April 2021 Economic Affairs

Sakshi Education

Govt extends deadline for making payment under Vivad Se Vishwas scheme till June 30
Government has extended certain timelines in order to give respite to taxpayers in difficult COVID times. It has extended deadline for making payment under tax dispute resolution scheme Vivad Se Vishwas by two months till 30th of June.

Time limit for passing of any order for assessment or reassessment under the Income Tax Act has been extended till 30th June.

Finance Ministry said the decision was taken following requests received from taxpayers, tax consultants, and other stakeholders that various time barring dates, which were earlier extended to 30th April, may be further extended.
Global Crude oil futures rise 31 cents to trade at 65.71 dollars a barrel
Global crude oil prices rose today, buoyed by hopes that demand will recover as economic growth picked up in Europe and lock-downs eased, but prices were still set for a weekly loss as India recorded the world’s highest daily total of COVID-19 infections. So, Brent crude oil futures rose 31 cents, to trade at 65.71 dollars a barrel. US crude futures gained 40 cents, 61.83 dollars a barrel.
NBFCs get nod to function in GIFT
Non-bank finance companies, both local and global, can now start operations in Gujarat’s GIFT City. They will be allowed to offer the whole range of services — loans, exotic derivative trades, investment banking, and third-party product sales.

The move by the International Financial Services Centre (IFSC), the regulator of the special economic zone, should draw top financial services companies from across the world, helping localise services that are typically offered overseas.
Paytm launches video-based wealth community
Digital financial services platform Paytm has announced a new video-based wealth community wherein users can interact with subject-matter experts on topics such as stocks, IPO, ETFs, mutual funds, among others.

“Paytm Wealth Community is India’s first investing community based on video, and will enable users to attend live sessions conducted by subject matter experts across an array of wealth topics like stocks, F&O, IPO, ETFs, mutual funds, gold, fixed income, and personal finance,” the company said in a statement.

It added that users will be able to learn from experts, interact with them to clarify doubts, and also chat with other users on the platform to discuss various wealth related topics.

Noting that the way youth today interacts, learns, or transacts, has evolved rapidly, Paytm said across all parts of life, digital communities and groups have grown.
SBI Mutual Fund launches Nifty Next 50 index fund
SBI Mutual Fund has announced the launch of SBI Nifty Next 50 Index Fund, an open-ended index scheme which would replicate the performance of the Nifty Next 50 Index, efficiently with relatively lower costs. The NFO will open on April 28 and close for subscriptions on May 11.
Government leaves GPF, other non-government PF interest rate unchanged at 7.1%
Government has left GPF and other non-government PF interest rate unchanged at 7.1 percent. Department of Economic Affairs said that GPF and other Special Deposit Scheme interest rate of 7.1 percent will be applicable for April to June quarter of the current financial year.

The government has decided to maintain status quo on General Provident Fund (GPF) and other non-government PF, gratuity funds interest rate at 7.1 percent. The deposits made under the Special Deposit Scheme for Non-Government Provident, Superannuation and Gratuity Funds will also bear interest at 7.1 percent with effect from April 1, 2021.

The decision is in-line with its earlier decision to keep interest rate on small savings schemes such as Public Provident Fund (PPF), NSC, etc unchanged for the current quarter.
Axis Bank board okays reclassification of NIACL as 'public investor' from 'promoter'
Public sector insurer The New India Assurance Co Ltd (NIACL) has been reclassified as a 'public shareholder' of NSE -1.08 % from being a 'promoter' earlier, the private sector lender said on Wednesday. Last week, the country's third-largest private sector lender had received a request from NSE -0.48 % to reclassify it to public category from promoter category investor.

In a regulatory filing, Axis Bank said a letter was placed for the consideration of the board at its meeting held on April 28, 2021. "The board at the meeting has considered and approved the said request received from NIACL to reclassify it to public category from promoter category".

The nod for the reclassification is subject to approval of the stock exchanges, statutory/regulatory authorities and shareholders of the bank.

NIACL held 0.67 per cent of the total issued and paid-up equity share capital of the bank as on April 22, 2021, said the lender.
ICICI Bank launches digital service ‘Merchant Stack’
ICICI bank has launched digital platform ‘Merchant Stack’ to target over 2 crore retail merchants in the country. The platform enables merchants to meet their banking requirements amid the Covid-19 pandemic.

The main features include instant credit facilities, zero-balance current account and digital store management, among others.

