10.

Economy Shots
For exam purposes consider SAVINGS = INVESTMENT
FDI Structure

100% Automatic Upto 100% Upto 100% Govt Combined (auto

Auto Route + govt)

1. Agri Animal 1. Infra in 1. PSBanking 1. Pvt Bank -

husbandry Security 20% 49 + 49%
2. Airport Market 2. Newspaper 2. Biotech
(green/brown) 49% 26% (brown) 74 +
3. Insurance 2. Insurance 3. Core Invest 74%
intermediaries 49% 100% 3. Defence
4. Broadcast 3. Pension 4. Food 49% + 49%
Service TV 49% Product 4. Healthcare
5. Coal & Lignite 4. Petrol Retail (Brown)
6. Petrol & Natural Refining 100% 74/74%
Gas 49% 5. Multi- 5. Pharma
7. Chemicals 5. Power brand (brown)
8. E-commerce Exchange retail 51% 74/74%
(market) 49%
6. Print Media 1.
6. Medical
9. Food —
Devices science/tech
Processing
— upto 100%
10. Gems and 6. Telecom
100% 7. Satellite
Jewellery 49% + 49%
11. IT sector 100%
12. Renewable
Energy
13. Roads &
Highways UNLISTED
HERE = MEANS
14. Railway
100%
Infrastructure
AUTOMATIC
15. Tourism
16. White Label
ATM
17. Pharma
Greenfield

