Current Affairs For Bank, IBPS Exams - 02 September, 2015

Current Affairs for BANK, IBPS Exams

02 September 2015

:: National ::

RBI proposes formula to calculate Base Rate

To bring in uniformity among banks for calculation of base rate and for effective transmission of policy rates, the Reserve Bank of India (RBI) on Tuesday proposed a formula to calculate the base rate for lending.
RBI suggested banks to consider marginal cost of funds to calculate individual lending rates.
RBI said that it would implement these proposals with effect from April 1, 2016. Banks were asked submit a road map clearly indicating the time frame for adopting these guidelines two months prior to the final implementation.
The components of Base Rate will include cost of funds, negative carry on CRR/SLR, un-allocable overhead costs and average return on networth.
At present, banks follow different methodologies for computing their Base Rate.
While some use the average cost of funds method, some have adopted the marginal cost of funds while others use the blended cost of funds (liabilities) method.

:: International ::

Omar al-Bashir's visit to the UN presents the US with a diplomatic challenge

Sudanese President Omar al-Bashir’s planned visit to the United Nations in New York this month presents US President Barack Obama’s government with a potentially embarrassing diplomatic challenge.
At the end of June, Fatou Bensoda, the chief prosecutor of the International Criminal Court (ICC), called on the UN Security Council to ensure compliance with the arrest warrant issued against al-Bashir in 2009.
The court wants to try him for war crimes and crimes against humanity. The chief prosecutor’s request came after it was announced that al-Bashir was planning to travel to New York to address a summit on sustainable development at the UN General Assembly.
Two weeks before the chief prosecutor’s call for action, al-Bashir escaped arrest in South Africa.
He left with the help of the South African government. It ignored a court order preventing him from leaving after he attended the African Union (AU) summit in Johannesburg.
Reputational risk If al-Bashir makes the trip to New York, international attention will focus on how Obama’s government responds.
The US government is not a signatory to the ICC statute, but as the host country it has the legal authority to arrest al-Bashir if he enters US territory.
He may then be surrendered to the ICC on the basis of the 2009 arrest warrant. Since the US was party to the UN’s initial referral of the al-Bashir case to the ICC, the Obama government can hardly turn a blind eye to the latest developments.
The planned trip involves considerable risk to the US’s reputation, particularly because al-Bashir has evaded justice for six years.
The question is: how does the US manage the question of al-Bashir’s immunity as a head of state attending a UN summit in New York?
In the case of the AU summit, the South African government claimed that as a guest of the continental body, al-Bashir enjoyed immunity against arrest. The government relied on the AU Convention on Privileges and Immunities. This grants immunity from arrest to representatives of AU member states attending AU conferences. Such immunity also applies during the representative’s travel to and from the place of the meeting.

China's AIIB to offer loans with fewer strings attached

China's new international development bank will offer loans with fewer strings attached than the World Bank, sources said, as Beijing seeks to change the unwritten rules of global development finance.
The Asian Infrastructure Investment Bank (AIIB) will require projects to be legally transparent and protect social and environmental interests, but will not ask borrowers to privatise or deregulate businesses for loans, four sources with knowledge of the matter said.
By not insisting on some free market economic policies recommended by the World Bank, the AIIB is likely to avoid criticism levelled against its rivals, who some say impose unreasonable demands on borrowers.
It could also help Beijing stamp its mark on a bank regarded by some in the government as a political as much as an economic project, and reflects scepticism in China about the virtues of free market policies advocated in the West.
A reduced focus on the free market could give the AIIB greater freedom to run projects, said a banker at a development bank who declined to be named.
For example, development banks that finance a water treatment plant may require the price of treated water to be raised to recoup costs, even if local conditions are not conducive to higher prices.
The AIIB, on the other hand, could avoid hiking prices and rely instead on other sources of financing, such as government subsidies, to defray costs, he said.
The bank, to which some 50 countries have signed up to join, also aims to have a simpler internal review and risk assessment system for projects compared with its peers to hold down costs and cut red tape, sources said.

:: Business ::

Government decided to waive MAT to be waived for FIIs

Union Finance Minister Arun Jaitley announced on Tuesday that the Narendra Modi government had decided to waive the controversial minimum alternate tax (MAT) on capital gains made by Foreign Institutional Investors (FIIs) prior to April 1, 2015.
The decision, to be carried out through an amendment to the Income Tax Act, is likely to come as a big relief to FIIs that pulled out more than Rs. 17,555 crore ($2.65 billion) from India in August.
“The Justice A.P. Shah Committee has said that there is no legal basis for levying 20 per cent MAT on past capital gains … it is not leviable,” Mr. Jaitley told reporters..
Through the amendment, the government proposes to clarify that MAT provisions will not be applicable to FIIs/FPIs not having a place of business/ permanent establishment in India for the period prior to 1.4.2015, said a release issued later.