[PIN-May-2016] Banking Affairs, Sports, BizGK; On-Tap License, CDD, ATM Cloning, Speedpay & more

Andy Murray splits with Amelie Mauresmo

[PIN-May-2016] Banking Affairs, Sports, BizGK; On-Tap License, CDD, ATM Cloning, Speedpay & more

  1. Prologue
  2. Banking/Finance Sector
    1. RBI related developments: May’16
    2. Public sector Banks: May 2016
    3. Private Commercial Banks
    4. Banking Frauds /cyber security
    5. NPA and Loan Defaults
    6. Digital Wallet / Payment Bank
  3. Finance sector
  4. Sports- Cricket
    1. Tennis & Badminton
    2. Olympics / Athletics related
    3. Football
    4. Sports- others
  5. BizGK

Prologue

  • So far we’ve covered Polity, history, environment, diplomacy related current affairs from the May 2016 in previous articles.
  • Now the last part i.e. Banking, finance, sports and BizGK related developments from May 2016

Banking/Finance Sector

Relevance: upcoming SBI PO Examination

RBI related developments: May’16
OMO
  • RBI conducted Open market operation to buy Rs.10,000 cr. Worth govt. securities to increase liquidity in the market.
  • When RBI buys in OMO operation, liquidity increases and when it sells, reverse happens.
  • Call rate is the rate at which, banks lend each other overnight money. When call rate increases, it means liquidity is declining. It is one of the many statistics, RBI keeps watch on, to measure liquidity
MPC
  • Government to nominate three directors to monetary policy committee, after finance bill is passed.
  • In monetary policy committee- from RBI side (1) Governor (2) 1 Dy. Governor (3) 1 executive director.
  • From government side- three expert members in finance/banking/allied topics. They’ll be selected by a committee consisting of Cabinet secy, RBI governor and Economic Affairs secretary.
Inflation
  • WPI inflation is 0.3% for April 2016. For straight 17 months it had remained in negative zone.
  • Now in positive zone mainly due to food articles and long drought period in Rural areas.
  • Little inflation is good for economy as it incentivizes production.

Public sector Banks: May 2016

PNB
  • PNB overtakes BoB as the PSB with biggest loss in history of Indian banking industry.
  • It posted Rs 5,367 cr loss in Q4-2015.
  • MD and CEO is Usha Anantha Subraminum.
  • Reason: higher provision for bad loans. (2) Rs.800 cr. Loan in Mallay’s Kingfisher. (3) Rs.166 cr. Loans given to Punjab government via FCI for food procurement. But investigation found the money was diverted elsewhere, and godowns didn’t have required amount of grains. (4) Rs.12,500 cr worth loans in iron-steel companies have turned NPA.
  • Solutions planned: (1) war room headed by GM (2) selling ot PNB housing finance and other non-core companies of the bank in stock exchange.
SBI
  • Q4-2015 profit is 1264 cr. Which is 66% less than previous year.
  • Rs. 31,000+ cr worth Loans are under watch list and SBI fears, 70% of them will turn into NPA.
Bank consolidation
  • SBI started process of merging its five associated banks + Bharatiya Mahila Bank.
  • Listed associated banks- Mysore, Travancore and Bikaner-Jaipur have informed BSE for this.
  • Associated bank staff unhappy, planning to go on strike.
  • More on pros and cons of SBI consolidation – covered in this lecture
BBB
  • Bank Board Bureau, started from 1st April under ex-CAG Vinod Rai. Now they’ve begun interviews to select PSU bank MD in Bank of Maharashtra, United Bank and Indian overseas bank.
  • More on BBB covered in this lecture
IDBI Became first public sector bank to open branch in GIFT City International Financial services centre (IFSC)

Private Commercial Banks

YES BANK Sought government approval to raise Foreign investment limit to 74%
Axis Bank
  • Launched green bonds to raise $500 million from international market, through its office in Dubai’s “GIFT City” (International financial services centre).
  • Money raised from these bonds, will be exclusively used for financing renewable energy projects in India.
  • In past Yes Bank, IDBI, EXIM banks have launched such bonds.
Kotak Mahindra As per market valuations, now it’s bigger than ICICI.

