GK Updates - 1 April | Banking Quiz

Manuel Valls named as new French prime minister

1.President Francois Hollande named former Interior Minister Manuel Valls as France's new prime minister Monday, just 24 hours after his Socialists suffered heavy losses in nationwide municipal elections.

2.Valls is consistently voted France's most popular Socialist in opinion polls and is considered part of the right wing of the party. He replaces unpopular Jean-Marc Ayrault.

3.The 51-year-old has drawn comparisons with former conservative French President Nicolas Sarkozy and is also the most popular Socialist among France's conservative right — he wants, for example, to rethink France's 35-hour working week, a Socialist initiative.

4.In a prerecorded televised speech, Hollande said it was time for a France to enter a "new phase" and pledged Valls would lead a "combative government."

5.He spelled out some key policy changes that included announcing new unspecified tax cuts and confirming a plan to slash 50-billion euros in government spending.

RBI monetary policy review: Rajan delivers no surprises, holds interest rates

1.As expected, Reserve Bank Governor Raghuram Rajan today kept the key policy rate (repo) unchanged since retail inflation still remains “sticky” but introduced steps to increase liquidity and contain volatility in the money market.

2.In the first bi-monthly monetary policy statement for 2014-15, the RBI Governor decided to pause and not disturb status quo. The repo rate, the central’s bank main policy rate and the rate at which it lends money to banks, remained at 8 per cent. Other policy instruments such as cash reserve ratio also remain unchanged at 4%.

3.The RBI has decided to increase the liquidity provided under 7-day and 14-day term repos from 0.5 per cent of Net demand and term liabilities (NDTL) of the banking system to 0.75 per cent, and decrease the liquidity provided under overnight repos under the LAF from 0.5 per cent of bank-wise NDTL to 0.25 per cent with immediate effect.

Large foreign banks need to be responsive to local norms: RBI

1.Sending a strong signal that large foreign banks will have to operate as wholly-owned units for better regulatory control, Governor Raghuram Rajan on Tuesday asked them to be responsive to local regulations and warned that if “carrot does not work,” it will have to wield the stick.

2.“At some time this (wholly-owned subsidiary route) will have to become a regulatory issue and to ensure the banking sector stability, we need our large foreign entities to be responsive to the regulations here,” Dr Rajan told reporters at the customary post-policy meeting in Mumbai.

3.“And, therefore at some point in time if the carrot does not work, we may need to push a little harder, as some of the jurisdictions across the world have done,” he said.

4.Last November, the RBI had released a framework for large foreign banks with over 20 branches to convert into wholly-owned subsidiaries and had set a cut off period of August 2010 under which those banks entering the country after this date would have to become subsidiaries and not branches.

5.The framework said all foreign banks which move to a wholly-owned subsidiary route will be treated nearly on par with nationalised banks apart from capital gains tax and stamp duty benefits.

FPIs can’t buy G-secs with maturity of less than 1 year: RBI

1.To encourage long-term foreign fund flows, the Reserve Bank on Tuesday prohibited foreign investors from buying government securities having maturity of less than one year.

2.“Investments by FPIs in G-Secs shall henceforth be permitted only in dated securities of residual maturity of one year and above, and existing investment in Treasury Bills will be allowed to taper off on maturity/sale,” the Reserve Bank of India (RBI) said in its monetary policy document.

3.The RBI has been rationalising and expanding limits for foreign portfolio investor (FPI) investments in debt markets.

4.To encourage longer maturity flows, investment limits in Treasury Bills were capped at $ 5.5 billion in April, 2013.

5.Later in June, the limit for long-term investors was increased by $ 5 billion.

6.FPI is a new umbrella class for foreign institutional investors (FIIs), sub account and qualified foreign investors.

7.The overall limit for FPI investment in G-Secs will, however, remain unchanged at $ 30 billion so the investment limits vacated at shorter end will be available at longer maturities, the RBI said.

8.The central bank also proposed simplifying know-your-customer (KYC) procedures for opening bank accounts by FPIs.

Indian Bank revises interest rates

1.Public sector Indian Bank today revised the interest rates on Foreign Currency Non-Resident (Banking) deposits with immediate effect.

2.For FCNR(B) deposits, in USD, the revised interest rate has been fixed at 2.56 per cent for deposits of one year and above but less than two years from the existing 2.55 per cent.

3.For deposits of two years and above but less than three years, the interest rates has been increased to 2.59 per cent from the existing 2.47 per cent, the Chennai-headquartered bank said in a statement.

4.Interest rates have been revised to 4.05 per cent for deposits of three years and above but less than four years from the existing 3.82 per cent, it said.

5.For four years and above but less than five years, the interest rates has been increased to 4.48 per cent from the current 4.23 per cent.

6.For deposits up to five years, the interest rates have been increased to 4.85 per cent from the existing 4.62 per cent, it added.

EC allows RBI to grant new bank licences

1.The Election Commission on Tuesday gave green signal to the Reserve Bank of India (RBI) for "in-principle" grant of licences for setting up new banks.

2.Since the Model Code of Conduct (MCC) came into operation on March 5, after the announcement of the general election schedule, the RBI had written to the Commission on March 12 seeking clarity on the issue of grant of new bank licenses.

3."The Commission is of the view that the Reserve Bank of India (RBI) may take necessary action (for grant of in-principle approval for banking licences) as deemed appropriate," the EC Principal Secretary K. Ajaya Kumar wrote to RBI Governor Raghuram Rajan.

4.The RBI had earlier planned to issue new bank licenses in March after a gap of ten years. The RBI had received 27 applications initially. Later, Tata Sons and Value Industries withdrew, leaving 25 contenders in the race.

