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Economy Shots: FDI Structure 100% Automatic Upto 100% Auto Upto 100% Govt Route Combined (Auto + Govt)
Economy Shots: FDI Structure 100% Automatic Upto 100% Auto Upto 100% Govt Route Combined (Auto + Govt)
Economy Shots: FDI Structure 100% Automatic Upto 100% Auto Upto 100% Govt Route Combined (Auto + Govt)
Economy Shots
For exam purposes consider SAVINGS = INVESTMENT
FDI Structure
Merger of banks
Share Swap Ratio — When a bank pays for an acquisition by
issuing its own shares to the shareholders of the target bank, this is
known as a share swap. The number of shares to be issued in lieu
of shareholders’ existing holdings in the target bank — is called
the swap ratio.
Regulated under — Banking Companies (Acquisition and
Transfer of Undertakings) Acts of 1970 and 1980 |
NOT under Banking Regulation Act 1949
PSB, RRB and Banks under moratorium are EXEMPTED from
CCI’s merger regulations
Market Intervention Scheme — procurement only for perishable &
horticulture | 10% increase in production or 10% decrease in the price
| similar to MSP but MIS is Ad-hoc | NAFED procure @MIP| Loss
shared 50-50 Centre and State
Foreign Sovereign Bonds — by Govt in foreign currency ($) | risk is
on issuer (here govt) | to finance FD
Off-budget Borrowings — borrowings themselves are not from the
CFI but the interest payment on them is done through CFI | Interest
from CFI
SEZ exemptions — 100% IT exemption on export income for 5
years, 50% for next 5 years
Exemption from Central/State Sales Tax
Service Tax exemption
0% GST is applicable (under IGST Act 2017)
Primary Deficit = 0 is GOOD for economy | borrowing is
just for paying interest, nothing more is added
Equalisation Levy — for e-commerce with >2 crore goods or
services to Indian customers | Once such a levy is imposed, the income
arising from the relevant transaction won‘t be subjected to income tax
to avoid double taxation.
The foreign firm won‘t get credit in its home country for the
equalization tax paid here
External Benchmark — Repo, 3/6 month T-Bill yield or any
benchmark published by FBIL (Fin Benchmark Pvt ltd)
EPCG Scheme — allow import of some capital goods at ZERO
custom duty | pre, pro, post production stage
At present Bilateral Netting is NOT allowed for financial contracts
Core Investment Companies are NOT mandated under LCR
norms
Advance Authorization Scheme: Advance Authorization (AA) is
issued to allow duty free import of inputs, which are physically
incorporated in export products
Transport and Marketing Assistance (TMA) for Specified
Agricultural Products — ONLY for foreign export of the products
GAGAN — ISRO + AAI regional navigation
Acceptance Development Fund — RBI | acceptance of
Debit/Credit cards in Tier III, IV cities
Import Elasticity of Exports — % increase in the EXPORT when
the IMPORT of raw/intermediate goods is increased by 1%.
Consumer goods are more sensitive than capital goods.
Duty Free Import Authorization (DFIA): Duty Free Import
Authorization (DFIA) is issued on post export basis for products for
which Standard Input Output Norms (SION) have been notified.
DGTR — Subsumed DGFT and others
Interest Equalisation Scheme — by DGFT through RBI
Anti-dumping Duty recommended by DGTR (Trade
Remedies)
Deemed Exports Scheme: Deemed Exports refers to those
transactions in which the goods supplied do not leave the country and
the payment for such supplies is received either in Indian rupees or
in free foreign exchange
MMR — Maximum Marginal Rate — effective tax rate after all
surcharges and cess to a company
Deleveraging is the process or practice of reducing the level
of one's debt by rapidly selling one's assets.
GSP — is under UNCTAD | each of the 13 countries have their own
rule of granting the status
LLPs are not internally governed under Companies Act 2013 | they
are done as per contract
All edibles, EXCEPT MUSTARD OIL AND RAPESEED OIL, are
free to export | Mustard oil is RESTRICTED to 5kg package size at
max. #ES2019
Liberalised Remittance Scheme (LRS) — every transaction
through PAN card | can buy immovable properties in overseas market
| NOT allowed buying and selling of foreign exchange abroad
ECB — All entities which are eligible for FDI can now also eligible for
ECB | $750 million ceiling per year
ECBs can be raised in INR or any convertible currency
USSD — Mobile banking | available to regular (not smartphone)
phones also | *99# such codes
Bharat Bond ETF is a debt fund | Bharat-22 ETF is a equity fund
Financial Stability Board (FSB) — Intl org | G20 | 2009 | G20
members + WB, IMF, OECD, BIS
Deposit Insurance and Credit Guarantee Corporation
(DICGC)
Wholly owned by RBI — subsidiary
Cover — Commercial Banks, Cooperative Banks, RRBs | Co-op
Societies are NOT insured
Limit = 5 lakh (maximum…all the accounts of similar type in one
bank clubbed) (principal + interest)
What is insured ?
All deposits like saving, fixed, current, recurring
Deposits of foreign Govts, Centre, State
Interbank deposits
State Land Development Banks deposits
DICGC does NOT deal with depositors directly, rather it sends
money through a Liquidator.
India Investment Grid — DPIIT (Min of Commerce & Industry) +
Invest India | host NIP
SWAP AUCTION BY RBI
Currency in India —
RBI can at max recommend GoI for denomination <Rs. 10,000
Any note with slogans and message of a political nature
written across it ceases to be a legal tender and the claim
on such a note will be rejected.
Design, form, and material of bank notes shall be approved by the
Central Government on the recommendations of the Central
Board of the RBI. Every banknote shall be a legal tender at any
place in India
"Mutilated notes are Accepted & Exchanged Here". Banks should
ensure that all their branches undertake note exchange business.
no person is entitled as a right to recover from the
Government of India or RBI the value of any lost, stolen,
mutilated or imperfect currency note of the GOI or bank note.
India - US
No Bilateral FTA | Trade only on WTO terms
India has Trade surplus in Goods and Services, Both !
US is India’s 2nd biggest export market after EU ||
EU>US>China
Custom Duty (only by Union) — on import and EXPORT |
Goods & Services both | Defence equipments imports EXEMPTED
from any such Custom Duty (UB 19-20) || Import Duty is only for imports
Hedge Funds — as Alternative Investment Funds
Unregistered private investment partnership or funds
available to qualified or high net-worth individuals (HNI), banks,
endowments, pension funds
Unregulated in India || Higer Risks
Not at par with the Mutual Funds
No definitive definition of these funds
The Economic Cost of foodgrains consist of three components,
namely
1. pooled cost of grains,
2. procurement incidentals and
3. the cost of distribution.
The pooled cost of food grains is the weighted MSP of the stock of
foodgrains available with FCI at the time of calculating the economic
cost.
P-Notes are issued by FPIs to overseas investors | offshore derivative
instrument of underlying asset | e.g Citigroup
Recent amendment to TOR of 15th Finance Commission — allocate
non-lapsable funds for defence and internal security
Quota @IMF based on
Size of Economy (GDP) - 50% > Openness 30% > Economic
Variability 15% > International Reserves 5%
India is the LARGEST IMPORTER of Vegetable Oils.