The bank also said the credit limit for customers will be dynamic, based on the available digital data.

The bank has thus launched the ‘Merchant Stack’, which most importantly offers a range of ‘contactless’ banking services, providing safety to merchants and their customers alike, he added.
Indian Bank signs MoU with BSNL
Indian Bank signed an MoU with Bharat Sanchar Nigam Limited to provide seamless telecom services to the bank at a competitive rate.

The MoU was signed in the presence of executive director of Indian Bank and chief general manager of BSNL, Chennai Telephones and will provide access to latest technologies at great competitive rates.

The bank is already using services of BSNL and Mahanagar Telephone Nigam Limited for its Wide Area Network across the country Dr VK Sanjeevi, chief general manager of Chennai Telephones said that BSNL and its subsidiary MTNL is connecting 5,000 branches and ATMs of Indian Bank.
Sebi issues guidelines for warehousing norms for agri, non-agri goods
Sebi on Friday came out with guidelines for preparing warehousing norms by clearning corporations for agricultural, agri-processed, base and industrial metals goods.

The guidelines, which will be the minimum requirements that will be prescribed by clearing corporations for warehousing service providers, are aimed at bringing uniformity, improve ease of doing business and rationalise regulatory compliance cost, among other aspects.

In a circular, Sebi said the guidelines would come into effect from June 1, 2021.

According to the regulator, the prescribed norms are the minimum requirements/ standards which a clearing corporation will set out for compliance by its accredited WSPs (Warehouse Service Providers) and assayers.
Flipkart partners with Adani group to strengthen its presence in India
Flipkart is strengthening its logistics and data centre capabilities. The homegrown ecommerce player has entered into a strategic and commercial partnership with the Adani Group.

To strengthen its supply chain infrastructure, Flipkart will work with end-to-end logistics service provider Adani Logistics Limited.

Besides, Flipkart will set up its third data centre at AdaniconneX Private Limited Chennai based facility, leveraging AdaniConneX's expertise and data centre technology solutions.

According to Flipkart, the facility will also enhance local employment and create ~2,500 direct jobs and thousands of indirect jobs. Flipkart's third data centre will be developed at the AdaniConnecX facility and will be designed to be reliable, secure and sustainable. The AdaniConneX data centre is a brand-new facility enabling Flipkart to design the data centre to its growing infrastructure needs with a significant focus on security and keeping data locally within India.
Google Pay creators launch Neobank Fi for millennials
Neobanks are virtual banks that work online and do not have physical branches.

Founded in 2019, Fi raised $13.5 million in its seed round led by Sequoia India and Ribbit Capital.

Its Android app, which has been in beta mode with 500 users, will go live on Wednesday. The founders said that they plan to add half a million users this year.

Fi's iOS app is in the works and will be released soon, the company said. All of its current features such as financial assistant AskFi and Fit Rules, which automatically saves, pays, or set reminders.

The three-year-old startup plans to launch monetisation products in the next six months with lending and wealth offerings. It also plans to add more banking partners in the near future.

At least half a dozen neobanks have cropped up in India in recent years. Among established financial institutions, State Bank of India and Kotak Mahindra have launched their own neobanki.
Co-lending partnership between HDFC and Indiabulls HFL
Housing Development Finance Corporation and Indiabulls Housing Finance (Indiabulls HFL) have entered into a co-lending program.

All loans will be processed in accordance with the Standard Operating Procedures (SOPs) and the loan eligibility criteria as specified by HDFC. The methodology will be the same as is done by HDFC while appraising its loans.

Post the initial appraisal, the loans will be approved by a senior official of HDFC and accordingly credit will be controlled by HDFC.

The loans under the program will be in the funding ratio of 80:20 (80% of the loan with HDFC and 20% Indiabulls HFL). Under the program, 20% of the credit risk by way of direct exposure shall be on the Indiabulls HFL's book till the time the loan is repaid and Indiabulls HFL will not assign its portion of the loan to any third party. Hence, Indiabulls HFL will be invested in the arrangement through the life of the loan.

HDFC will continue to have oversight on the programme post approval of loans, through the disbursement stage, as well as the post disbursement stage through the life of the loan.
Aceware launches first neobank in Kerala
Neobanks operate without physical branches; target customers making financial transactions via mobile apps and other digital media platforms

Aceware FinTech Services, a leading fintech services company in Kerala, has launched the state’s first neobank, Ace Money Neobank, in partnership with YES Bank and ICICI Bank.

