Finance/Business/Economy News
1. RBI extends deadline for Small banks’ licensing applications
Reserve Bank of India (RBI) today extended the deadline for submission of applications for licensing of Small Finance Banks (SFBs) and Payments Banks (PBs) to February 2 and clarified that a minimum capital of Rs 100 crore is must for setting niche banking entities.
“Keeping in view the difficulties expressed by various parties, it has been decided to extend the last date of receipt of applications to February 2, 2015,” RBI said.
The earlier deadline was January 16.
RBI had issued guidelines for licensing for SFBs and PBs in November. The aim behind setting up of such entires is to deepen financial inclusion and boost saving habits.
Responding to queries from individuals and organisations relating to SBFs, the RBI said promoter (individual) of large business or industrial house cannot act as promoter himself to form a small bank.
It also said there is no such stipulation regarding ideal number of branches a SBF shall have to be eligible for the license.
RBI also clarified the proposed SBFs would be “required” to use ‘Small Finance Bank’ in its name and the minimum paid-up capital of Rs 100 crore should be readily available at the time of obtaining banking licence.
Also, after setting up of the bank, if the lender proposes to go for an IPO, prior approval of RBI is necessary.
PBs are allowed to offer locker and vault facilities.
It further said the balance at the close of business on any day should not exceed Rs 100,000 per individual customer in a Payment Bank.
On payment of utility (like power and telephone) bills RBI said this it is not allowed for Payment Banks.
2. RBI, US financial regulators sign info sharing agreement
The RBI has signed an information sharing agreement with US banking regulators for better coordination with them in supervising financial institutions.
During Prime Minister Narendra Modi's visit to the US in September last year, both countries issued a joint statement to corroborate the efforts of the RBI and American banking regulators and supervisors for exchange of information to enhance the effectiveness of cross border supervision.
Since then, India and the US have moved fast to expand partnership in oversight of financial institutions, including between RBI, FRB, OCC and the FDIC.
"The Reserve Bank, on December 9, 2014, concluded a Statement of Co-operation (SoC) on Supervisory Cooperation and Exchange of Supervisory Information with the Board of Governors of the Federal Reserve System (FRB), Office of the Comptroller of Currency (OCC) and Federal Deposit Insurance Corporation (FDIC)," RBI said in a notification today.
3. Reserve Bank of India eases KYC norms for NBFCs
Amending rules for NBFCs with regard to their KYC exercise, the Reserve Bank today relaxed the time limit during which such due diligence is required.
The rules have been eased due to practical difficulties and constraints in getting Know-Your-Customers (KYC) documents at frequent intervals.
"Full KYC exercise will be required to be done at least every 2 years for high risk individuals and entities.
"Full KYC exercise will be required to be done at least every 10 years for low risk and at least every 8 years for medium risk individuals and entities, taking into account whether and when client due diligence measures have previously been undertaken and the adequacy of data obtained," RBI said in a notification.
However, it added that physical presence of clients may not be insisted at such periodic updations.
RBI asked Non-Banking Financial Companies (NBFCs) to continue carrying out on-going due diligence with their clients and closely examine transactions to ensure their consistency, business and risk profile and source of funds.
Also, NBFCs would be required to get fresh photographs of minor customers on becoming major.
As per earlier norms, NBFCs were required to undertake KYC once in every 5 years for low risk category customers and once in two years for high and medium risk categories.
Further, RBI said NBFCs need not ask for fresh proofs of identity and address during periodic updation for low risk clients if their address/identity remains unchanged.
4. India manufacturing ends 2014 on high note as PMI hits 2-year peak
India’s manufacturing activity picked up in the last month of calendar year 2014, shows the widely-tracked HSBC Purchasing Managers’ Index (PMI). The index rose to a two-year high of 54.5 in December, compared with a 21-month high of 53.3 the previous month. The job market, though, remained a little tight in the month, with reports of lay-offs at a few companies.
A reading of more than 50 on PMI suggests an expansion while one below that level implies contraction. Manufacturing PMI has been in an expansion mode for over a year now. This might come as cheer at a time when official data suggested the country’s manufacturing growth rate dropped to a five-year low of 7.6 per cent in October.
A decline in global commodity prices, meanwhile, kept inflation on a leash — that might give the Reserve Bank of India (RBI) some scope to lower the policy rate for boosting economic growth.
Markit Economics, which compiles the manufacturing PMI data on the basis of a survey among 350 private companies, said business conditions in India improved at a faster pace across market groups during December — the sharpest expansion was seen in consumer goods.
5. Shyamala Gopinath appointed HDFC Bank chairperson
Former Reserve Bank of India (RBI) deputy governor Shyamala Gopinath has been appointed non-executive chairperson of HDFC Bank Ltd with immediate effect, the bank said in a statement to the stock exchanges.
