Eco and Fin May 2

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COVERAGE:
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IMPORTANT NEWS
 Finance Ministry will take a call on Rs. 3,000-crore

capital infusion this fiscal year based on financial
Rs. 3K-cr capital performance of three lossmaking public sector
general insurance companies.
for PSU insurers to
 According to sources, the finance ministry last year had
be based on asked National Insurance Company Limited,
performance Oriental Insurance Company Limited and United
India Insurance Company to chase bottom line rather
than top-line and underwrite only good proposals.
 The ninth round of India-UK free trade agreement

(FTA) negotiations concluded with detailed
discussions across a range of policy areas, the UK
government.
 A joint outcome statement issued by the Department
for Business and Trade (DBT) revealed that Round 9
of the ongoing talks took place between April 24 and 28
INDIA-UK FTA: in a hybrid format, with some Indian officials travelling
‘DETAILED’ Policy to London and others attending virtually.
Discussions Held  There is no date set for the 10th round of
negotiations, which is likely to be hosted by New
Delhi, also in a hybrid format.
 As with previous rounds, these were conducted in a
hybrid fashion — a number of officials from India
travelled to London and others attended virtually.
 During the round, detailed discussions took place
across a range of policy areas.
 India and Canada have agreed to step up discussions

on movement of skilled professionals and students,
considering its significant contribution in enhancing
India, Canada to the bilateral economic partnership between the two
step up talks on nations.
skilled workers  During the sixth India-Canada Ministerial Dialogue
on Trade and Investment in Ottawa, Commerce and
Industry Minister Piyush Goyal and his Canadian
counterpart Mary Ng reviewed the progress of the
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seven rounds of negotiations towards an early
harvest trade deal.
 Recognising the need for a comprehensive trade
agreement to create new opportunities for boosting
trade and investment flows, the India- Canada
Comprehensive Economic Partnership Agreement
(CEPA) negotiations were formally re-launched last
year.
 Towards this, it was decided that an early progress
trade agreement
(EPTA) would be a
transitional step
towards the CEPA.
 Imports from
Canada stood at
$3.77 billion
during the 11-
month period last
year as against $.2
billion in 2021-22.
 The two countries
also discussed ways to increase cooperation in sectors,
such as agricultural goods, chemicals, green
technologies, infrastructure, automotive, clean
energy, electronics, and minerals and metals.
 The ministry of ports, shipping and waterways

launched the “Harit Sagar” Green Port Guidelines,
aimed at achieving zero carbon emissions by
promoting eco-friendly practices in port
development, operation, and maintenance.
 The guidelines emphasize the use of clean and green
energy, such as green hydrogen, green ammonia, green
methanol/ethanol, to reduce carbon emissions over
Guidelines for defined timelines.
green ports
Objective:
unveiled
 The objective of the guidelines is to minimize waste
through reduce, reuse, repurpose, and recycle to
attain zero waste discharge from port operations while
promoting monitoring based on Environmental
Performance Indicators.
 Union minister for ports, shipping and waterways,
Sarbananda Sonowal, launched the guidelines in the
presence of Union minister of state for ports, shipping
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and waterways and tourism, Shripad Y. Naik, and other
officials.
 The government is at a “fairly advanced stage” of

finalising a well-coordinated e-commerce policy and
consumer protection rules, which will incorporate
provisions of Open Network for Digital Commerce
(ONDC).
 E-commerce rules and e-commerce policy will be
congruent with each other.
 The online food delivery space is currently a duopoly.
Purpose:
 The idea behind the ONDC was to try and create a

fairly inclusive playing field for different businesses,
particularly smaller players, who may not get access to
the e-commerce portals directly.
 ONDC has also expanded its geographic footprint from
Govt close to 85 cities at the start of the year to over 230 now.
finalising e-  Notable additions on the buyer side include PhonePe’s
commerce policy: Pincode and Airpay, while enterprises such as HUL
DPIIT secy and ITC have gone live on the seller side.
 The network commenced its ‘Alpha’ testing, with its
first-ever real-world transactions, in April last year.
 It subsequently began its ‘beta testing’ in Bengaluru
via the grocery and food delivery segments at the end
of September.
 ONDC also
ventured into
other domains
such as fashion,
beauty and
personal care,
electronics and
appliances in January, which are also gradually
expanding.
 The network recently made a big splash in the online
food delivery space, butting heads with Swiggy and

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Zomato by offering cheaper food items. As a result,
traffic on the network has greatly increased.
 India’s vulnerability to global shocks is expected to

reduce this fiscal year (FY24) driven by the reducing
current account deficit (CAD) amid challenging
India’s external financing conditions, CRISIL Ratings said.
vulnerability to  CAD is India’s major short-term external liability,
global shocks to which affects the exchange rate and investor sentiment.
reduce in FY24:  After peaking at 3.7 per cent of gross domestic
CRISIL product in the second quarter of F22, CAD shrank
significantly to 2.2 per cent in the third quarter of
FY23, driven by falling oil imports, and boost from
services exports.
 The Central Board of Indirect Taxes and Customs

(CBIC) has rolled out a module for automated scrutiny
of GST returns.
 This module will enable the officers to carry out
scrutiny of GST returns of Centre Administered
Taxpayers selected on the basis of data analytics and
CBIC rolls out risks identified by the System.
 In the module, discrepancies on account of risks
module for
associated with a return are displayed to the tax
automated GST officers.
returns’ scrutiny  Tax officers are provided with a workflow for
interacting with the taxpayers through the GSTN
Common Portal for communication of discrepancies
noticed.
 Implementation of this Automated Return Scrutiny
Module has commenced with the scrutiny of GST
returns for FY 2019-20.

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 The number of government-registered startups is
nearing the six-figure mark and stands at 98,927 as of
May 9.
 India has added 12,214 start-ups so far in 2023.
 Registration of start-ups with the Department for
Promotion of Industry and Internal Trade (DPIIT) helps
avoid the socalled angel tax.
Angel Tax:
 The angel tax is when the government imposes a tax

on investments that start-ups receive.
 The tax department reportedly saw the angel tax as a
measure to prevent money laundering using inflated
start-up valuations.
Performance of sectors:
 Of more than 50 sectors, just five: information

Start-up technology services; health care and lifesciences;
registrations near education; agriculture; and food and beverages
100K-mark, no. of account for around a third of the registered start-ups.
new ventures  Analysis shows that Maharashtra, Karnataka, Delhi
and Uttar Pradesh have emerged as preferred start-
surges since Covid
up destinations, accounting for half of all new
registrations and a similar share of the resultant
employment.
 Maharashtra provides the most employment via
start-ups, according to government figures.
 It shows generation of 51,357 jobs, followed by Delhi
(30,083) and Karnataka (24,487). Gujarat is ahead in

terms of people employed with 23,832, compared to
22,969 in Uttar Pradesh.

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 In the latest push to electric vehicles (EVs) to meet
climate goals, government think tank NITI Aayog has
come up with yearly targets for ride-hailing apps for
electrifying their fleet by 2030-31.
 For two-wheelers, the target is to achieve 30 per
cent of EVs in the fleet, while for four wheelers the
aim is 20 per cent.
 However, half of the total three-wheeler fleet
registered on these apps should be electric by 2030-
NITI sets FY31 31, according to the goals set.
target for Ola,  These numbers are a part of a yet-to-be-released study
Uber in green push by NITI Aayog in collaboration with Uber and Ola
across cities.
 While these targets

have been set, one of
the key challenges
will be production
and supply of these
vehicles.
 Building infrastructure and attracting investments

will be the key focus areas for India over the next 25
years to emerge as a developed nation by 2047, finance
minister Nirmala Sitharaman told business leaders
in Japan during a visit.
 The minister said that when there are several factors in
India’s favour, genuine efforts will help make up for
the lost opportunities of the past and achieve the
goal of a developed nation.
Infrastructure,
 Sitharaman is currently on a two-day visit to Japan,
investments to to attend the G7 finance and central bank governors’
stay in focus for meeting at Niigata.
25 yrs: FM  Referring to the efforts in India’s development journey,
she said India was focussing on infrastructure, both
physical and digital, as well as domestic and foreign
investments, innovation and technology-use in the
lives of people and ensuring every citizen benefits
from growth and development.
 Sitharaman referred to the initiatives of the Indian
government and said that the Union Budget
presented by her in February was prepared keeping in
mind the needs of the next 25 years.

