IRDAI

The IRDAI has recently constituted panels of its whole-time members to investigate violations by certain insurers and intermediaries. The Insurance Regulatory and Development Authority of India (IRDAI) plays a crucial role in ensuring that the insurance sector in India operates smoothly, transparently, and fairly. Its role is particularly focused on protecting policyholders, regulating insu

Bond Yield

According to Bank of Baroda Research, the yield on India’s benchmark 10-year government bonds is expected to stay soft (low) in July. This indicates stable or easing borrowing costs for the government in the near term. What Are Bonds? Bonds are debt instruments, like an IOU (I owe you), issued by governments or companies to borrow money. The issuer promises to pay back th

VWAP for Institutional Investors

In a move aimed at making trading more transparent and efficient for institutional investors and market participants, SEBI (Securities and Exchange Board of India) has mandated the issuance of a Common Contract Note with a single Volume Weighted Average Price (VWAP). This will standardize the pricing system and improve the ease of trading in the stock market. What is Volume Weighted Average

Gig workforce

The Union Budget 2025 introduced several measures to formally recognize gig and platform workers, providing them with social protection schemes. However, the Periodic Labour Force Survey (PLFS) 2025 has not been updated to capture the unique nature of gig work, leaving significant gaps in official labour statistics. The NITI Aayog's 2022 report on India’s gig and platform economy

AI companies

The recent legal rulings involving AI companies like Anthropic and Meta have significant implications for the intersection of copyright law and the rise of generative AI tools. These decisions help clarify the legal standing of AI models' use of copyrighted material for training purposes, especially in the context of claims like those from authors and content creators. Key Highlights: C

Banking Laws (Amendment) Bill, 2024

Banking Laws (Amendment) Bill, 2024 In News: The Banking Laws (Amendment) Bill, 2024 was recently passed by the Lok Sabha. This bill seeks to amend multiple key banking laws in India to improve the regulatory framework, enhance operational efficiency, and align with contemporary banking practices. About the Bill: The Banking Laws (Amendment) Bill, 2024 amends the following important laws

Amendments in Indexation for Long-Term Capital Gains (LTCG)

Recently, the Ministry of Finance announced an amendment concerning the Long-Term Capital Gains (LTCG) tax on real estate, responding to criticism regarding earlier proposals made in the Budget 2024-25. Key Aspects of the Amendment Choice for Taxpayers: Taxpayers are now given the option to choose between a new, lower LTCG tax rate or to continue with the existing regime, which offers a h

Lithium Reserves in India

The Atomic Minerals Directorate for Exploration and Research has identified 1,600 tonnes of lithium resources in the Mandya district of Karnataka. This discovery is poised to have several significant implications for India. Implications of Lithium Discovery Reduced Import Dependence: Currently, India heavily relies on imports for lithium, primarily from China and Hong Kong. Domestic reser

Central Banker Report Cards 2024

RBI Governor Shaktikanta Das has been awarded an A+ rating in the Global Finance Central Banker Report Cards 2024. This marks his second consecutive year being rated A+ and ranking in the top 3 central bankers globally. Role of Central Banks Central banks are crucial for: Regulating Monetary Policy: They control inflation, manage interest rates, and maintain financial system stab

RBI Revises NPAs Provision Norms for Co-operative Banks

The Reserve Bank of India (RBI) has introduced revised norms for provisioning Non-Performing Assets (NPAs) among co-operative banks to enhance financial stability and uniformity in the treatment of bad debts. Need for New Norms The new guidelines were necessitated due to some co-operative banks not recognizing the required provisions for NPAs as an expense, which can undermine their financia

Ways and Means Advances (WMA)

The Reserve Bank of India (RBI) has increased the Ways and Means Advance (WMA) limit for States and Union Territories (UTs) to ₹60,118 crore from the previous limit of ₹47,010 crore. This increase aims to help States and UTs manage their fiscal situations more effectively. Purpose: WMA is a facility provided by RBI to address temporary mismatches in cash flow between receipts and payments.