5.Earlier in the day, Dr. Rajan while unveiling bi-monthly monetary policy in Mumbai had said that once the central bank gets the Elections Commission's approval it would expedite the process and grant licences.

Noel Tata takes over as Trent Chairman

1.Noel Naval Tata, brother-in-law of Tata group Chairman Cyrus Mistry, has taken over as the chairman of retail firm Trent, succeeding FK Kavarana who retired from the Tata group companies after attaining the age of 70 this month.

2.Tata, 57, was vice chairman of the company and was instrumental in getting British retail giant Tesco as a joint venture partner to invest in the Indian retail sector. The JV plans to invest Rs 680 crore in multi-brand retail stores in the country - the first JV after the Indian government opened up the sector for foreign direct investment in September 2012.

3.Noel Tata, who is the son-in-law of Pallonji Mistry - the largest single shareholder of Tata Sons with 18.5 per cent stake, was earlier widely speculated to take over as the chairman of the Tata group from Ratan Tata.

4.Noel was the managing director of Trent from 1999, a post he relinquished in 2010 and became vice-chairman. The company's consolidated turnover rose from Rs 8 crore in 1999 to Rs 1,932 crore in 2013.

Change in Climatic condition may lead India to war: UN report

1.The latest report of UN panel on Climate Change released on 30 March 2014 has warned that the climate change being faced in Asia has increased the risk of armed conflict among India, Pakistan, Bangladesh and China. As per the report, the possibility of war would be due to the severe stress on water resources and food-grain production in future, due to climatic change.

2.The UN’s Intergovernmental Panel on Climate Change in its report has assessed the impacts of climate change on human health, settlements and natural resources. In its findings the panel concluded that the environmental change is heading towards terrible conditions and the worst is yet to come, if no measures are taken to curb the ill-effects of global warming.

3.In context of India the report says that India, like other developing economies would lose a Gross Domestic Product (GDP) up to 1.7 percent in case the annual temperature rises at a mean of 1 degree Celsius as compared to pre-industrialisation level. The effects of the climatic change will hit maximum to the poor.

Nancy Powell resigns as U.S. Ambassador

1.US Ambassador to India Nancy Powell resigned on Monday, paving the way for a political appointee to repair bilateral ties ruptured by the handcuffing and strip search of Indian diplomat Devyani Khobragade in New York last December.

2.Ms. Powell "announced in a US Mission Town Hall meeting that she has submitted her resignation to [US] President [Barack] Obama and, as planned for some time, will retire to her home in Delaware before the end of May," said a note on the US Embassy website.

3.Ms. Powell’s removal had been in the works so far after senior US and Indian officials felt compartmental thinking by US State Department officials failed to account for the broader political implications of moving against Dr. Khobragade in a dogged manner, said Government sources.

4.Not only did the US State Department buid up a meticulous case against Dr. Khobragade, they went to the extent of spiriting away her maid's husband and children to the US on concession tickets provided to the embassy.

5.Since then, the case has gathered its own momentum and the US legal authorities have once again approached a New York court after it had dismissed a case against Dr. Khobragade.

6.A political appointee as US Ambassador to India, it is presumed, will start with a clean slate without the baggage of having being involved in a ``pincer grip’’ type of operation to fix the Indian diplomat. He would not have a stake in defending or covering up for US State Department employees involved in the entire process, thus increasing the possibility of restoring ties to normal at a time when a new Government will take office in a couple of months, they added.

SEBI disclosure norms for mutual funds effective from today

1.Mutual fund houses now require to make monthly disclosures about assets managed by them as well as explain the rationale behind exercising their voting rights in firms, as part of stronger SEBI norms effective from Tuesday.

2.Mutual funds will have to disclose details with respect to Asset Under Management from different categories of schemes, AUM from places beyond top-15 cities, contribution of sponsor and its associates in AUM, contribution from different types of investors (retail, corporate etc), state-wise contribution and AUM from sponsor/non-sponsor group distributors.

3.Besides, the mutual fund players would now have to disclose the specific rationale behind supporting their voting decision.

4.The MFs are required to make the disclosures on their websites and share the same with Association of Mutual Funds of India (AMFI) within 7 working days from end of the month.

5.The disclosures would also be available on AMFI website.

6.Besides, the fund houses would have to make disclosure of votes cast on their website on a quarterly basis, within 10 working days from the end of the quarter. Further, they would make the disclosures on voting details in their annual report.

7.The rules were recently framed by the Securities and Exchange Board of India (SEBI) as part of its first-ever long term policy for the mutual fund industry.

Asian Development Bank pegs GDP growth rate for 2014-15 at 5.5 per cent

1.India’s GDP is poised to accelerate to 5.5 per cent in 2014-15 on the back of improved performance in industry and services but it may take some time for the country to reach its potential growth rate, says an Asian Development Bank (ADB) report.

2.“The recent deceleration of economic growth in India appears to have bottomed out, but the economy will not reach its potential until remaining structural bottlenecks are overcome”, said the ADB Outlook 2014 released on Tuesday.

3.Indian economy, according to Central Statistical Office (CSO), is estimated to record a growth rate of 4.9 per cent in 2013-14, up from decade’s low of 4.5 per cent posted in the previous financial year. The economy has been growing at 9 per cent before the growth rate was pulled down by 2008 global financial meltdown.

4.“India’s capacity for more rapid growth over the long term is high, with a promising outlook for labour, worker skills, capital, infrastructure, and productivity,” ADB Deputy Chief Economist Juzhong Zhuang said, adding a serious effort on reforms would be needed to achieve and sustain higher rates of growth going forward.

5.The growth is expected to rise further to 6.0 per cent in 2015-16 as the recovery in advanced economies will bolster external demand and government actions are likely to remove some structural bottlenecks impeding industry and investment, says the ADB report.