सामयिक विषय: Economics

Finance Ministry approves 8.65% interest rate on EPF for 2016-17

Finance Ministry approval for interest rate on EPF

Question: How much per cent of interest rate has been recently approved to Labor Ministry by Finance ministry for Employees Provident Fund (EPF) for 2016-17.
(a) 8.86 per cent
(b) 8.75 per cent
(c) 8.65 per cent
(d) 8.55 per cent
Answer- (c)
Related facts:

  • On April 20th, 2017, 8.65 per cent interest rate on Employees Provident Fund (EPF) has been approved to Labor Ministry by Finance ministry for financial year 2016-17.
  • More than four crore subscribers of EPF organization will be benefited by this approval.
  • Prior to this approval “The Central Board of Trustees (CBT) had decided to give 8.65 percent to their subscriber.
  • Employees Provident Fund and Miscellaneous Provisions Act-1952, provides financial protection to employees in the form of insurance associated Provident Fund, Family Pension and Deposit Amount.
  • This act is applicable in whole of India except Jammu& Kashmir.
  • It applies to all establishments mentioned in Schedule to the act and to all such establishments where more than twenty or more persons are employed.
  • The Central Board of Trustees is a tripartite body and Central labor and employment Minister is its Chairman.
  • EPFO provides various services, such as the collection of funds provided by members of the establishment, supervision of accounts of the members and distribution of funds under various beneficial schemes to the members and to their nominees.

Reference:
http://www.business-standard.com/article/economy-policy/finance-ministry-approves-8-65-interest-rate-on-epf-for-2016-17-117042000403_1.html
http://zeenews.india.com/personal-finance/finance-ministry-approves-8-65-interest-rate-on-epf-for-2016-17-1997784.html
http://paisa.khabarindiatv.com/article/finance-ministry-ratifies-8-65-interest-rate-on-epf-says-labour-minister/
http://www.punjabkesari.in/business/news/finance-ministry-clears-8-65–interest-on-epf–dattatreya-608969

Revised Prompt Corrective Action (PCA) by RBI

Revised Prompt Corrective Action (PCA) by RBI

Question – Reserve bank of India has issued a notification titled “Revised Prompt Corrective Action (PCA) framework for banks.”This PCA framework will be effective from-
(a) 31st March, 2017
(b) 1st April, 2017
(c) 21st April, 2017
(d) 31st March, 2018

Answer-(b)
Related Facts:

  • On April 13th, 2017, Reserve Bank of India has issued a notification regarding Revised Prompt Corrective Action (PCA) framework for banks.
  • The provisions of the revised PCA framework will be effective from April 1, 2017 based on the financials of the banks for the year ended March 31, 2017.
  • The revised framework would apply to all banks operating in India including small and foreign banks.
  • The existing PCA framework for banks has since been reviewed and revised; framework would be reviewed after three years.
  • The PCA framework does not preclude the Reserve Bank of India from taking any other action as it deems fit in addition to the corrective actions prescribed in the framework.
  • The salient features of revised PCA Framework for Banks are as follows:
    A. Capital, asset quality and profitability continue to be the key areas for monitoring in the revised framework.
    B. Indicators to be tracked for Capital, asset quality and profitability would be CRAR/ Common Equity Tier I ratio1, Net NPA ratio2 and Return on Assets3respectively.
    C. Leverage would be monitored additionally as part of the PCA framework.
    D. Breach of any risk threshold (as detailed under) would result in invocation of PCA.
    E. The PCA framework would apply without exception to all banks operating in India including small banks and foreign banks operating through branches or subsidiaries based on breach of risk thresholds of identified indicators.
    F. A bank will be placed under PCA framework based on the audited Annual
  • Financial Results and the Supervisory Assessment made by RBI.
  • Common menu for selection of discretionary corrective actions are Special Supervisory interactions, Strategy related actions, Governance related actions Capital related actions, Credit risk related actions, HR related actions, Profitability related Actions , Operations related actions.

Reference:
https://rbi.org.in/Scripts/NotificationUser.aspx?Id=10921&Mode=0
http://in.reuters.com/article/brief-india-cenbank-announces-revised-pr-idINFWN1HL0A6
http://economictimes.indiatimes.com/news/industry/banking/finance/banking/rbi-issues-revised-features-of-prompt-corrective-action-framework-for-banks/articleshow/58168369.cms

Government approves nine (9) FDI proposals involving FDI of Rs. 659 crore

9 FDI proposals approved by the government

Question: – In the 2017-18 budget speech, the Finance Minister announced the ending of which institution in the future?
(a) Policy Commission
(b) Foreign Investment Promotion Board
(c) Bank Board Bureau
(d) None of these
Ans: (b)
Related facts:-

  • On 24 March, 2017; 9 FDI proposals of Rs 659 crore were approved by the Government of India.
  • The recommendations were made in the 243th Meeting of Foreign Investment Promotion Board (FIPB) (21 February 2017).
  • These proposals are as follows:
  • Acquisition of100% of shares of Atria Convergence Technology Pvt. Of Telecom Sector by ARGAN (Mauritius) Ltd And TA FVCI (Amount Rs 35 Crore)
  • The Venus Aesthetic LLP of the Limited Liability Partnership (LLP) area, given extension of 60 days to make a deal with the RBI.
  • Grant (Amount 0.05 crore) to Dr Reddy Laboratories Ltd of Pharma sector for Employee Ownership Scheme.
  • Approval of investment to Franklin Templeton Asset Management India Pvt Ltd in
  • Financial Area MF Utilities India Pvt Ltd.
  • The proposal to make Solar Direct Energy India Pvt Ltd (SD India) only as an investment company.
  • Access to JC Decaux Advertising India Pvt. Ltd in telecom sector as Infrastructure Service Provider (Amount Rs.35 crore)
  • Acquisition Proposal of 9,79,875 equity of Digital Outsourcing Pvt Ltd By You Broadband India Ltd of Telecom Sector.
  • Proposal to increase the participation from 81.63% to 100%. (Amount Rs 533.83 crore) of foreign investors in Netmagic Solutions Pvt. Of Telecom Sector.
  • Telecom sector Vodafone India Ltd By, You Broadband India ltd. Acquisition of 100% of shares – offer. (Amount Rs 55.09 crore)
  • It is notable that the Finance Minister had announced the end of the Foreign Investment Promotion Board (FIPB) in the 2017-18 speech in future.
  • There are two channels of foreign investment in India-
    1. Automatic ‘route’ approved by RBI.
    2. Approved by FIPB (Delhi-way)

Related Links:
http://pib.nic.in/newsite/PrintRelease.aspx?relid=159859
http://economictimes.indiatimes.com/news/economy/policy/fipb-approves-nine-fdi-proposals-worth-rs-659-crore/articleshow/57814898.cms
http://www.univarta.com/news/business/story/820809.html
http://economictimes.indiatimes.com/news/economy/policy/government-abolishes-fipb-more-fdi-policy-easing-on-anvil/articleshow/56909680.cms

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