The RBI plans to enable UPI for cash deposits and allow foreign investors in the IFSC to invest in Sovereign Green Bonds.
About
The Reserve Bank of India (RBI) has proposed to enable UPI for cash deposit facility.
Cash Deposit Machines (CDMs) deployed by banks enhance customer convenience while reducing cash-handling load on bank branches.
The facility of cash deposit is presently available only through the use of debit cards.
The Governor said operational instructions on enabling UPI for cash deposit facility will be issued shortly.
PPP
In another announcement to provide more flexibility to Prepaid Payment Instruments (PPIs) holders, the RBI has proposed to permit linking of PPIs through third-party UPI applications.
This will enable the PPI holders to make UPI payments like bank account holders. Instructions in this regard will be issued shortly.
At present, UPI payments from bank accounts can be made by linking a bank account through the UPI App of the bank or using any third-party UPI application. However, the same facility is not available for PPIs. PPIs can currently be used to make UPI transactions only by using the application provided by the PPI issuer.
Sovereign Green Bonds (SGrBs)
The RBI to facilitating wider non-resident participation in Sovereign Green Bonds (SGrBs), decided to permit eligible foreign investors in the International Financial Services Centre (IFSC) to also invest in such bonds.
A scheme for investment and trading in SGrBs by eligible foreign investors in IFSC is being notified separately in consultation with the Government and the IFSC Authority.
Based on an announcement in the Union Budget for FY 2022-23, the Government of India had issued SGrBs in January 2023. The SGrBs were also issued as part of the Government borrowing calendar in FY 2023-24.
At present, foreign portfolio investors (FPIs) registered with SEBI are permitted to invest in SGrBs under the different routes available for investment by FPIs in government securities.
RBI Retail Direct scheme
The RBI has also decided to introduce a Mobile App of its RBI Retail Direct scheme which was rolled out in November 2021, giving access to individual investors to maintain gilt accounts with RBI and invest in government securities. The Scheme enables investors to buy securities in primary auctions as well as buy/sell securities through the NDS-OM platform.
To further improve ease of access, a mobile application of the Retail Direct portal is being developed. The app will enable investors to buy and sell instruments on the go, at their convenience. The app will be available for use shortly.
Central Bank Digital Currencies (CBDCs)
The distribution of Central Bank Digital Currencies (CBDCs) through Non-bank Payment System Operators.
Currently CBDC pilots in the Retail and Wholesale segments are underway with more use-cases and more participating banks. Continuing with this approach, the RBI has proposed to make CBDC-Retail accessible to a broader segment of users in a sustained manner, by enabling non-bank payment system operators to offer CBDC wallets.
This is expected to enhance access and expand choices available to users apart from testing the resiliency of the CBDC platform to handle multi-channel transactions. Necessary changes will be made to the system to facilitate this.
Small Finance Banks
To expand the avenues available to the Small Finance Banks for hedging interest rate risk in their balance sheet and commercial operations more effectively as well as to provide them with greater flexibility, the RBI has decided to allow them to deal in permissible rupee interest derivative products in terms of Rupee Interest Rate Derivatives (Reserve Bank) Directions, 2019. A circular in this regard will be issued shortly.
The current guidelines permit Small Finance Banks to use only Interest Rate Futures (IRFs) for the purpose of proprietary hedging.
Liquidity Coverage Ratio (LCR) framework
Banks covered under LCR framework are required to maintain a stock of high quality liquid assets (HQLA) to cover the expected net cash outflows in the next 30 calendar days. However, the recent episodes in some jurisdictions have demonstrated the increased ability of the depositors to quickly withdraw or transfer deposits during times of stress, using digital banking channels.
Such emerging risks may require a revisit of certain assumptions under LCR framework. Therefore, certain modifications to the LCR framework are being proposed towards facilitating better management of liquidity risk by the banks. A draft circular in this regard will be issued shortly for comments of all stakeholders.
Anti-dumping
Time to Read :🕑 11 Mins
Why in news?
Domestic organic chemical and petrochemical companies are petitioning the government for an anti-dumping investigation into Chinese imports.
Background
Over the last ten days, the Directorate General of Trade Remedies (DGTR) has initiated anti-dumping investigations or recommended anti-dumping duties against a dozen different Chemical, petrochemical and bulk drug products (mostly from China).
These products are Sodium Cyanide, Flexible Skabstock Polyol, Titanium Dioxide, Azo Pigment, Effect Pigment (Countervailing Duty), Insoluble Sulphur and Plastic Processing Machines.
Anti-dumping
The last six months have been terrible and that is why you are seeing domestic industry approaching government on large numbers”, a chief executive of a chemical company said on condition of anonymity.
The level of Imports from China vary from chemical to chemical. But across the board margins and volumes are affected for domestic firms”.
It was highlighted that India accounted for just 3 percent of global capacity, while China enjoys 50 percent.
With China economy not doing well due to real estate slump, the chemical and material demand is down domestically. The domestic firms here are unable to even match the landed prices.
