Current Affairs Of 21st August

1. Jaitley calls for better risk management from public sector banks
The Finance Minister, Arun Jaitley, on Thursday made it clear to public sector banks that the Government expects much better standards of risk management practices from them.
This remark is significant as it came in the backdrop of increased incidents of frauds coming to light in the banking system.
"Some recent events are disturbing. I hope it will only be a drop in the ocean," Jaitley said at the 108th foundation day event of Indian Bank in the Capital.
Jaitley said "credibility" is extremely importantant as far as the functioning of banking system is concerned.
"Banks must endeavour to continously have improved standards of credibility," he said.
Sub-prime crisis
It is only the attribute of conservatism and professionalism that helped the Indian banking system survive the sub-prime crisis that hit the developed world in 2007-08, he pointed out.
On the occasion, Jaitley inaugurated 108 branches and 108 ATMs of Indian Bank.

2. Finance Ministry orders forensic audit on Dena Bank, OBC in Rs 437-cr fraud
 The Finance Ministry has ordered a forensic audit of Dena Bank and Oriental Bank of Commerce
after some of their Mumbai-based branches allegedly misappropriated funds worth Rs. 437 crore, mobilised through fixed deposits.
Professional services firm KPMG in India has been given the mandate to undertake forensic investigations, sources close to the development said.
The report is expected in a month’s time.
In the case of Dena Bank, the misappropriation was to the tune of Rs. 257 crore and related to funds mobilised from seven corporates. In Oriental Bank’s case, it related to misappropriation of funds amounting to Rs. 180 crore, reportedly belonging to the Jawaharlal Nehru Port Trust.

3. Deeply concerned with rise of fanaticism in Arab world: India
Amid escalation in violence in a number of Gulf countries, India on Thursday expressed deep concern over the rise of fanaticism, extremism and terrorism in parts of the Arab region, saying they are tearing apart the fabric of societies as well as affecting regional stability.
In an address at an event here, external affairs minister Sushma Swaraj touched on a range of issues relating to Gulf nations and said India was looking at investments from the sizeable sovereign wealth funds in the oil-rich countries which can prove to be a "game changer" in India's quest for world-class infrastructure.

4. Savings in financial assets rise: RBI report
Savings in deposits and small savings of individuals increased in the 2013-14, while saw a drop in
mutual funds and currency.
As per the Annual Report of the RBI, savings in deposits by the household sector increased by Rs. 1 lakh crore in a year to Rs. 6.91 lakh crore in 2013-14 as against Rs. 5.91 lakh crore in 2012-13.
The saving deposits are about 59 per cent to the gross financial savings, of which about 53 per cent constitute deposits with commercial banks.
Net financial savings of household sector grew 13 per cent to Rs. 8.19 lakh crore as against Rs. 7.22 lakh crore in the previous year.
This is for the first time that the RBI released data on the financial saving of the household sector.

5. Decision on FDI limit in HDFC Bank soon: FinMin
The Finance Ministry today said it is looking at issues connected with HDFC Bank’s proposal to raise
FDI limit in it and will take a decision shortly.
“It is a very complex issue we are dealing with it but I can assure you we are seized of the matter,” Economic Affairs Secretary Arvind Mayaram said here when asked about HDFC Bank’s FDI proposal.
Late last year, HDFC Bank had approached the Foreign Investment Promotion Board (FIPB) for increasing the foreign holding in the bank to 67.55 per cent from 49 per cent.
If the proposal of the bank to raise foreign investment to 67.55 per cent is accepted, it would exceed the cap of 74 per cent, after taking into account parent HDFC Ltd’s stake.
The Department of Economic Affairs (DEA) and DIPP (Department Of Industrial Policy & Promotion) are of view that promoter HDFC Ltd’s 22.56 per cent stake in HDFC Bank is foreign investment.
Foreign entities, including FIIs, hold more than 77.36 per cent in HDFC Ltd.
The foreign holding in a bank cannot exceed 74 per cent as per the existing norms.