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 She also highlighted the government’s priority to
incentivise and facilitate investment by businesses
through the Production Linked Incentive (PLI)
schemes, which were initially introduced for 14
sectors and is now being expanded in the crucial areas
of semi-conductors and solar components.
 Referring to India’s commitment to the greening of the
economy and the international goals under Nationally
Determined Contributions, especially in renewable
energy, she said that the country has already achieved,
with its own funds, 175 GW of solar energy. It now
aims to achieve 300 GW by 2030.
 Businesses with ₹5-10 crore sales will now have to

generate e-invoices for business-to-business
transactions as part of a government move aimed at
capturing large volumes of data on economic
transactions and checking whether GST has been
paid by those in the value chain.
 The government has been lowering the threshold for
eligible entities for e-invoicing in phases, beginning
Businesses with with entities with more than ₹500 crore revenue in
more than ₹5 October 2020.
crores sales have  Now the threshold is ₹10 crore, and the new
to generate e- threshold of ₹5 crore will be effective from 1
invoices August.
 Companies have to generate these e-invoices from
the portals of either government run National
Informatics Centre, or the portals run by private
agencies.
 E-invoicing is helping the authorities check the
practice of selling without proper invoices which leads
to leakage of tax revenue at the lower end of the
supply chain
 India’s retail inflation rate in April fell to an 18-month

low on the back of a high base and easing price
CPI inflation dips pressures across categories, giving the central bank
to 18-month low elbow room to maintain an extended pause on policy
rates.
of 4.7% in April
 Factory output growth, on the other hand,
decelerated sharply to a five-month low in March,
reflecting concerns about weak consumer demand.

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 Data released by the National Statistical Office (NSO)
showed that the
Consumer Price
Index (CPI)-based
inflation stood at
4.70 per cent in
April, as against
5.66 per cent the
previous month.
 Due to moderation
in the food, fuel,
clothing and
services prices, the
headline inflation
rate stayed within the Reserve Bank of India’s
(RBI’s) upper tolerance limit for the second
consecutive month in 2023.
 Export lender Exim Bank plans to raise up to record

$4 billion in financial year 2023- 24 (FY24) for
extending trade finance and term loans.
 Harsha Bangari, managing director of the export
credit agency, said the fundraising would depend on
market conditions.
 Exim, which raised $3.47 billion in FY23, has a broad
Exim Bank to investor base and would look at different currencies.
raise up to record  Exim Bank raised $1 billion through sustainability
$4 bn this fiscal yr bond in January 2023, under its environment social
governance (ESG) framework.
 It later raised $100 million via a second offering of the
bond.
 Proceeds from the bonds will be used for renewable
energy, clean transportation, access to essential
services and basic infrastructure, affordable housing,
and water and waste management, Bangari said.

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 Capital expenditure
(capex) by large central
public sector
enterprises (CPSEs) with
a target of Rs. 100 crore
or more has grown by
121 per cent year-on-
year (YoY) to Rs.
53,000 crore in April.
Reasons:
 National Highway
Authority of India
Capex by large
(NHAI) and petroleum
state-run firms
CPSEs started the capex cycle on a stronger note.
jumps 121% in  In April, CPSEs, along with departmental arms,
April achieved 7.3 per cent of the budgeted target of Rs.
7.33 trillion for FY24.
 The central government has increased the capex target
by 13.4 per cent in FY24 over the revised target of
Rs. 6.5 trillion in FY23.
Target:
 The capex target covers 54 CPSEs and five

departmental arms.
 The departmental arms include NHAI and Railways.
 During FY23, CPSEs were able to achieve 100.4 per
cent of their full-year revised target of Rs. 6.46
trillion.
 Foreign investors have shown strong buying interest in

Indian equities in May and invested more than Rs.
23,152 crores in the first fortnight due to lower
chances of further rate hikes by the US Federal
Reserve, a strong domestic macro-outlook and a good
FPIs pump in Rs. earning season.
23K crore on  With this, now Foreign Portfolio Investors (FPIs) have
strong outlook become macro-outlook equities in 2023 so far by
attracting Rs. 8,572 crore, data available with the
depositories showed.
 According to data from the depositories, FPIs invested
a net sum of Rs. 23,152 crores in Indian equities in
the first fortnight during May 2-12.

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 This came following a net infusion of Rs. 11,630 crores
in equities in April and Rs. 7,936 crores in March.
 The March investment was mainly driven by bulk
investment in the Adani Group companies by the US-
based GQG Partners.
 IL&FS has completed transfer of its fifth road asset -

Pune Sholapur Road Development Company
IL&FS transfers (PSRDCL) - to Roadstar Infra Investment Trust
(InvIT) at enterprise value of Rs. 2,000 crores as part
road asset to InvIT
its debt resolution strategy.
for Rs. 2,000  With this transfer, secured lenders of this asset will
crores get full recovery of their dues under the Invit structure
while the group lenders will be issued Invit units as
settlements for their loans, IL&FS said in a statement.
 Regulator for housing finance firms (HFFs) National

NHB asks large Housing Bank (NHB) has asked housing finance
HFFs to adopt companies with asset size of over Rs. 1,000 crores to
warning signals adopt an early warning signals (EWS) framework to
framework check financial frauds and to prevent accounts from
turning into non-performing assets.
 The Netherlands has emerged as India’s third largest

exports destination after the US and UAE during
2022-23.
Reasons:
 Due to surge in shipment of goods such as petroleum

products, electronic items, chemicals, and aluminium
Netherlands turns goods, according to the data of the commerce
key trading ministry.
partner  India’s trade surplus with The Netherlands has also
increased from $8 billion in 2021-22 to $13 billion
in 2022-23.
 The Netherlands has taken over major destinations
such as the UK, Hong Kong, Bangladesh and
Germany, the data showed.
 India’s exports to The Netherlands rose by about
48% to $18.52 billion during 2022-23 as against
$12.5 billion in 2021-22.

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 In 2021-22 and 2020-21, the outbound shipments to
the European country stood at $12.55 billion and
$6.5 billion, respectively.
 The exports are registering healthy growth continuously
since 2000-01, when India’s exports to that nation was
$880 million.
 Merchandise exports fell to a six-month low and

imports did their worst in 20 months -- both in value
terms — in April.
Reasons:
 Sluggish demand for Indian goods due to an economic

downturn in key destinations.
 Easing commodity prices weighed on India’s trade
basket.
Exports fall 12.7% Data Points:
in April; trade gap
 The data released by the
at 20-month low
commerce department
showed outbound shipments
from India witnessed a sharp
12.7 per cent contraction
at $34.66 billion in April.
 While inbound saw a
sharper decline at 14 per
cent to $49.9 billion,
leading to a 20-month-low
trade deficit at $15.24 billion.
 HDFC will raise up to Rs. 8,000 crores by issuing

bonds on a private placement basis to shore up its
resources via the issue of 5-year bonds carrying a
HDFC to raise up coupon of 7.7 per cent.
to ₹8,000 crores  The unsecured redeemable non-convertible
via 5-year bonds debentures issue will have a base size of Rs. 3,000
at 7.7% crores with an option to retain over-subscription of
up to Rs. 5,000 crores.
 The proceeds will be used for financing or refinancing
the housing finance business requirements.

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 Mumbai ranks sixth among 46 cities globally in
terms of annual price growth of high-end residential
properties with an appreciation of 5.5 per cent,
according to Knight Frank.
 Real estate consultant Knight Frank India in the
report ‘Prime Global Cities Index Q1 2023’ said that
Mumbai, Bengaluru, and New Delhi have seen an
Mumbai ranks 6th increase in average an n u al prices in January- March
2023.
in housing price
 Mumbai moved up from the 38th rank in Q1 2022 to
growth index, the 6th rank in Q1 2023 based on the annual growth
globally in high-end or prime properties.
 Bengaluru and New Delhi also witnessed an upward
movement to 16th and 22nd ranks from their previous
37th and 39th ranks, respectively, in the first quarter
of calendar year 2022.
 Dubai clinched the top position globally with an
increase of 44.2 per cent in prime residential
properties values.
 The National Stock Exchange (NSE) posted a net

profit of Rs. 7,356 crores on a consolidated basis for
the 2022-23 financial year (FY23), a 41 per cent rise
from its net profit of Rs. 5,198 crores from the previous
financial year.
 The total revenue on a consolidated basis stood at Rs.
NSE posts net 12,765 crores, showing a 44 per cent growth year-on-
profit of Rs. 7,356 year (YoY).
crores  For the quarter ended in March, the consolidated net
profit stood at Rs. 2,067 crores, a 31 per cent YoY
rise.
 For FY23, the exchange’s earnings per share increased
from Rs. 104.95 in FY22 to Rs. 148.58.
 NSE’s board, meanwhile, has recommended a dividend
of Rs. 80 per share for FY23.
 The National Stock Exchange (NSE) on Monday

launched rupee denominated futures contracts on
NSE launches WTI underlying NYMEX WTI crude oil and natural gas in
crude oil & gas its commodity derivatives segment.
futures  This came after the exchange, in March, received
approval from markets regulator Securities and
Exchange Board of India (Sebi) to launch these
contracts.

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 The addition of these contracts has expanded NSE's
product offering in the energy basket as well as its
overall commodity segment.
 The wholesale price index- (WPI) based inflation

entered deflationary territory in April, falling to 34-
month low at -0.92 per cent from 1.34 per cent in
March.
Reasons:
 Higher base effect.

