Economics Current Affairs – 17 January – 24 January, 2015

State Bank of India signed a loan agreement for 100 million euro with European Investment Bank.

The funds will be used for lending to private businesses in the country. As per the agreement, the loan will be utilized to support the development of private sector, in particular small and medium-sized enterprises, social and economic infrastructure as well as climate change mitigation and adaptation in the country.

The agreement was facilitated by SBI Capital Markets, a subsidiary of the country’s largest bank.

India’s foreign exchange (forex) reserves jumped by USD 2.660 billion to all time high USD 322.135 billion

Strong FII (Foreign institutional investors) inflows to Indian capital market and reduction in import bill due to drop in Crude oil are the main reasons for record high forex reserves.

The previous life-time high for the reserves was USD 320.79 billion, way back in the week to September 2, 2011.

RBI simplified norms for revamping External Commercial Borrowings Policy

The Reserve Bank of India (RBI) has simplified the existing procedure for restructuring of external commercial borrowings (ECBs).

Under the simplified procedure, the RBI has delegated powers to the banks (authorised to deal in foreign exchange) to make changes/modifications in the draw-down and repayment schedules of the ECB raised both under the automatic and approval routes.

ECBs are commercial loans availed from non-resident lenders with minimum average maturity of 3 years.

RBI issued final guidelines for banks to act as Insurance brokers

With new guidelines rolled in, RBI allowed banks to act as insurance brokers, set up their own subsidiaries and also undertake referral services for multiple companies, in a bid to increase insurance penetration in the country.

Banks have also been allowed to set up subsidiaries and joint venture companies for undertaking insurance business with risk participation

The existing rules allowed a bank can act as a corporate agent and sell policy of only one life insurer and one non-life insurance company.

There are about 87 commercial lenders  and 52 insurance companies in the country. Out of these 52 insurance companies, 24 are in the life insurance business and 28 are in general insurance business. In addition, GIC is the sole national reinsurer.

Agriculture GDP growth accelerated to 3.3% in 11th plan

Agriculture GDP growth has accelerated in the 11th plan, to an average rate of 3.3 per cent, compared to 2.4 per cent in the 10th and 2.5 per cent in the 9th plan.

Government to allocate 36 coal blocks to PSUs

The government kick-started the process of allocating cancelled coal mines to state-owned firms. Initially it will allot 36 blocks out of which one mine will be given to the steel sector while the rest will be given to the power sector. For schedule II (producing mines) category 23 blocks will be put on offer while 23 Schedule III mines (ready to produce mines) will be auctioned.

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