Facts and Trends

1. Latest Eco stats — Q1 2020 | Released by NSO
1. GDP Growth = -23.9% (contraction)
2. GVA Growth = -22.8% (contract)
3. Private Investment = -47%
4. Private Consumption = -27%
5. Government Expenditure = +16.4%
6. Private consumption = 56% of GDP !! And 32% of all
Investment (this was before Q1 covid)
2. Forex reserve continuously rising — Aug. $534 billion | Not in top 3
in the world | FCN>Gold>SDR
3. States’ share in Government borrowing has risen CONSISTENTLY
from FY 14 - 19
4. External Debt — increased from last year | Commercial Borrowing
> Non-resident deposits > Debt from multilateral agencies |
denominations $>INR>SDR | USD makes up >50% of our
external debt
5. Global economy growth — lowest since GFC 2008
6. Sharp decline in the real fixed investment from 2011 and only
plateaued in 2016 (NEVER GROWN)
7. Household investment, Private investment — DECLINE
8. Share of loans and advances from Centre in States Govts’ liabilities
has declined significantly from 57% (1991) to 6.6%(2014). 12th FC
recommended this — to disintegrate centre from states’ liabilities
9. FDI largest — Singapore > Mauritius
10. Female LFPR — Rural > Urban !! | More female workers in agri in
rural areas than male
Rural — Unemployed Male > Female | Urban — Unemployed
Female > Male
11. Remittance — UAE > US> Saudi
12. Private Consumption / GDP — wavy …. Recent decline
13. Net Service Surplus is under a STEADY decline (as %GDP) | 2016
it financed 67% of merchandise deficit but only 50% in last 2 years.
14. India’s trading partner = US>China>UAE>Saudi>Hong Kong
15. Trade Surplus — US and UAE (only, as per ES)
16. India’s share in world export is WAVY trend | NOT increasing
continuously
17. Export composition — Petroleum > Pearl/Precious >Drugs>Gold |
% wise … to US>UAE>China
18. Import composition — Petroleum Crude > Gold > Petroleum
Product > Coal | from China > US
19. Services IMPORT and EXPORT BOTH are RISING for last 4
years (as %GDP) | surplus declining
20. India’s merchandise IMPORT/GDP — rising for last 4 years
21. Direct Taxes 54% | Indirect Tax 46%
22. 99.1% companies in India are Small/Medium (<Rs. 400 crore
turnover) | only 0.9% large companies (>400 cr)
23. Corporate Income Tax (CIT) rate — REDUCED for Domestic
companies (<400 crore turnover) |
UNCHANGED for foreign companies | Now CIT is lower than
most of the ASEAN countries
24. Deceleration in the growth of GVA by ALL sectors EXCEPT —
Defence, Agri & Allied, Pub Ad
25. CAD reduced — stable external sector | wavy trend
26. ECB (high ECB = Good BoP) — 2014 to 2019 ECB turned
NEGATIVE
27. India has HIGHEST number of diaspora/migrants
28. #1 remittances received in India | consistent rise over the years
29. Lag between rate of fixed investment and its impact on GDP growth
is seen to be of 3-4 years
30. Expenditure — Interest Repayments > Defence > Subsidies
31. Receipts — Borrowing > Corporation = GST > Income Tax
32. Disinvestment — ETFs are the biggest source of receipts
33. Total Receipt — continuous increased for last 5 years | Capital and
Revenue both increased (R > C)
34. Food, Fertiliser subsidy (both) REDUCED compared to last year |
Total Subsidy Bill … wavy (for last 4 years)
35. Subsidy —rising 2017-2019 | Food > Fertiliser > Petrol
36. Credit Growth declined for both Banks and NBFCs
37. Agriculture contri to GVA — CONTINUOUSLY declining (as non-
food are performing well)
38. Service Sector :: 55% GVA | 38% Export | 67% FDI
39. Caffeinated Beverages — GST INCREASED to 28% + 18% Cess
40. Continuous decline in investment rate — decelerated GDP growth,
weakened consumption
41. Debt/GDP Ratio — DECREASING for last 5 years
42. States have continued on path of fiscal consolidation | General Govt
(Centre + States) fiscal consolidation as FRBM
43. Central Govt Debt/GDP CONTINUOUSLY declining for last 5
years | safe also, as low share of external debt (20%)
44. Deficit trends (last 3 years) | F>R>ER>P
1. Fiscal — wavy (latest increased) | 3.5-3.8%
2. Revenue — almost same | 2.4% | FY 21 … increase
3. Effective Revenue — almost same | 1.5%
4. Primary — wavy (0.2-0.7%)
5. External Debt — decreasing
6. Internal Debt = 65% of total
7. Market borrowing — wavy
45. Taxes
1. Total tax/GDP — increased till 2016 then decreasing
2. Direct tax/GDP — increasing | Indirect tax/GDP —
decreasing (since 2016)
46. Fiscal Deficit — from FY 14 - 19 : FD has continuously decreased or
remained constant (3.5 (17/18)), FY 20 = increased (from 3.5 to 3.8)
| In current fiscal (FY 21) it is estimated to be around 6.7-7% (covid)
47. Revenue — Tax and Non-Tax both where LOWER than revised
target
Tax & Non-Tax both have INCREASED from FY 18 to FY 20 (but
for FY 20 they have missed the target)
48. Expenditure — INCREASED from FY 18 to FY 20 | FY 20 missed
the revised target
49. Personal Income tax = increased by 14%
50. Rural Development — funding REDUCED | MGNREGA
allocation also REDUCED
51. FPI investment limit RAISED from 9% → 15% | UB 20-21
52. 100% Tax exemption to FDI till 2024 | 3 year lock-in period
53. Total domestic air passenger have CONTINUOUSLY increased
over last 5 years
54. PM KISAN — continuously decreased in the three instalments
55. Aim to double milk production by 2025 | 2x Milk by 2025
56. 8 core industries make up 40.27% weight in the IIP (8-core …
highest weight to Refinery > electricity > steel)
57. India is 2nd largest crude STEEL producer in the world after China
(China >>> India) | 3rd largest in finished steel
58. Coal import — wavy for last 5 years | domestic production
CONTINUOUSLY rise
59. Disinvestment
1. Target has NOT increased continuously … wavy
2. Actual disinvestment has NOT increased continuously … wavy