 Continuing contraction in prices of manufactured
products.
Data Points:
 Data released by the Commerce and Industry Ministry

on Monday showed prices for manufactured items (-
First in 3 years, 2.42 per cent) contracted further in April from -0.77
wholesale prices per cent in March, led by a decelerated price rise in
contract in April items such as beverages, tobacco, apparel, leather,
pharmaceuticals, and cement.
 The fall in WPI
comes after the
consumer price
index- (CPI-) based
retail inflation rate
fell to an 18-month
low at 4.7 per cent
in April, remaining
below the central
bank’s tolerance
limit for the second
consecutive month.

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 Russia emerged as the largest exporter of oil to
India in the last financial year with 50.84 million
tonnes of crude supplies, according to data from the
commerce and industry ministry, amid western
sanctions on Russian oil purchases following its
invasion of Ukraine.
Russia turns  However, in terms of value of imports, Iraq was
India’s largest oil source in FY23.
India’s biggest
 Saudi Arabia,
crude supplier by United Arab
volume Emirates and the
US completed the
list of the top five
suppliers to India
during the financial
year ended 31
March.
 Trade officials of India and UK are set to sit across

the negotiating table for the tenth round of talks next
month in India between 5 and 9 June, directorate
general of foreign trade (DGFT) Santosh Sarangi
said.
 India and the United Kingdom began trade talks in
India-UK FTA
January 2021 but missed the Diwali deadline amid
talks to be held political uncertainty in the UK.
next month  However, both sides have refrained from giving out a
deadline to complete talks.
 The commerce ministry informed that investment is
being negotiated as a separate agreement (Bilateral
Investment Treaty) and would be concluded
simultaneously with India-UK FTA.
 Exports to India’s key markets — the US, the United

Arab Emirates, China, Singapore, Bangladesh and
Germany — witnessed a sharp decline, resulting in a
12.69 per cent contraction in outbound shipments
Exports saw sharp during April, commerce department data showed.
fall on decline in  India’s biggest export market — the US — with 17
US, UAE share per cent share witnessed 17.16 per cent contraction at
$5.9 billion in April.
 This was followed by the United Arab Emirates (UAE)
that saw 22.09 per cent decline at $2.23 billion
exports.

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 These two countries exported goods worth $8.13
billion, indicating a share of over 23 per cent in April.
 While these six countries out of India’s top ten export
destinations saw
contraction,
shipments to Saudi
Arab, the
Netherlands, United
Kingdom (UK) and
Italy saw 8.38 per
cent, 23 per cent,
20.69 per cent and
3.59 per cent, growth
respectively.
 These 10 countries
comprise 48 per
cent of the value of
goods exported in
April.
 The Nifty derivatives contracts traded on the

Singapore Exchange (SGX) have been renamed to
GIFT Nifty.
 Earlier, they were referred to as SGX Nifty.
SGX Nifty  The NSE announced that starting July 3, all
outstanding Nifty contracts at SGX will be fully
renamed transferred to NSE IFSC at GIFT City for order
matching.
GIFT Nifty  The exchange has obtained approvals from the
Monetary Authority of Singapore (MAS) and IFSCA
— regulators at Singapore and Gift City, respectively.
 On April 17, SGX had issued a circular on migrating
all Nifty positions to NSE IFSC.
 The National Stock Exchange (NSE) has received Rs.

300 crores from the Securities and Exchange Board
of India (Sebi) following relief from the Supreme Court
NSE receives Rs. (SC), which is hearing an appeal by the market
300 crores from regulator in the colocation case.
Sebi  The court on March 20 asked Sebi to return Rs. 300
crores to the NSE from the Rs. 1,107 crore the
exchange had deposited as part of the disgorgement in
the case.

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 The Union Cabinet approved the modified production-
linked incentive (PLI) scheme for information
technology (IT) hardware to boost local
manufacturing of products like tablets and laptops,
and more than doubled
its budgetary outlay to
Rs. 17,000 crores from
the previous provision
of Rs. 7,325 crores.
 The revised scheme
may offer incentives of
up to 9 per cent on the
incremental sales of
tablets, laptops, all-in-
one personal
computers, servers,
Cabinet nod for and edge computing
Rs. 17,000-crore devices manufactured
IT hardware PLI in the country to attract
investment in the sector.
2.0
 The tenure of the scheme has been extended to six
years from four years announced in 2021.
 The government now aims to bring flexibility to the
scheme by allowing the original equipment
manufacturers (OEMs) to apply for incentives under
the scheme anytime in the next three years.
 The base year for comparing incremental sales will be
2022-23.
 The scheme’s budget will be divided among the three
categories -- domestic, global, and hybrid.
 The maximum incentive for global companies will be
capped at Rs. 4,500 crores, while players who fall
under the hybrid category may get a maximum
incentive of Rs. 2,250 crores.
 For domestic companies, there will be a cap of Rs. 500
crores.
 The Centre has decided to slash the Faster Adoption

and Manufacturing of (Hybrid &) Electric Vehicles
Govt cuts FAME-II
(FAME-II) subsidy of electric two-wheelers to Rs.
subsidy for e-2Ws 10,000 per Kwh, from the existing Rs. 15,000 per
to Rs. Kwh.
10,000/kWh  The existing maximum subsidy cap of 40 per cent of
the ex-factory price of the vehicle has also been brought
down to 15 per cent.
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 The move came as the Rs. 2,000-crore outlay for
supporting electric two wheelers was about to get
exhausted months before the March 2024 deadline of
the scheme.
 The government has already disbursed subsidies for
around 80 per cent electric two-wheelers of the
targeted 1 million.
 The proposed increase in the scheme outlay and
reduction in subsidy per vehicle may enable longer
government support for the e-2W segment.
 At present, the subsidy for EV makers ranges between
Rs. 17,000 and Rs. 66,000 per electric two-wheeler.
 After the new notification, the subsidy for each E2W
would come down to Rs.
15,000 - Rs. 20,000 per
electric vehicle.
 When launched, FAME II
had a provisioning of Rs.
10,000 per kWh.
 It was increased to Rs.
15,000 per Kwh as there
was low demand for
electric two wheelers then.
 To ensure that fertiliser prices remain unchanged for

farmers, the Union Cabinet has approved a Rs.
38,000-crore subsidy for non-urea fertilisers for the
coming kharif season.
 In total, the central government will spend Rs. 1.08
trillion in subsidies during kharif 2023-24, which is
almost 62 per cent of the Budget Estimates for
financial year 2023-24 (FY24).
Cabinet approves  Of the Rs. 1.08 trillion, around Rs. 70,000 crore is
Rs. 38,000-cr for urea, while the rest is for nonurea fertilisers till
subsidy for non- September.
 In Rabi
urea fertilisers
2022, the
government
had
provided
around Rs.
52,000
crores for
non-urea
fertilisers.
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 The lower subsidy in 2023-24 kharif is due to falling
global and domestic rates.
 The Union Cabinet approved signing of a pact between

the Competition Commission of India (CCI) and the
Egyptian Competition Authority (ECA).
MoU signing Aim: The MoU between the two regulators is aimed at
promoting and strengthening of co-operation in
between India,
competition law and policy through exchange of
Egypt competition
information, sharing of best practices as well as through
regulators gets various capacity building initiatives.
nod
 According to the release, the MoU also aims to develop
and strengthen linkages between CCI and ECA as
well as learn and emulate from each other's experiences
in the enforcement of competition law.
 The Ministry of Health and Family Welfare (MoHFW)

announced at a G20 co-branded event with the
World Health Organization (WHO) its ambitious target
of putting 75 million people with hypertension and
diabetes on standard care by 2025.
 The screening would be done through public health
centers (PHCs).
HealthMin to put  The Indian government’s ambitious target of
reaching 75 million people with hypertension under
75 mn with
standard care in primary healthcare by 2025 is the
hypertension on
largest cover of non-communicable diseases (NCDs)
standard care by in the world for primary healthcare,” said WHO Chief
2025 Tedros Adhanom Ghebreyesus.
 To fight the menace of NCDs, India has created a
platform through the creation of more than 150,000
health and wellness centers and operationalisation of
telemedicine and digital health services.
 Around 40,000 primary healthcare medical officers
will be trained on standard treatment workflow for
NCDs through the Shashakt portal, MoHFW said.

Crack Grade B 20
 The finance ministry has included use of credit card
abroad by an Indian resident within the $250,000
limit that an individual is allowed to remit abroad in a
year under the liberalised remittance scheme (LRS),
showed an official order.
 Under this scheme, the Reserve Bank of India allows
residents to spend funds abroad up to the specified
ceiling for investment and expenditure, including
Credit card used
travel, education, medical treatment and buying
abroad to count as
securities and physical assets.
foreign remittance  Until now, a resident Indian’s overseas use of credit
cards during foreign travel was excluded from the
$250,000 cap by a provision in the Foreign Exchange
Management (Current Account Transactions) Rules,
2000.
 An amendment to the rule brought out by the finance
ministry late showed that this exclusion has been
dropped.
SBI’s Q4  State Bank of India’s (SBI’s) standalone profit in the

standalone net January- March
quarter of FY23,
jumps 83% to Rs.
declared on Thursday,
16,695 cr grew by 83.19 per
cent to a record Rs.
16,695 crores on the
back of healthy net
interest income (NII)
and lower provisions.
 The previous best
quarterly profit was
Rs. 14,205 crores in
Q3FY23.
 For the full financial
year 2022-23, the
bank’s standalone net
profit grew 58.58 per cent to Rs. 50,232 crores.

