Economy Current Affairs
Economy Current Affairs May 1st Week 2016
Category : Economy Current Affairs
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1) Rs. 1,900 crore provision for stressed assets drags State Bank of Hyderabad net.

  • State Bank of Hyderabad has posted a 19.15 per cent drop in its net profit at Rs. 1,064.93 crore for the financial year 2016, as against Rs. 1,317.13 crore made during 2014-15.
  • For the fourth quarter, the bank posted a profit of Rs. 253.13 crore, down 43.18 per cent.
  • Provision during the year and also allocations made to take care of future requirements of other assets under stress has had a direct impact on the overall profitability of the bank. The bank had made a provision of Rs. 1,900 crore this year, which has impacted its profitability.

Impressive growth:

  1. The operating profit has shown impressive growth of 13.01 per cent year-on-year to reach Rs. 3,293 crore and the net profit was Rs. 1,065 crore. Adequate provisions suggested by the RBI in respect of stressed assets accounts identified under early recognition process have been made by the bank.

2) Paytm ties up with Wipro for payments bank.

  • Paytm, India`s largest mobile payments, has joined hands with Wipro Ltd to create the requisite technology infrastructure for its upcoming payments bank business.
  • According to Paytm, Wipro will be implementing the core banking solution for Paytm and also programme managing the integration of other key systems like the anti-money laundering solution and the regulatory reporting solution.
  • Wipro will play a crucial role in helping Paytm interface its existing systems with the core banking solution. It will also put in place and manage the data centres for the payments bank in order to ensure smooth functioning of the new unit.
  • This part of the series of tie-ups, the firm has planned in run-up to its launch of its much-awaited payments banks. Technology is an integral part of the value proposition.
  • Paytm had received an in-principle approval to set up a payments bank. Payments banks can accept demand deposits and savings bank deposits from individuals and small businesses, up to a maximum of Rs. 1 lakh per account.

3) Airtel and GBI announce partnership for West Asia.

  • Airtel Business, the enterprise arm of Bharti Airtel, has partnered with networking player GBI to increase its direct reach in West Asian countries.
  • GBI being a key network asset for the region will not only improve our customers` experience and reach but would also enable GBI`s customers to experience a seamless extension on the Airtel Global network spanning across 50 countries across 5 continents.
  • Airtel Business only offers enterprise services to its clients in Middle East.
  • The partnership will help "extend our network reach to Airtel`s customers and to further enhance the benefits of our value propositions for customers and partners".
  • GBI owns and operates a multilayer carrier neutral network providing connectivity to West Asian countries.
  • The partnership is in line with the long-term strategy of Airtel Business, considering the long-term potential for the Middle East market.

3) L&T Finance Q4 net rises 15%.

  • L&T Finance Holdings reported a 15 per cent increase in year-on-year consolidated net profit at Rs. 237 crore in the fourth quarter ended 2016, as compared with Rs. 206 crore in the year-ago quarter.
  • The financial holding company’s net profit was almost flat at Rs. 857 crore (Rs. 855 crore in FY15).
  • The board of directors of the company recommended dividend of Rs. 0.80 per equity share of face value Rs. 10 each.
  • The Larsen & Toubro-promoted company, which is registered with the Reserve Bank of India as a ‘non-deposit taking, systemically important, core investment company’, has seven wholly-owned subsidiaries, including L&T Finance, L&T Infrastructure Finance Company, L&T Investment Management, L&T Capital Markets, and L&T Housing Finance.

Loan disbursement:

  1. Year-on-year (y-o-y), loan disbursements were up 20 per cent at Rs. 10,688 crore in the reporting quarter. Loans and advances grew 22 per cent y-o-y to Rs. 57,831 crore.
  2. The company moderated its growth in the farm equipment business due to the challenging environment in this sector.
  3. The growth has been led by healthy disbursements in key areas - operational projects in renewable energy and roads and retail products - housing, microfinance and two-wheelers.
  4. Net interest margin has been maintained in the 5.5 per cent to 5.8 per cent band in the last eight quarters.


4) Government must boost supply of `India Gold Coins`.

  • The World Gold Council has called upon the government to increase the supply of ‘India Gold Coins’ to encourage people to invest in the yellow metal.
  • At present, these coins are available only through MMTC outlets and select banks and its distribution should be accelerated by adding more features, such as buyback arrangements in banks.
  • The total recycled gold in India in 2015 was 80.2 tonnes.
  • The launching of the Gold Coins will prompt temples to deposit their gold in banks, as devotees may prefer gold-coin offerings instead of jewellery.
  • Gold savings should flow through the banking system for the benefit of the economy and it would encourage savings, promote financial inclusion, and leverage passion for gold.

