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Economy Current Affairs October 2nd Week 2017
Author : Admin
Category : Economy Current Affairs
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Economy Current Affairs October 2nd Week 2017

1. Bengaluru Metro gets Rs. 3,800 crore from European Investment Bank.

India here on Thursday signed a loan agreement with the European Investment Bank (EIB) for a 300 million euro-financing for the second phase of the Bangalore Metro Rail Project, an official said.

The amount for "Phase II Line R6" of the Namma Metro (Our Metro) in Bengaluru represents the first tranche of the 500 million euro financing of the project approved in July, the Union Finance Ministry said in an official release.
"Bangalore Metro Rail Project Phase II is to be jointly financed by the European Investment Bank (Euro 500 million) and Asian Infrastructure Investment Bank (Euro 300 million)," it said.

"The project envisages extension of East-West and North-South lines, which includes a total length of 72.095 km (13.79 km underground), and 61 stations with 12 underground stations."
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The project implementation period is five years, the statement added.

In 2015, French funding agency Agence Francaise De Development (AFD) extended a Rs 1,500-crore loan for Phase II.

This was in addition to the Rs 810 crore the AFD lent for the now completed Phase I.
 
2. Reserve Bank of India to soon Launch Financial Literacy Drive in 9 States.
Reserve Bank of India to soon Launch Financial Literacy Drive in 9 States
The Reserve Bank will soon launch a financial literacy drive in 80 blocks in nine states on pilot basis to educate people on e-transactions, formal sector borrowings and insurance purchases.

Six NGOs registered with the Depositor Education and Awareness Fund -- CRISIL Foundation, Dhan Foundation, Swadhaar Fin Access, Indian School of Micro Finance for Women (ISMW), Samarpit and the PACE Foundation -- have been selected to execute the pilot project in collaboration with banks.

"The Reserve Bank is initiating a pilot project on financial literacy at the block level to explore innovative and participatory approaches to financial literacy," RBI said while inviting expression of interest from agencies to conduct impact assessment of Pilot CFL (Centre for Financial Literacy) Project.
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The pilot project, RBI document said will be commissioned in the 9 states of Maharashtra, Chhattisgarh, Bihar, Odisha, Karnataka, Telangana, Andhra Pradesh, Haryana and Uttar Pradesh across 80 blocks by the 6 NGOs in collaboration with the sponsor banks.

The total cost of the pilot project over a period of three years is Rs 18.40 crore.

The aim of the CFL is to inculcate the habit of making a household budget and recording financial transactions, encourage transactions in savings accounts, and active saving by depositing in banks through fixed deposits and recurring deposits.

Besides, the pilot project aims to ensure people borrow from formal finance institutions and approach banking Ombudsman for redressal of their grievances.

It will also "encourage e-transactions through electronic means viz NEFT, RTGS, IMPS, Internet Banking, Mobile Banking, UPI (Unified Payment Interface) etc", the document said.
 
3. Reliance Commercial Finance Inks Agreement with IREDA for Rs 300 cr Loan.
Reliance Commercial Finance Inks Agreement with IREDA for Rs 300 cr Loan
Anil Ambani-led Reliance Capital arm will get a loan assistance of Rs300 crore from government body Indian Renewable Energy Development Agency Ltd (IREDA) to utilise funds for on-lending to renewable energy sector. “Reliance Money (a brand of Reliance Commercial Finance Ltd or RCFL) signs Rs300 crore agreement with Indian Renewable Energy Development Agency Ltd (IREDA),” Reliance Money said in a statement on Monday.

The company will use the funds for lending to its renewable energy and energy efficiency projects, it said in a statement. “Our partnership with IREDA opens new opportunities for us to create solutions for renewable power sector,” said Devang Mody, executive director and chief executive officer, Reliance Commercial Finance Ltd (RCFL).

RCFL finances wind and solar energy projects besides providing assistance for developing infrastructure and projects in renewable energy space backed by government. The Make in India campaign of the government under its initiative like ‘Prayas’ has aimed at creating 5 gigawatts (GW) of photo-voltaic manufacturing capacity from 2019 and build 20GW of projects by 2026.
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The government has targeted to raise its renewable energy capacity to 175GW by 2022 from 45GW at present. “With the Prime Minister’s vision of promoting renewable energy we too understand the importance of what right financing will do to the sector.