3. In 2017-18 and 2018-19, Govt met and exceeded the
investment target | 2019-20 it missed
60. PLFS — Labour Force Participation REDUCED from 55% to 49%
(2011-2017)
61. Every district must have one Ayushman Bharat-Empanelled
healthcare centre
62. Agriculture
1. Share of Agri & Allied in GVA has declined … continuously for
last 5 years
2. Agri Export — Rice > Spices (1-2)| consistent growth overall
agri export for 3 years
3. India is the LARGEST milk producer in the world
4. Milk, Meat and Egg — per capita availability has
CONSISTENTLY risen for last 5 years
5. Fisheries — INLAND (70%) > MARINE (27%) | None 100%
potential harvested
6. Agri mechanisation at 40% | less than china (60%)
63. PM Jan-Aushadhi Yojana is extended to ALL districts | includes
surgical equipments also
64. Unemployment Rate = 6.5% (45-year high)
65. Schools
1. >95% have girls toilet | >95% boys toilet
2. 55% have school boundary
3. 2/3rd have library
4. About 45-50% students are enrolled in private schools | 35%
 schools are private
5. ~60% have Electricity | ABOUT 40% SCHOOLS DON’T
HAVE ELECTRICITY CONNECTIONS
66. LFPR Women — 23%
67. India Agri export — Rice #1 > Spices #2 (Value wise)
68. Total installed renewable energy — 84 GW
69. Domestic Oil Production has been DECLINING over some years
70. Power production — Thermal Largest | Private > State > Centre
71. Tourism
1. Most intl tourists COMING to India — Bangladesh > US>UK
2. Top 5 DOMESTIC tourist destination — TN > UP > KA >
AP > MH
3. Top 5 INTL tourist destination — TN> MH > UP> DL >RJ
72. Turn-around period for ships — CONTINUOUS decline for last 5-6
years
73. India is LARGEST producer of SUGAR (UP>MH>KA) | BRAZIL
IS 2nd LARGEST | Official Source
74. India’s agricultural trade has dropped from 2013 to 2017 | India’s
agri export share = 2.2%
75. Livestock Census 2020 (5-yearly)
1. Total increase of 4.6%
2. Cattle highest > Goat > Buffalo | Cattle, buffalo, pig %share
has declined
3. UP>RJ>MP
76. Oilseeds — India IMPORT >60%
1. >70% production is in rain-fed area
2. India is the LARGEST importer of Vegetable Oil — Palm Oil
is the largest
77. Rubber — India is 6th largest producer | 2nd largest consumer |
KL>TN
78. Horticulture — area under cultivation has increased | production
has also increased over decade
79. Production — 1st largest in Banana, Mango, Lime, Papaya |
2nd largest overall fruit & vegetable production
80. Karnataka has the highest Nuclear Power generation capacity
81. 82% of Rural Indian household DON’T have water connections.
INSURANCE Sector — 100% in Insurance Intermediaries
and 49% in Insurance Company overall | Auto
Basel III (new introductions)
1. Capital Conservation Buffer (CCB)
2. Leverage Ratio
3. Discretionary counter-cyclic Buffer
4. Liquidity Coverage Ratio (LCR)
5. Net Stable Funding Ratio (NSFR)
UB2020 Taxation — Resident of India = global income is
taxable | NRI — ONLY Indian income taxable
FDI in Commercial Coal Mining — 100% Automatic | For
countries sharing land border with India, Govt Approval
Essential Commodities Act — Exporters and Food Processors —
EXEMPTED from ANY Stocking Limit
National GIS Enabled Land Bank Scheme — by Commerce
and Industry Ministry
WATERFALL Mechanism is under IBC 2016 — priority to
secured creditors > unsecured creditors while liquidating a company
PM CARE Fund — NOT to be audited by CAG | independent
auditor appointed by the trustees
RBI’s Ombudsman Scheme for Digital Transactions —
ONLY for Non-Banking Digital transactions regulated by RBI
|Banking entities digital transactions will continue under Banking
Ombudsman Scheme | Appellate authority is vested with the Deputy
Governor of RBI.
RBI’s Special Liquidity Facility- Mutual Fund (SLF-MF) — 90-
days REPO by RBI to bail out Mutual funds (NOT LTRO) | Banks
can extend loans to MF to meet the liquidity challenge of MF
Compensation Cess
It is levied under GST Act 2017
Objective — to compensate states for loss of revenue | manuf.-
heavy states are at loss
Cess on Who? — all taxpayers EXCEPT exporters and
composition schemes taxpayers on SELECTED goods or services
(NOT ALL). There can be cess chargeable on certain
IMPORTED goods.
Input Tax Credit (ITC) is applicable on Compensation cess.
Mostly this cess is levied on sin goods — tobacco (upto 200%) etc
Side pocketing rule: Side pocketing is a framework that allows
mutual funds to segregate the bad assets in a separate portfolio within
their debt schemes. SEBI introduced it after IL&FS fiasco
RBI DOES NOT regulate —
1. Housing Finance Companies HFCs
2. Merchant Bank Companies
3. Stock Exchange
4. Venture Capital Funds
5. Nidhi Companies (by MCA)
6. Insurance
7. Chit Companies
STATUTORY BODIES
1. Competition Commission of India — 2003
2. SEBI — 1992
3. IRDAI — 1999
4. NHB — 1988
5. ICAI — 1949
6. AICTE — 1945
7. FSSAI — 2011
8. NHAI — 1988
9. MCI — 1956
10. SERB — Science and Engg. Research Board | DST
11. DGCA
12. CBFC (Film Certification) — 1951 (Cinematographic Act
1952)
13. TRAI — 1997
14. INDIAN NURSING COUNCIL — 1947
15. CPCB — 1974
16. PHARMACY COUNCIL OF India 1948
17. KVIC — 1957
18. BAR COUNCIL 1961
19. PENSION FUND REGULATORY & DEVELOPMENT
AUTHORITY 2003
20. CENTRAL COUNCIL FOR INDIAN MEDICINE — 1971
| AYUSH MINISTRY
21. INLAND WATERWAYS REGULATORY AUTHORITY
 1985
22. COIR BOARD OF India 1953
23. CENTRAL ELECTRICITY AUTHORITY OF India 1951
(Powergrid corporation is a Company)
NPPA IS NOT A STATUTORY BODY
ADVERTISEMENT STANDARDS COUNCIL — Its a NON-
GOVERNMENT Body
ATOMIC ENERGY REGULATORY BOARD IS NOT
STATUTORY AS OF NOW
Subsidy in Fertiliser
No subsidy in fertiliser till 1977
Urea is NOT covered under NBS framework
Subsidies are given to the manufacturer/importers; NOT TO
THE FARMERS
OPERATION TWIST