Gopinath’s appointment for a three-year term starting Friday was approved by shareholders through a postal ballot, the bank said.
HDFC Bank has been without a chairperson since former Indian Administrative Service (IAS) officer C.M. Vasudev retired as chairman on 26 August 2014.
Gopinath retired as the RBI deputy governor in June 2011 after a 39-year stint at the central bank. She was in charge of financial markets, banking regulation and supervision and foreign exchange management.
6. PM raises solar investment target to $100 bn by 2022
Indian Prime Minister Narendra Modi has ramped up his target for solar energy as he bets on renewables to help meet rising power demand and overcome the frequent outages that plague Asia's third largest economy, a senior official told Reuters.
India gets twice as much sunshine as many European countries that use solar power. But the clean energy source contributes less than 1 per cent to India's energy mix, while its dependence on erratic coal supplies causes chronic power cuts that idle industry and hurt growth.
Modi now wants companies from China, Japan, Germany and the United States to lead investments of $100 billion over seven years to boost India's solar energy capacity by 33 times to 100,000 megawatts (MW), said Upendra Tripathy, the top official in the Ministry of New and Renewable Energy.
That would raise solar's share of India's total energy mix to more than 10 per cent. In Germany, a leader in renewable energy, solar accounted for about 6 per cent of total power generated in 2014.
India had earlier set an investment target of $100 billion for the next five years for all types of renewable energy, with wind taking up two-thirds of the total. In an interview, Tripathy said Modi's new solar target was ambitious, "but if you do not have a higher goal, you will not achieve anything".
Canadian Solar and China's JA solar told Reuters they are looking at making cells or modules - used in solar panels - in India. JinkoSolar Holdings said recent announcements have also raised their interest.
U.S.-based First Solar and SunEdison Inc have sizeable businesses in India, and together with local firms will invest $6 billion in India for the fiscal year to March 31. Tripathy expects new and existing companies to invest about $14 billion annually starting next fiscal year through to 2022.
Among First Solar's top projects are two plants with Kiran Energy Solar Power and Mahindra Solar One totalling 50 MW in Rajasthan. SunEdison is working on a 39 MW project in India and hopes to participate in the solar expansion plan, said regional managing director Pashupathy Gopalan.
News Related to India and Indian Polity
7. Pak boat carrying explosives blows up near Gujarat
All four people on board the vessel from near the Pakistani port city of Karachi are believed to have been killed in the dramatic episode, according to the defence ministry.
The suspicious behaviour of the boat's crew brought back memories of the 26/11 terror attacks in Mumbai six years ago. Then, 10 gunmen had travelled from Karachi in a boat, hijacked an Indian fishing vessel and steered it to Mumbai to go on a three-day rampage during which they killed 166 people.
A defence ministry official said the trawler stopped only after the ICG fired shots, but the crew had by then set it on fire, triggering a major explosion that sank the vessel. Neither the boat nor its crew could be "recovered" due to rough weather.
The ICG ruled out the explosion being an accident, saying the men on the boat sped away because they were hiding "something really serious".
8. Bhel to set up Telangana's first thermal power plant for Rs 3,810 cr
State-owned Bhel has bagged a Rs 3,810 crore contract from Telangana for setting up the newly formed state's first thermal power project.
"Valued at Rs 3,810 crore, the order is for setting up the 800 MW supercritical thermal power plant on EPC (engineering, procurement & construction) basis at Kothagudem in Khammam District of Telangana," Bhel said in a statement.
The order has been placed on the company by the Telangana State Power Generation Corporation Limited (TSGENCO).
The project is to be commissioned in 36 months on fast-track basis with both Bhel and TSGENCO setting up teams to expedite clearances and execution of the project.
TSGENCO has entered into an MoU with Bhel for construction of new thermal power plants totalling to 6,000 MW in the state in the next three years to meet the increasing demand for power, the statement said.
9. M Sathiyavathy appointed as Director General of Civil Aviation
Union Government on 31 December 2014 appointed M Sathiyavathy as Director General of Civil Aviation (DGCA). With this appointment, Sathiyavathy, a 1982 batch Union Territories cadre IAS officer became the first women DGCA and will hold the post till 28 January 2017.
She succeeded Prabhat Kumar, a 1985-batch IAS officer of the Uttar Pradesh cadre, who completed his central deputation and return to his parent UP cadre. In January 2014, Kumar was appointed as the DGCA head for three years.
At the time of appointment, Sathiyavathy was serving as additional secretary and financial advisor in the aviation ministry.
10. Government to prioritise drugs, states to revive Jan Aushadhi Pharmacies
To infuse a fresh lease of life into the struggling Jan Aushadhi chain of pharmacy outlets, set up to make affordable generic drugs available to people, the government plans to focus on select drugs and states, spruce up supply chain and encourage doctors to use generic names of drugs.
