Essential Facts (Prelims) – September 04 & 05 , 2019

Cabinet approves higher procurement price for ethanol

Category: Economy

  • The Union Cabinet approved a higher procurement price for ethanol purchased by oil marketing companies for the ethanol blended petrol (EBP) programme, which will come into effect from December 1 for a period of one year.
  • According to the new decision, the price of ethanol from C-heavy molasses and B-heavy molasses will be increased.
  • The oil marketing companies will also pay the Goods and Services Tax and transportation tax associated with the ethanol supply — a provision that existed in the previous plan as well.
  • Increased ethanol blending in petrol has many benefits including reduction in import dependency, support to agricultural sector, more environmental friendly fuel, lesser pollution and additional income to farmers.

₹4,557 crore one-time infusion into IDBI Bank

Category: GS 3 ( Economy)

  • The Cabinet approved a one-time capital infusion of ₹4,557 crore into IDBI Bank in a bid to help the bank return to profitability.
  • The Life Insurance Corporation of India, which owns a 51% stake in the bank, will infuse another ₹4,743 crore in IDBI.
  • The infusion is expected to help IDBI raise further capital on its own and come out of the Reserve Bank of India’s Prompt Corrective Action framework next year.
  • The infusion will be through recapitalisation bonds.
  • The government will infuse the capital into the bank and the bank will buy the recapitalisation bonds from the government on the same day, with no impact on liquidity or the current year’s Budget.

PSBs must have ₹10 lakh crore business to appoint CGMs

Category: Economy

  • The Finance Ministry has decided to fix a cut-off mark in terms of total business of public sector banks (PSBs) to create the position of chief general managers (CGMs).
  • PSBs will now have the position of CGM which was thus far available only to the State Bank of India.
  • PSBs having a total business of ₹10 lakh crore will be eligible to have CGM posts in Scale VIII.
  • A bank can appoint a maximum of one CGM for four general managers (GMs),.

India among top 10 nations in gold reserves

Category: Economy

  • India has pipped the Netherlands to move into the list of top ten countries in terms of total gold reserves.
  • India is at the 10th spot.
  • According to the World Gold Council, India has gold reserves totalling 618.2 tonnes, which is marginally higher than the Netherlands’ reserves of 612.5 tonnes.
  • Interestingly, in terms of individual countries, India actually ranks ninth since the International Monetary Fund (IMF) occupies the third position after the U.S. and Germany.
  • India’s entry into the list of top ten countries comes at a time when the quantum of monthly purchases is the lowest in over three years.
  • India’s gold reserves have grown substantially in the past couple of decades from 357.8 tonnes in the first quarter of 2000 to the current 618.2 tonnes.

External benchmark-based lending must: RBI

Category: Economy

  • The Reserve Bank of India (RBI) made it mandatory for all banks to link floating rate loans — to retail customers and loans to micro, small and medium enterprises (MSME) — to an external benchmark.
  • The move is aimed at faster transmission of monetary policy rates.
  • Banks have been reluctant to cut interest rates despite the RBI lowering the repo rate by 110 basis points (bps).
  • The norms for external benchmark linking of interest rates was scheduled to be operational from April 1, but was deferred.
  • At present, interest rates on loans are linked to a bank’s marginal cost of fund-based interest rate (MCLR).
  • Banks can choose from one of the four external benchmarks — repo rate, three-month treasury bill yield, six-month treasury bill yield or any other benchmark interest rate published by Financial Benchmarks India Private Ltd.

Vienna crowned ‘most liveable city’

Category: International

  • Austria’s capital has retained its ranking as the world’s most liveable city, according to an annual report from the Economist Intelligence Unit (EIU).
  • Vienna once again came ahead of Melbourne — which had held the top ranking for seven years until losing it to Vienna in 2018.
  • Each year, the EIU gives 140 cities scores out of 100 on a range of factors such as living standards, crime, transport infrastructure, access to education and healthcare, as well as political and economic stability.
  • Europe claimed eight of the top 20 spots, with cities in Japan, Australia, New Zealand and Canada making up the rest.
  • However, the City of Light, Paris, dropped six places to 25th due to the anti-government “yellow vest” protests.
  • For the first time, the index noted the effects of climate change on liveability, with New Delhi plunging in the rankings to 118th (a drop of six ranks) due to “poor air quality, undesirable average temperatures and inadequate water provision.
  • The least liveable cities were Karachi, Tripoli, Dhaka, Lagos and, at the very bottom, Damascus.