Union Budget 2021- Budget at a glance, Key Takeaways & Highlights

The Union Budget 2021-22 was presented by the Hon’ble Finance Minister Nirmala Sitharaman on 1st February 2021 in the Parliament. The Budget speech was given by the FM from 11 a.m. to 1 p.m.
This year’s Budget lays focus on the seven pillars for reviving the economy – Health and Wellbeing, Physical and Financial Capital and Infrastructure, Inclusive Development for Aspirational India, Reinvigorating Human Capital, Innovation and R&D, and Minimum Government Maximum Governance. Several regulations around the securities market are proposed to be merged as a single code. Several direct taxes and indirect taxes amendments were also proposed.

Economic Survey 2020-21 Key Highlights: Govt pegs FY22 GDP growth at 11%, FY21 GDP to contract 7.7%

Union Finance Minister Nirmala Sitharaman tabled Economic Survey 2020-21 in the Parliament on January 29, 2021. The survey is generally presented a day before the Union Budget. This year, the survey is being presented earlier because the day-before-budget is a Sunday. The real growth rate for FY21 has been taken as -7.7% (MoSPI) in Economic Survey 2020-21 and real growth rate for FY22 is assumed as 11.5 % based on IMF estimates.
Following the presentation of the Economic Survey in both the houses of the Parliament by Finance Minister Nirmala Sitharaman, Chief Economic Adviser KV Subramanian addressed a press conference in which he introduced the highlights of the annual survey document.

Introduction of Legal Entity Identifier for Large Value Transactions in Centralised Payment Systems

The Legal Entity Identifier (LEI) is a 20-digit number used to uniquely identify parties to financial transactions worldwide. It was conceived as a key measure to improve the quality and accuracy of financial data systems for better risk management post the Global Financial Crisis. LEI has been introduced by the Reserve Bank in a phased manner for participants in the over the counter (OTC) derivative and non-derivative markets as also for large corporate borrowers.

Risk Based Internal Audit (RBIA) Framework – Strengthening Governance arrangements

The banks are required to put in place a risk based internal audit (RBIA) system as part of their internal control framework that relies on a well-defined policy for internal audit, functional independence with sufficient standing and authority within the bank, effective channels of communication, adequate audit resources with sufficient professional competence, among others. Banks are expected to re-orient their approach, in line with the evolving best practices, as a part of their overall Governance and Internal Control framework. Banks are encouraged to adopt the International Internal Audit standards, like those issued by the Basel Committee on Banking Supervision (BCBS) and the Institute of Internal Auditors (IIA).

RBI releases the Financial Stability Report, January 2021

The Financial Stability Report (FSR), which reflects the collective assessment of the Sub-Committee of the Financial Stability and Development Council (FSDC) on risks to financial stability, and the resilience of the financial system in the context of contemporaneous issues relating to development and regulation of the financial sector. The release of FSR was rescheduled to incorporate the first advance estimates of national income for 2020-21 that were released by the National Statistical Office on January 7, 2021.

Report on Trend and Progress of Banking in India 2019-20

Reserve Bank of India released the Report on Trend and Progress of Banking in India 2019-20, a statutory publication in compliance with Section 36 (2) of the Banking Regulation Act, 1949. This Report presents the performance of the banking sector, including co-operative banks, and non-banking financial institutions during 2019-20 and 2020-21 so far.

RBI’s Bi-Monthly Review dt. 4th December 2020 – Key Takeaways and Highlights

RBI Monetary Policy Highlights: The Monetary Policy Committee (MPC) of the Reserve Bank kept the repo rate unchanged at 4 percent and maintained an ‘accommodative’ stance. The RBI MPC began its three-day deliberations on Wednesday. In another major announcement, RBI Governor said that the commercial and co-op banks will not give out dividends this year and retain all the profits.

RBI working group suggests permitting large NBFCs to convert into bank

RBI had constituted an internal working group on 12 June to review extant ownership guidelines and corporate structure for Indian private sector banks.The internal working group of Reserve Bank of India (RBI) suggested that large Non-Banking Financial Company (NBFCs) can convert into banks if they fulfill certain criteria. “Well run large NBFCs, with an asset size of ₹50,000 crore and above, including those which are owned by a corporate house, may be considered for conversion into banks subject to completion of 10 years of operations and meeting due diligence criteria and compliance with additional conditions specified in this regard,” the central bank panel recommended.

Lakshmi Vilas Bank Crisis – All you want to know about

Lakshmi Vilas Bank is the third Bank after the PMC and Yes Bank to be placed under Moratorium in the recent times. The financial position of The Lakshmi Vilas Bank Ltd. (the bank) has undergone a steady decline with the bank incurring continuous losses over the last three years, eroding its net-worth. In absence of any viable strategic plan, declining advances and mounting non-performing assets (NPAs), the losses are expected to continue. The bank has not been able to raise adequate capital to address issues around its negative net-worth and continuing losses. Further, the bank is also experiencing continuous withdrawal of deposits and low levels of liquidity.

Atmanirbhar Bharat Stimulus Package 3.00 – Key Highlights

Union Finance Minister Nirmala Sitharaman  announced on Thursday the 12th November, 2020 new stimulus measures worth Rs 2.65 lakh crore, under Atmanirbhar Bharat Abhiyaan 3.0 to boost the Indian economy amid the ongoing COVID-19 pandemic. The new stimulus package reinforces the ‘fiscal conservatism’ ideology of the government — rather than large cash transfers, the growth philosophy centres around creating an ecosystem that aids domestic demand, incentivises companies to generate jobs and boost production. (She also informed that the total stimulus announced by the Government and Reserve Bank of India till date, to help the nation tide over the COVID-19 pandemic, works out to ₹ 29.87 lakh crore, which is 15% of national GDP. Out of this, stimulus worth 9% of GDP has been provided by the government.)