Economy & Banking Current Affairs October 2015 (Part 2)

RBI Activities

Cut Repo Rate by 50 Basis Points

• The RBI governor Raghuram Rajan cut repo rate under the liquidity adjustment facility (LAF) by 50 basis points from 7.25% to 6.75%. The repo rate now stands at a 4-1/2 year low, But Rajan kept the Cash Reserve Ratio (CRR) unchanged at 4%.
• It was announced in the fourth bi-monthly policy of RBI released on September 29, 2015. It will proove a big boost for the markets and economy. On the basis of an assessment of the current and evolving macroeconomic situation, it has been decided to :
• Continue to provide liquidity under overnight repos at 0.25% of bank-wise NDTL at the LAF repo rate and liquidity under 14-day term repos as well as longer term repos of up to 0.75% of NDTL of the banking system through auctions.
• Continue with daily variable rate repos and reverse repos to smooth liquidity. Consequently, the reverse repo rate under the LAF stands adjusted to 5.75%, and the Marginal Standing Facility (MSF) rate and the Bank Rate to 7.75%.

Read Also – Defence & Security Current Affairs October 2015.

Granted Licenses to 10 Small Banks

• The Reserve Bank of India (RBI) granted small bank license to 10 applicants who are already engaged in micro finance on September 16, 2015. This move is most far-reaching initiative on financial inclusion since bank nationalisation in the late 1960s.
• These license will be valid for 18 months for the 10 entities. They are
• Au Financiers (India) Limited
• Capital Local Area Bank
• Disha Microfin Private Limited
• Equitas Holdings Private Limited
• ESAF Microfinance and Investments Private Limited
• Janalakshmi Financial Services Private Limited
• RGVN (North-East) Microfinance Limited
• Suryoday Micro Finance Private Limited
• Ujjivan Financial Services Private Limited
• Utkarsh Micro Finance Private Limited
• The banks will further the agenda of financial inclusion by offering credit to small businesses and marginal farmers besides units in the unorganised sector. They will also provide avenues for savings and will be high-tech but low-cost institutions, as envisaged by the Central bank.

Pact Signed with Nepal Rastra Bank

• The Reserve Bank of India (RBI) signed a Memorandum of Understandings (MoU) on Supervisory Cooperation and Exchange of Supervisory Information with the Nepal Rastra Bank (NRB) on September 14, 2015.
• The MoU was signed by Nepal Rastra Bank’s Executive Director Narayan Prasad Paudel and RBI’s Executive Director Meena Hemchandra at the central office of RBI in New Delhi. With this pact, RBI has signed 27 such MoUs, one Letter for Supervisory Cooperation and one Statement of Cooperation.
• RBI has entered into Memorandam of Understandings (MoU), Letter for Supervisory Cooperation and Statement of Cooperation with supervisors of a few countries to promote greater cooperation and share supervisory information.

Issued Rs 5 Coin on Golden Jubilee of 1965 Indo-Pak War

• The Reserve Bank of India (RBI) said on September 3, 2015 that it will shortly put into circulation Rs 5 coins to commemorate golden jubilee of Indo-Pak War 1965. The coins will be legal tender as provided in The Coinage Act 2011. Existing coins in this denomination will also continue to be legal tender.
• The new coin in the obverse will bear Lion Capital of Ashoka Pillar in the centre with Satyamev Jayate inscribed below it. The year ‘2015 is written below the image of the monument. Also, ‘Golden Jubilee 1965 Operations’ in English on the lower periphery will also be written on this face of the coin.
• On the reverse it will bear image of ‘Amar Jawan’ monument along with the design of olive leaves branch on its left and right sides at the center, with the inscription ‘veerata aur balidan’ in Devnagri script on the left upper periphery and ‘Valour And Sacrifice’ in English on the right upper periphery.

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