Trends in Remittance

Trends in Remittance: Key Insights from the World Bank's Migration and Development Brief 1. Overview of Remittances Definition: Remittances are funds sent by migrants to their families or relatives in their home countries while they are working abroad. These transfers are vital for recipient countries, contributing significantly to household incomes and foreign exchange reserves. Me

Variable Rate Repo (VRR)

The Variable Rate Repo (VRR) is a monetary policy tool used by the Reserve Bank of India (RBI) to manage short-term liquidity in the banking system. Here's a detailed overview: About VRR Purpose: Infuse Liquidity: The VRR mechanism is employed when the RBI wants to inject liquidity into the banking system, particularly when banks are hesitant to borrow at the fixed Repo Rate due to

Insolvency and Bankruptcy Code

The proposed amendments to the Insolvency Resolution Process for Corporate Debtors under the Insolvency and Bankruptcy Code (IBC) by the Insolvency and Bankruptcy Board of India (IBBI) aim to address several critical areas to improve the efficiency and effectiveness of the Corporate Insolvency Resolution Process (CIRP). Here’s a breakdown of what these amendments might entail and their poten

External Commercial Borrowings (ECBs)

External Commercial Borrowings (ECBs) are a mechanism that allows eligible Indian entities to access foreign funds, contributing significantly to the financing of various projects and operational needs. What are External Commercial Borrowings (ECBs)? Definition: ECBs refer to commercial loans obtained by eligible resident entities from non-resident entities. These loans are a means for In

PUMP DUMP SCHEME

A "pump and dump" scheme is a type of financial fraud where the price of a stock is artificially inflated through deceptive practices, allowing perpetrators to sell their shares at the inflated price before the price crashes. Here’s a more detailed breakdown: How It Works Pump Phase: Promotion: Fraudsters use false or misleading information to create hype around a

Syndicated loan

A syndicated loan is a type of financing arrangement where multiple lenders come together to provide a large loan to a borrower. This method is commonly used for significant financing needs, often exceeding the capacity of a single lender to provide alone. Key Points of Syndicated Loans Participation of Multiple Lenders: In a syndicated loan, a group of lenders (usually banks or f

Revised Priority Sector Lending Norms

Why in the News? The Reserve Bank of India (RBI) has updated the Priority Sector Lending (PSL) norms to enhance credit flow in economically disadvantaged districts where average loan sizes are low. This revision aims to encourage more small loans in areas that traditionally have lower access to credit. Key Changes in PSL Guidelines Incentive Framework: Objective: To boost lending

RBI Governor pushes for group insolvency mechanism

Context: RBI Governor Shaktikanta Das advocates for a specified framework for the group insolvency mechanism and a vibrant market for stressed assets in India to enhance the functionality of the Insolvency and Bankruptcy Code (IBC). News: Legislative changes to establish appropriate principles for the group insolvency mechanism, addressing challenges like intermingling of assets, defining

Post Payments Bank

Context: India Post Payments Bank enter into MoU with Hindustan Zinc to offer financial inclusion services to its CSR beneficiaries. Significance of the MOU: The collaboration will ensure in creating a lasting impact on the lives of community beneficiaries around Hindustan Zinc’s operational areas.  The key services provided by the IPPB will ensure Financial Inclusion and ens

‘Swayam Siddha’

Swayam Siddha is a financial product from the State Bank of India (SBI) that provides loans to women entrepreneurs from Self Help Groups (SHGs). The loans can be up to 5 lakh rupees.

Windfall tax – Petroleum

India cut its windfall tax on petroleum crude to 1,700 rupees ($20.53) a tonne from 2,300 rupees a tonne, according to a recent government notification. Windfall Tax It is a tax levied by governments against certain industries when economic conditions allow those industries to experience significantly above-average profits. The term “windfall” refer

Investment bankers

An investment banker is an individual who often works as part of a financial institution and is primarily concerned with raising capital for corporations, governments, or other entities. Examples of investment banker employers - Goldman Sachs (GS), Morgan Stanley (MS), JPMorgan Chase (JPM), Bank of America Merrill Lynch (BAC), and Deutsche Bank (DB).

