Current Affairs CSEET Nutshell·
IICA signs MoU with DSNLU to collaborate for offering Courses, Research and Publications, Advancement of Knowledge, Capacity Building, Awareness and Advocacy (December 14, 2022)
The Indian Institute of Corporate Affairs (IICA), Manesar established by the Ministry of Corporate Affairs (MCA), Government of India and Damodaram Sanjivayya National Law University (DSNLU), Vishakhapatnam have entered into a Memorandum of Understanding (MOU) on December 14, 2022.
IICA is established by the Ministry of Corporate Affairs as a think-tank and a Centre of Excellence to support the growth of the corporate sector in India through an integrated and multi-disciplinary approach. IICA has been mandated to offer capacity building and advisory solutions to Government, Statutory Authorities, Private Sector, etc, apart from taking up research in the corporate area.
The MOU is signed between IICA and DSNLU for the purpose of academic collaboration that will encompass offer and award of degree, diploma and certificate courses of contemporary importance; exchange members of faculty and students; research and publication; other academic activities; offer of expert advice and consultancy; and conduct joint workshops, seminars and conferences. In addition to this, active efforts will be made to develop joint training and research programs that will be pursued in a collaborative spirit. The MOU will foster advancement in offering Post Graduate Courses such as LL.M, jointly organizing awareness and outreach programmes for the benefit and welfare of humanity.
Bimonthly Monetary Policy Statement
The central bank of the 5th largest economy of the world has decided to increase the policy repo rate by 35 basis points to 6.25%. Consequently, the
standing deposit facility (SDF) rate stands adjusted to 6.00 per cent, and the marginal standing facility (MSF) rate and the Bank Rate to 6.50 per cent. Delivering the bimonthly Monetary Policy Statement of the RBI through the RBI’s YouTube channel today, the Governor Dr. Shaktikanta Das informed that the Monetary Policy Committee has also decided to remain focused on withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth.
Explaining the rationale behind the monetary policy stance, the RBI Governor observed that the MPC was of the view that further calibrated monetary policy action is warranted to keep inflation expectations anchored, break core inflation persistence, and contain second-round effects. He asserted that these actions will strengthen the medium-term growth prospects of the Indian economy.
Indian Economy expected to grow at 6.8% in 2022-23
The Governor informed that the economy is projected to grow at 6.8 per cent in the current financial year 2022-23, with Q3 at 4.4 per cent and Q4 at 4.2 per cent. Real GDP growth is projected at 7.1 per cent for Q1:2023-24 and at 5.9 per cent for Q2. The Governor wants us to take note that even after this revision in our growth projection for 2022-23, India will still be among the fastest growing major economies in the world.
As regards inflation, the Governor stated that headline inflation is projected at 6.7 per cent in 2022-23.
The Governor summarized the findings thus. GDP growth in India remains resilient and inflation is expected to moderate; but the battle against inflation is not over.
Banks get additional flexibility in investment management
Banks had been granted a special dispensation of enhanced Held to Maturity (HTM) limit of 22 per cent of Net Demand and Time Liabilities (NDTL), for Statutory Liquidity Ratio (SLR) eligible securities acquired between September 1, 2020 and March 31, 2022, until March 31, 2023. It has now been decided to extend the dispensation of enhanced HTM limit of 23 per cent up to March 31, 2024. Banks will now be allowed to include securities acquired between September 1, 2020 and March 31, 2024 in the enhanced HTM limit. This will further flexibility to banks in managing their investment portfolios.
UPI gets Stronger
The capabilities in UPI will be further enhanced by introducing single-block- and-multiple-debits functionality. This facility will enable a customer to block funds in his/her account for specific purposes, which can be debited whenever needed. This will significantly enhance the ease of making payments for investments in securities including through the Retail Direct platform as well as e-commerce transactions.
Hedging of Gold in the International Financial Services Centre (IFSC)
Resident entities in India are currently not permitted to hedge their exposure to gold price risk in overseas markets. With a view to providing greater flexibility to these entities to hedge the price risk of their gold exposures, resident entities will now be permitted to hedge their gold price risk on recognised exchanges in the IFSC. This measure will benefit importers/exporters of gold such as jewellers and industries which use gold as an intermediate or raw material.
Launch of Central Bank Digital Currency (December 12,2022)
The RBI has launched pilots of CBDC in both Wholesale and Retail segments. The pilot in wholesale segment, known as the Digital Rupee -Wholesale (e₹- W), was launched on November 1, 2022, with use case being limited to the settlement of secondary market transactions in government securities. Use of (e₹-W), is expected to make the inter-bank market more efficient. Settlement in central bank money would reduce transaction costs by pre- empting the need for settlement guarantee infrastructure or for collateral to mitigate settlement risk. The pilot in retail segment, known as digital Rupee- Retail (e₹-R), was launched on December 01, 2022, within a closed user group (CUG) comprising participating customers and merchants.
The RBI has identified eight banks for phase-wise participation in the retail pilot project. The first phase includes four banks, namely the State Bank of India, the ICICI Bank, the Yes Bank and the IDFC First Bank. Subsequently, another four banks, viz., the Bank of Baroda, the Union Bank of India, the HDFC Bank and the Kotak Mahindra Bank will participate in the retail pilot.
The RBI has already rolled out a pilot in the retail version of the CBDC (e₹-R), on December 01, 2022. The e₹-R is in the form of a digital token that represents legal tender. It is being issued in the same denominations as the paper currency and coins. It is being distributed through financial intermediaries, i.e., the banks. Users will be able to transact with e₹- R through a digital wallet offered by the participating banks. Transactions can be both Person to Person (P2P) and Person to Merchant (P2M). The e₹-R offers features of physical cash like trust, safety and settlement finality. Like cash, the CBDC will not earn any interest and can be converted to other forms of money, like deposits with banks.
On the other steps being taken by RBI for full operationalisation of CBDC include
expanding the scope of the pilots gradually to include more banks, use rs and locations based on feedback received during the pilots.