TOP CURRENT AFFAIRS

24 SEPTEMBER 2019

SOURCES :DD NEWS,AIR, RSTV

1.SBI to adopt repo rate as external benchmark for all floating rate loans from Oct 1

CONTEXT:State Bank of India on Monday said it will adopt repo rate as the external benchmark for all floating rate loans for MSME, home and retail loans, from October 1, 2019.

On September 4, the Reserve Bank of India (RBI) had mandated all banks to link all new floating rate personal or retail loans and floating rate loans to micro, small and medium enterprises (MSMEs) to an external benchmark from October 1 onwards.

“We have decided to adopt repo rate as the external benchmark for all floating rate loans for MSME, housing and retail loans effective October 1, 2019,” the bank said in a release.

The RBI gave the banks options to benchmark their floating rate loans either to repo rate, three-month or six-month treasury bills or any benchmark market interest rate published by Financial Benchmarks India Private (FBIL).

The bank has also extended the external benchmark-based lending to medium enterprises, to boost lending to the MSME sector as a whole.

It had introduced floating rate home loans effective July 1, 2019, but has made some modifications in the scheme effective October 1, 2019, to comply with the latest regulatory guidelines, the release said.

REPO RATE:

The term ‘Repo’ stands for ‘Repurchase agreement’. Repo is a form of short-term, collateral-backed borrowing instrument and the interest rate charged for such borrowings is termed as repo rate. In India, repo rate is the rate at which Reserve Bank of India lends money to commercial banks in India if they face a scarcity of funds. Commercial banks sell government securities and bonds to Reserve Bank of India with an agreement to repurchase the securities and bonds from Reserve Bank of India on a future date at a pre-determined price including interest charges.

External Benchmark Rates:

The Reserve Bank of India has made it mandatory for all banks to link all new floating rate loans (i.e. personal/retail loans, loans to MSMEs) to an external benchmark with effect from 1st October 2019. The move is aimed at faster transmission of monetary policy rates.

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.
At present, interest rates on loans are linked to a bank’s marginal cost of fund-based interest rate, known as the Marginal Cost of Lending Rate (MCLR).
Existing loans and credit limits linked to the MCLR, base rate or Benchmark Prime Lending Rate, would continue till repayment or renewal.
Those customers wanting to switch to the repo-linked rate can do so on mutually acceptable terms.
Adoption of multiple benchmarks by the same bank is not allowed within a loan category.
The interest rate under the external benchmark shall be reset at least once every three months.
Fixed vs Floating Interest Rate

The fixed interest rate on loan means repayment of loans in fixed equal instalments over the entire period of the loan. In this case, the interest rate doesn't change with market fluctuations.
Floating interest rate by name implies that the rate of interest varies with market conditions. The drawback with floating interest rates is the uneven nature of monthly instalments.

2.PM Modi to address UNSG's Climate Action Summit today

CONTEXT:Prime Minister Narendra Modi will today address the UN Secretary General's Climate Action Summit. He will also attend a High-level Meeting on Universal Health Coverage and 'Leaders' Dialogue on Strategic Responses to Terrorist and Violent Extremist Narratives' at the United Nations headquarters in New York.

Prime Minister is scheduled to have bilateral meetings with Amir of Qatar, Sheikh Tamim Bin Hamad Al Thani, President of Niger, Mahamadou Issoufou, Prime Minister of Italy, Giuseppe Conte, President of Namibia, Hage Geingob and President of Maldives, Ibrahim Mohammed Solih.

He will also have meeting with Executive Director of UNICEF, Ms Henrietta H Fore.

Later in the day, Prime Minister will inaugurate Gandhi Solar Park at the UN headquarters and Gandhi Peace Garden. Mr. Modi arrived in New York on the second leg of his week-long US visit after an unprecedented and historic visit to Houston.

Our correspondent reports that Prime Minister will address the 74th Session of United Nations General Assembly on Friday and participate in other multilateral and bilateral engagements.

UN Climate Action Summit 2019:BY UNGA
Global emissions are reaching record levels and show no sign of peaking. The last four years were the four hottest on record, and winter temperatures in the Arctic have risen by 3°C since 1990. Sea levels are rising, coral reefs are dying, and we are starting to see the life-threatening impact of climate change on health, through air pollution, heatwaves and risks to food security.

The impacts of climate change are being felt everywhere and are having very real consequences on people’s lives. Climate change is disrupting national economies, costing us dearly today and even more tomorrow. But there is a growing recognition that affordable, scalable solutions are available now that will enable us all to leapfrog to cleaner, more resilient economies.

The latest analysis shows that if we act now, we can reduce carbon emissions within 12 years and hold the increase in the global average temperature to well below 2°C and even, as asked by the latest science, to 1.5°C above pre-industrial levels.

Action porfolios

In order to ensure that the transformative actions in the real economy are as impactful as possible, the Secretary-General has prioritized the following action portfolios, which are recognized as having high potential to curb greenhouse gas emissions and increased global action on adaptation and resilience.

