Current Affairs February-2014
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CURRENT AFFAIRS FEBRUARY-2014 Reserve Bank of India • The RBI Working Paper Warns of Strains in Asset Quality of Banks – A Reserve Bank of India (RBI) working paper ha warned banks of further strains on their asset quality. The working paper titled, Re-emerging Stress in the Asset Quality of Indian Banks: Macro-financial Linkages, stated if the current adverse macro-economic condition persisted, the system level gross Non-Performing Assets (NPA) ratio could rise to 4.4% by end March, 2014. − This ratio could go up to 7.6% under the severe risk scenari. In October, 2013, the International Monetary Fund (IMF) scaled down its projection of world Gross Domestic Product (GDP) growth for 2013 to 2.9%. − In its First Quarter Review of Monetary Policy 2013-14, the RBI has also revised its growth projection for 2013-14 downwards to 5.5%. While the credit growth in the recent period had ebbed, the RBI projected the non-food credit growth to be around 15% in 2013-14. Thus, notwithstanding the fact that credit growth is not going to be significantly robust, muted economic prospects and global headwinds could lead to further deterioration in asset quality. − The position is not alarming at the current juncture, and some comfort is provided by the sound capital adequacy of banks, which ensure that the banking system remains resilient even in the unlikely contingency of having to absorb the entire existing stock of NPAs. • The RBI Working Paper Warns of Strains in Asset Quality of Banks – A Reserve Bank of India (RBI) working paper has warned banks of further strains of their asset quality. The working paper titled, Re-emerging Stress in the Asset Quality of Indian Banks: Macro-financial Linkages, stated if the current adverse macro-economic condition persisted, the system level gross Non-Performing Assets (NPA) ratio could rise to 4.4% by end March, 2014. − This ratio could go up to 7.6% under the severe risk scenari. In October, 2013, the International Monetary Fund (IMF) scaled down its projection of world Gross Domestic Product (GDP) growth for 2013 to 2.9%. − In its First Quarter Review of Monetary Policy 2013-14, the RBI has also revised its growth projection for 2013-14 downwards to 5.5%. While the credit growth in the recent period had ebbed, the RBI projected the non-food credit growth to be around 15% in 2013-14. Thus, notwithstanding the fact that credit growth is not going to be significantly robust, muted economic prospects and global headwinds could lead to further deterioration in asset quality. − The position is not alarming at the current juncture, and some comfort is provided by the sound capital adequacy of banks, which ensure that the banking system remains resilient even in the unlikely contingency of having to absorb the entire existing stock of NPAs. • Non-Bank Entities to Set-up WLA – The Reserve Bank of India (RBI) has issued Certificate of Authorisation to four non-bank entities, including Tata Communications Payment Solutions and Muthoot Finance, to set-up White Label ATMs (WLAs) in the country on February 7, 2014. The other two non-bank entities to which the RBI has issued the certificate for setting up and operating the White Label ATMs are Prizm Payment Services and Vakrangee Limited. − White Label ATM – Most of the ATMs belong to banks, but the cash dispensing machines which are owned and operated by non-banking companies are called White Label ATMs. Other Banks • NABARD Sanctions over Rs.19100 crore under RIDF Scheme to States – National Bank for Agriculture and Rural Development (NABARD) has sanctioned loans worth over Rs.19100 crore under Rural Infrastructure Development Fund (RIDF) to States for agriculture and allied activities on February 9, 2014. Started is created out commercial banks’ shortfall in lending to agriculture or priority sector. CSB, Ch-17, Ph: 044-24333346 GA/Feb2014’14/Page-1 Supreme Court • Supreme Court gave Adoption Rights to Muslims – The right to adopt a child (till now restricted to Hindus, Buddhists and Jains) now extends to Muslims, Christians, Jews, Paris and all other communities. In a landmark judgement, the Supreme Court on February 20, 2014 ruled that any person can adopt a child under the Juvenile Justice (Care and Protection of Children) Act 2000 irrespective of religion he or she follows and even if the personal laws of the particular religion does not permit it. Centre Government • National Mission on Libraries – President Pranab Mukherjee launched the Rs.400 crore National Mission on Libraries (NML) in New Delhi on February 3, 2014. National Mission on Libraries is an initiative of Ministry of Culture to ensure sustained and long term focus on the development of Libraries. The mission has been set up in keeping with the recommendations