Current Affairs Economy & Banking

  According to the report of US-based think tank “World Population Review”, India has emerged as the 5th-largest world economy in 2019, overtaking the United Kingdom and France. India’s economy is the fifth-largest in the world with a gross domestic product (GDP) of $2.94 trillion. The size of the UK economy is $2.83 trillion and that of France is $2.71 trillion. These measures have helped India accelerate economic growth. In purchasing power parity (PPP), India’s GDP is $10.51 trillion, exceeding that of Japan and Germany. Due to India’s high population, India’s GDP per capita is $2,170 (for comparison, the US is $62,794). India’s real GDP growth is expected to weaken for the third straight year from 7.5% to 5%. According to the report, India’s service sector is the fast-growing sector in the world accounting for 60% of the economy and 28% of employment. The manufacturing and agriculture are two other significant sectors of the economy. The report observed that India’s economic liberalisation began in the early 1990s and included industrial deregulation, reduced control on foreign trade and investment, and privatisation of state-owned enterprises.

  India’s reinsurance company, General Insurance Corporation of India (GIC Re) has received the license from Central Bank of the Russian Federation (Bank of Russia) to commence reinsurance business in Russia. The license enables the subsidiary to commence transacting domestic and international reinsurance business in Russia based on the capital invested by the Corporation.

  The Union Ministry of Finance has notified ‘Printing of One Rupee Currency Notes Rules, 2020’ vide Gazzette Notification G.S.R. 95(E) dated February 7, 2020. “The One Rupee notes shall be printed at the note printing presses for issue under the authority of Government of India for circulation.
  • New one rupee note dimensions
The One Rupee currency note shall be rectangular 9.7 x 6.3 cms, with its paper made of 100 per cent (cotton) rag content. The note will be 110 microns thick, weighing 90 GSM (Grams per Square Meter). It will also have multi-tonal watermarks with Ashoka Pillar in the window without the words ‘??????? ????’ (Satyamev Jayate), hidden numeral ‘1’ in the centre and the hidden word ‘????’ (Bharat) vertically arranged on the right-hand side.
  • New one rupee note design
The Obverse side of one rupee note will contain the words “???? ?????? above the words “Government of India” with the bilingual signature of Shri Atanu Chakraborty, Secretary, Ministry of Finance and with the replica of New Rupee One coin with ‘?’ symbol of 2020 issued with ‘??????? ????? and capital Inset letter ‘L’ in numbering panel. The design surrounding will be of the Sagar Samrat, which is an oil exploration rig. The rig drilled the first offshore well in 1974 and has been in service with the Oil and Natural Gas Corporation (ONGC) since.
  • New one rupee note colour
The overall colour of One Rupee Currency note will be predominantly pink green on obverse and reverse in combination with others.
  • History of currency note in India
Currency notes were introduced in India in 1861, and the one-rupee note was introduced by the British on November 30, 1917. Although the printing of the note was discontinued in 1994, it was reintroduced in 2015 after a gap of 22 years.

  The Pension Fund Regulatory and Development Authority (PFRDA) has decided to increase the minimum net worth criterion for pension fund managers. The minimum net worth criterion for pension fund managers has been increased from Rs 25 crore to Rs 50 crore. This enhancement in the minimum net worth criterion for pension fund managers will bring pension funds on par with mutual funds which have to meet a minimum net worth requirement of Rs 50 crores as per Securities and Exchange Board of India (SEBI) rules. The fresh guidelines states that the licenses issued to the pension fund managers will remain valid until cancelled by the regulator as compared to the five years validity of the previously granted licenses. So, new guidelines will made provision for licenses to have indefinite validity and hence, will help the pension sector to grow to new levels.

  Deposit Insurance and Credit Guarantee Corporation (DICGC) increases the insurance coverage for depositors in all insured banks from Rs 1 lakh to 5 lakh with effect from February 4, 2020, with the approval of Government of India. The rate of premium payable by the insured banks will be raised from 10 paise per Rs 100 of assessable deposits to 12 paise per Rs100 of assessable deposits per annum. This step is taken with a view to providing a greater measure of protection to depositors in banks the Deposit Insurance and Credit Guarantee Corporation, a wholly-owned subsidiary of the Reserve Bank of India. Thus in terms of Section 16 (1) of Deposit Insurance and Credit Guarantee Corporation Act 1961, the limit of the total amount payable by the Corporation to any one depositor in respect of his/her deposits with an insured bank in the same right and capacity shall be 75 lakh.

  Fitch Ratings has estimated India’s GDP growth of 5.6% in the next FY21 in its India Economic Outlook. This forecast is lower than the projection made by the government’s Economic Survey. For the current fiscal 2019-20 (FY 20), GDP is projected at 4.6%. Fitch has also estimated that in the fiscal year 2022, government debt will remain 70% of total GDP.

  The Reserve Bank of India has cancelled the Certificate of Authorisation (CoA) of Vodafone m-pesa. This cancellation is done after its voluntary surrender of authorisation. Now Vodafone m-Pesa cannot continue to transact the business of issuance & will no longer have the right to provide payment facility as a prepaid instrument (PPI). Vodafone Idea in 2019 has decided to close m-pesa vertical after the closure of Aditya Birla Idea Payments Bank Limited (ABIPBL), with which it was being merged.

 ICICI Bank has rolled out “Cardless Cash Withdrawal” service through ATM. The “Cardless Cash Withdrawal” service can be used for cash withdrawal having a per day transaction limit of Rs 20,000. The service will enable the ICICI customers to withdraw cash from the ATM by putting a request on ICICI Internet Banking App “iMobile”. Hence, this service provides cash withdrawal facility from ATM without any use of Debit Card. The service also comes with secure and convenient cash withdrawal process for everyday usage and purchases, everything from the convenience of the users mobile phone.

  The United Nations has lowered India’s GDP growth rate to 5.7% for the Fiscal Year 2019-20 in its World Economic Situation and Prospects (WESP) 2020 report. UN has lowered the growth rate to 5.7% from 7.6% which it projected in its WESP 2019 report. UN has also projected India’s growth rate at 6.6% for FY 2020-21 and 6.3% for FY 2021-22. According to the UN, India’s growth rate for FY 2018-19 was 6.8%.

 The National Payments Corporation of India (NPCI) has launched a blockchain-technology based payment system ‘Vajra Platform’. The newly launched platform, which is based on the Distributed Ledger Technology (DLT) has been designed for automating payment clearing and settlement processes of NPCI products such as unified payments interface (UPI) and Rupay card.
The platform has three types of nodes:
  • Clearing House node (CHN) for NPCI.
  • UIDAI node for Aadhaar authentication.
  • Participant node (PN) for all banks.

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