1India’s rural economy hit hard as informal lending breaks down
Rural economy largely shut out of the banking sector
- Small-time financiers would typically lend cash to farmers and traders every day, providing a vital source of funding for a rural economy largely shut out of the banking sector, albeit at interest rates of about 24 per cent.
- The action was intended to target wealthy tax evaders and end India’s “shadow economy”, but it has also exposed the dependency of poor farmers and small businesses on informal credit systems in a country where half the population has no access to formal banking.
Percent of bank branches per 100,000 people in rural areas.
2Citi India waives debit card fees for merchants till Dec 31
Fee waiver for all domestic debit card transactions
- Foreign lender Citi India today announced fee waiver for all domestic debit card transactions as part of its efforts to encourage digital payments.
- The temporary suspension of the merchant discount rate (MDR) on all domestic debit card transactions it acquires will remain until December 31.
- Best Consumer Internet Bank in India
- Best Corporate/Institutional Internet Bank
3Commerce Ministry for lifting all curbs on gold imports
Pitched for ‘restriction free’ imports of gold
- Commerce and Industry Minister Nirmala Sitharaman has pitched for ‘restriction free’ imports of gold to help gems and jewellery exports and also discourage smuggling.
- She also added that ,restrictions on gold imports can be justified on the grounds of maintaining the balance of payments ,one has to be mindful of the fact that such barriers encourage smuggling.
Major smuggling ports
4To drain surplus liquidity, RBI orders additional CRR
Heavy inflow of deposits seen
- The RBI has asked banks to temporarily maintain additional average daily balance with it in order to drain out the surplus liquidity with them. This follows the banking system being flooded with liquidity triggered by a heavy inflow of deposits, due to the ongoing demonetisation exercise.
- The cash reserve ratio (CRR), or the slice of deposits that banks have to maintain with the central bank, however, continues at 4 per cent of deposits.
RBI wants the scheduled bank to maintain it.
5Allow us to accept old notes for repayment
NBFCs approach Finance Ministry
- Asset financing non-banking finance companies (have now knocked on the Finance Ministry’s door, asking to be allowed to accept Rs.500 and Rs.1,000 notes towards borrower repayments till December 30.
- RBI had announced that banks can accept old notes till December 30 so long as these are credited to the customer’s deposit or loan accounts, and cash transaction/suspicious transaction reporting is done under the Prevention of Money-Laundering Act.
Last Date to accept old notes in Banks.
6Tax now likely on downloading movies, music from foreign sites
The service tax which would be imposed on foreign companies
- If you download a movie or some music from a site based abroad, such as the iTunes Store, your bill will rise due to the proposed goods and services tax (GST), if the revised draft model Bill becomes law.
- The exemption to such services provided in India by providers located in foreign territory is being withdrawn with effect.
Central Board Of Excise & Customs
Is headed by One Chairperson and six Members.
7Eight years later, India Inc more vulnerable
Banks’ bad loans ratio is 3.5 times higher
- Corporate India and banks are much less prepared for an economic slowdown than they were on the eve of the 2008 global financial crisis based on key ratios.
- The corporate debt-equity level is now twice that during 2007-08, while corporate profitability during 2015-16, as measured by return on equity, was half that in FY08.
7.2 lakh crore
Counties top listed financial firm owned to their lenders in 2016.
8Prime Minister’s online governance initiative invites tips ahead of budget
Online governance along with union budget
- Prime Minister Narendra Modi’s online governance initiative operational since July 26 this year, has invited suggestions from the public for the Union Budget for 2017-18. The last date for submission is December 15.
- The Centre announced that the Union Budget would be presented on February 1, in a break with the colonial practice of budget presentation on the last working day of February.
Revenue loss through direct tax proposals.
9Committed to easing pain: RBI Governor
Logistics of removing 86% of notes in circulation is huge
- Terming demonetisation a “once in a lifetime event” that requires mammoth logistics, Governor Urjit Patel said RBI is taking all necessary actions to “ease the genuine pain of citizens who are honest and who have been hurt” and hoped things will normalise soon.
- He urged people to start using cash substitutes like debit cards and digital wallets, saying it will make transactions cheaper and easier
Deployed employees to beat the queue