In the first phase, start-ups, traders and business entities can open current accounts with the neobank, according to the company.

Neobank is a kind of virtual bank that operates without any physical branches. Neobanks mainly target customers who make financial transactions using mobile applications and other digital media platforms.

The services of Ace Money are available at all the panchayats in Kerala and customers can make all the financial transactions at the service points of Ace Money neobank.
IFFCO gives order for its 2nd Oxygen plant in Bareilly to fulfil demand of oxygen
Indian Farmers Fertiliser Cooperative Limited, IFFCO has given order for its 2nd Oxygen plant in Aonla, Bareilly in Uttar Pradesh to fulfil the demand of medical grade oxygen in the country.

In a statement, the company said, it will give free Oxygen to hospitals in nation’s service. The Medical Oxygen plant with capacity of 130 Cubic meters per hour will commence by 30th May.

The Oxygen plant will generate medical grade oxygen and fill 450 big D type cylinders daily and 150 medium B size cylinders on demand supplied to all hospitals free from 30th May.

The company said, it will fill up free of cost, the oxygen cylinders for hospitals in Uttar Pradesh and adjoining areas. The States need to bring their own cylinders for refill. It said, the work for other two plants at Phulpur in Uttar Pradesh and Paradeep in Odisha is also on high speed.
RBI allows banks to pay 50 pct of pre-COVID dividends on equity shares
The Reserve Bank of India has allowed banks to pay dividends on equity shares.

Asking banks to proactively raise and conserve capital in wake of the second wave of Covid, the RBI has told banks to restrict dividend to 50% of what regulations allow.

RBI has clarified that All banks shall ensure to meet the applicable minimum regulatory capital requirements after dividend payment.

Last year, the central bank had banned banks from paying dividend after the Covid outbreak.

Cooperative banks are permitted to pay dividend on equity shares from the profits of the financial year ended March 31, 2021
CEA, CEEW launch renewable energy dashboard for info on renewable energy (RE) projects
The Central Electricity Authority (CEA) and CEEW's Centre for Energy Finance (CEEW-CEF) on Wednesday launched the India Renewables Dashboard.

The dashboard is a joint effort to provide detailed operational information on renewable energy (RE) projects in India, according to a statement.

This information on dashboard is freely available to policymakers, developers, financiers, and the public. It was launched by Sandesh Kumar Sharma, member (planning) of CEA, the statement added.

The dashboard, supported by the Shakti Sustainable Energy Foundation, captures daily generation data at the state, regional and national levels for the aggregate 93 gigawatts (GW) of installed RE capacity in India.
Indian Bank in pact with Chennai Angels for start-up financing
Indian Bank has signed an agreement with The Chennai Angles for financing start-ups under its loan programme, ‘IND Spring Board.

Start-ups generally find it difficult in getting support for working capital at the time of expansion of their commercial production. Indian Bank has taken an initiative to address this by launching IND Spring Board.

Under this product, the bank will support start-ups by extending credit facilities of up to ?50 crore for working capital requirements and also fund term loan requirements for acquiring fixed assets for their unit, according to a statement.

To further extend its support to start-ups, Indian Bank, on Thursday, signed an MoU with The Chennai Angels.

The Chennai Angels, an angel investment group based in Chennai, was established with the objective of fostering entrepreneurship with prime focus on nurturing and mentoring new-generation entrepreneurs. The group has already invested in more than 50 start-ups in different sectors.
Sebi forms expert group to examine feasibility of SPACs
Capital market regulator Sebi has formed a group of experts to examine the feasibility of introducing Special Purpose Acquisition Companies (SPACs) like structures in India, sources said on Thursday.

The group, formed under Sebi's Primary Market Advisory Committee (PMAC), has been asked to submit its report at the earliest, the sources added. "Sebi wants to explore the potential of SPACs while at the same time building adequate checks and balances in regulatory framework to take care of the associated risks," said a source privy to the development.

SPACs are formed to raise capital in an initial public offering (IPO) with the purpose of using the proceeds to identify and merge with a target company. SPACs are usually formed by private equity funds or financial institutions, with expertise in a particular industry or business sector, with investment for initial working capital and issue related expenses.

Such companies have recently become popular in the US. There has been increasing demand that SPACs should be allowed in India as well.

According to market experts, while SPACs have several advantages, they also raise various regulatory concerns.

