Current Affairs Update – 5 October, 2017



Hello and welcome to exampundit. Here are the Important Current Affairs of 5 October, 2017. These are very important for the upcoming IBPS PO, IBPS RRB, OICL AO, UIIC Assistant & NICL Assistant Exams.

Banking & Financial
News
RBI’s Janak Raj panel suggests
linking bank lending rates to a market benchmark

  • A committee set up by the Reserve
    Bank of India (RBI) on Wednesday recommended linking bank lending rates to a
    market benchmark, in a bid to hasten monetary policy transmission as well
    improve transparency in rate setting by lenders.
  • The panel—headed by Janak Raj,
    principal adviser, monetary policy department—recommended that all floating
    rate loans advanced from April could be referenced to one of three external
    benchmarks.
  • The panel has suggested a
    risk-free curve involving rates on treasury bills, or certificate of deposits
    rates or the central bank’s policy repo rate.
  • RBI will take a final view on suggestions
    of the panel after taking into account public feedback received until 25
    October.
  • The panel pulled up banks for
    “arbitrariness” in calculating the base rate and marginal cost of funds-linked
    lending rates (MCLR), two existing benchmarks to which retail lending rates
    such as car loan and home loan rates are fixed. The spreads charged over these
    internal benchmarks “has undermined the integrity of the interest rate setting
    process”, it said.
  • The panel suggested that lending
    rates should be reset once every quarter, from the current practice of once a
    year.
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RBI issues directions for
peer-to-peer lending platforms

  • The Reserve Bank of India (RBI),
    on October 4, issued directions for non-banking financial companies (NBFC) that
    operate peer-to-peer (P2P) lending platforms. According to the directions, from
    now on no NBFC can start or carry on the business of a P2P lending platform
    without obtaining a Certificate of Registration. Every company seeking
    registration with the bank as an NBFC-P2P shall have a net owned funds of not
    less than Rs 20 million or such higher amount as the bank may specify.
  • There is good news for existing
    NBFC-P2Ps as well as because there are few players already in the market. They
    have been asked to apply for registration as NBFC-P2Ps within 3 months.
  • These directions issued by RBI
    will be known as the Non-Banking Financial Company – Peer to Peer Lending
    Platform (Reserve Bank) Directions, 2017, and will come into force with
    immediate effect.
  • P2P lending is a form of
    crowd-funding used to raise loans which are paid back with interest by bringing
    together people who need to borrow, from those who want to invest. It can be
    defined as the use of an online platform that matches lenders with borrowers to
    provide unsecured loans. The borrower can either be an individual or a legal
    person requiring a loan. The interest rate may be set by the platform or mutual
    agreement between the borrower and lender.
Scope of activities of NBFC-P2P
Among several other things, an NBFC-P2P can:

  • Act as an
    intermediary providing an online marketplace or platform to participants
    involved in P2P lending.
  • Not raise
    deposits as defined by or under Section 45I(bb) of the Act or the Companies
    Act, 2013.
  • Not lend on its
    own.
  • Not hold, on
    its own balance sheet, funds received from lenders for lending, or funds
    received from borrowers for servicing loans; or such funds as stipulated in
    paragraph 9.
  • Not cross-sell
    products except for loan-specific insurance products.
  • Not permit
    international flow of funds.
An NBFC-P2P will be expected to:

  • Undertake due
    diligence on the participants.
  • Undertake
    credit assessment and risk profiling of the borrowers and disclose the same to
    their prospective lenders.
  • Undertake
    documentation of loan agreements and other related documents.
  • Provide
    assistance in disbursement and repayments of loan amount.
  • Render services
    for recovery of loans originated on the platform.
Prudential norms

  • The aggregate
    exposure of a lender to all borrowers at any point of time, across all P2Ps,
    shall be subject to a cap of Rs 10 lakh.
  • The aggregate
    loans taken by a borrower at any point of time, across all P2Ps, shall be
    subject to a cap of Rs 10 lakh.
  • The exposure of
    a single lender to the same borrower, across all P2Ps, shall not exceed Rs
    50,000.
  • The maturity of
    the loans shall not exceed 36 months.
Fund transfer mechanism

  • Fund transfer between
    participants on the P2P lending platform will happen through escrow account
    mechanisms. All fund transfers shall be through and from bank accounts, and
    cash transactions are strictly prohibited.
  • Earlier, the RBI had issued a
    discussion paper on regulation of the P2P lending platform as a non-banking
    finance company (NBFC). Thereafter, the P2P platform has been notified as an
    NBFC under section 45I (f) (iii) of the Reserve Bank of India Act, 1934 as per
    the gazette notification published on September 18, 2017.
Mastercard, Andhra Pradesh Ink
Strategic MoU To Digitally Transform State As A “Fintech Valley”