Officials said the government is considering a proposal to trim the list of drugs being distributed through Jan Aushadhi outlets to 40-50 mass consumption ones from the 320 medicines enlisted to be part of stock at present.
The department of pharmaceuticals also plans to focus on states where the model has already picked up, before chasing its original goal of having at least one Jan Aushadhi special store in each of the 630 districts in the country.
A study found that the mean availability of drugs at these stores stood at only 33%. This is partly due to overdependence on central public sector units.
The government now plans to increase participation of private drug firms in the project. Also, a detailed plan is being drawn up to encourage doctors to prescribe generic drugs.
Experts said getting doctors to prescribe drugs by their generic names rather than brand names is critical for the revival of Jan Aushadhi scheme.
Currently, chemists are not legally allowed to substitute unbranded generics in place of prescribed branded generics.
11. L Narashima Reddy appointed as new Chief Justice of Patna High Court
Bihar Governor Keshri Nath Tripathi today administered oath of office to Justice L Narashima Reddy as the new Chief Justice of Patna High Court.
Prior this appointment, Reddy (61) was a judge at Andhra Pradesh High Court and Executive Chairman of Andhra Pradesh State Legal Services Authority. He succeeded Justice Rekha M Doshit.
The swearing-in ceremony was held at Raj Bhawan and Chief Minister Jitan Ram Manjhi, Bihar Legislative Council Chairman Awadhesh Narayan Singh, Bihar Legislative Assembly Speaker Uday Narayan Chaudhary, several ministers, judges and officials attended it.
Reddy was born in an agricultural family of Gavicherla village of Warrangal district of Andhra Pradesh, and went on to obtain Master's Degree in International Law from Osmania University. He joined the bar in 1979.
12. Former ISRO chief Vasant Gowarikar passes away
Eminent scientist Vasant Gowarikar, one of the pioneers of Indian rocket science and former chief of the Indian Space Research Organisation (ISRO), passed away after a brief illness at the city’s Deenanath Mangeshkar Hospital, aged 81.
Mr. Gowarikar, a protégé of Dr. Vikram Sarabhai, was part of the illustrious band of scientists who initiated India’s satellite research programme and included luminaries such as A. P. J. Kalam, E. V. Chitnis, Pramod Kale and U. R. Rao, among others.
Intimately associated with ISRO's humble birth, Dr. Gowarikar once reminisced on the exciting early days of space research under Dr. Sarabhai when his office was in the building of the local St. Mary Magdalene Church in Thumba in Kerala.
Dr. Gowarikar also served as scientific advisor to late Prime Minister P.V. Narasimha Rao between 1991 and 1993, was appointed as Vice-Chancellor, Pune University and was chairman of the Marathi Vidnyan Parishad between 1994 and 2000.
Dr. Gowarikar, along with his associates, also compiled the massive The Fertilizer Encyclopedia(2008) that featured 4,500 entries detailing the chemical composition of fertilizers, and containing information on everything from their manufacturing and application to their economic and environmental considerations.
Dr. Gowarikar, who was earlier honoured with the Padma Shri, was later awarded the Padma Bhushan in 2008.
International News
13. Five new countries join UNSC as non permanent members
Five new countries on Thursday joined the U.N. Security Council as non-permanent members, while Chile assumed the rotating presidency for January.
With the start of a new year, five new countries — Angola, Malaysia, New Zealand, Venezuela and Spain — have begun their two-year term, replacing Argentina, Australia, Luxembourg, South Korea and Rwanda, Xinhua reported.
Octavio Errazuriz, permanent representative of Chile to the U.N., took over the rotating council presidency from Cherif Mahamat Zene, the Chadian U.N. ambassador who held the council presidency for December 2014.
According to the U.N. Charter, the 10 non-permanent members of the Security Council are elected by the General Assembly, with five elected in October each year, to join the five permanent and veto-wielding members of Britain, China, France, Russia and the U.S.
Under the U.N. Charter, the Security Council has the primary responsibility for the maintenance of peace and security in the world at large.
The council presidency rotates among the members in the English alphabetical order of their names. Each president holds office for one calendar month.
Sports News
14. Boxing India gets name clearance from Sports Ministry
The Ministry stated that the matter has been examined in detail and it has no objection to the registration of 'Boxing India' (BI).
Commenting on the development, BI President Sandeep Jajodia said, "We are extremely thankful to the Ministry of Youth Affairs & Sports - Government of India for approving the registration of 'Boxing India'.
"The registration is a stepping stone in expediting the administrative formalities and streamlining the overall functioning and activities of Boxing India," he said.
BI Secretary General Jay Kowli said the federation is all set to hold its first Elite Men's National Championship.