1) What is the share split that was agreed by the central board of the State Bank of India (SBI) on 24 September 2014? – 1:10
Explanation: A share split of 1:10 means one equity share of SBI will now be split into 10 shares. This stands for reducing the face value of equity shares of the bank from Rs. 10 per share to Rs. 1 per share and to increase the number of issued shares in proportion thereof. The stock split is expected to increase investor participation in the stock. Earlier during September 2014, Punjab National Bank and ICICI Bank had also announced share split. Both the banks have approved sub-division of one equity share into five.
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2) Which two Union Territories of the Indian Union achieved a unique milestone of 100% banking coverage as revealed in a meeting of Finance Ministry on 1 October 2014? – Puducherry and Chandigarh
Explanation: Puducherry and Chandigarh achieved this milestone by providing all the households with at-least one account. This was revealed in the meeting that the Finance Ministry held with representatives of public and private sector banks to review the progress made in the implementation of Pradhan Mantri Jan Dhan Yojana (PMJDY), the flagship financial inclusion programme launched on 28 August 2014.
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3) During September 2014 international ratings agency Standard & Poor’s (S&P’s) revised the rating outlooks on 11 Indian banks and financial institutions to stable from negative. However, the outlook was still kept negative for two banks. Which two banks are these? – Indian Overseas Bank (IOB) and Syndicate Bank
Explanation: The negative outlook for Indian Overseas Bank (IOB) and Syndicate Bank means a possible weakening in these banks’ asset quality and capitalisation. The 11 banks whose rating outlooks were revised from negative to stable are – ICICI Bank, HDFC Bank, Axis Bank, Kotak Mahindra Bank, State Bank of India, Bank of India, IDBI Bank Ltd, Indian Bank, Union Bank of India, IDFC and Kotak Mahindra Prime.
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4) What is the new name of MCX Stock Exchange (MCX-SX) that was approved by capital market regulator Securities and Exchange Board of India (SEBI) during September 2014? – Metropolitan Stock Exchange of India (mSXI)
Explanation: The board of MCX-SX approved the proposal for rechristening the exchange few months ago and subsequently an application was submitted to the SEBI. The name change is a part of the turnaround strategy to give the exchange a new identity and disassociate itself from the scam-tainted promoter Financial Technologies.
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5) According to a report released by international ratings firm Moody’s during September 2014, how much fund would be needed by the major public sector banks of India for the full implementation of Basel III norms by year 2019? – Between Rs 1,50,000 crore to Rs 2,20,000 crore ($26-$37 billion)
Explanation: The rating agency estimated that public sector Indian banks that it rates could need that external capital, assuming a moderate recovery in India’s GDP growth, and a gradual decline in non-performing loans from current levels. This report by Moody’s rated 11 PSU banks which represent around 62% of net loans in the Indian banking system. Basel III raises the minimum required capital levels for both total Tier 1 to 7.0% and Common Equity Tier 1 (CET1) capital to 5.5%, and banks will also need to meet a Capital Conservation Buffer to pay dividends. That will pressure the Indian public sector banks, as low capital levels remain a key credit weakness.
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6) The Reserve Bank of India (RBI) presented its 4th Bi-monthly Monetary Policy review on 30 September 2014. As was widely expected, RBI kept the major rates unchanged as the central bank kept its focus on tackling inflation. What are the major rates and projections coming out of this review?
- GDP growth rate projected at 5.5% for current fiscal
- The high growth rate during Q1 (Apr-June 2014) may not be sustained in Q2 and Q3
- Consumer Price Index (CPI)-based inflation projected to remain at 8% by Jan 2015 and 6% by Jan 2016
- Repo rate (short term lending rate) unchanged at 8%
- Cash Reserve Ratio (CRR) unchanged at 4%
- Statutory Liquidity Ratio (used for unlocking banking funds) retained at 22%
- The liquidity rate under Export Credit Refinance (ECR) reduced from 32% to 15% (w.e.f. 10 October 2014)
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7) The new Monetary Policy Framework Agreement, which aims to change the monetary policy formulation and will also focus on inflation targeting, is proposed to be signed by which date as announced by the Finance Ministry recently? – 1 February 2015
Explanation: The proposed framework is based on a combination of recommendations by FSLRC (Financial Sector Legislative Reforms Commission) and the Urjit Patel Committee, along with inputs from the Rajan Panel on Financial Sector Reforms. The Finance Ministry is presently seeking the comments of the RBI on this framework. The proposal will then be placed in the public domain before finalising the agreement. The endeavour is to sign the agreement by 1 February 2015, to show that one of the key Budget announcements has been implemented. The establishment of a modern monetary policy framework was announced in the Union Budget 2014-15 presented by Union Finance Minister Arun Jaitley on 10 July 2014.
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8) In a strongly-worded order, Indian capital market regulator SEBI during September 2014 barred as many as 13 entities from the securities market for varying periods ranging from three to five years. What was the charge on these 13 entities? – Manipulation of global depository receipts (GDRs) by these entities
Explanation: A detailed probe by SEBI found that these entities actively traded in the shares of GDR-issuer companies and thereby facilitated the sub accounts of Foreign Institutional Investors (FIIs) in selling those shares in Indian markets. The 13 entities are – Basmati Securities, Oudh Finance and Investment, Alka India, SV Enterprise/Sarfaraz Khan Pathan, Ashok Panchariya, Madanlal Girdharilal Bugualiya, Indra Varun Trade Impex, Delight Financial Advisors, Vinod Amrutlaal Naai, Newgen International, Excel Paints, Cherry Cosmetics and Edelweiss Estate.
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9) The Union Govt. during September 2014 constituted a committee to recommend strategies on restructuring the Railway Board. Who is heading this committee? –Bibek Debroy
Explanation: Bibek Debroy is the leading economist and has been associated with the Centre for Policy Research (CPR). The committee basically has to suggest ways to restructure the board to ensure faster decision-making. It also has to suggest ways to ensure objectivity in decision-making. Additionally, it has to recommend ways to raise finances. Other members on the panel are Gurcharan Das, Ravi Narain (former CEO of National Stock Exchange), KM Chandrashekhar (former Cabinet Secretary), Partha Mukhopadhyay (Centre for Policy Research) and Rajendra Kashyap, former Finance Commissioner of Railways.
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10) Which act associated with setting up of a tribunal was struck down by the Supreme Court through its order delivered on 25 September 2014? – National Tax Tribunal Act
Explanation: In its order delivered on 25 September 2014, a Constitutional Bench of the Supreme Court said that Parliament could not take away the powers of the judiciary and rest them in a tribunal which is not a court in its characteristic. A tribunal was set up in 2005 under the National Tax Tribunal Act. This tribunal was set up to decide tax-related cases by taking away jurisdiction of high courts in such matters. However, the 2005 law was stuck in litigation in high courts. All cases were transferred to the Supreme Court for a final decision. The Act allowed the executive extensive control with regard to appointments of members and procedure of the tribunal. The tribunal was envisaged to function like National Green Tribunal (NGT) in the taxation field.
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