  • Global payments company
    Mastercard plans to invest another $750 million-odd in India by 2020 to fuel
    its growth in the world’s second-fastest growing large economy.
  • This money will be used for
    organic growth and acquisitions, and in activities such as cybersecurity,
    mobile and digital payments, smart cities and wallets, said Ajaypal S Banga,
    President and CEO, Mastercard said here on Thursday.
  • The planned investment of about
    $750 million comes on top of the $550 million that Mastercard invested in India
    over the last three years.
  • About 14 per cent of Mastercard’s
    global employee base of 15,000 is based in India and most of them are
    technologists developing mobile technology and cyber security solutions. “There
    are also a bunch of people doing data analytics and advanced data analytics,”
    he said. As on date, Mastercard has offices in Vadodara, Gurugram and Pune.
  • Mastercard has been using the
    acquisition route to grow its business in India. This includes the 2014 buy of
    software solutions and payments management firm ElectraCard Services (ECS).
  • On Thursday, Mastercard signed a
    Memorandum of Understanding (MoU) with Andhra Pradesh to digitally transform
    the State’s delivery of services to people, especially farmers, and drive
    financial inclusion.
  • The MoU, which will be valid for
    two years, was signed between Andhra Pradesh Chief Minister N Chandrababu Naidu
    and Mastercard’s Banga. The MoU will help Andhra Pradesh create a “fintech
    valley” of global repute at Vizag, Naidu told reporters here.
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Gujarat first state to slash VAT
on fuel prices

  • Ahead of the state assembly
    elections, the state government has cut value-added tax (VAT) on petrol and
    diesel, making it the first state to follow the Centre’s directions to do so.
  • Speaking at an event in Una as
    part of the ‘Gaurav Yatra’, Gujarat chief minister Vijay Rupani said that the
    government was set to reduce taxes on the retail fuel. Gujarat government is
    likely to make an announcement soon.
  • Recently, the union government
    cut basic excise duty on petrol and diesel by Rs 2 a litre.
  • Union oil minister Dharmendra
    Pradhan had recently stated that retail fuel prices were set to ease out,
    following which the Centre asked state governments to cut VAT on petrol and
    diesel to ease rates.
India’s renewable energy capacity
to double by 2022: IEA

  • India’s renewable energy capacity
    will be more than double by 2022, according to the latest renewables market
    analysis and forecast report by the International Energy Agency (IEA).
  • The increase, according to the
    report, would be enough for India to overtake renewable expansion in the
    European Union for the first time ever.
  • The country’s renewable energy
    installed capacity is 58.30 GW as per the recent government data. The
    government has an ambitious target of raising it to 175 GW by 2022 including
    100 GW of solar and 60 GW of wind energy.
  • IEA stated in its report that the
    solar PV and wind together represent 90 per cent of India’s capacity growth as
    auctions yielded some of the world’s lowest prices for both technologies.
Bangladesh signs USD 4.5 billion
loan deal with India

  • Bangladesh on 4 October 2017
    signed a massive USD 4.5 billion third line of credit (LoC) agreement with
    India for its social sector development and infrastructure with Finance
    Minister Arun Jaitley vowing to back the country’s developmental initiatives.
  • The accord was signed in the
    presence of India’s Finance Minister Jaitley and his Bangladeshi counterpart A
    M A Muhith after the two leaders held talks.
  • The USD 4.5bn LoC was announced
    during Prime Minister Sheikh Hasinas visit to India in April.
News related to India and states
Center to organise Paryatan Parv
across the country to promote tourism

  • The Union Ministry of Tourism
    would be organising Paryatan Parv, a festival of tourism, from 5 October 2017
    in collaboration with other central ministries, state governments and
    stakeholders.
  • The main objective behind
    organising the festival is to draw focus on the benefits of tourism and
    showcase the cultural diversity of the country and to reinforce the principle
    of ‘Tourism for All’.
  • The 20-day festival would be
    beginning at Humayun’s Tomb in Delhi. It will end on 25 October.
The festival will have three main components:

  • Dekho Apna Desh
  • Tourism for All
  • Tourism & Governance
The components aim to encourage
Indians to visit their own country by holding tourism events at sites across
all states and interactive Sessions and workshops with stakeholders on varied
themes.
Appointments
ICMR Chief Soumya Swaminathan
appointed WHO Deputy Director-General

  • Soumya Swaminathan, director
    general of Indian Council of Medical Research (ICMR), appointed deputy
    director-general, of World Health Organization (WHO), in Geneva.
  • This position is the
    second-highest at the UN’s health agency. The position is also the highest post
    held by any Indian in the WHO.
  • This new leadership team in WHO
    was announced by Dr. Tedros Adhanom Ghebreyesus, the director-general, who was
    elected to the post in May 2017.
  • The second appointment along with
    Dr. Swaminathan was Jane Ellison, who was Special Parliamentary Adviser to the
    UK’s Chancellor of the Exchequer, has been appointed as a Deputy Director
    General for Corporate Operations (DDC), whereas Dr. Swaminathan has been
    appointed as Deputy Director General for Programmes.

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