Marginal increase:

  • Demand for gold last year had registered a marginal increase to 849 tonnes against 828 tonnes in 2014. In the fourth quarter, demand grew 6 per cent to 233 tonnes from 220 tonnes in the same period last year.

5) India rated 9th in FDI Confidence Index.

  • India has secured ninth position in the 2016 Foreign Direct Investment Confidence Index, a global management consulting firm, Underlining that the country is ``finally`` embarking on a growth path that will see it ``unlock its full potential``.
  • India jumped two places to rank number 9 in this year’s AT Kearney Foreign Direct Investment (FDI) Confidence Index.
  • India has emerged as the fastest growing economy in the world, surpassing China as well as Brazil, Russia and South Africa, the other members of BRICS - an acronym of five major fast-growing emerging economies.
  • The Index of a London-based consulting firm is a forward looking analysis of how political, economic, and regulatory changes will likely affect FDI inflows into countries in the coming years. The Index is constructed using primary data from a proprietary survey administered to senior executives of the world’s leading corporations.

6) Commerce Ministry launches web-based dashboard for export, import data.

  • The Commerce Ministry launched a web-based dashboard to provide an easy access to detailed trade data of the country.
  • The dashboard would give an accurate perspective to the general public on the facts around the trade performance in India.
  • `EXIM Analytics` would provide data graphically exposing patterns, trends and correlations that might go undetected in text based data.
  • It also gives a graphical collection of exports and imports from India for example the export turnover of the country, how it performs over time and what are the export destinations.

7) LIC itself has bad loans of well over Rs. 12,000 crore.

  • India’s leading life insurer, Life Insurance Corporation (LIC), has non-performing assets (NPAs) of its own to worry about.
  • According to LIC’s 2014-15 annual report, it had gross NPAs amounting to 3.3 per cent (Rs. 12,230 crore) of its total ``debt`` (the term it uses). This had risen to 4.23 per cent as of 2015.
  • LIC’s bad loans have been steadily rising over the last five years. In 2010-11, its GNPAs were at just 0.95 per cent. LIC’s total ``debt`` of about Rs. 3,70,625 crore as of 2015, is actually higher than HDFC Bank’s loan book of about Rs. 3,65,495 crore in the FY15 fiscal.
  • Aside from its investments in debentures and bonds, LIC has extended loans to the Centre and State governments, banks and financial institutions and companies, which amounted to about Rs. 1 lakh crore as of March 2015.

8) Uber ties up with Alipay globally.

  • Online cab aggregator Uber announced a global partnership with third-party payment platform, Alipay, to enable Chinese travellers avail of rides through this solution in more than 400 cities.
  • Uber riders in India can avail of the facility through Paytm platform. China’s Alibaba Group and its affiliate Ant Financial had earlier picked up stake in One97 Communications, the parent company of Paytm.
  • Alipay’s collaboration with Uber reflects a step forward of Ant Financial’s global strategy, and it also extends to the Alipay’s strategic global partners like Paytm in India.
  • The tieup aims to bring better experiences for our users globally.

9) NSE to launch platform for financing SMEs against bills.

  • The National Stock Exchange (NSE) is planning to launch a new trading platform for bill discounting or trade receivables of micro, small and medium enterprises (MSME). The country’s largest exchange has forged a joint venture with the Small Industries Development Bank of India (Sidbi) for the new platform, which is likely to go live by the end of this calendar year.
  • The new electronic trading platform is aimed at easing the liquidity constraints of MSMEs. Bill discounting is a concept where a firm sells its accounts receivables to a bank or a factoring firm. Selling bills or accounts receivables helps the firm generate cash, which would otherwise have got realised at a future date.
  • The Reserve Bank of India (RBI) had issued the final guidelines for setting up a Trade Receivables Discounting System in 2014.

10) Wilful defaulters owe Rs. 66,000 crore to govt banks.

  • There were 7,686 wilful defaulters owing Rs. 66,190 crore to state-owned banks as of 2015.
  • The total outstanding amount in top 100 non-performing accounts (NPAs) with public sector banks (PSBs) was Rs. 1.73 lakh crore as of 2015.
  • The number of wilful defaulters of PSBs rose from 5,554 to 7,686 in three years to 2015 while the amount involved more than doubled to Rs. 66,190 crore from Rs 27,749 crore.
  • The total exposure of top 50 defaulters of PSBs as of 2015 was Rs. 1,21,832 crore.

11) IMF retains India growth forecast at 7.5 per cent.