Banking Frauds /cyber security

CDD USA updates customer due diligence (CDD) rules, banks will have to identify the shell company owners. This will put a check against tax evaders.
Customer liability RBI to bring a customer liability framework after noticing following malpractices

  • Some of the Jan Dhan accounts are used for money muling. An idle account was used for sending and receiving large amount of funds without knowledge of account holder.
  • Banks are mis-selling third party pension, insurance, mutual fund products bundled with loan products.
  • They are also charging penalties on non-maintenance of minimum balance in savings account, despite RBI’s guidelines against it.
ATM cloning
  • RBI asked banks to upgrade ATMs by 2017- September to prevent cloning of the cards.
  • They’ll have to task additional measures to safeguard EVM cards (Europay, Mastercard, Visa) and PIN cards.
Bitcoins Australian tech entrepreneur Craig Wright says he’s the founder of Bitcoin- codenamed “Satoshi Nakamoto.”

NPA and Loan Defaults

Wilful defaulters
  • SEBI will not allow them to issue new shares/bonds at capital market.
  • They’ll not be allowed to hold board positions in listed companies.
  • SEBI to delist 4,200 firms from national and regional stock exchanges, whose shares have not been traded in last seven years. Most likely these firms are shell companies used for loan defraud and money laundering purpose.
I&B Code 2015
  • Insolvency and Bankruptcy Code 2015: Lok Sabha cleared with two amendments (1) workers to have first claim during liquidation (2) India can enter in cross-border treaties to takeover foreign assets of defaulter so, that future-Mallayas can’t find shelter abroad.
  • More on this bill, SARFAESI and NPA definitions covered in this lecture
Zoom Develops Top defaulter of India. Owes over 3000 crore rupees to Indian banks.

Digital Wallet / Payment Bank

On Tap Licenses
  • RBI will allow on-tap bank licenses i.e. private entities can walk in any time of the year to apply for commercial bank license, rather than waiting for “rounds”.
  • But large industrial entities can’t start commercial bank, at max they can invest 10% in it.
  • Resident Indians, NBFCs with 10 years of good track-record can apply, provided they’ve total assets of Rs.5,000 crores and financial business accounts for minimum 60% of their income/business.
Payment Bank
  • Total 11 licenses were given. But following three have withdrawn
  • Dilip Sangavi (Sun Pharma, he had tied up with Telenor and IDFC)
  • Cholamandalm (of Murugappa group.)
  • Tech Mahindra dropped plans- citing “too many players, profit margins will be razon thin.”
  • More theory on differential banks- covered in this lecture
Speed Pay
  • BSNL’s e-wallet tied with SBI. This will compete with PayTM, MobiKwik and Oxigen.
  • Earlier BSNL launched similar with Andhra Bank but reach was very low.
Paytm
  • Its chief Vijay Shekar Sharma promised to launch Paytm Payment Bank in 2016, August.
India Post
  • Won RBI license for starting payment bank. Now Min. of Information and Broadcasting put cabinet note to get approval, to launch it by March 2017.
  • India Post also expects to earn Rs.1,300 crore by tieing up with e-commerce sites for cash on delivery.

Finance sector

SEBI
  • Ordered Mutual funds to disclose salary paid to top executives. It turns out MF paid more in salaries than aggregate profit earned.
  • In other words, customers are derived of better returns, because of fat-salaries of top-executives.
Ujjivan This Microfinance company has issued IPO

Sports

CRICKET

BCCI-
  • Its present constitution is so bogus, transparency can’t be achieved, says SC.
  • BJP’s Anurag Thakur becomes new president of BCCI. Earlier he was secretary of this organization.
  • Ajay Shikre becomes new secretary of BCCI, he replaced Anurag Thakur.
ICC
  • Shashan Manohar become the new ICC Chairman.
  • ICC Cricket committee head: Anil Kumble remains the head position. Rahul Dravid added as member.

Tennis & Badminton

Andy Murray splits with Amelie Mauresmo

Andy Murray
  • Madrid Open: Andy Murray defeated Djkovic
  • Italy Open: Andy Murray defeated Djokovic, again.
Andy Murray’s lady coach
  • Britain’s Andy Murray was first high profile tennis male star to hire a female coach – Amelie Mauresmo. But after two years of partnership, they’ve split.
  • Amaelie Mauresmo blamed Andy Murray’s abrasive behavior for the split.
Badminton
  • Chong Wei’s smash (408 kmph) is the fastest smash recorded in Badminton, at Hong Kong Open.
  • Thomas Cup being held In Thailand.
French Open
  • Lefty Rafael Nadal pulled out of tournament because of injury in his left wrist.
  • Hawkeye technology not used in French Open. Umpires given the discretion to determine line calls.