With the funding we are confident that RCFL will provide solutions and help fill any gaps in financing the renewable energy sector,” said K.S. Popli, chairman and managing director, IREDA. RCFL is part of Reliance Capital that offer products like business expansion loans, vehicle loans, loans against property, infrastructure financing, agriculture loans and supply chain financing among others.
 
4. RBI introduces strict KYC guidelines for Prepaid Payment Instructions.
RBI introduces strict KYC guidelines for Prepaid Payment Instructions
In a fresh set of guidelines for prepaid payment instruments (PPIs), including e-wallets, the Reserve Bank of India has allowed interoperability and introduced stricter Know Your Customer (KYC) norms to prevent fraud and foster competition.

The central bank has set a December 31, 2017, compliance deadline for the new set of rules. All existing wallet users, too, have to convert to the full KYC format by the year-end.

However, the operational guidelines on interoperability will be issued separately, the RBI said in its directive.
With the recent move, customers will now be able to move money between wallets of different companies and banks seamlessly through the Unified Payments Interface (UPI), provided they complete full KYC formalities.

Interoperability shall be enabled in phases for the PPIs, the regulator said. “In the first phase, PPI issuers (both bank and non-bank entities) shall make all KYC-compliant PPIs issued in the form of wallets interoperable among themselves through UPI within six months from the date of issue of this direction,” the RBI said. “In subsequent phases, interoperability shall be enabled between wallets and bank accounts through UPI. Similarly, interoperability for PPIs issued in the form of cards shall also be enabled in due course.”

UPI, which was launched by the National Payments Corporation of India in August 2016, is a mobile-based payments system that facilitates instant fund transfer between bank accounts, without having to divulge details of the accounts. KYC is a process through which financial institutions verify information about customers to ensure services are not misused.

The RBI has also revised the limit of semi-closed PPIs from Rs 20,000 to Rs 10,000 per month. “The amount loaded in such PPIs during any month shall not exceed Rs 10,000 and the total amount loaded during the financial year shall not exceed Rs 1 lakh.”

Besides, the central bank has increased the networth requirements for players in the wallets space. For a PPI licence, companies need a positive networth of Rs 5 crore at the time of application against the earlier requirement of Rs 2 crore. The RBI has also mandated that within the third financial year of receiving an authorisation wallets should have a networth of Rs 15 crore.

“This is the third edition of reforms in PPI. The first one allowed non-banks to participate in regulated payments systems, the second allowed domestic remittance from PPIs to bank accounts. Now, the third edition is laying the foundation for PPIs to become interoperable with all existing payments instruments and on a par with debit/credit cards in a phased manner. This would ensure that PPIs contribution to digital payments from the current share of less than 10% can move to 30-40% within the next five years,” said Navin Surya, chairman, Payments Council of India.
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“These guidelines are testimony to the growing influence of digital wallets in the Indian financial industry. RBI’s new norms further enrich PPIs and demonstrate our government’s allegiance to digital payments and commitment to the growth of the industry,” said MobiKwik founder and CEO Bipin Preet Singh. He also felt that the new guidelines could mark the end for payments banks. “Also in my view, the growth of PPIs per these directives will have a corrosive effect on payment banks, as their relevance depreciates further.”

“Clarity on KYC and interoperability to foster collaborative innovation in the eco-system of both banks and non-banks alike. KYC structure and compliance are good for the long-term growth of this industry,” said Bhavik Vasa, chief growth officer, ItzCash Ebix. “Among the positives, we are happy with the Rs 1 lakh limit on PPI. This has a clear intent of moving away from paper vouchers to digital, and is a welcome step in the right direction.”

Vasa, however, said that as an industry “we would like to seek clarity with the regulator and understand better on reasons for a few downward revisions and limits, like minimum KYC PPI limit of Rs 10,000. These may limit our fight against physical cash in the economy, especially when we can buy gold up to Rs 2 lakh with cash in India”.


 

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