August 8, 2018

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NATIONAL NEWS

  1. The share of Indian households owning a two-wheeler (scooter or motorcycle) equals the share of households owning a bicycle or animal cart, as per the data from the National Family Health Survey (NFHS) 2015-16.
    • About one- third of households owned a two-wheeler in 2015-16 (excluding car owners), and a roughly equal share, 33.3%, owned a bicycle or animal cart (excluding households that owned other vehicles as well), the data shows.
    • The NFHS surveyed more than 600,000 households in 2015- 16, and among other things, provides district-wise representative data on ownership of vehicles.
    • A Mint analysis of the unit-level NFHS data shows Tirupur district of Tamil Nadu has the highest ownership of two-wheelers, with nearly three- fourth of households owning either a scooter or motorcycle.
    • Panchkula in Haryana has the highest share of four- wheeler-ownership, with four in 10 households owning a four-wheeler (including car, trucks, and tractors).
    • The analysis shows the estimated share of two-wheeler owners in rural India at 34% is 20 percentage points lower than that in urban India.
    • The estimated share of four-wheeler owners in urban India at 12% is 5 percentage points higher than that in rural India.
    • Tamil Nadu, Haryana, Chhattisgarh, and Punjab saw the biggest increases in two-wheeler ownership between 2011 and 2015-16,
    • Kerala, Tamil Nadu, Rajasthan and Haryana saw the biggest gains in ownership of four-wheelers.

 

  1. A government panel has recommended amending the Passport Act to prevent borrowers from fleeing the country.
    • If the recommendations are accepted, it will be a step towards ensuring that large borrowers are held accountable for non-payment of loans to banks and cannot flee the country without paying their dues.
    • The government panel is headed by Rajiv Kumar, secretary, Department of Financial Services in the ministry of finance. 
    • In February, a ₹14,356 crore scam surfaced at Punjab National Bank involving Nirav Modi and Mehul Choksi. 
    • According to data collated by the External Affairs Ministry, 28 Indians involved in financial irregularities had fled the country in the period between 2015 and 30 June 2018. The list was compiled by the Central Bureau of Investigation and Enforcement Directorate (ED).

 

  1. India is confident of achieving its ambitious target of 100 gigawatts (GW) solar power by 2022 despite the imposition of a safeguard duty on imported solar components.

 

  1. The majority of Acute Encephalitis Syndrome (AES) patients admitted to the hospital between August and October each year have Scrub Typhus.
    • The first indication of scrub typhus’ role came during a 2014 study at Baba Raghav Das (BRD) Medical College by researchers from Karnataka’s Manipal Centre for Viral Research. 
    • Scrub Typhus is an acute illness caused by bacterium Orientia Tsutsugamushi, which is transmitted by the bite of an infected mite larva present in the soil.

 

  1. Foreigners no longer need a Restricted Areas Permit to visit 29 inhabited islands in the Andaman and Nicobar chain.
    • The Union Ministry has lifted the restrictions.
    • The 29 inhabited islands have been excluded from the Restricted Area Permit (RAP) notified under the Foreigners (Restricted Areas) Order, 1963, till December 31, 2022, subject to certain conditions.
    • However, citizens of Afghanistan, China and Pakistan and foreign nationals having their origin in these countries would continue to require RAP to visit the Union Territory.
    • For visiting Mayabunder and Diglipur, citizens of Myanmar will continue to require RAP, which shall be issued only with the prior approval of the ministry.
    • The Foreigner (Protected Areas) Act requires foreigners to obtain a Protected/Restricted Area Permit to visit certain areas in India.
    • The requirement is in addition to getting an Indian Visa.

 

  1. The 5th Report of Assessment of India’s Policy and Programmes on Breastfeeding and Infant and Young Child Feeding in 2018 also gives India a score of 45 out of 100 on 10 parameters under the category of policy and programmes.
    • However, India performs better in terms of infant and young child feeding practices scoring 34 out of 50 on five parameters.
    • The report has been prepared by a national consortium of public health groups and agencies including government departments, AIIMS and UNICEF, under the aegis of World Breastfeeding Trends Initiative (WBTI).
    • India has made some progress over the years and between National Family Health Survey (NFHS)-3 and NFHS-4, early initiation of breastfeeding has improved from 4% to 41.5% children breastfed within one hour of birth.

 

  1. The Indian National Trust for Art and Cultural Heritage (INTACH) has called for transforming heritage buildings in Rajasthan into “economic assets” for the society.
    • Economic benefits could be derived from these properties as an alternative to paying for their upkeep on a regular basis.
    • INTACH was founded as non-profit charitable organisation in 1984 in New Delhi with the vision to create a membership organisation to stimulate and spearhead heritage awareness and conservation in India.
    • Chairman of INTACH – Gen. (Retd.) L.K. Gupta.

 

  1. The Minister for Road Transport & Highways, Shipping, Water Resources, River Development and Ganga Rejuvenation Shri Nitin Gadkari launched 2 IT initiatives of the Road Transport & Highways Ministry named: Bidder Information Management System (BIMS) and Bhoomi Rashi and PFMS linkage.
    • BIMS – The portal will work as a database of information about bidders, covering basic details, civil works experience, cash accruals and network, annual turnover etc.
    • Bhoomi Rashi and Public Financial Management System (PFMS) linkage – This will facilitate payment related to compensation for land acquisition to all the beneficiaries directly through the Bhoomi Rashi system.
    • Bhoomi Rashi comprises the entire revenue data of the country, right down to 6.4 lakh villages.