  • The International Monetary Fund has retained its growth forecast for India this year at 7.5 per cent, largely driven by private consumption even as weak exports and sluggish credit growth weigh on the economy.
  • India`s growth momentum is expected to be underpinned by private consumption, which has benefited from lower energy prices and higher real incomes.
  • In its latest Regional Economic Outlook for Asia and the Pacific, weak exports and sluggish credit growth (stemming from weaknesses in corporate sector and public sector banks` balance sheets) will weigh on the economy.
  • India has benefited from lower oil prices and remains the fastest-growing large economy in the world, with GDP expected to increase by 7.5 per cent this year and next.


12) Special Financial Package for North East.

  • Rs. 33097.02 crore has been allocated for the North Eastern Region by 56 Central Ministries/ Departments including Rs. 2400 crore provided to the Ministry of Development of North Eastern Region (DoNER).
  • The budget allocation to Ministry of DoNER includes funds for the Non-Lapsable Central Pool of Resources (NLCPR) scheme and the scheme of North Eastern Council (NEC). In addition to the above, an amount of Rs. 1000 crore has been allocated for grants to Autonomous Councils, areas covered under the Sixth Schedule of the Constitution.
  • The Ministry has also been receiving, from time to time, proposals from State Governments including through their priority lists for possible funding under the NLCPR scheme and NEC schemes which have been taken up within the budgetary provisions of the Ministry.

13) Jindal Brothers Sign Rs. 6,500 Crore Power Deal.

  • Sajjan Jindal-led JSW Energy agreed to buy out Brother Naveen Jindal’s debt-laden Jindal Steel and Power’s 1000 megawatt power plant in Chhattisgarh for an enterprise valuation of Rs. 6,500 crore.
  • The cost of the deal is linked to an initial enterprise value of Rs. 4,000 crore, which may be increased to Rs. 6,500 crore if pre-agreed fuel supply and power offtake arrangements are met. Under the terms of the deal, an interest-bearing advance of Rs. 500 crore is to be paid after shareholders’ approval of both firms and the competition watch dog CCI.

14) CCEA approved two laning with formation of four lane of Shimla Bypass on NH-22.

  • The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, has given its approval for development of two laning with formation of four lane of Shimla Bypass (Kaithlighat to Shimla section) on National Highway-22 in Himachal Pradesh.
  • This work will be under the National Highways Development Project (NHDP) Phase-III. The approval is in Hybrid Annuity Mode.
  • The cost is estimated to be Rs.1583.18 crore including cost of land acquisition, resettlement and rehabilitation and other pre-construction activities. The total length of the road will be approximately 28 kms.
  • The main object of the project is to expedite the improvement of infrastructure in Himachal Pradesh and also in reducing the time and cost of travel for traffic, particularly heavy traffic, plying on the Kaithlighat to Shimla section on National Highway-22.

15) Snapdeal acquires TargetingMantra.

  •, India’s second largest e-commerce company has acquired TargetingMantra (Insightful Pvt. Ltd), a Gurugram-based marketing and personalization services company for an undisclosed amount.
  • The Targeting Mantra team comes with valuable experience in driving superior customer experience through machine learning.
  • The companies did not disclose the financial details of the transaction. The TargetingMantra’s team will help in building the customer experience solutions that will personalize shopping experiences for customers.

16) Lenskart raises Rs. 400 crore from IFC, Ratan Tata.

  • Online eyewear seller Lenskart has raised about Rs. 400 crore ($60 million) in Series D from a group of investors led by IFC, an arm of the World Bank.
  • While IFC has invested Rs. 171 crore in the Delhi-based firm, other marquee investors who also participated in the current round were IDG Ventures, TPG Growth and Adveq Management. In addition, Ratan Tata and Kris Gopalakrishnan (co-founder of Infosys) invested in their personal capacity.
  • Lenskart’s total funding stands at $95 million (Rs. 640 crore, approximately) and is valued at Rs. 1,200 crore, according to industry experts. Ronnie Screwvala’s Unilazer Ventures is also an investor in the company.
  • Lenskart, which started as an online player in 2010, has over the past few years adopted an omni-channel way to expand its business. At present, it has over 100 stores across more than 65 cities and sells over 10,000 different styles of eyewear across brands.

17) Indian Railways creates Non-Fare Revenue Directorate to explore advertising in train coaches.

  • Railways have created a new directorate to carry out advertisements in rail coaches, along the track and near stations in a big way to increase the revenue substantially from non-tariff sources.
  • Named as `Non-Fare Revenue Directorate`, the new wing would explore getting advertisements on coaches, wagons, locomotives and at stations and commercial exploitation of vacant rail land among others.
  • The directorate would be headed by a senior-level railway official and the new wing will focus on various ways to enhance revenues by 10 per cent to 20% from the current 5 per cent from the non-tariff sources.
  • Action plan to increase the non-fare revenue was a Rail Budget proposal this year.