Crack Grade B 21
‘Exports to EU A report by think tank Global Trade Research Initiative
worth $1.3 bn to (GTRI):
be hit by  India’s exports of products like coffee, leather hides

deforestation rule’ and paperboard worth $1.3 billion annually to the
European Union (EU) will get impacted due to the
deforestation regulation adopted by the EU.
 Within three weeks of introducing the carbon border
tax, the European Union Council on May 16 adopted
the European Union Deforestation-Free Products
Regulation.
 The (GTRI) said that the EU-DR appears to prioritise
protecting its own agricultural sector and promoting
exports, making imports more difficult.
Senior citizens  The government’s decision to expand the upper limit of

scheme sees the Senior Citizens Savings Scheme (SCSS) and hike
the interest rate appears to have worked, with the
investment of over
scheme having garnered upwards of Rs. 10,000 crores
Rs. 10K crores in in April.
April  This is more than three times the amount the scheme
received in previous years.
 Govt. is seeing a bonanza and has got a very good
report in the first month of the expanded senior citizen
scheme. It was in excess of Rs. 10,000 crores.
 Normally in the past, for the first month, we have
had around Rs. 3,000 crores.
 Union Finance Minister Nirmala Sitharaman in her
Budget speech increased the maximum deposit limit
for SCSS to Rs. 30 lakhs from Rs. 15 lakh and for
Monthly Income Account Scheme to Rs. 9 lakhs
from Rs. 4.5 lakh for single accounts and to Rs. 15
lakhs from Rs. 9 lakhs for joint accounts.
 She had also announced a one-time new small savings
scheme, Mahila Samman Savings Certificate, that
would be made available for a two-year period up to
March 2025.
 This will offer deposit facility up to Rs. 2 lakhs in the
name of women or girls for a tenor of 2 years at fixed
interest rate of 7.5 per cent with partial withdrawal
option.”

Crack Grade B 22
GOVT PLANS TO  A plan to develop eight new cities to alleviate
SET UP 8 NEW population burden on the existing urban centres in
the country is under consideration.
CITIES TO EASE
 The 15th Finance Commission in one of its reports
POPULATION
had recommended that new cities should be
BURDEN developed, said M B Singh, director of the G20 unit
of the Union Housing and Urban Affairs Department.
 Singh was speaking to PTI on the sidelines of a meeting
of ‘Urban 20 (U20)’.
 “After the finance commission’s recommendation,
the states sent proposals to the Central Government
for 26 new cities, and after a scrutiny, eight new
cities are being considered for development.
Just 25% ESG Preparedness survey by Deloitte India:

consumer, realty  Only a fourth of India Inc feels adequately equipped
firms aware of to meet their environmental, social, governance
ESG norms: (ESG) strategy and compliance requirements with
Survey consumer industry lagging the most, reveals an ESG
Preparedness survey by Deloitte India.
 The survey, done between March and April this year,
found out that less than half of the companies
reported being aware of the existing ESG reporting
mechanisms and regulations
in India.
 In the survey of 150
organisations, 68 per cent of
firms in the financial
services sector were well
aware of the ESG regulations
while the number for the
consumer, real estate and
construction sectors stood at
only 25 per cent.
 The report pointed out that only 7 per cent
organisations in the consumer industry indicated
robust preparedness for ESG requirements, owing to
the lack of investors’ focus on ESG performance in this
sector.
Govt may not take  The Union government is unlikely to undertake any
up new PSU stake new public-sector undertaking (PSU)
disinvestment— including privatisation of public-
sales in FY24
sector banks—in 2023-24.

Crack Grade B 23
 Any such stake sale might take place only after the
general elections next year.
 The priority will be to speed up the ongoing deals,
including those to sell stakes in IDBI Bank, Shipping
Corporation, and Container Corporation of India
(Concor).
 The government has set a disinvestment target of
Rs. 51,000 crores for 2023-24.
 Dipam raised Rs. 50 crores as disinvestment
receipts through offer for sale between April and May
this year, besides over Rs. 400 crore as dividend.
 In her Budget speech for 2021-22, Finance minister
Nirmala Sitharaman had said two public-sector banks
and a general insurance company would be
privatised, and that legislative amendments for this
would be moved.
 The Privatisation Bill is yet to be moved. The said
privatisation of banks would take longer and might
not be part of the 2023- 24 disinvestment plan.
20% tax on credit  Starting 1 July, a 20% tax collected at source (TCS)
card spend during will be levied on overseas credit card expenses of
Indians, barring such expenditure on education or
overseas travel
medical treatment- related visits, which will be
subject to a lower rate, the finance ministry clarified
on amendments to the foreign exchange
management rules issued earlier this week.
 The credit card issuer will collect the tax when the
bill is settled in rupees and can be adjusted against
the cardholder’s tax liability when paying taxes.
 While the salaried class may have to wait till the time of
filing returns, professionals can use this credit to set
off their advance tax liability met on a quarterly
basis.
 The inclusion of overseas use of credit cards within
the purview of the Reserve Bank of India’s
liberalized remittance scheme, which attracts TCS, is
effective from 16 May.
 Currently, the TCS rates range from 0.5% to 5%.
 Credit card use during foreign visits is now covered
under LRS, which has an annual cap of $250,000,
above which RBI permission is needed.

Crack Grade B 24
Overseas debit,  In a step that would come as relief to individuals
credit card travelling abroad, the Centre excluded up to Rs.7
lakh of debit and credit card payments in a financial
payments up to
year from the ambit of the liberalised remittance
Rs.7 lakh a year scheme (LRS).
out of LRS: Govt  These transactions will not attract tax collected at
source (TCS).
 To avoid any procedural ambiguity, it has been decided
that any payments by individuals using their
international debit or credit cards up to Rs.7 lakh
per financial year will be excluded from the LRS
limits and, hence, not attract any TCS.
 It added that the existing beneficial TCS treatment
of education and health payments would continue.
 The changes to the Foreign Exchange Management
(Current Account
Transactions Rules),
2000, will be issued
separately.
 The finance ministry had
notified the Budget 2023
announcement of
bringing international
credit card transactions
under LRS by imposing a
20 per cent TCS from 1
July.
CBDT widens  The Central Board of Direct Taxes (CBDT) widened

valuation norms the valuation methods under the angel tax provision
on investment by foreign investors in start-ups to
for angel tax
bring clarity and end tax disputes.
 Further, it exempted certain categories of investors
— such as those registered with regulatory authorities
and government-owned entities whose chances of
circulating unaccounted money are low — from the
said tax provision.
 Among the proposed valuation norms, it has suggested
valuation by a Securities and Exchange Board of
India registered category-I merchant banker using
any internationally accepted pricing methodology
applied on an arm’s length basis, if it is of a date not
more than 90 days prior to the date of issue of
shares that are the subject matter of valuation.

Crack Grade B 25
 Further, to account for forex fluctuations, bidding
processes and variations in other economic indicators,
etc, which may affect the valuation of the unquoted
equity shares during multiple rounds of investment, it
proposed providing a safe harbour of 10 per cent
variation in value.
Govt eyeing 1% India is looking to mandate the blending of 1 per cent of

SAF in all sustainable aviation fuel (SAF) in all domestic commercial
flights within the next two years, said Petroleum and
commercial flights
Natural Gas Minister Hardeep Singh Puri.
by ’25
SAF:
 SAF refers to waste-derived aviation fuel.

 Unlike traditional jet fuels, it is made from various
sources such as used cooking oil, agricultural waste,
municipal solid waste, fats or non-food crops, and
forestry residues.
 This means it has the potential to reduce greenhouse
gas emissions by up to 80 per cent.
Target:
 Government was working to quickly raise the level of

domestic SAF production and was aiming to make 1
per cent blending mandatory in all domestic
commercial flights by 2025.
 This may be extended to 5 per cent in the next few
years.
 By 2025, if we target to blend 1 per cent SAF
blending in Jet fuel, India would require around 140
million litres of SAF per annum.
UP government  Uttar Pradesh emerged as the largest buyer of goods

top buyer from and services among all states and union territories
from government portal GeM in 2022-23, according
GeM portal in
to the central government data.
FY23
 The Uttar Pradesh government and its agencies
procured goods and services worth Rs.12,152 crore
from the union commerce ministry's platform
Government e-marketplace (GeM) during last fiscal
year, the data showed.