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

MAXIMUM (Not Minimum)

7th Economic Census — MoSPI
Covers all the non-agri businesses and enterprises
Tie-up with CSC e-gov services
Will be Digital — better accuracy
Provision under Collection of Statistical Data 2008
National Digital Communication Policy 2018
Universal broadband access of 50mbps to every citizen
Provide 1 Gbps to all Gram panchayats
 Attract $100 billion investment
NOTHING about research papers or patents
EoDB — lagging areas : Enforcing contracts, Starting up a business,
Registering Property (3)
MAT = corporates | AMT = non-corporates | Income Tax Act
1961
NAHEP — Agri higher edu | by ICAR + WB
Price Stabilisation Fund — implemented by SFAC | e-NAM also by
SFAC
NCDC — National Cooperative Development Centre is under
Agriculture ministry
Rubber in NOT treated as Agricultural produce | NOT Agricultural
income | Rubber Policy 2019 under Commerce Min
Krishi Kisan App — Agri Ministry
Green-Ag Project — GEF supported | NOT Pan India
NBFCs — All Deposit taking and non-deposit taking with
asset size >Rs. 10000 crore — Liquidity Coverage Ratio
KCC Interest subvention — upto Rs. 3 lakh!
Mandatory Gold Hallmarking — by Ministry of Consumer
Affairs | only on jewellery, not on medical/industrial use | BIS mark,
carat and fineness, Hallmarking centre ID number, Jeweller’s ID
number | India is NOT a party to Vienna Convention on
Hallmarking (Precious Metals)
IFSC — regulated by RBI, SEBI, IRDAI
Principle of Reverse Consensus — WTO
PRAKASH Portal — Power Ministry | Koyla Availability | NTPC
developed
Merit Order Operation : aims to reduce the cost of generation of
Power | Power Ministry
Renewable Energy Promotion And Facilitation Board — on
the lines of Foreign Investment Promotion Board
Chaired by Join Secretary MNRE (NOT BY MINISTER)
Advanced Ultra Super Critical (AUSC) Thermal Power Plant
— Chattisgarh | World’s first | BHEL-NTPC
Gas Pricing in India is done based on international benchmarks |
domestic demand/supply DOESN'T matter