For public shareholders, SPACs give the advantage of investing along with the sponsors in the SPAC like private equity type transactions. The advantage for the sponsor is that it allows rapid deployment of capital to take advantage of opportunities.

It also helps the target company acquired by the SPAC going public during periods of market instability or volatility in traditional IPO markets. SPACs also face several challenges. According to experts, SPACs have distinct trading cycles unlike an IPO.

They also need to deal with uncertainty risk like divergent interests of sponsors, investors and the target company. In the Indian context, some of the challenges are that merger through scheme of arrangement could be time consuming. Similarly, the process of liquidation could take considerable time, which might reduce the attractiveness of SPAC over IPO.

There are regulatory concerns and issues as well in the SPAC proposal. "As per the Companies Act, 2013, a company is required to commence business within one year of incorporation. This may not suit a SPAC which may not have business for nearly two years," said a company secretary. Other regulatory concerns could be the stage at which retail participation should be allowed.

Sebi regulations also would need amendment to allow listing of a SPAC which could initially be a non-operating company. The other concern is regarding change in control post amalgamation, which again might require amendments to takeover regulations, said a market expert.
World Bank approves USD 32 million project to improve health services in Mizoram
The World Bank Board of Executive Directors has approved a USD 32 million project to improve management capacity and quality of health services in Mizoram, a world bank statement said on Thursday.

The project titled "Mizoram Health Systems Strengthening Project" will strengthen the governance and the management structure of the Mizoram Health department and its subsidiaries, the statement said.

It will improve the quality and coverage of services delivered by the state government health systems, and invest in a comprehensive quality assurance programme which would enable quality certification of health facilities, it said.

The key focus will be to strengthen the effectiveness of the state health insurance programme, build synergies with the Government of India's Pradhan Mantri Jan Arogya Yojna (PMJAY), and thereby reduce financial barriers in accessing hospital services, prevent catastrophic out of pocket expenditure for health by poor families and expand coverage.

The Mizoram Health Systems Strengthening Project will benefit the people across the state. It will also benefit healthcare personnel by strengthening their planning and management capabilities along with building their clinical skills and competencies.

Mizoram's performance on key health outcomes is mixed when compared to national averages, with significant urban- rural disparities and an increasing burden of non-communicable diseases (NCDs).

In 2019-20, under-five mortality in Mizoram was 24 per 1,000 live births, and the prevalence of stunting among under-five children was 28.9 per cent which increased marginally from the previous survey (2014-15).

Non-Communicable Diseases in adults account for more than 50 per cent of the disease burden in the state. "While Mizoram performs better than the national average on many key health indicators, access to quality health services is a challenge, particularly in rural areas.
PayPal Launches Cryptocurrency Checkout Service in US
PayPal will announce later on Tuesday that it has started allowing US consumers to use their cryptocurrency holdings to pay at millions of its online merchants globally, a move that could significantly boost use of digital assets in everyday commerce.

Customers who hold Bitcoin, Ether, Bitcoin cash, and Litecoin in PayPal digital wallets will now be able to convert their holdings into fiat currencies at checkouts to make purchases, the company said.

The service, which PayPal revealed it was working on late last year, will be available at all of its 29 million merchants in the coming months, the company said.

The offering made PayPal one of the largest mainstream financial companies to open its network to cryptocurrencies and helped fuel a rally in virtual coin prices.

Bitcoin has nearly doubled in value since the start of this year, boosted by increased interest from larger financial firms that are betting on greater adoption and see it as a hedge against inflation.

PayPal's launch comes less than a week after Tesla said it would start accepting Bitcoin payments for its cars. Unlike PayPal transactions where merchants will be receiving fiat currency, Tesla said it will hold the Bitcoin used as payment.

Still, while the nascent asset is gaining traction among mainstream investors, it has yet to become a widespread form of payment, due in part to its continued volatility.

PayPal hopes its service can change that, as by settling the transaction in fiat currency, merchants will not take on the volatility risk.
Rs 2,74,034 crore Foreign Portfolio Investments (FPI) inflows in Indian equity markets
Financial Year (FY) 2020-21 witnessed strong Foreign Portfolio Investment (FPI) inflows into the Indian equity markets of Rs 2,74,034 crore, thus, reflecting steadfast confidence of foreign investors in the fundamentals of the Indian Economy.

The robust FPI flows came on the back of faster than expected economic recovery supported by multiple tranches of innovatively designed stimulus packages.

