Current Affairs for BANK, IBPS Exams - 02 December 2017

::National::

Financial Resolution and Deposit Insurance Bill of 2017 to be tabled

• Bank depositors’ fears about the safety of their savings — once the Centre enacts the proposed new law for resolving financial entities’ bankruptcy — may be premature as the legislation is still at the drafting stage Finance Minister said.
• Expected to be tabled in winter session, the Financial Resolution and Deposit Insurance (FRDI) Bill of 2017 proposes scrapping the Deposit Insurance and Credit Guarantee Corporation (DICGC) that guarantees repayment of all bank deposits up to Rs. 1,00,000 in case a stressed bank is liquidated.
• There is ambiguity on how depositors’ savings will be protected in stressed banks and other financial entities under the new law, which also includes a ‘bail-in’ option to resolve financial entities’ stress.
• A bail-in option entails a bank issuing securities in lieu of the money deposited in its coffers. Asked about the implications of this clause, Mr. Jaitley said the drafting process of the Bill was still under way and it could be reviewed as part of the regular drafting process for new legislation.
• Instead of the DICGC, the Bill envisages a Resolution Corporation under the Finance Ministry with representatives from the stock market and banking, insurance and pension fund regulators.
• Lenders, which have to pay a premium to the DICGC for insuring deposits of up to Rs. 1 lakh, would have to pay a sum to the Resolution Corporation as per the proposed Bill. But it is silent on the insured amount.
• “The Corporation shall, in consultation with the appropriate regulator, specify the total amount payable by the Corporation with respect to any one depositor, as to his deposit insured under this Act, in the same capacity and in the same right,” the draft Bill states.
• The Corporation will be given a year’s time to resolve problems facing firms in trouble.

Polavaram project to be kept on held

• The State government, which is pushing the envelope to complete the Polavaram project as per schedule, was caught off guard when the Centre indicated that it needed to put everything on hold.
• Though the State government is giving top priority to the project, the Centre is showing in more than one way that it does not share the enthusiasm of the State.
• After telling the State government that it had to make adjustments at several meetings, it is now writing letters asking it to literally stop work.
• Chief Minister N. Chandrababu Naidu has said time and again that water will be released into the right and left main canals of the project by gravity in June 2018.
• Most of the spillway and the coffer dam built upstream the ECRF should be completed to be able to fulfil the promise.
• The 174-km right main canal (PRMC) is complete, and this year over 100 tmcft water lifted by the Pattiseema Lift Irrigation Scheme was used to irrigate Krishna delta. Work however needs to be done on the left main canal.
• The efforts of the State government notwithstanding, the Central Water Resources Department (WRD) wrote to the NHPC to look into the design of the coffer dam and asked the corporation to see if there was a need for a coffer dam at all.
• It also ordered the A.P. government to ‘put on hold’ work on seepage cutoff wall and any other structure of the coffer dam “till advice of NHPC is received.”
• Since then an expert committee of the NHPC has visited the site once, but it is yet to give its advice.
• Unless the ECRF dam and the spillway are built simultaneously, water cannot be sent into the canals by gravity. As per schedule, work on the coffer dam should begin not later than December 1, but in the changed situation it may take a while before the NHPC experts come out with a verdict.
• The State government tried to go ahead with the coffer dam as recommended by the Dam Design Review Panel (DDRP).
• The reasons cited for keeping on hold part of the tenders are unfounded, irrigation officials said. “The Centre seems to be afraid of the existing contractor,” said a senior engineer.