Chemical imports
India’s chemical imports from China has surged to around $ 15.5 billion in April -January 2024 from $ 11.3 billion in April-January 2020-21.
While Chemicals imports at dumped prices from China is matter of concern, the issue is not that worrisome for bulk drug imports from China.
The domestic pharmaceutical firms have faced growing competition from Chinese imports in recent years, impacting pricing and market share.
Unfair pricing - Challenges
The number of anti-dumping actions against China is increasing due to concerns about unfair pricing practices, market dominance, trade imbalances, regulatory compliance issues and allegations of unfair trade practices.
The domestic API companies may face higher input costs this year due to rising raw material prices and supply chain disruptions. These challenges could impact their production costs and overall competitiveness in the market.
India’s imports of active pharmaceutical ingredients from China has risen from $ 2.17 billion in April-January 2021 to about $ 2.72 billion in April-January 2024.
API industry has faced challenges over the past four months.
The rising costs of Key Starting Materials (KSMs) sourced from China have strained India’s API sector, with manufacturers unable to pass on these expenses to formulators.
While China continues to support the pharmaceutical industry and supply predictability has improved, certain segments of the API industry face challenges due to China’s pricing strategies.
Way forward
One of the things the government must look to do is find a way to reduce the time taken for completing the anti-dumping investigation, it was suggested.
India has implemented measures like the production linked incentive scheme and plans for API manufacturing parks to boost domestic production.
The price hikes have not significantly impacted the formulation industry when compared to China’s overall market trends.
Pin code MH-1718
Time to Read :🕑 7 Mins
Why in news?
Almost four decades later, letters meant for Antarctica will now have a new PIN code, MH-1718, with the Department of Posts opening a second branch of the post office on Bharati research station in Antarctica.
About news
The code currently assigned is “experimental”, which is the norm when a new branch begins.
India’s two research bases on Antarctica — Maitri and Bharati — are located 3,000 km apart.
Notably, both branches are part of the Goa postal division.
Background
In 1984, shortly after India’s first foray to Antarctica, its first post office on the icy continent was set up at Dakshi Gangotri — the nation’s first scientific base there
Within the first year, as many as 10,000 letters and mail had been posted and ‘cancelled’ at the historic post office.
And so began what officials describe as a “unique experiment” for India’s postal fraternity. Dakshin Gangotri submerged in ice in 1988-89 and was subsequently decommissioned.
On January 26, 1990, a post office branch was set up at India’s Maitri research station on Antarctica.
Since then, for more than 35 years, letters and postcards in blank envelopes are sent — mostly by philatelists, collectors and hobbyists — to the Maitri post office for ‘cancellation’.
The impression, ‘Maitri North Goa’, from the Antarctic research base is a famed “collector’s item”.
In practice, the letters meant for the post office in Antarctica are sent to the National Centre for Polar and Ocean Research (NCPOR), the nodal agency for India’s polar expeditions, in Goa. When a scientific expedition to the continent leaves from the NCPOR, a researcher is usually tasked with carrying the consignment of letters. At the research base, the letters are ‘cancelled’, brought back, and returned via post.
Washington Treaty
Time to Read :🕑 5 Mins
Why in news?
The foundations of the North Atlantic Treaty Organization (NATO) were officially laid down on 4 April 1949 with the signing of the North Atlantic Treaty, more popularly known as the Washington Treaty.
About
The Washington Treaty – or North Atlantic Treaty – forms the basis of the North Atlantic Treaty Organization – or NATO.
The Treaty was signed in Washington D.C. on 4 April 1949 by 12 founding members.
The Treaty derives its authority from Article 51 of the United Nations Charter, which reaffirms the inherent right of independent states to individual or collective defence.
Collective defence is at the heart of the Treaty and is enshrined in Article 5.
It commits members to protect each other and sets a spirit of solidarity within the Alliance.
The Treaty is short – containing only 14 articles – and provides for in-built flexibility on all fronts.
Despite the changing security environment, the original Treaty has never had to be modified and each Ally has the possibility to implement the text in accordance with its capabilities and circumstances.
World Anti-Doping Agency
Time to Read :🕑 5 Mins
Why in news?
India has emerged as the country with the highest percentage of doping offenders, according to the 2022 testing figures released by the World Anti-Doping Agency (WADA).
About WADA
It was established on 10 November 1999 to protect athletes, promote the values of clean sport, and preserve the spirit of sport internationally.
It was set up as a foundation under the initiative of the International Olympic Committee with the support and participation of intergovernmental organizations, governments, public authorities, and other public and private bodies fighting doping in sport.
It is composed and funded by the sport movement and governments of the world.
Its governance and funding are based on equal partnership between the Sport Movement and Governments of the world.
Its primary role is to develop, harmonize and coordinate anti-doping rules and policies across all sports and countries.
Key activities include scientific and social science research; education; intelligence & investigations; development of anti-doping capacity; and monitoring of compliance with the World Anti-Doping Program.
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