made by the PM- backed National Knowledge Commission. States • RAJASTHAN – Chandoli – India’s first Minority Cyber Village was inaugurated by the Minister for Minority Affairs K. Rehman Khan on February 19, 2014 in Chandoli in Alwar district of Rajasthan. − Chandoli has been selected as the first village for the pilot project as it holds more than 80% of minority population and also because the minorities of the Mewat region is still backward in education. The project will be carried in other areas after the success of the pilot project. The Cyber village project will provide computer education to people in the age group of 15 to 59. • DELHI – President’s Rule Imposed – The Union Cabinet accepted the Delhi LG’s report on February 15, 2014 and decided to impose President’s rule in Delhi following the resignation of Chief Minister Arvind Kejriwal. Najeeb Jung had sought imposition of Central Rule but did not accept Kejriwal’s recommendation of dissolution of assembly and fresh elections. • ASOM – 1st State to Ban Smokeless Tobacco – Asom became the first State in India to legally ban consumption of all forms of smokeless tobacco, including pan masala containing tobacco and nicotine, through an act which comes into effect on February 12, 2014. • CHHATTISGARH - BUDGET 2014-15 The budget has made a provision of Rs.3900 crore for providing rice at Rs.1 per kg to 85% families of the state under Mukhyamantri Khaddyanna Suraksha Yojana towards implementation of the Chhattisgarh Food and Nutrition Security Act. The State government has offered several bonanzas in the education sector and announced free education to girl students of government colleges up to graduation. Interest rates have also been further reduced to one percent for education loans under the Mukhyamantri Uchcha Siksha Kirnn Anudan Yojana while giving interest-free education loans under the scheme for students of Naxal-affected districts. • ODISHA – Odia became the 6th Classical Language of the country to get classical language status after the Union Cabinet conceded a long-pending demand for putting it in the same league as Sanskrit, Tamil, Telugu, Kannada and Malayalam on February 20, 2014. • HARYANA – The 28th Surajkund International Crafts Mela Kicked-off – The Mela had began in Surajkund (Faridabad) on February 1, 2014. Goa was the ‘Theme State’ and Sri Lanka was the ‘Partner Country’ this year. The main purpose of the fair is to give a platform to artisans from remote areas to sell their products without the help of middlemen. • MAHARASHTRA – New Law for Recovery of Bad Loans – Maharashtra government appointed a committee to bring a legislation that will improve the recovery of loans given as part of government schemes on January 31, 2014. The proposed legislation will create a mechanism for forceful recoveries of loans given under government schemes. It will not be applicable to agricultural and other loans. CSB, Ch-17, Ph: 044-24333346 GA/Feb2014’14/Page-2 What are Non-Performing Assets (NPA) or Bad Loans? Any asset, including a leased asset, becomes a non-performing when it ceases to generate income for the banks are called Non Performing Assets or Bad Loans. As per RBI guidelines, the NPA is defined as under: à Non performing asset (NPA) is a loan or an advance where: Interest and/or installment or principal remain overdue for a period of more than 90 days in respect of a term loan. à The account remains ‘out of order’ in respect of an Overdraft/Cash Credit (OD/CC). à The bill remains overdue for a period of more than 90 days in the case of bills purchased and discounted. à The installment of principal or interest there on remains overdue for two crop seasons for short duration crops. à The installment of principal or interest there on remains overdue for one crop season for long duration crops. à The amount of liquidity facility remains outstanding for more than 90 days, in respect of a securitisation transaction undertaken in terms of guidelines on securitisation dated February 1, 2006. à In respect of derivative transactions, the overdue receivables representing positive mark-to- market value of a derivative contract, if these remain unpaid for a period of 90 days from the specified due date for payment. • GUJARAT – ‘Amul’ Launched its First Milk ATM – India’s dairy major ‘Amul’ has launched India’s first milk ATM which will sell milk through Any Time Milk vending machines. The 24×7 ATM has been installed at the Amul Dairy at Anand in Gujarat. The ATM machine can store 150 pouches of milk, each of 300 ml. The milk costs Rs.10 per pouch. The milk pouches are kept in the automatic dispensing machine which also keeps them chilled under 4°C. Place in the News • Ennore Port (Chennai) – The Ennore Port in Chennai, one of the 12 major ports in the country, will now be known as Kamarajar Port on February 20, 2014.