Centre asks views of state on a draft law on triple-talaq

• The Centre wrote to the States asking for their views on a draft law that imposes a maximum of three-year jail term on a Muslim man for giving instant triple talaq — or talaq e biddat — to his wife.
• The government was set to introduce the Bill in the winter session of Parliament, which starts on December 15. Once the proposed Muslim Women Protection of Rights on Marriage Bill is approved by Parliament, it will cover all cases of instant triple talaq across the country, except in Jammu and Kashmir.
• The draft has been prepared by a Group of Ministers, headed by Home Minister Rajnath Singh. Other members are External Affairs Minister Sushma Swaraj, Finance Minister Arun Jaitley, Law Minister Ravi Shankar Prasad and his deputy P.P. Chaudhary, and the junior Minister in the PMO Jitender Singh.
• As per the provisions of the draft bill, a husband who resorts to instant triple talaq can be jailed up to three years and fined.

Union Cabinet approved the launch of National Nutrition Mission

• The Union Cabinet approved the launch of National Nutrition Mission with a target to reduce malnutrition and low birth weight by 2% each year. The government has budgeted Rs. 9,046 crore for the mission for a period of three years.
• More than 10 crore people will be benefited by this programme. All the States and districts will be covered in a phased manner; to begin with, the worst-affected 315 districts will be targeted this financial year.
• The core idea behind the mission is to converge all the existing programmes on a single platform.
• “One Ministry alone working in its own silo can’t achieve this,” Women and Child Development Minister Maneka Gandhi said.
• For example, the Pradhan Mantri Matruvandana Yojana, which provides support to pregnant and lactating women, works under the Ministry of Women and Child Development; while Mission Indradhanush, which seeks to increase rates of complete immunisation of women and children, is under the Ministry of Health.
• The mission targets to bring down stunting in children. As per the National Family Health Survey, 38.4% of children in India have stunted growth.
  The mission plans to bring this down to 25% by 2022. It also aims to bring down anaemia among children, women and adolescent girls by 3% every year.
• There remains confusion over whether or not Aadhaar is mandatory for all beneficiaries, many of who are children below the age of three years.
• Women and Child Development secretary R.K. Shrivastava said it was mandatory, but no beneficiary would be denied benefits for the lack of Aadhaar card.

Navy is alive to threat from Chinese submarine in Gulf of Aden

• Referring to the Chinese deployment of submarines for anti-piracy patrols in the Gulf of Aden, the Chief of the Naval Staff, Admiral Sunil Lanba, on Friday said it was an “odd task” for a submarine to perform.
• China has actively deployed ships and submarines in the Indian Ocean in the name of anti-piracy measures and the frequency has steadily gone up.
• Several U.S. military officers too have expressed similar views in the past. On this note, Admiral Lanba said the Navy had “carried out threat assessment of PLAN submarines.”
• In a related development, India and Singapore are in the process of discussing the modalities of the overarching naval cooperation agreement signed in presence of the two Defence Ministers earlier this week.
• After much deliberation, the Indian Navy has decided to go ahead with a conventionally powered reactor instead of a nuclear-powered one for its second Indigenous Aircraft Carrier (IAC-II).

Printed Study Materials for IBPS, SBI Bank Exam

::International::

Govt of Niger has given permission to USA to fly armed drones out of the capital

• The government of Niger has given the Defense Department permission to fly armed drones out of the capital, Niamey, Pentagon officials said, in a major expansion of the U.S. military’s footprint in Africa.
• A memorandum of understanding between the U.S. and Niger, which was finalised this week, calls for the remotely piloted aircraft to be armed initially, by the military’s Africa Command, at the Nigerien air base in Niamey where they are currently deployed without arms.
• The drones, the memo says, will eventually be moved to a Nigerien air base in Agadez, where U.S. troops will also be deployed.
• Pentagon officials said the new mission likely would increase the number of U.S. troops in Niamey, from the 800 who are there now. About 500 of those troops now deployed in Niger would move to the base in Agadez.
• The Pentagon has been trying for two years to get permission from the Nigerien government to put precision-guided bombs and missiles on a fleet of Reapers to be flown out of Niamey.
• While the U.S. has been able to reach Yemeni, Somali and Libyan targets from bases in Djibouti and southern Italy, its reach in West Africa has been more limited.
• The Niger deployment would be only the second time that armed drones have been stationed and used in Africa.
• Drones now based in Djibouti are used in Yemen and Somalia, where there have been 30 strikes this year against al-Shabab and Islamic State targets, twice the number than in all of 2016. Drones used in Libya fly from Italy.

