indian start-ups, Glance and VerSe Innovation, as part of its USD 10 billion Google for India Digitisation Fund to enable them to further scale up availability of content in different formats across various Indic languages.
As per reports, Google has participated in Glance's USD 145 million (about Rs. 1,071.5 crore) and VerSe Innovation's USD 100 million (about Rs. 739 crore) funding rounds.
In July this year, Google's Sundar Pichai had announced a USD 10 billion (Rs. 75,000 crore) Google for India Digitisation Fund that will be invested over the next five to seven years to help accelerate the adoption of digital technologies in the country.

Dec 24, 2020

RBI to introduce 'Positive Pay System'

The Reserve Bank of India is to introduce "Positive Pay System" from January 1, 2021 for cheque transactions above Rs. 50,000. This is to be done to enhance safety and eliminate frauds.
'Positive Pay System' is a process of reconfirming key details of large-value cheques. The large value cheques are those where the transactions are above 50,000 INR. It basically involves reconfirmation of key details of cheques. It is not mandatory for the banks to implement the system.
The cheque issuer electronically submits certain details of the cheque to the bank via SMS, ATM, mobile app, etc. These are cross-checked by the Cheque Truncation System and discrepancies are flagged to the drawee and presenting banks. The facility is to be developed by the National Payments Corporation of India.

India, Japan Come up with Mechanism for Cooperation in Steel Industry

India and Japan have devised a mechanism for cooperation in the steel industry at the joint secretary level and will see both sides discussing a number of issues in the sector including international trade. India, which is the second-largest producer of steel, still lags behind Japan and China in terms of per capita consumption. The dialogue mechanism will see New Delhi-Tokyo cooperating to increase this.
Both sides signed a Memorandum of Cooperation to herald the cooperation. It was signed by the Secretary of India's Steel Ministry Pradip Kumar Tripathi and Vice-Minister for International Affairs, Tanaka Shigehiro representing Japan's Ministry of Economy, Trade, and Industry.
India and Japan's collaboration come even as both sides are increasing cooperation in many areas including alternate supply chains in a post-pandemic world.

Wipro to Acquire IT Verticals of Metro AG

Wipro signed a $700-million digital and IT partnership deal with Metro AG, that will see over 1,300 employees of the German wholesaler move to the Indian IT major.
The estimated deal value for the duration of the first five years is approximately $700 million. With the intention to extend up to four additional years, it can be a potential spend of up to $1 billion," Wipro said in a statement.
As a part of this transaction, Wipro will take over the IT units of Metro AG — Metro-NOM GMBH in Germany and Metro Systems Romania S.R.L.

Dec 23, 2020

Govt. Invites Bids for Sale of its Stake in Shipping Corporation

The finance ministry began the process of divesting the government's entire 63.75% stake in Shipping Corporation of India (SCI) along with management control by inviting expressions of interest from potential bidders.
At SCI's current market price, the government can raise around Rs. 2,500 crore from the stake sale.
RBSA Capital Advisers will be the transaction adviser for the divestment process and bids can be submitted until 13 February.
Listing out the terms of the divestment process, the department of investment and public asset management (Dipam) said that interested bidders should have positive Ebitda (earnings before interest, taxes, depreciation and amortization) in three of the previous five years and a minimum net worth of Rs. 2,000 crore. In case of a consortium, the lead member should have a minimum net worth of Rs. 1,001 crore with at least 50.01% equity in the consortium. The ultimate beneficial owner for any bidder should not be the same as that of any other bidder or of any consortium member.

ICICI Bank Launches 'Infinite India'

ICICI Bank launched 'Infinite India' — an online platform for foreign companies looking to set up or increase business in India. This platform provides banking solutions, as well as value-added facilities.
'Infinite India' platform offers convenience to foreign companies as it eliminates the need of co-ordinating with multiple touch-points leading to a hassle-free experience of doing business in India.
The 'Infinite India' initiative is part of the bank's strategy to further strengthen its technology-enabled offerings aimed to partner with foreign companies coming to India. The bank believes that the dedicated strategy for this segment will further simplify the journey of foreign companies looking to start or expand their business in India.

GIC, ESR form $750 Million JV to Invest in Industrial, Logistics Realty in India

As per reports, Singapore's sovereign wealth fund GIC and ESR Cayman have entered into an 80:20 strategic partnership to establish a $750-million joint venture to develop and acquire industrial and logistics assets in India.
The joint venture will develop and own industrial and logistics facilities as well as acquire core assets, focusing on Tier 1 and Tier 2 cities across India. To begin with, the joint venture will start with about 2.2 million sq ft build-to-core asset, located in proximity to the large consumption hubs of Mumbai and Thane.