Crack Grade B 26
Retail inflation for  Retail inflation for farm workers and rural labourers
farm, rural eased marginally to 6.5 per cent and 6.52 per cent in
April compared to 7.01 and 6.94 per cent, respectively,
workers eases
in March this year.
marginally in April
 Point-to-point rate of inflation based on the CPI-AL
(consumer price index for agricultural labourers)
and CPI-RL (rural labourers) stood at 6.50 per cent &
6.52 per cent in April 2023, compared to 7.01 per
cent & 6.94 per cent, respectively, in March 2023, and
6.44 per cent and 6.67 per cent, respectively, during
the corresponding month of (April 2022) the previous
year," a Labour Bureau statement said.
Bank credit grows  Credit offtake remained robust early at the start of the
15.5% till May 5 current financial year, with 15.5 per cent growth
year-on year (YoY) clocked till May 5 as against 11.8
per cent a year ago.
 Deposit mobilisation also improved, growing 10.4
per cent YoY as against 9.7 per cent in the same
period in FY23, showed Reserve Bank of India data.
 Credit offtake expanded by 15 per cent and deposits
grew by 9.6 per cent in the whole of FY23.
 In the current financial year (FY24), bank credit in
absolute terms grew by Rs.2.29 trillion to Rs.139.04
trillion.

Crack Grade B 27
REPORTS & INDICES

India likely to grow 6.7% in 2024: UN DESA – WESP Report
 Robust domestic demand will drive India’s economic growth in 2023, while
higher interest rates and weaker external demand will continue to weigh on
investment and exports during the calendar year, the United Nations
Department of Economic and Social Affairs (UNDESA).
World Economic Situation and Prospects report:
 In its mid-year update to its World Economic Situation and Prospects report,
the UNDESA retained its growth forecasts for India at 5.8 per cent and 6.7 per
cent for the 2023 and 2024 calendar years, respectively.
Indian Scenario:
 India’s economy — the largest in the (South Asian) region — is expected to

expand by 5.8 per cent in 2023 and 6.7 per cent in 2024, supported by
resilient domestic demand.
 As the (South Asian) region is highly vulnerable to extreme climate conditions,
potential droughts and floods also pose a significant risk to the economic outlook.
Global Scenario:
 The UN arm revised upward its growth forecast for the world economy to 2.3
per cent, from 1.9 per cent estimated earlier for 2023, but pared down its
estimate for 2024 to 2.5 per cent, from 2.7 per cent predicted earlier.
 Besides, the report also notes that the Reserve Bank of India’s rate-hiking
spree, which led to a cumulative increase of 250 basis points in the repo rate
since May 2022, will finally bear fruit, as the headline inflation figure is expected
to remain well below the central bank’s upper tolerance limit of 6 per cent in
2023.
Inflation:
 Inflation in India is expected to decelerate to 5.5 per cent in 2023 as global

commodity prices moderate and slower currency depreciation reduces imported
inflation.
Outlook:
 The report mentioned that the labour markets in the developed economies
have shown remarkable resilience, with employment rates at record high levels
contributing to sustained robust household spending leading to wage gains, thus
making it harder for central banks to tame inflation.

Crack Grade B 28
India may add over 7,000 ultra-rich people by 2027: Knight
Frank Report
The Wealth Report 2023:
 The number of ultra-high net worth individuals (UHNWIs) in India is expected to

rise 58.4 per cent in the next five years from 12,069 in 2022 to 19,119 in
2027, a report by property consultancy Knight Frank.
 In its ‘The Wealth Report 2023’, Knight Frank said that the number of Indian
UHNWIs — those with a net worth of $30 million or above — fell 7.5 per cent in
2022.
Reasons:
 due to economic slowdown,

 rate hikes,
 appreciation of the US dollar and geopolitical uncertainties.
Global Scenario:
 Globally, the number of UHNWIs fell 3.8 per cent in 2022 compared to 2021.
 Taking the longer view, the global UHNW population grew by 44 per cent in the
five years to 2022 and, although we forecast growth to slow to 28.5 per cent
over the next five years, the recent dip will prove short lived as we adapt to a
new economic environment.
Indian Scenario:
 The report added that India’s billionaire population is expected to increase from
161 individuals in 2022 to 195 individuals in 2027.
 Moreover, the Indian high-net-worth-individual (HNI) population, with assets of
$1 million and more, will rise 107 per cent from 797,714 persons in 2022 to
1.65 million in 2027.
Asia Scenario:
 The report added that in the next five years, Asia is expected to witness a 40 per
cent growth in the number of ultra-wealthy.
 By 2027, Asia will be home to 210,175 UHNWIs taking over Europe and
standing only second to the Americas,” it said.
 UAE was the fastest-growing country with an 18.1 per cent increase, bringing
the number of UHN WIs to 1,116.
 Saudi Arabia and Turkey followed with a growth rate of 10.4 per cent and 6.2
per cent.

Crack Grade B 29
Regulatory Bodies in NEWS:

Exchange-traded commodity derivatives: FPIs get Sebi nod.
What is in the News?
The Securities and Exchange Board of India (Sebi) allowed stock exchanges to
extend direct market access (DMA) facility to foreign portfolio investors (FPIs) in
exchange traded commodity derivatives (ETCDs).
Frameworks:
 In September last year, the SEBI had allowed FPIs to participate in exchange
traded commodity derivatives (ETCDs) only for cash settled non-agricultural
commodity derivatives contracts and indices.
 FPIs can commonly use the DMA facility to trade in equity markets. Sebi has now
allowed them to do the same in ETCDs.
 This is a welcome move, considering the multitude of advantages that DMA offers
to FPIs like direct control over their orders, faster execution of orders,
reduced risk of errors, greater transparency, maintaining confidentiality,
increased liquidity, lower impact costs for large orders.
Direct Market Access (DMA):
DMA facilitates the clients of a broker to directly access the exchange trading system
through the broker’s infrastructure.
Aim: to execute orders without manual intervention by the broker.
What has changed?
 Until now, there wasn’t much participation from FPIs as some ambiguities
remained on which categories could participate.
 It was specified that only corporates in the shape of Alternative Investment
Funds (AIFs) could participate but there was no clarity about trusts and other
categories.
 There have been submissions to Sebi and exchanges seeking written
clarifications.
 Sebi has noted that the DMA facility will also help in implementing better
hedging and arbitrage strategies.
 In the earlier circular, the markets regulator had specified conditions stating that
FPIs belonging to categories like individuals, family offices and corporates will
be allowed position limit of 20 per cent of the client level position limit in a
particular commodity derivatives contract.

Crack Grade B 30
RBI’s released Master Direction on Outsourcing of
Information Technology Services.
The Reserve Bank of India (RBI) released the final norms for outsourcing of information
technology- (IT-) related services by financial sector entities, which will come into
effect from October 1.
For:
 Scheduled Commercial Banks (excluding Regional Rural Banks).

 Local Area Banks; Small Finance Banks; Payments Banks.
 Primary (Urban) Co-operative Banks.
 Non-Banking Financial Companies.
 Credit Information Companies; and
 All India Financial Institutions (EXIM Bank, NABARD, NaBFID, NHB and SIDBI)
Purpose:
 In order to ensure effective management of attendant risks, the Statement on

Developmental and Regulatory Policies proposed the issuance of suitable
regulatory guidelines on Outsourcing of IT Services.
 The underlying principle of these Directions is to ensure that outsourcing
arrangements neither diminish REs ability to fulfil its obligations to
customers nor impede effective supervision by the RBI.
Definitions:
Material Outsourcing of IT Services: are those which

 if disrupted or compromised shall have the potential to significantly impact the
RE’s business operations; or
 may have material impact on the RE’s customers in the event of any
unauthorised access, loss or theft of customer information.
Outsourcing of IT Services: shall include outsourcing of the following activities:
 IT infrastructure management, maintenance and support (hardware, software
or firmware);
 Network and security solutions, maintenance (hardware, software or firmware);
 Application Development, Maintenance and Testing; Application Service
Providers (ASPs) including ATM Switch ASPs;
 Services and operations related to Data Centres;
 Cloud Computing Services.
 Managed Security Services; and
 Management of IT infrastructure and technology services associated with
payment system ecosystem.
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Role of the Regulated Entity:
Regulatory and Supervisory requirements:
 Outsourcing of any activity shall not diminish RE’s obligations as also of its Board
and Senior Management, who shall be ultimately responsible for the outsourced
activity.
 REs shall ensure that the service provider, if not a group company, shall not
be owned or controlled by any director, or key managerial personnel, or
approver of the outsourcing arrangement of the RE, or their relatives.
Comprehensive assessment of need for outsourcing and attendant risks:
 determining the need for outsourcing based on criticality of activity to be
outsourced.
 determining expectations and outcome from outsourcing.
 determining success factors and cost-benefit analysis; and
 deciding the model for outsourcing.
Compliance with all applicable statutory and regulatory requirements:
The RE shall consider all relevant laws, regulations, rules, guidelines and conditions
of approval, licensing or registration, when performing its due diligence in relation to
outsourcing of IT services.
Grievance Redressal Mechanism:
 REs shall have a robust grievance redressal mechanism that shall not be
compromised in any manner on account of outsourcing, i.e., responsibility for
redressal of customers’ grievances related to outsourced services shall rest
with the RE.
 Outsourcing arrangements shall not affect the rights of a customer against the
RE, including the ability of the customer to obtain redressal as applicable under
relevant laws.
Governance Framework
IT Outsourcing Policy:
 An RE intending to outsource any of its IT activities shall put in place a

comprehensive Board approved IT outsourcing policy.
 The policy shall incorporate, inter alia, the roles and responsibilities of the
Board, Committees of the Board (if any) and Senior Management, IT function,
business function as well as oversight and assurance functions in respect of
outsourcing of IT services.
Role of the Board

 putting in place a framework for approval of IT outsourcing activities depending
on risks and materiality;
 approving policies to evaluate the risks and materiality of all existing and
prospective IT outsourcing arrangements; and
 setting up suitable administrative framework of Senior Management for the
purpose of these Directions.