::Business and Economy::

Centre significantly eased the auction rules to rekindle investor interest in mining

• More than two years after it introduced auctions as a means to allot mining rights for major minerals, the Centre significantly eased the auction rules in a bid to rekindle investor interest in a process that has been marred by failed auctions.
• While 33 blocks of minerals have been successfully auctioned since May 2015, when the mineral auction rules were introduced, as many as 60 auctions have flopped for lack of interest.
• The development assumes significance as the Centre is looking to auction more than 100 blocks over the next 15 months with a potential value of about Rs. 2 lakh crore.
• States can now allocate blocks even if there are less than three bidders in the fray during the second round of auction, as opposed to the existing rule that requires the process to be annulled if there are less than three bidders in the first three rounds.
• In a bid to expand the pool of prospective bidders, net worth requirements have also been relaxed. For an average annual output of up to Rs. 2 crore, bidders now need a net worth of just Rs. 0.5 crore.
• Similarly, for an average annual output of up to Rs. 20 crore, the net worth norm has been slashed from Rs. 40 crore to Rs. 10 crore.
• Rigid end-use conditions on minerals excavated from a block, have been done away with. Miners can now dispose of 25% of unused low-grade ore.
• The Centre aims to spur increased interest in the upcoming auctions — 34 mineral blocks are in the pipeline for the rest of 2017-18. The new norms also have a clause to discourage miners from ‘squatting’ on mine leases.

Fitch Ratings said the banking sector outlook could be changed

• Fitch Ratings said the banking sector outlook may be revised to stable from negative in 2018 if the Centre’s Rs. 2.11 lakh crore capital infusion plan is well executed.
• “If the government front-loads a substantial part of the capital injection — as is generally expected — Fitch may revise the sector outlook to stable during 2018 — provided there is greater clarity on operational details and timelines associated with the recapitalisation exercise,” Fitch said.
• It had been maintaining negative sector outlook on Indian banks for many years.
• Fitch also said the exercise should go a long way in plugging the capital gap amid expectations of more haircuts and subdued earnings.
• The timing of injection will be crucial due to the beneficial impact it can have on both the pace of non-performing loan (NPL) resolution — where banks have been hesitant to accept large haircuts due to the potential capital impact — and banks’ ability to raise capital at better valuations.
• Fitch said recapitalisation coupled with resolution of some large NPL accounts could mean that asset-quality parameters may eventually witness some stability after FY18.
• “Credit growth is likely to recover gradually, but a sharp uptick is ruled out until balance sheets are cleaned up,” it added.

Manufacturing activity improved in November to its highest level in a year

• Manufacturing activity improved in November to its highest level since October 2016 on the back of growth in new orders and output, a private sector survey showed.
• The Nikkei India Manufacturing Purchasing Managers’ Index recorded a value of 52.6 in November, up from 50.3 in October. A value above 50 denotes an expansion in activity, while one below 50 implies contraction.
• “The Indian manufacturing sector recorded its strongest improvement in business conditions for 13 months, recording marked and accelerated increases in output and new orders,” the report said.
• “Furthermore, manufacturing companies observed a renewed increase in new export orders during November.”
• On employment, the report said greater production requirements in November led to the fastest rate in employment creation since September 2012. “The upward movement in the headline index was driven by a marked increase in output,” it said.
• “Furthermore, the rate of expansion quickened to the strongest since October 2016. A combination of higher order book volumes and a decrease in GST rates reportedly contributed to greater production.”
• However, the report said, the rate of growth in production was still lower than the long-term trend witnessed since the survey was started in March 2005.

  Printed Study Materials for IBPS, SBI Bank Exam

  Current Affairs is Part of Online Course of IBPS Exams.

  Click Here for Daily News Archive