GS-3, Indian Economy, Uncategorized

With 10 branches, first small finance bank kicks off operations

Jalandhar-based Capital Small Finance Bank Ltd, India’s first small finance bank, has commenced operations. The bank kicked off operations with ten branches. Capital Small Finance Bank has been set up by converting the erstwhile Capital Local Area Bank Ltd. It was one of the 10 applicants to be given in-principle approval for setting up SFBs… Continue reading With 10 branches, first small finance bank kicks off operations

GS-3, Indian Economy, Uncategorized

The neglected impact of a rate cut

Issue Impact of a rate cut on the exchange rate Problems before the Indian economy A gloomy world economic scenario Over-leveraged corporate balance sheets An extremely weak rural demand. How could rate cut depreciate the exchange rate? Ninety-five per cent of India’s investment comes from domestic sources. Further, a significant portion of foreign direct investment… Continue reading The neglected impact of a rate cut

Editorials, GS-3, Indian Economy, Uncategorized

RBI to ease registration process for NBFCs

Reserve Bank of India (RBI)  has decided to simplify the registration process for non-banking finance companies (NBFCs). What is a Non-Banking Financial Company (NBFC)? A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 engaged in the business of loans and advances, acquisition of shares/stocks/bonds/debentures/securities issued by Government or local authority… Continue reading RBI to ease registration process for NBFCs

Agriculture, GS-3, Uncategorized

No sanctity for sovereign guarantee

Livemint Issue A mismatch between the value of stocks kept in warehouses and loans taken against them. Context It has been found that the stocks of foodgrains kept in the warehouses of the Punjab government are inadequate to cover the loan against such stocks, so the Reserve Bank of India (RBI) has directed banks to… Continue reading No sanctity for sovereign guarantee

GS-3, Indian Economy, Uncategorized

Deepak Mohanty Committee on Financial Inclusion

The Reserve Bank of India (RBI) has released the Report on Medium-term Path on Financial Inclusion submitted by 14-member committee headed by RBI Executive Director Deepak Mohanty RBI had constituted the committee in July 2015 to examine the existing policy regarding financial inclusion and a five-year (medium term) action plan It was tasked to suggest… Continue reading Deepak Mohanty Committee on Financial Inclusion

GS-3, Indian Economy, Uncategorized

Relation between fiscal deficit and bank credit

There is  an inverse correlation between fiscal deficit (fiscal expansion) and bank credit (monetary expansion). That is, if credit growth falls, fiscal deficit may need to rise and if credit rises, fiscal deficit ought to fall — to ensure adequate money supply to the economy. The FRBM Act says it cannot borrow more than 3… Continue reading Relation between fiscal deficit and bank credit

Editorials, GS-3, Indian Economy, Uncategorized

Banks need an autonomy stimulus

Article Link Until recently, Indian banks were believed to be performing better compared to their global counterparts. However, recent reported losses of some Indian banks have raised concerns. Global Banks Vs Indian Banks: Globally bank shares are falling because of an expected fall in bank earnings as interest rates have become negative. In India, however,… Continue reading Banks need an autonomy stimulus

Editorials, GS-3, Uncategorized

A carrot for the honest

A lot has been discussed about pros and cons of a cashless economy. However, with government’s recent plan to allow more free ATM transactions, this topic has once again come to the fore. Few experts argue that instead of encouraging more free ATM transactions, the government should rather bring in policies that encourage cashless transactions.… Continue reading A carrot for the honest

Editorials, GS-3, Indian Economy, Uncategorized

An Out of the Box Idea for Bank Recapitalization

Article Link It is now widely acknowledged that the health of country’s state-owned banks has become worse in the last two years. Current state of these Banks: Stressed assets (including gross non-performing assets (NPAs) and restructured loans) on the books of state-owned banks were at 14% as of September 2015, dramatically higher than the 4.6%… Continue reading An Out of the Box Idea for Bank Recapitalization