The Government and regulators had also undertaken major policy initiatives directed at improving ease of access and investment climate for FPIs in the recent past.

These include simplification and rationalisation of the FPI regulatory regime, operationalisation of the online Common Application Form (CAF) for the purpose of registration with SEBI, allotment of PAN and opening of bank and Demat accounts etc.

The increase in aggregate FPI investment limit in Indian companies from 24% to the sectoral cap has been a catalyst for increase in weightage of Indian securities in major equity indices, thus mobilising massive equity inflows, both passive and active, into Indian capital markets.

The growth forecast for India in FY 2021-22 have been pegged above 10% by the World Bank, IMF and several global research organizations underscoring that India will continue to remain an attractive investment destination in the near future.
RBI decides to publish Financial Inclusion Index
The Reserve Bank of India has decided to publish the Financial Inclusion Index. To begin with, The FI index will be published annually in July for the previous financial year.

Financial Inclusion has been a thrust area for the Government, RBI and other regulators, with significant progress made over the years.

This index will be used to measure the extent of financial inclusion in the country. It will use various parameters and shall reflect the broadening and deepening of financial inclusion in the country. Financial Inclusion has been viewed as a key enabler for achieving inclusive and sustainable development worldwide.
Nirmala Sitharaman participates in 103rd Meeting of World Bank Development Committee Plenary
Union Minister for Finance Nirmala Sitharaman participated in the 103rd Meeting of the Development Committee Plenary of World Bank through video conferencing.

The items on the agenda included World Bank Group (WBG) and International Monetary Fund Support for Debt Relief Under the Common Framework and Beyond COVID-19 pandemic. In her intervention at this session, the Finance Minister stated that we are all engaged in steering our economies and people safely out of COVID-19 pandemic.

The Government of India has taken several measures to contain the spread of pandemic and also to mitigate its social and economic impact including a series of economic stimulus packages in last one year.
Curbs on PMC Bank extended till 30 June
The RBI has extended restrictions on withdrawals and deposits from Punjab and Maharashtra Cooperative (PMC) bank until June 30, 2021.

This decision was made because the central bank was working to finalize investors in multi-state cooperatives bank that had been scammed.

PMC Bank is monitoring and investigating suspected violations in certain loan accounts, especially loans to financially stressed real estate player Housing Development & Infrastructure (HDIL)

The banking crisis was first exposed in September 2019, and the Reserve Bank of India (RBI) subsequently contained banking activities for six months.

RBI also limits the amount that customers can withdraw from their account first, up to 1,000 rupees and later up to 25,000 rupees.

The Law Enforcement Bureau also filed a money laundering case against PMC bank scam. About PMC Bank: PMC Bank was established in 1984. It has 137 branches in seven states.

There are 81 branches in Thane, Mumbai, Navi Mumbai and Palghar regions. There are 10 districts in Pune and 12 districts in the rest of Maharashtra. Small businesses, housing associations and institutions are its main customers.
NSE Academy Signs MoU with GIFT SEZ limited
NSE Academy Limited (NAL), a wholly owned subsidiary of the National Stock Exchange (NSE) has signed a Memorandum of Understanding (MoU) with GIFT SEZ Limited (a wholly owned subsidiary of Gujarat International Finance Tec-City Co. Ltd.).

The MoU lays down the foundation for NSE Academy Limited and GIFT City to assist in capacity building of trained manpower by developing, launching and conducting training programs related to International Financial Services.

Both organisations will jointly create unique certification and regulatory programs for the corporates and organisations operating in IFSC at GIFT City.

In addition, they will help facilitate research in the field of International Financial Services as well as create a platform to organise conferences, speaker sessions and knowledge series in this area to create awareness about IFSC under the joint banner of GIFT City & NSE Academy Limited.
SBI signed a $ 1 billion loan agreement with JBIC
India’s largest lender State Bank of India (SBI) on Wednesday (31 March, 2021) said it has signed a loan agreement of up to $1 billion with Japan Bank for International Cooperation (JBIC).

The bank had signed a similar deal with JBIC in October last year as well.

This loan, the bank said, is intended to promote smooth flow of funds for the whole range of business operations of Japanese automobile manufacturers in India. JBIC is wholly owned by the Japanese government.

Dinesh Khara, chairman, SBI said in a statement that covid-19 crisis has delivered a significant shock to global trade, disrupted production lines and depressed global demand.