Economy and Banking Current Affairs December 2016

Anti-dumping Duty on Certain Chinese Products

• The Union government has extended anti-dumping duty on import of certain Chinese products, used in garment, footwear and toys manufacturing, for another five years i.e., up to 2021.
• The CBEC imposed the duty based on recommendations of the DGAD. The DGAD made the case for continuation of the levy after its 2nd sunset review of the anti-dumping duty in force on the imports.
• The anti-dumping duty on ‘narrow woven fabrics hook and loop Velcro tapes’ will be charged at the rate of $ 1.87/kg. These products are mainly used in garment manufacturing, surgical and orthopedic apparatus, shoes and footwear, luggage/bags, toys, automobile upholstery and various other industrial segments. The anti-dumping duty was in force till October 5, 2016.

Finance Ministry Set-up PDMA

• The Finance Ministry set-up a Public Debt Management Cell (PDMC) with a view to streamline government borrowings and better cash management with the overall objective of deepening bond markets on October 4, 2016.     ,

• The PDMC will have only advisory functions to avoid any conflict with the statutory functions of the RBI. The Joint Secretary (Budget), Department of Economic Affairs would be the overall in-charge of the PDMC.
• The PDMC has been tasked to plan government borrowings, including market borrowings and other borrowings, like Sovereign Gold Bond issuance.
• Other functions of the PDMC are to manage government’s liabilities, monitor cash balances, improve cash forecasting, and foster a liquid and efficient market for government securities.

See Also – Indian Railway Question Paper.

Rs 65250 Crore Disclosed under Income Declaration Scheme

• The Union Finance Minister Arun Jaitley announced that the Central Board of Direct Taxes (CBDT) had received total disclosures of Rs 65250 crore under the Income Disclosure Scheme, 2016 in the form of cash and other assets. September 30,2016 was the last day of the government’s Income Declaration Scheme (IDS). Hyderabad emerged as a top destination with declaration of Rs 13000 crore, followed by Mumbai (Rs 8500 crore), New Delhi (Rs 6000 crore) and Kolkata (Rs 4000 crore).’
• The IDS, which charges a one-time effective tax rate of 45% on undisclosed income or property, gave a chance to domestic taxpayers to declare undisclosed income or •assets by September 30 and avail immunity from prosecution under the Income-tax Act, Wealth Tax Act and Benami Transactions (Prohibition) Act.

RBI’S ACTIVITY CURRENT AFFAIRS

Opened Second Banking Ombudsman Office in New Delhi

• The Reserve Bank of India (RBI) has opened a second office of the Banking Ombudsman on November 1,2016 in New Delhi, taking into account the significant increase of the banking network.
• The first office of the Banking Ombudsman at RBI, New Delhi, will have the jurisdiction over Delhi and Jammu & Kashmir, The second office will have jurisdiction over Haryana (except Panchkula, Yamuna Nagar and Ambala Districts) and Ghaziabad and Gautam Buddha Nagar districts of Uttar Pradesh.
• The office of the Banking Ombudsman handles cases related to operation in deposit accounts, complaints relating to interest rates, non-honouring of bank guarantee, remittances from abroad and related complaints, and loan related complaints.

Relaxed Norms for Foreign Investment in Startups

• The Reserve Bank of India (RBI) relaxed foreign investment norms on October 21, 2016 in financial services firms, startups and in investments by foreign regulated capital investors.
• Foreign Venture Capital Investors (FVCIs) can invest in Indian startups without prior the RBI.

• The RBI also allowed banks to approve extension of external commercial borrowings on their own provided the debt is unpaid and has not defaulted before. The RBI decides to allow FDI up to 100% in other financial services.
• The RBI has opened the gates for more overseas investment coming to India by a series of steps liberalising the Foreign Direct Investment (FDI) rules, even as it braces for a possible $ 26 billion outflows on account of FCNR-B deposit (foreign currency nonresident-bank) maturities.

Released Report of the Internal Working Group (IWG) on Rationalisation of Branch Authorisation Policy

• The RBI released report of the Internal Working Group (IWG) on Rationalisation of Branch Authorisation Policy on October 6, 2016.
• A ‘banking outlet’ has been defined “as a fixed point service delivery unit, manned by either bank’s staff or its Business Correspondent where services of acceptance of deposits, encashment of cheques/cash withdrawal or lending of money are provided for a minimum of 4 hours per day for at least five days a week’.
• Banks to open banking outlets subject to their meeting the 25% norm of opening banking outlets in unbanked rural centres. An Unbanked Rural Centre (URC) has been redefined as a ‘rural (tier 5 and 6) centre that does not have a CBS-enabled ‘banking outlet’ (including a fixed point BC outlet) of a Scheduled Commercial Bank or a CBS-enabled Regional Rural Bank, Local Area Bank, licensed Cooperative Bank or any other CBS-enabled bank licensed by the Reserve Bank for carrying out customer based banking transactions’.
• With a view to incentivising opening of banking outlets in North-Eastern States, Sikkim and in Left-Wing Extremism Affected Districts, a banking outlet or a part-time banking outlet opened in any of these States/notified districts, will be treated as a banking outlet/part-time banking outlet in an unbanked rural centre.