Crack Grade B 32
Role of the Senior Management:
 identifying IT outsourcing risks as they arise, monitoring, mitigating, managing
and reporting of such risks to the Board/ Board Committee in a timely
manner;
 ensuring (i) effective oversight over third party for data confidentiality and (ii)
appropriate redressal of customer grievances in a timely manner;
 prior evaluation of prospective IT outsourcing arrangements and periodic
evaluation of the existing outsourcing arrangements.
Risk Management:
 REs shall put in place a Risk Management framework for Outsourcing of IT

Services that shall comprehensively deal with the processes and
responsibilities for identification, measurement, mitigation, management, and
reporting of risks associated with Outsourcing of IT Services arrangements.
 The risk assessments carried out by the REs shall be suitably documented with
necessary approvals in line with the roles and responsibilities for the Board of
Directors, Senior Management and IT Function. Such risk assessments shall be
subject to internal and external quality assurance on a periodic basis as determined
by the Board-approved policy.
 REs shall be responsible for the confidentiality and integrity of data and
information pertaining to the customers that is available to the service provider.
Rising overnight funding costs may deter RBI from rate hikes.
Excess cash that banks park with the RBI has dwindled to ₹788 billion.
Highlights:
 A cash crunch driven surge in funding costs in Indian money market to a five-
week high may deter the nation’s central bank from hiking benchmark policy
rates.
 The weighted average call rate, an overnight funding cost rate the central bank
monitors, was at 6.78%, above the upper band of the Reserve Bank of India’s
interest rate corridor, of 6.75%.
 The higher overnight rate is almost equivalent to a rate hike, even though the
RBI paused in the April policy.
 Excess cash that banks park with the RBI has dwindled to ₹788 billion, from as
high as ₹9 trillion in 2022, driving up the funding costs.
 The current liquidity tightness phase is being driven by diminishing core
liquidity unlike previous recent episodes which were more owing to higher
government cash balances.
RBI asks banks and REs to ensure full transition away from
LIBOR
Crack Grade B 33
The Reserve Bank of India (RBI) has issued an advisory to banks and other RBI-
regulated entities, emphasizing the need to take steps to ensure a complete
transition away from the London Interbank Offered Rate (LIBOR) from July 01,
2023.
For:
 All Commercial and Co-operative Banks / All India Financial Institutions

 Non-Banking Financial Companies including Housing Finance Companies
 Standalone Primary Dealers
Key Messages in the advisory include:
 Banks / Financial Institutions (FIs) are advised to ensure that no new

transaction undertaken by them, or their customers rely on or are priced
using the US$ LIBOR or the Mumbai Interbank Forward Outright Rate
(MIFOR).
 The Financial Benchmarks India Pvt. Ltd. (FBIL) will cease to publish
MIFOR after June 30, 2023.
 Banks/FIs are advised to take all necessary steps to ensure insertion of
fallbacks at the earliest in all remaining legacy financial contracts that
reference US$ LIBOR (including transactions that reference MIFOR).
 Banks/FIs are expected to have developed the systems and processes to
manage the complete transition away from LIBOR.
The Reserve Bank will continue to monitor the efforts of banks/FIs for ensuring a
smooth transition from LIBOR.
Background:
 The Financial Conduct Authority (FCA), UK, in a press statement dated

March 05, 2021, announced that all LIBOR settings will either cease to be
provided by any administrator or no longer be representative:
 Immediately after December 31, 2021, in the case of all Pound sterling,
Euro, Swiss franc and Japanese yen settings, and the 1-week and 2-month
US dollar settings; and
 Immediately after June 30, 2023, in the case of the remaining US dollar
settings.
 The complete transition from LIBOR is a significant event in the global
financial markets which requires continued attention from all stakeholders
to mitigate operational risks and ensure an orderly transition.
 The Reserve Bank has been proactively taking steps to deal with the
issues around LIBOR transition and had issued an advisory on “Roadmap
for LIBOR Transition” dated July 08, 2021, wherein banks/FIs, inter-alia,
were encouraged to undertake transactions using widely accepted
Alternative Reference Rate (ARR), as soon as practicable and in any case
Crack Grade B 34
by December 31, 2021 and insert robust fallback clauses in relevant
LIBOR linked financial contracts.
Reserve Bank launches ‘100 Days 100 Pays’ Campaign for

Return of Unclaimed Deposits.
Unclaimed Deposits:
Balances in savings / current accounts which are not operated for 10 years, or term
deposits not claimed within 10 years from date of maturity are classified as
“Unclaimed Deposits”.
 These amounts are transferred by banks to “Depositor Education and

Awareness” (DEA) Fund maintained by the Reserve Bank of India.
 The Reserve Bank, from time to time, through its public awareness initiatives,
has been encouraging members of public to identify and approach the bank
concerned for claiming such deposits.
 Recently, the Reserve Bank has also announced the setting up of a Centralised
Web portal for public to search unclaimed deposits across multiple banks.
 The Reserve Bank of India announced a ‘100 Days 100 Pays’ campaign for banks
to trace and settle the top 100 unclaimed deposits of every bank in every
district of the country within 100 days.
 This measure will complement the ongoing efforts and initiatives by the
Reserve Bank to reduce the quantum of unclaimed deposits in the banking
system and return such deposits to their rightful owners/ claimants.
 The banks will commence the campaign from June 01, 2023.
RBI: Formalisation of Informal Micro Enterprises on Udyam

Assist Platform
RBI released the circular for: Formalisation of Informal Micro Enterprises on Udyam
Assist Platform.
For:
 All Commercial Banks,

 Small Finance Banks,
 Local Area Banks,
 Regional Rural Banks
 All Primary (Urban) Co-operative Banks/State Co-operative Banks
/ District Central Co-operative Banks
 All-India Financial Institutions
 All Non-Banking Financial Companies

Crack Grade B 35
All lenders were advised to obtain ‘Udyam Registration Certificate’ for classification of
entities as MSME.
Highlights:
 The Ministry of Micro, Small and Medium Enterprises (‘MSME’), Government of

India has launched the Udyam Assist Platform (UAP) to facilitate formalisation
of Informal Micro Enterprises (IMEs) through online generation of Udyam Assist
Certificate.
 Registration on the platform is done with the assistance of Designated Agencies
which are RBI regulated entities (including scheduled commercial banks, non-
banking financial companies, etc.).
 The Government of India has specified that the certificate issued on the UAP
to IMEs shall be treated at par with Udyam Registration Certificate for the
purpose of availing Priority Sector Lending (PSL) benefits.
 Government of India has clarified to RBI that IMEs are those enterprises
which are unable to get registered on the Udyam Registration Portal (URP)
due to lack of mandatory required documents such as Permanent Account
Number (PAN) or Goods and Services Tax Identification Number (GSTIN).
 It has been clarified that the turnover of enterprises exempted from filing
returns under the provisions of the Central Goods and Services Tax Act, 2017
shall be the sole criterion to be defined as IMEs for the purpose of UAP.
 Accordingly, IMEs are those enterprises that are not covered in the Goods and
Services Tax regime.
 An interface has been created between the UAP and Udyam Registration Portal
(URP) to enable the transition and migration of the IMEs from UAP to URP, once
IMEs obtain the mandatorily required documents.
 In view of the aforementioned notification and clarification, IMEs with an
Udyam Assist Certificate shall be treated as Micro Enterprises under MSME for
the purposes of PSL classification.
Reserve Bank of India in collaboration with the GFIN invites

firms to participate in Greenwashing TechSprint.
GFIN:
 GFIN is a group of over 80 international organisations committed to supporting
financial innovation in the interest of consumers and it is currently chaired by the
Financial Conduct Authority.
 RBI as a participating member is inviting firms from India to participate in this
Greenwashing TechSprint.
Highlights:
 The Reserve Bank of India will be among 13 international regulators taking part
in the Global Financial Innovation Network (GFIN)’s first ever Greenwashing
TechSprint.