6. India to grow at 5.8% in 2014-15: Mayaram
The Finance Ministry today said the growth rate in the current financial year will accelerate to 5.8 per cent, better than previous estimates, saying the green shoots of economic recovery are now visible.
I am very confident that we will achieve somewhere close to 5.8 per cent... If we see the trend growth, then we will see there are green shoots of recovery in the economy,” Finance Secretary Arvind Mayaram said at an Assocham event.
The Reserve Bank has projected the GDP growth for 2014-15 fiscal at 5.5 per cent and the Economic Survey had pegged the growth at between 5.4-5.9 per cent.
The GDP growth had slumped to 4.7 per cent last fiscal.

7. Jaitley advocates for low tax regime in tourism sector
 Advocating for low taxation regime, Finance Minister Arun Jaitley today said if higher taxes are levied on the tourism industry, then there will be less tourists and lesser revenue collection.
“If tourism industry, state governments and the centre are loaded with higher taxes then we will have less tourists and lesser collection,” he said at a Tourism Ministers conference here.
Hinting at the existing higher taxation on tourism sector, Jaitley said, “Today, wealthy Indians are finding it cheaper to get their children married in Thailand than in Indian hotels. It’s a hard reality.”
Tour operators are demanding reduction in various taxes for long particularly exemption of service tax on packaged tours as the payment is made in forex.


8. RBI surplus falls 14.75% in FY14; transfers entire sum to govt
The Reserve Bank today said its surplus (profit) for the FY’14 fiscal declined 14.75 per cent to Rs. 52,679 crore as its interest income from investments in foreign sovereign bonds declined during the year even as its investments increased.
“The year ended with an overall surplus of Rs. 52,679 crore, representing a decrease of 14.75 per cent over the previous year,” the RBI said in its annual report for the FY’14 fiscal. The central bank follows a July—June fiscal calender.
However, the central bank transferred the entire surplus to the government, making it the largest ever transfer by it.
The RBI’s balance sheet size rose 10 per cent to Rs. 26,24,400 crore from Rs. 23,90,700 crore in the same period last year.

9. RBI issues guidelines for NBFCs on lending against shares
To reduce volatility in the capital market arising from non-banking finance companies (NBFCs) offloading shares pledged by borrowers who have defaulted on loans, the Reserve Bank of India on Thursday introduced a minimum set of guidelines on lending against shares.
According to the guidelines applicable to NBFCs with asset size of Rs. 100 crore and above, the NBFCs have to maintain a loan-to-value (of shares pledged) of 50 per cent and accept only Group 1 securities as collateral for loans of a value more than Rs. 5 lakh.
RBI said the NBFCs also have to ensure that these do not in any way come in the way of meeting the requirements of genuine borrowers. The guidelines come into effect immediately.
All NBFCs with asset size of Rs. 100 crore and above should report online to stock exchanges information on the shares pledged in their favour by borrowers to avail themselves of loans.

10. My role doesn’t undermine Duncan Fletcher: Shastri
 Handed the task of overseeing a struggling Indian cricket side, newly-appointed Team India Director Ravi Shastri has refuted suggestions that his role would undermine the position of beleaguered coach Duncan Fletcher.
Shastri was appointed Team Director after India lost the fifth and final Test against England in under three days to go down 1-3 in the series.
“My role is to oversee everything. All of them report to me. This is for the ODI series in England,” Shastri told ’ESPNCricinfo’.
Asked if his position would affect Fletcher’s stature, Shastri said, “Absolutely not. He stays as the head coach. And these two (Sanjay Bangar and B Arun) will be his assistants.”
Shastri said he took up this assignment as he wanted to contribute to the team. “It was an important time in Indian cricket. The state of Indian cricket is such that I know I can contribute. I have never been scared about how tough the job is or how easy the job is. The important thing is the contribution. If I am here today, and at times some forget, it is because of the BCCI. The platform they gave me when I was a junior cricketer to play for my state and then the country,” he said.