 

INTERNATIONAL NEWS

  1. China has reported a current account deficit of USD 28.3 billion in the first half of this year, which is the first in 20 years for the world’s second largest economy.
    • The world’s second largest economy posted 9 percent GDP last year and the government has fixed 6.5 percent as this year’s growth target.

 

BANKING AND ECONOMY

  1. The Parliamentary Standing Committee on Commerce has asked the Reserve Bank of India to restore the issuance of Letters of Undertaking (LoU) and Letters of Comfort (LoC) for trade credit.
    • The Committee notes that there is also unanimity that the ban of LoU/LoC has resulted in rise in the cost of credit by 2% to 2.5%.
    • The ban on LoU/LoC takes away the benefit of cheap source of funds availed by the importers. Costly imports shall lead to higher costs of production and erode the competitiveness of the domestically produced goods.
    • This will affect the cost competitiveness of the country’s trade and industry and have a cascading effect on jobs. The loss of jobs is something the country can ill-afford.
    • The Reserve Bank of India has scrapped quasi-bank guarantee instruments such as the Letter of Undertaking and Letter of Comfort that blew a Rs. 14,000 crore hole in the books of Punjab National Bank as the regulator attempts to plug a loophole and improve banks’ due diligence in trade credit.  
    • Banks can continue to issue guarantees and Letter of Credit for trade purposes which are the international norm, and also have features that makes the claim on the issuer strong.
    • Letter of Credit (LCs) – A Letter of Credit (LCs) is a document from a bank or a financial institution on the buyer’s behalf that assures the payment to the seller. The bank needs to have certain documents in possession before it issues the letter of credit. This letter is regarded as a guarantee to the seller that the payment will be made even if the buyer fails to do so.
      1. Bank Guarantees and LCs are considered less risky because receiving banks have to conduct their own credit appraisal on companies before accepting them. 
      2. LCs are more secure because they have details of the purchase by the importer, the date of issue, expiry date, the material purchase and other transaction details.
    • Letter of Undertaking – It is a form of guarantee issued by a banking entity to a person concerned for availing short term credit from the overseas branch of an Indian bank.
      1. These letters of undertaking (LoUs) are not issued against general retail transactions and instead are used for business or trade transactions.
    • Letter of Comfort (LoCs) – It is a written document that provides a level of assurance that an obligation will ultimately be met.
      1. In its traditional context, a letter of comfort is given to organizations or persons of interest by external auditors regarding statutory audits statements, and reports used in a prospectus.
      2. These instruments were a form of credit guarantee, often used by importers to fund their overseas purchases.

 

  1. The Reserve Bank of India (RBI) has cancelled licences of 368 Non-Banking Financial Companies (NBFCs) in the six months ended June, more than double the number of such cancellations in the whole of 2017, for failing to meet regulatory norms.
    • The move is being seen as an attempt to clean up the sector, which has more than 11,402 entities, of which 222 are non-deposit taking NBFCs.
    • According to the amendment in the RBI Act of 1997, the central bank had mandated the minimum capital requirement for NBFCs at ₹ 25 lakh.
    • The requirement was increased to ₹ 2 crore for new NBFCs.
    • However, the old ones were allowed to continue with the earlier capital requirement until RBI issued a revised regulatory framework in 2014.
    • Under this, it had set a deadline for all NBFCs to reach the minimum net owned fund of ₹2 crore before 31 March 2017.
    • The Financial Intelligence Unit (FIU) classified close to 4,135 NBFCs registered with RBI as non-complaint under the Prevention of Money Laundering Act (PMLA) as on 31 July.
    • FIU also highlighted that these NBFCs had failed to appoint principal officers and report all suspicious and cash transactions of over ₹10 lakh to the FIU.
    • NBFC or Non-Banking Financial Companies is a company in India, which is registered under the Companies Act, 1956, and which provides banking services without meeting the legal definition of a bank.
    • NBFC do not accept and lend deposit.

 

  1. Punjab National Bank expects to complete the stake sale in its mortgage lending arm, PNB Housing Finance, by the end of the financial year.
    • It is also planning to list its insurance venture, PNB Metlife, on the bourses.
    • PNB reported a $2-billion fraud in February has declared a June quarter loss of ₹940 crore, against a profit of ₹343 crore a year ago.
    • Indian banks reported a total loss of about ₹70,000 crore due to frauds during the last three fiscals up to March 2018 as per Rajya Sabha.

 

  1. The value of transactions made through mobile wallets touched a record 14,632 crore in June, as per the data released by Reserve Bank of India ( RBI) showed, rising 4.2% from 14,047 crore in May.
    • However, the number of transactions fell around 5% to 309.62 million in June after reaching an all- time high of 325.41 million in May.

 

MISCELLANEOUS

  1. Muthuvel Karunanidhi, former Chief Minister of Tamil Nadu and President of Dravida Munnetra Kazagham, died.
    • He became chief minister for the first time in 1969.

 

  1. Two New books launched –
    • Ten Ideologies: The Great Asymmetry between Agrarianism and Industrialism” – book by S Jaipal Reddy.
    • RSS: A View to the Inside – book by BJP general secretary Ram Madhav.