Crack Grade B 36
 The number of investment products marketed as ‘green’ or making wider
sustainability claims is growing.
 Exaggerated, misleading or unsubstantiated claims about Environmental, Social
and Governance (ESG) credentials damage confidence in these products and the
RBI wants to ensure that consumers and firms can trust that products have the
sustainability characteristics they claim to have.
 RBI will therefore be participating in a virtual TechSprint, hosted on the FCA’s
Digital Sandbox, to bring together international regulators, firms, and innovators
to address sustainable finance as a collective priority.
 The TechSprint will be to develop a tool or solution that can help regulators
and the market effectively tackle the risks of greenwashing in financial services.
 RBI is inviting all India based firms who are interested in participating in the
TechSprint to apply. The application window is open and will close on 21st May
2023.
 Firms will get the opportunity to work with regulatory experts, a variety of
stakeholders and professionals from across the globe.
 Additionally, to support the application process, the GFIN will be providing
an information pack for firms interested in participating on the TechSprint.
 Firms that are successful in their applications will proceed through to on-
boarding which will take place on 1st and 2nd June. This will provide firms with
training on the Digital Sandbox and an in-depth overview of the TechSprint process.
 The TechSprint will launch on 5th June and will run for 3 months, ending with
a showcase day in September 2023.
 Firms interested in applying to the GFIN Greenwashing TechSprint can review
the list of participating regulators via the GFIN website.
RBI released: Master Circular - Income Recognition, Asset

Classification, Provisioning and Other Related Matters - UCBs.
For: All Primary (Urban) Co-operative Banks.
Origin:
In order to reflect a bank's actual financial health in its balance sheet and as per the
recommendations made by the Committee on Financial System (Chairman Shri M.
Narasimham), the Reserve Bank has introduced, in a phased manner, prudential
norms for income recognition, asset classification and provisioning for the advances
portfolio of the banks.
NPA:
A non-performing asset is a loan or an advance where:
 Interest and / or installment of principal remain overdue for a period of more

than 90 days in respect of a Term Loan.
 The account remains 'out of order', in respect of an Overdraft / Cash Credit
(OD/CC) and all other loan products being offered as an overdraft facility,
Crack Grade B 37
including those not meant for business purposes and/or which entail interest
repayments as the only credits.
 The bill remains overdue for a period of more than 90 days in the case of bills
purchased and discounted.
Asset Qualification Norms:
 UCBs having total assets of ₹2000 crore or above as on March 31, 2020 were
required to implement system-based asset classification with effect from June
30, 2021.
 UCBs having total assets of ₹1000 crore or above but less than ₹2000 crore as
on March 31, 2020, and having self-assessed themselves as being under Level III
or Level IV were required to implement system-based asset classification with
effect from September 30, 2021.
 UCBs which meet the above criteria as at the end of the financial year 2020-
2021 or subsequent financial years shall implement system-based asset
classification within a period of six months from the end of the financial year
concerned.
 For smooth implementation of the system, such UCBs may conduct
pilot/parallel run and evaluate the results for accuracy/integrity of the asset
classification in compliance with the applicable RBI instructions so as to ensure
that they are ready for implementation of the system-based asset classification
from the appointed date.
 UCBs not meeting the above criteria are also encouraged to voluntarily
implement the system-based asset classification in their own interest.
 Primary (Urban) Co-operative Banks (UCBs) having total assets of ₹500 crore
and above shall report credit information, including classification of an account as
Special Mention Account (SMA), on all borrowers having aggregate exposures of
₹5 crore and above with them to Central Repository of Information on Large
Credits (CRILC) maintained by the Reserve Bank.
 Aggregate exposure shall include all fund-based and non-fund-based exposure,
including investment exposure on the borrower.
 UCBs having total assets of ₹500 crore and above are required to submit CRILC
Report on quarterly basis with effect from December 31, 2019.
Income Recognition Norms:
Interest income in respect of restructured accounts classified as 'standard assets' will

be recognized on accrual basis and that in respect of the account classified as 'non-
performing assets' will be recognized on cash basis.
Provisioning Norms:
The total provisions required against an account (normal provisions plus provisions
in lieu of diminution in the fair value of the advance) are capped at 100% of the
outstanding debt amount.

Crack Grade B 38
Gift City examines Indian stock UDRs.
The International Financial Services Centre Authority (IFSCA), the regulatory body
overseeing GIFT City’s international financial services centre, is considering
permitting unsponsored depository receipts (UDRs) for Indian shares.
Advantages:
 This move would offer investors the opportunity to invest in Indian stocks and
avail of tax benefits.
 By introducing Indian UDRs, the International Financial Services Centre (IFSC)
in Gift City aims to boost liquidity, attracting foreign funds seeking offshore
alternatives to the Mumbai stock markets.
 The availability of Indian UDRs, coupled with significant tax benefits, is
expected to bolster the attractiveness of IFSC.
 Currently, Gift City offers derivatives, debt products, and UDRs of foreign
companies such as Apple and Google.
 Depository receipts allow investors exposure to equities of foreign companies,
with custodian banks facilitating the transactions by purchasing shares and
issuing receipts.
 These receipts can be traded on designated stock exchanges, similar to regular
shares.
Sebi proposes special rights to unitholders of REITs, InvITs.

Highlights:
 With an aim to strengthen governance norms, markets regulator Sebi proposed

special rights to unitholders of REITs and InvITs by providing the right to
nominate representative on the boards.
 Also, the regulator has suggested the concept of self-sponsored real estate
investment trust (REIT) or infrastructure investment trust (InvIT), according
to a consultation paper.
 In addition, Sebi has proposed that principles of stewardship code should be
applicable to members, nominated by the unitholders, on the board of directors
of investment manager of REIT and InvIT.
Solvency requirement for surety bonds cut to 1.5x.

Highlights:
The Insurance Regulatory and Development Authority of India (Irdai) has decided to
lower the solvency requirement for surety bonds to 1.5 times, from 1.875 times after
receiving feedback from the insurance players.
IRDAI’s statements:
Crack Grade B 39
 “On the basis of the evaluation of various representations received, the solvency
requirement applicable for such products has been reduced to control level of
1.5 times from 1.875 previously prescribed,” the regulator said in a press
release.
 “Further, the prevailing 30 per cent exposure limit applicable on each contract
underwritten by an insurer, has also been removed.
 These amendments follow the earlier notification removing the cap on
premiums that could be underwritten in a financial year by mono-line insurers
transacting only Surety Insurance Business,” Irdai said.
Framework:
 The insurance regulator in January 2022 had come out with a framework for
development of surety insurance business in the country, which came into
effect from April 1, 2022.
 Irdai allowed the Indian general insurers to commence surety insurance
business, if they have 1.25 times the solvency margin they are required to
keep.
 The insurance regulator mandates insurance companies to maintain solvency
of 1.5 times at all times.
Aim:
 Irdai said the current revisions are aimed to expand the surety insurance
market by increasing the availability of such products and creating the
opportunity for more insurers to service the increasing demand from various
sectors of the economy.
 Surety insurance will increase liquidity of contractors and provide strong
boost especially to the infrastructure sector.
 Surety bonds are a type of insurance policy protecting parties involved in a
transaction or contract from potential financial losses due to a breach of
contract or other types of non-performance.
MCA: Merger approvals for startups, small businesses fast-

tracked.
Highlights:
 The ministry of corporate affairs has made it easier for small companies and
startups to secure the green flag for mergers by way of ‘deemed approvals’.
 Small companies and startups seeking approvals for mergers and
amalgamations will now have deemed approvals for the transaction if the Centre
does not issue a conformation order within 60 days of receiving a request.
Advantages:

Crack Grade B 40
 The move, part of the Companies (Compromises, Arrangements and
Amalgamations) Amendment Rules, 2023 issued by the ministry, brings more
accountability to the authorities, cuts red tape and helps to improve the ease of
doing business.
 The original rules formulated in 2016 have been amended to facilitate
timebound decision-making and to bring about clarity in dealing with comments
and objections received regarding a particular case.
 The government now has an upper limit of 60 days within which to either
approve the merger scheme or place its views before the appellate authority
if there are any objections. Failing this, it will be treated as a deemed approval.
 As per the amended provision, if no objection or suggestion is received within
30 days from the RoC and official liquidator, the central government has the
authority to issue a confirmation order within 15 days provided that it is in the
public interest or in the interest of creditors.
 If any objections or suggestions are received from the RoC and official
liquidator and the government finds these objections unsustainable and the
scheme is determined to be in the public interest, the government may issue a
confirmation order within 60 days.
 If the scheme is not judged to be in the public interest, then it is to be referred to
a tribunal.
 Where the government fails to issue a confirmation order within 60 days, it is
to be deemed that the merger or amalgamation scheme is duly approved.
Govt expects RBI surplus to surpass Budget targets.