Olympics / Athletics related

Disabled
  • Invictus Games: held for disabled personnel from UK army. Warrior Games- for disabled American armed forces personnel.
Olympics
  • Air force warrant officer Ashok Kumar become 1st Indian referee to officiate wrestling tournaments at Rio Olympics.
  • Edelweiss Tokyo insurance company is one of the sponsors of Indian team. They’ve offered Rs.1 crore life cover to every Indian athlete participating in Rio-Olympics.

Football

Bhaichung Bhutiya
  • This football player fought West Bengal election on TMC ticket from Siliguri. But defeated by Congress.
FC Goa
  • Indian Super League (ISL) has banned this team and impose 11 crore penalty. Because last after defeat, their players and managers has criticized the board and alleged match fixing.
Leicester Fox
  • Leicester City fox won English Premier league. Team manager: Claudio Ranieri; Team Owner: A thai businessman Sri Vaddhana Prabha. This is historic because team consisted of very cheap players, and odds of winning were 2000:1 according to Bookies.

Sports- others

Chess
  • Chennai’s 10 year old R.Praggnanandhaa becomes the youngest international master.
Tony Cozier
  • Cricket journalist and commentator from West Indies. Dead.
Manny Pacquiao
  • Noted boxer from Manila, won senate seat, experts believe he’ll become President in future.
Wrestling
  • In 74kg weight wrestling category, Narsingh has won quota for Rio-Olympics.
  • But ex-Olympic medalist Sushil Kumar says, Wrestling federation should hold a trial to decide who is more fit.
  • Delhi HC tells both parties to sit together and work it out. Later Sushil was dumped.
  • US and Iran have trial system. Russia and Japan send quota winner.

BizGK

Airtel Airtel sets call drop benchmark at 1.5%. If more call drops above benchmark, then Airtel will donate money for rural education.
Apple
  • CEO Tim Cook visited India for the first time, Will setup an iOS app development centre in Bengaluru. Tim Cooke updated Narendra Modi’s iOS app and visited Emran Hashmi on filmset.
  • Wanted to sell 2nd hand refurbished iphones in India, but government denied permission because It may lead to dumping of environmentally hazardous substandard products in India, and hurt “Make in India” initiative.
  • It’ll tie up with SAP for create enterprise software for large corporates.
Cars
  • NCAP- New car assessment program. It’s a global testing program to check car-safety. India’s five car models failed in this test, including Maruti and Mahindra Scorpio.
  • After Mitsubhishi, now Suzuki also apologizes for fudging fuel average tests of its car to boost sales.
Flipkart
  • It’s investors have reduced flipkart’s valuation by ~40%. But flipkart unworried because it doesn’t have any need of new capital at the moment. But in long term, all such e-commerce websites will have to revisit their biz. Model.
  • Recruited 18 IIM-A students but then postponed their appointment till December 2016, and gave them Rs.1.5 lakh compensation in the mean time. IIM-A got furious and asked flipkart to appoint them ASAP.
Hero cycle
  • Filed suit against Avon bicycle for copying their designs protected under Design Act 2000.
Kishor Biyani
  • Resigned from Future retail group Chairmanship. Became MD of Bharati Retail.
Lenskart This online eyeware shopping site, known for its SMS-spam, has raised Rs.400 crores investment from World bank’s IFC, Ratan Tata and others.
Myntra
  • In 2015, they shut down online shopping site and went for mobile app only. Reason cited- majority of the traffic came from mobiles.
  • But other fashion sites didn’t go for “mobile only” platform, and women customers prefer desktop / laptop so view intricate details of fabric, jewellary etc.
  • Finally, Myntra.com decided to reopen the website.
Nokia
  • Microsoft sold branding rights of Nokia to Foxcoon and HMD. Now they’ll relaunch Nokia phones.
NSE Wants to get itself listed as a public limited company. But SEBI says self-listing not allowed in current rules.
Tatacliq.com E-commerce site by Tata group. Launched in May 2015. It’ll have facility to buy online and collect from physical store.
Thyrocare This medical diagnostic company’s share price jumped to 49% within a day when it was listed on stock exchanges.

This concludes the round of current affairs for May-2016.

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