Energy transition, Climate finance and carbon pricing, Industry transition, Nature-based solutions, Cities and local action, Resilience
Finance: mobilizing public and private sources of finance to drive decarbonization of all priority sectors and advance resilience;
Energy Transition: accelerating the shift away from fossil fuels and towards renewable energy, as well as making significant gains in energy efficiency;
Industry Transition: transforming industries such as Oil and Gas, Steel, Cement, Chemicals and Information Technology;
Nature-Based Solutions: Reducing emissions, increasing sink capacity and enhancing resilience within and across forestry, agriculture, oceans and food systems, including through biodiversity conservation, leveraging supply chains and technology;
Cities and Local Action: Advancing mitigation and resilience at urban and local levels, with a focus on new commitments on low-emission buildings, mass transport and urban infrastructure; and resilience for the urban poor;
Resilience and Adaptation: advancing global efforts to address and manage the impacts and risks of climate change, particularly in those communities and nations most vulnerable.

In addition, there are three additional key areas:

Mitigation Strategy: to generate momentum for ambitious Nationally Determined Contributions (NDCs) and long-term strategies to achieve the goals of the Paris Agreement.
Youth Engagement and Public Mobilization: To mobilize people worldwide to take action on climate change and ensure that young people are integrated and represented across all aspects of the Summit, including the six transformational areas.
Social and Political Drivers: to advance commitments in areas that affect people’s well-being, such as reducing air pollution, generating decent jobs, and strengthening climate adaptation strategies and protect workers and vulnerable groups

3.Four new Supreme Court judges take oath of office

CONTEXT:Four new Supreme Court judges took oath of office on Monday, taking the total strength of judges in the apex court to 34.

Chief Justice of India Ranjan Gogoi administered oath of office and secrecy to justices Krishna Murari, S Ravindra Bhat, V Ramasubramanian and Hrishikesh Roy in a simple function in courtroom one.

The appointment of the four judges takes the number of judges in the apex court to the total sanctioned strength of 34.

Justices Murari and Bhat headed the Punjab and Haryana and Rajasthan high courts respectively.

Justices Ramasubramanian and Roy headed the Himachal Pradesh and Kerala high courts respectively.

The Centre had on Wednesday cleared the names of the four high court chief justices, who were recommended by the apex court Collegium on August 30 for elevation as apex court judges.

The Supreme Court (Number of Judges) Amendment Bill, 2019:
The Supreme Court (Number of Judges) Amendment Bill, 2019 was introduced in Lok Sabha on August 5, 2019 by the Minister of Law and Justice, Mr. Ravi Shankar Prasad. The Bill amends the Supreme Court (Number of Judges) Act, 1956.

The Act fixes the maximum number of judges in the Supreme Court at 30 judges (excluding the Chief Justice of India). The Bill increases this number from 30 to 33.

4.Ayushman Bharat scheme completes one year of its launch

CONTEXT:Ayushman Bharat - the Pradhan Mantri Jan Arogya Yojana has completed one year of its launch today and the day is being celebrated as Ayushman Bharat Diwas across the country.

Prime Minister Narendra Modi has said that Ayushman Bharat is more than just a health care scheme as it is a beacon of hope to more than 50 crore of India's most vulnerable people.

Ayushman Bharat scheme :

Key Features

The government-sponsored health insurance scheme will provide free coverage of up to Rs 5 lakh per family per year at any government or even empanelled private hospitals all over India for secondary and tertiary medical care facilities.
Modicare will be available for 74 crore beneficiary families and about 50 crore Indian citizens. Under the process, 80 percent of beneficiaries, based on the Socio-Economic Caste Census (SECC) data in the rural and the urban areas, have been identified.
There is no restriction on the basis of family size, age or gender.
Ayushman Bharat is unlike other medical insurance schemes where there is a waiting period for pre-existing diseases. All kinds of diseases are covered from day one of the Ayushman Bharat policy. The benefit cover includes both pre and post hospitalization expenses.
The expenditure incurred in premium payment will be shared between Central and State Governments in a specified ratio. The funding for the scheme will be shared – 60:40 for all states and UTs with their own legislature, 90:10 in Northeast states and three Himalayan states of Jammu and Kashmir, Himachal and Uttarakhand and 100% Central funding for UTs without legislature.
The NHPS will draw additional resources from the Health and Education Cess and also depend on funding from States to boost the Central allocation. The premiums are expected to be in the range of `Rs 1,000 – ` 1,200 per annum.
The NHPM (National Health Protection Mission) will pay for the hospitalisation costs of its beneficiaries through strategic purchasing from public and private hospitals.

5.GST rate cut on hotel accommodation service will boost tourism sector: Tourism Minister Prahlad Singh Patel

CONTEXT:Union Tourism Minister Prahlad Singh Patel has said, GST rate cut on hotel accommodation service will boost tourism sector. He was addressing curtain-raiser press conference on Indian Tourism Mart (ITM) in New Delhi today.

ITM is being organized with the objective of positioning the tourism destinations and products of the country in international source markets.

Over 240 international delegates have confirmed their participation from 51 countries including Argentina, Australia, Brazil, Canada, China, France, Germany, Italy, Malaysia, New Zealand, Russia, South Korea, UK and USA.

INDIA TOURISM MART 2019 is being planned as Business to Business (B2B) meeting where ministry of tourism will be hosting 300+ Foreign Tour Operators (FTOs) from all across the world,

Key Features of INDIA TOURISM MART 2019

A Business only Flagship event, INDIA TOURISM MART 2019 will ensure

* Visit of 300+ Overseas Tour Operators (FTOs) from 70+ countries with a firm interest in selling Indian Tourism products in their countries and seeking partnerships with Indian travel trade
* Exclusive One to One meetings with Exhibitors
* Business Conferences & Seminars
* Post Event FAM trips to various parts to India