The Centre expects a windfall surplus transferable from the Reserve Bank of India
(RBI) for the current fiscal year (2023-24, or FY24).
Highlights:
 The Centre expects a windfall surplus transferable from the Reserve Bank of
India (RBI) for the current fiscal year (2023-24, or FY24).
 Any dividend from the RBI, to be decided at the central bank’s board meeting
and likely to be transferred this month itself, to be comfortably above the FY24
Budget Estimates (BE) for dividends from the RBI, state-owned banks, and
financial institutions combined, of Rs. 48,000 crores.
Reasons:
 The main reason why the Centre and analysts expect a bumper dividend
windfall is that the RBI is said to have raked in a massive net income gain
from foreign exchange currency sales as a buffer for the rupee during
tumultuous geopolitical upheavals last year owing to Russia’s invasion of Ukraine.
 This is not the first time the RBI has paid a windfall surplus to the Centre.

Crack Grade B 41
 As the RBI shifted from a July-June financial year to an April-March financial
year in 2021, it transferred Rs. 99,122 crores.
 That amount itself was Rs. 45,611 crores higher than the BE for revenue from
dividends by the RBI and public sector banks of Rs. 53,510.6 crore for FY22.
 But the highest surplus that the RBI has ever paid to the government was for
2019-20 — a record Rs. 1.23 trillion, following the recommendations of the
Bimal Jalan Committee on the Economic Capital Framework.
 In addition, the RBI had also transferred Rs. 52,637 crores of excess provisions
that very year.
 The Jalan panel had recommended that the RBI, at all times, should keep its
‘realised equity’ at 5.5-6.5 per cent of the balance sheet, and the rest can be
transferred to the central government.
 While the fiscal year has just begun, any windfall surplus will be welcomed by the
government as it bids to meet the fiscal deficit target of 5.9 per cent of GDP,
amidst lack of clarity on exactly to what extent will recession in the West impact
India’s trade and tax collections.
A dozen insurance permits up for grabs: IRDAI.

The insurance regulator, IRDAI plans to issue about a dozen licences this year,
building on last year’s momentum when three companies got insurance licences in
life and non-life segments after more than a decade.
Highlights:
 Nearly 20 applications are awaiting approval with the Insurance Regulatory

and Development Authority of India (Irdai), which has now set up a dedicated
facilitation cell to support the registration application of companies and is
providing on-tap no-objection certificates to fast-track approvals, an official
familiar with the development said.
 About a dozen of these applicants may get a final nod to start insurance
operations this year.
 Irdai chairman Debasish Panda said that the business environment is
favourable and conducive, and investors are attracted to the insurance
sector, a sentiment underscored by the interest in new licences.
 Few more applicants are in the pipeline at various stages of fulfilling the criteria
for registration.
 These applicants are supported by dedicated facilitation cells of Irdai.
 With the addition of new companies, there are now 25 life insurers and 34
general players operating in the country.
Important Data:

Crack Grade B 42
 The Indian insurance market is the 10th largest globally, with the insurance
industry registering a 13% growth during FY23.
 FDI in the insurance sector is about ₹57,000 crore, with assets under
management (AUM) growing by 11% in FY23 to reach ₹60 trillion.
 As insurance penetration rises, the regulator expects the domestic insurance
market to reach $200 billion by 2027.
 It has steadily increased from 2.7% in 2000 to 4.2% in 2020 and was 3.2% in
2021, according to the Economic Survey 2022-23 released in January.
602nd Meeting of Central Board of the Reserve Bank of India

held
The 602nd meeting of the Central Board of Directors of Reserve Bank of India was
held today (19th May 2023) at Mumbai under the Chairmanship of Shri Shaktikanta
Das, Governor.
Highlights:
 The Board in its meeting reviewed the global and domestic economic situation
and associated challenges including: the impact of current global geopolitical
developments.
 The Board also discussed the working of the Reserve Bank during the year
April 2022 – March 2023 and approved the Annual Report and accounts of the
Reserve Bank for the accounting year 2022-23.
 The Board approved the transfer of ₹87,416 crore as surplus to the Central
Government for the accounting year 2022-23, while deciding to keep the
Contingency Risk Buffer at 6%.
Circular issued by RBI: "₹2000 Denomination Banknotes –

Withdrawal from Circulation by RBI".
The Reserve Bank of India announced the withdrawal of the Rs. 2,000 currency notes
— which was introduced during the demonetisation exercise in 2016 — from
circulation, citing its ‘Clean Note Policy’, which aims to remove damaged, counterfeit,
or soiled notes from circulation, and lack of usage.
Background:
 The ₹2000 denomination banknote was introduced in November 2016 under

Section 24(1) of RBI Act, 1934, primarily to meet the currency requirement of
the economy in an expeditious manner after the withdrawal of legal tender status
of all ₹500 and ₹1000 banknotes in circulation at that time.

Crack Grade B 43
 The objective of introducing ₹2000 banknotes was met once banknotes in other
denominations became available in adequate quantities. Therefore, printing of
₹2000 banknotes was stopped in 2018- 19.
 About 89% of the ₹2000 denomination banknotes were issued prior to March
2017 and are at the end of their estimated lifespan of 4-5 years.
 The total value of these banknotes in circulation has declined from ₹6.73 lakh
crore at its peak as on March 31, 2018 (37.3% of Notes in Circulation) to ₹3.62
lakh crore constituting only 10.8% of Notes in Circulation on March 31, 2023.
 It has also been observed that this denomination is not commonly used for
transactions. Further, the stock of banknotes in other denominations
continues to be adequate to meet the currency requirement of the public.
 In view of the above, and in pursuance of the “Clean Note Policy” of the Reserve
Bank of India, it has been decided to withdraw the ₹2000 denomination
banknotes from circulation.
 The banknotes in ₹2000 denomination will continue to be legal tender.
 It may be noted that RBI had undertaken a similar withdrawal of notes from
circulation in 2013-2014.
Guidelines:
 Accordingly, members of the public may deposit ₹2000 banknotes into their bank
accounts and/or exchange them into banknotes of other denominations at any
bank branch.
 Deposit into bank accounts can be made in the usual manner, that is, without
restrictions and subject to extant instructions and other applicable statutory
provisions.
 In order to ensure operational convenience and to avoid disruption of regular
activities of bank branches, exchange of ₹2000 banknotes into banknotes of
other denominations can be made up to a limit of ₹20,000/- at a time at any bank
starting from May 23, 2023.
 To complete the exercise in a time-bound manner and to provide adequate time
to the members of public, all banks shall provide deposit and/or exchange facility
for ₹2000 banknotes until September 30, 2023.
 Separate guidelines have been issued to the banks.
 The facility for exchange of ₹2000 banknotes up to the limit of ₹20,000/- at a
time shall also be provided at the 19 Regional Offices (ROs) of RBI having Issue
Departments from May 23, 2023.
 The Reserve Bank of India has advised banks to stop issuing ₹2000
denomination banknotes with immediate effect.
 Members of the public are encouraged to utilise the time up to September 30,
2023, to deposit and/or exchange the ₹2000 banknotes.

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Crack Grade B 1

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 Finance Ministry will take a call on Rs. 3,000-crore

 The ninth round of India-UK free trade agreement

 India and Canada have agreed to step up discussions

 The ministry of ports, shipping and waterways

 The government is at a “fairly advanced stage” of

 The idea behind the ONDC was to try and create a

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 India’s vulnerability to global shocks is expected to

 The Central Board of Indirect Taxes and Customs

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 The angel tax is when the government imposes a tax

 Of more than 50 sectors, just five: information

(30,083) and Karnataka (24,487). Gujarat is ahead in

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 While these targets

 Building infrastructure and attracting investments

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 Businesses with ₹5-10 crore sales will now have to

 India’s retail inflation rate in April fell to an 18-month

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 Export lender Exim Bank plans to raise up to record

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 The capex target covers 54 CPSEs and five

 Foreign investors have shown strong buying interest in

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 IL&FS has completed transfer of its fifth road asset -

 Regulator for housing finance firms (HFFs) National

 The Netherlands has emerged as India’s third largest

 Due to surge in shipment of goods such as petroleum

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 Merchandise exports fell to a six-month low and

 Sluggish demand for Indian goods due to an economic

 HDFC will raise up to Rs. 8,000 crores by issuing

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 The National Stock Exchange (NSE) posted a net

 The National Stock Exchange (NSE) on Monday

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 The wholesale price index- (WPI) based inflation

 Higher base effect.

 Data released by the Commerce and Industry Ministry

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 Trade officials of India and UK are set to sit across

 Exports to India’s key markets — the US, the United

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 The Nifty derivatives contracts traded on the

 The National Stock Exchange (NSE) has received Rs.

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 The Centre has decided to slash the Faster Adoption

 To ensure that fertiliser prices remain unchanged for

 The Union Cabinet approved signing of a pact between

 The Ministry of Health and Family Welfare (MoHFW)

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SBI’s Q4  State Bank of India’s (SBI’s) standalone profit in the

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be hit by  India’s exports of products like coffee, leather hides

Senior citizens  The government’s decision to expand the upper limit of