Banking and Financial News – 09 May 2014
Banking and Financial News – 09 May 2014
RBI to Issue Guidelines for On-Tap Banking Licences in FY15: Deputy Governor (NDTV Profit) - Reserve Bank of India (RBI) Deputy Governor R. Gandhi on Thursday said the apex bank is likely to issue guidelines for issuing of "on-tap" bank licences in 2014-15. The comment comes a month after the RBI granted two preliminary licences to set up new banks. Alongside, the RBI is also expected to issue guidelines on differentiated bank licences in the current financial year, Mr Gandhi added.On-tap licensing means that the RBI window for granting banking licences will be open through the year.
Last month, the RBI gave bank licences to IDFC Ltd, and Bandhan Financial Services, opening the door for allowing new banks for the first time since 2004.
India’s April trade deficit narrows to $10.01 billion (The Mint) - India’s merchandise exports bounced back in April after declining for two consecutive months while a drop in imports helped narrow the trade deficit and ease pressure on the external sector and the rupee. During April, merchandise exports grew 5.26% to $25.6 billion, while imports shrank 15% to $35.7 billion, leaving a trade deficit of $10.1 billion. A pick-up in exports and curbs on gold imports helped India to rein in its current account deficit in the second and third quarters of 2013-14. India’s current account deficit narrowed to 0.9% of gross domestic product (GDP) in the quarter ended December, from 1.2% of GDP in the preceding quarter.
A large trade deficit made the Indian economy vulnerable to external sector shocks and saw the Indian currency touching a record low of almost 69 per dollar in August.
Important Financial Terms in the News explained.
Trade Deficit - An economic measure of a negative balance of trade in which a country's imports exceeds its exports. A trade deficit represents an outflow of domestic currency to foreign markets. Economic theory dictates that a trade deficit is not necessarily a bad situation because it often corrects itself over time.
Current Account Deficit - It occurs when a country's total imports of goods, services and transfers is greater than the country's total export of goods, services and transfers. This situation makes a country a net debtor to the rest of the world.
Gross Domestic Product (GDP) is a measure of all of the services and goods produced in a country over a specific period; classically a year.