Show Cause Notice by Financial Intelligence Unit

Context: India’s Financial Intelligence Unit has issued show-cause notices to nine offshore crypto-currency operators, including Binance, for not complying with the Prevention of Money Laundering Act, 2002 (PMLA). News: Show Cause Notices for compliance have been sent to nine offshore Virtual Digital Assets Service Providers (VDA SPs) under Section 13 o

Small finance bank

Context: Recently, Small finance bank (SFB) campaigns were launched.The initiative aims to showcase the achievements of Small Finance Banks (SFBs) in terms of their business models to various stakeholders. About Small Finance Bank (SFB): Small Finance Banks are financial institutions dedicated to providing financial services in regions that are underserved and unbanked. They are i

First advance estimates of national income released by the National Statistical Office (NSO)

Context: India’s real GDP growth in 2023-24 is estimated at 7.3%, compared to 7.2% a year ago, as per the first advance estimates of national income released by the National Statistical Office (NSO), which reckon the economy will outperform the 7% uptick recently projected by the Reserve Bank of India (RBI). About NSO (National Statistical Office): Role and Affiliation: The NSO ser

Credit Rating Agencies and INDIA

Recently, India released a document titled ‘Re-examining Narratives: A Collection of Essays’ to present alternate perspectives on economic policy that have long-term implications for India’s growth and development priorities. What are credit rating agencies? Credit Rating Agencies (CRA) – According to IMF, they are private companies that assess credit risk&n

Asset quality of Indian banks improves to decadal high: RBI

Background: As per the Financial Stability Report by the Reserve Bank of India (RBI), the Gross Non-Performing Assets (GNPA) ratio reached 5% in September 2022. Concurrently, the ratio of Net Non-Performing Assets (NPAs) to net advances has decreased to 1.3% in September 2022, marking the lowest point in the last decade. The NPAs had experienced an increase from 3.8% in 2014 to 11.4% in 2018. H

Nation’s first interstate multi-modal transport hub coming up near Delhi airport

CONTEXT: The proposed hub located near the GMR Aerocity will provide connectivity through an Interstate Bus Terminus, Delhi Metro, the proposed Passenger Transport Centre, and proposed Rapid Rail Transit System station. Delhi International Airport Limited (DIAL) plans to develop India's first multi-modal interstate transport hub near Aerocity, focusing on integrating bus, metro, and air

New royalty rates for strategic minerals

New royalty rates for strategic minerals     Why in the News? The centre has recently approved royalty rates of 3% each for lithium and niobium and 1% for Rare Earth Elements (REEs). What does the new royalty rates imply? The Second Schedule of the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) was amended to specify the rate of royalty

The impact of Claudia Goldin’s work-Nobel Prize in Economics

The impact of Claudia Goldin’s work-Nobel Prize in Economics Why in the News? The Sveriges Riksbank Prize in Economic Sciences for 2023 by the Royal Swedish Academy of Sciences was awarded to Harvard University Professor Claudia Goldin. She was awarded for “having advanced our understanding of women’s labour market outcomes”. Her work “first compreh

RBI’s Monetary Policy

RBI’s Monetary Policy     Why in the News? The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) maintained the status quo on interest rates during its review meeting in October. The RBI prefers higher rates for longer periods for both domestic and external reasons: External factors include: Higher US inflation rates (they

India Steel

India Steel     Indian steel companies plan to raise prices of various grades of the alloy due to rising import costs of coking coal.  Australia accounts for over 50% of its coking coal imports of around 55-60 million metric tonne a year. India also meets its coking coal requirements by importing from Russia and the United States. India su

Open Market Operations (OMO)

Open Market Operations (OMO)     It refers to the purchase and sale of securities (treasury bills and government securities) in open market by the central bank of any country. This is done to regulate money supply in the economy. OMO is one of the most important ways of monetary control that is exercised by the central banks.  The central bank sells securit

India’s Banking sector

  Transformative reforms undertaken: Consolidation in the public sector banking space Emergence of private banks Specialised non-banking financial companies (NBFCs) Emerging fintech ecosystem have increased the diversity quotient of the financial sector and made it inclusive. The legacy issues of non-performing assets (NPAs) have been left behind by banks. Interna

Multilateral Development Banks (MDBs)

It is an international financial institution established by two or more countries for the purpose of encouraging economic development in poorer nations. It consists of member nations from both developed and developing countries. It intends to provide loans and grants to member nations to fund projects to support social and economic development in the areas of infrastructu

GST ON ONLINE GAMING & ITS IMPLICATIONS

UNIFORM 28% GST ON ONLINE GAMING & ITS IMPLICATIONS Why in the news? The GST Council has decided to levy a uniform 28% GST on Online gaming, casinos and horse-racing. What are the new changes? The 28% taxation will be applicable on the entire face value of the bet. This is a deviation from the earlier 18% GST on the platform value of the bet. Online gaming, Casinos and horse-r