Central Bank of India Launches RuPay Select Debit Card

Central Bank of India launched a variant of contactless Debit Card — 'RuPay Select'.
Launched in association with the National Payments Corporation of India on the occasion of the bank's 110^th foundation day, the RuPay Debit Select Card will focus on customers' lifestyle, fitness, rejuvenation, nutrition and personal care.
The Bank also launched FASTAG (for electronic toll collection) in association with OSTA.

Dec 22, 2020

US Telcos Ordered to Rip and Replace Huawei Components

The US Federal Communications Commission (FCC) has ordered certain US telecommunications companies to remove Huawei equipment from their network.
The FCC has also started the process of revoking China Telecom's authorization to operate in the US.
The rip and replace order is the latest US move against Huawei made on national security grounds.
The order includes subsidies for smaller carriers for removing and replacing the equipment.
However, the commission cannot actually implement the reimbursements without the approval of funding from congress.

European Union Gives Approval to Fiat Chrysler and PSA Merger

The European Union gave conditional approval to the mega-merger of car giants Fiat Chrysler (FCA) and Peugeot Citroen (PSA), after the firms promised to address competition fears.
The tie-up, which was announced late last year and planned to be completed in early 2021, will create Stellantis, set to be the world's fourth-largest automaker in terms of volume, and number three in terms of sales.
The combined company unites brands such as Peugeot, Citroen, Fiat, Chrysler, Jeep, Alfa Romeo and Maserati into a global giant, each of which will continue under its own marque.
The decision to approve the deal came after it had carried out an in-depth investigation over concerns it might stifle competition.
The approval is conditional on full compliance with a commitments package offered by the companies.

Dec 21, 2020

ONGC Opens 8th Hydrocarbon Producing Basin of India

State-owned Oil and Natural Gas Corporation (ONGC) opened India's eighth hydrocarbon producing basin when it started oil flow from a well in the Bengal basin.
Oil production commenced from the well Asokenagar-1 in 24 Pargana district.
The well Asokenagar-1 was completed as an oil producer under early-monetisation plan issued by the Government of India.
With this ONGC has discovered and put to production seven out of the eight hydrocarbon producing basins of India, covering 83 per cent of established oil and gas reserves.
ONGC is India's largest oil and gas producer contributing 72 per cent of the country's hydrocarbon production.

Bank of Baroda Completes Integration of Erstwhile Dena and Vijaya Banks with Itself

State-run Bank of Baroda has completed integration of 3,898 branches of erstwhile Vijaya Bank and Dena Bank with itself.
In a first three-way amalgamation, Vijaya Bank and Dena Bank were merged with Bank of Baroda from April 1, 2019.
The bank has completed the integration of 1,770 erstwhile Dena Bank branches in December 2020, and had earlier completed the integration of 2,128 erstwhile Vijaya Bank branches in September 2020.
Over 5 crore customer accounts were migrated. In addition to branches, all ATMs, POS machines and credit cards have been migrated successfully.
The bank said that all customers now have access to a total of 8,248 domestic branches and 10,318 ATMs across India, which will provide them complete access to its entire suite of products and services.

RBI Seeks Applications under Second Cohort

The Reserve Bank announced the second cohort under the Regulatory Sandbox (RS) with the theme of 'Cross Border Payments' and also reduced net-worth requirement for entities interested in participating.
Regulatory sandbox refers to live testing of new products or services in a controlled/test regulatory environment for which regulators may permit certain relaxations for the limited purpose of the testing.
The RS allows the regulator, innovators, financial service providers and customers to conduct field tests to collect evidence on the benefits and risks of new products and systems.
The central bank had announced the opening of the first cohort under RS with the theme of 'Retail Payments'.
It has also decided on 'MSME Lending' as the theme for the third cohort, details of which it will announce in due course.

GoldenTree and PIMCO Join Oak Hill Consortium for Vodafone Idea Funding

As per reports, US-based GoldenTree Asset Management and Pacific Investment Management Co (PIMCO) have likely joined a consortium led by investment firm Oak Hill Advisors, which is in talks to provide a $2 billion (Rs. 14,720 crore) credit line to Vodafone Idea.
The move to expand the global lender consortium is aimed at quickly filling up Vi's sizable funding requirement and also distributing the risk exposure across a larger pool of financiers.
The proposed funding model is likely to be a blend of convertible instruments, comprising bonds and warrants with a linked equity option that will allow the consortium members to turn a portion of the debt into shares of the telco.

PayPal Fined for Violating India's Anti-money Laundering Processes

American online payment gateway giant PayPal has been imposed a Rs. 96 lakh penalty by the Financial Intelligence Unit (FIU) for alleged contravention of the anti-money laundering law and accused of concealing suspect financial transactions and abetting disintegration of India's financial system.
PayPal began India operations in November 2017.
The company has also been charged with defeating and frustrating the tenets of public interest and the provisions of the Prevention of Money Laundering Act (PMLA), which aims to keep the country's financial system safe from economic crimes, terrorist financing and black money transactions.

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