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

CHAMPIONS Portal — Ministry of MSME

CPGRAM — Ministry of Personnel, Public Grievance, Pension
IBC 2016 is available for BOTH secured and unsecured creditors |
SARFESI Act 2002 only for secured
IBC 2016 — India has NOT adopted UNICTRAL Model Cross
Border Law, 1997 | Its just based on it
Fully Accessible Route for G-Sec : enable non-residentws to invest
in specified Government of India dated securities |
No investment ceiling | No FPI limit
FDI @e-commerce — Market based = 100% || Inventory
based — 0% ( NOT ALLOWED)

AT-1 Bonds — Pay ONLY interest | cancel w/o consulting

investors | can even skip interest payment
Reflation is a fiscal or monetary policy designed to expand output,
stimulate spending, and curb the effects of deflation, which usually
occurs after a period of economic uncertainty or a recession. Reflation
aims to stop deflation

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.

Oil seeds — 70% rainfed cropping | We import 60% of our demands

for Oil seeds

National Mission for Disease Control Programme — under

Animal Husbandry and Fisheries Ministry
Trends
Unemployment = 6.1% — 45-year high
Unemployment in Urban > Rural Areas
Female Labour participation rate has DECLINED from 2012 to
2018 (23%)
Overall Labour Force participation has also DECLINED (49.8%)
— half of working age population is unemployed
ELEPHANT BONDS — a tax amnesty scheme which is targeted to
bring back the Black Money | here people can invest 50% of their
undisclosed income in the bonds — infra project | no persecution
FINANCIAL MARKETS
Negotiated Dealing System
Digital platform by RBI to deal with G-Sec
Act both as — Primary and Secondary Markets for G-Sec
Both Central and State Governments participate
Primary — auctioned by RBI
Secondary — trading

NABARD, National Housing Bank — Statutory and GoI holds

100% stakes in BOTH
Payments Bank — mainly for remittences and payment | Nachiket
Mor Committee
What is allowed?
1. Demand Deposits
2. Maximum balance of Rs. 1,00,000
3. Internet Banking
 4. Prepaid payment instruments
What is NOT allowed?
1. Time Deposits, Fixed Deposits
2. Issuing Credit Cards
3. Giving Loans
4. Accepting NRIs’ deposits
5. No NBFCs activities
Min Capital = Rs. 100 crore | CRR = RBI’s rate | FDI upto
74% (49% auto)
Ways-and-Means Advances (WMA) — RBI gives temporary loan
facilities to the centre and state governments as a banker to
government. This temporary loan facility is called Ways and Means
Advances (WMA).
The WMA scheme was designed to meet temporary mismatches
in the receipts and payments of the government.
This facility can be availed by the government if it needs
immediate cash from the RBI. The WMA is to be vacated after 90
days.
Interest rate for WMA is currently charged at the repo rate.
The limits for WMA are mutually decided by the RBI and the
Government of India.
What Is Subordinated Debt?

Subordinated debt (also known as a subordinated debenture) is an

unsecured loan or bond that ranks below other, more senior loans
or securities with respect to claims on assets or earnings.
Subordinated debentures are thus also known as junior securities.
In the case of borrower default, creditors who own subordinated
debt will not be paid out until after senior bondholders are paid in
full.

What is Invoice Financing?

Invoice financing is a way for businesses to borrow money against

the amounts due from customers. Invoice financing helps
businesses improve cash flow, pay employees and suppliers, and
reinvest in operations and growth earlier than they could if they
had to wait until their customers paid their balances in full.
Businesses pay a percentage of the invoice amount to the lender
as a fee for borrowing the money. Invoice financing can solve
problems associated with customers taking a long time to pay as
well as difficulties obtaining other types of business credit.