Current Affairs - 28 July 2016

General Affairs 

Controversy Buried, People's President Kalam Gets A Memorial

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  CHENNAI:  Six months ago, cattle grazed a litter-infested field on which stood a dirty make-shift structure in Rameshwaram. It was the temporary memorial for former president APJ Abdul Kalam - put on freeze following a controversy over the handover of the land.
  
  Today, on the first death anniversary of the former president, a lifesize golden statue stands on the site. The Centre and the state have come together to give the people's president a national memorial.
  

  Inaugurating the bronze statue, Union Minister M Venkaiah Naidu said, "Dr Kalam will live forever in our minds and hearts. His thoughts continue to be with us all the time."
  The site will house a planetarium, a library and also an auditorium, where scientific lectures and presentations will be conducted. Besides, Rs. 48 crore has been allocated to develop Dr Kalam's hometown, Rameshwaram.
  
  The memorial for India's missile man had started after media reports about the utter neglect of the site where Dr Kalam had been buried and the subsequent public clamour. It was Prime Minister Narendra Modi who had promised that a memorial will come up there and requested the Tamil Nadu government for the grant of the land.
  
  

  But even after the state allotted the 1.3 acres for the memorial, work did not start for months, even though the place was treated like a pilgrim centre. Not only Dr Kalam's admirers, pilgrims to the Rameswaram also stopped by to pay their respects to the man who was hailed as the father of India's missile programme.
  
  Dr Kalam - who was in office as India's 11th President from 2002 to 2007, died of a cardiac arrest on July 27 at a hospital in Meghalaya, where he had gone to deliver a lecture. He was 83 years old.

Rahul Gandhi To Speak On Price Rise In Lok Sabha Tomorrow

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  NEW DELHI:  Congress Vice President Rahul Gandhi is expected to mount a scathing attack on the government in the Lok Sabha on Thursday on the issue of rising prices of essential commodities.
  
  Party sources today said that the House is expected to take up a short duration discussion on the issue.
  
  With the prices of pulses and some other commodities skyrocketing in recent months, the main opposition party has launched a sharp attack on the Narendra Modi dispensation for hitting hard the common man.
  
  Last week, Congress President Sonia Gandhi had targeted the government on the issue of price rise and asked party lawmakers to be aggressive and hold the government and its ministers accountable for it.
  
  Picking holes in the government's claims of economic growth, she said "when it comes to growth and GDP figures that they tout, questions on their veracity are raised even by their own party leaders. BJP blocked every important FDI initiative of the UPA government. Yet now it has put in place a free-for-all policy even in sensitive areas like defence."

Lok Sabha Approves Amendment To Lokpal Act For Deferring Asset Filing

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  NEW DELHI:  Lok Sabha today approved an amendment to the Lokpal Act to allow extension to 50 lakh central government employees and NGOs receiving government funds in the deadline for filing asset declaration beyond July 31.
       
  While the House provided immediate relief by approving the amendment to Section 44 of the Act, the provision will be examined in detail by a Parliamentary Standing Committee which will submit its report before next session of Parliament.
        
  

  Moving the amendment for consideration, Minister of State for Personnel Jitendra Singh said the government has received representations from Members of Parliament and other stakeholders and on July 25 a delegation of MPs had met Prime Minister Narendra Modi demanding deletion of the provision.
       
  The amendment pertains to Section 44 of the Lokpal Act which deals with declaration of assets and provision of making the assets public, he said.
       
  "Till the present impasse is overcome, the deadline with regard to government servants can be deferred," Mr Singh said as he moved amendments to the Act.  
       
  Mr Singh said the Standing Committee would give its recommendation before the next session of Parliament and till then the deadline for declaration of assets of public servants and NGOs can be deferred.
       
  As per the rules notified under the Lokpal and Lokayuktas Act 2013, every public servant shall file declaration, information and annual returns pertaining to his assets and liabilities as well as for his spouse and dependent children on March 31 every year or on or before July 31 of that year.
       
  In April, the government had extended the date of filing returns by public servants from April 15 to July 31. This is the fifth extension in the deadline since the Act came into force in January 2014.
       
  As per rules, organisations receiving more than Rs. 1 crore in government grants and donations above Rs. 10 lakh from abroad fall under the ambit of Lokpal.
       
  "Since this law was framed by the Standing Committee, the same (amendment) has to go to Standing Committee. Government is open to the idea of of amending the law but the same can be done after taking into account the recommendations of Standing Committee. The Standing Committee is seized of the matter and I hope that the Standing Committee will give report before next session," Mr Singh said while referring it to the Committee.

India To Appeal Against Hague Tribunal's Verdict In Antrix-Devas Deal

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  NEW DELHI:  India will appeal against the verdict of the Hague tribunal in Antrix-Devas deal case, in which the international court had declared the annulling of the contract as "unfair" and "inequitable" and asked it to pay huge amount as compensation.
  
  "We will appeal against the verdict at Hague (tribunal)," said AS Kirankumar, Secretary, Department of Space. He, however, declined to comment any further on the issue.
  

  India lost the arbitration case in a Permanent Court of Arbitration (PCA) tribunal based in the Hague over its space marketing PSU Antrix Corp annulling a contract with Bengaluru-based private multimedia firm Devas.
  
  The tribunal ruled that the Indian government had acted "unfairly" and "inequitably" in cancelling the contract involving use of two satellites and spectrum.
  
  The tribunal has found that the Indian government's actions in annulling the contract and denying Devas commercial use of S-band spectrum constituted an expropriation, Devas Multimedia Private Ltd. has claimed.
  
  Hitting back, the government had defended the decision of annulling the deal saying it was taken considering the "essential security interests" through well-reasoned, valid and proper consultations in the Cabinet Committee on Security (CCS).
  
  In a statement yesterday, the Department of Space (DoS) had said the limited liability of compensation would be only up to 40 per cent of the value of the investment and the exact quantum has not yet been determined.
  
  "The government of India reiterates that it had invoked the essential security interests through a well-reasoned, valid and proper CCS decision," the DoS said.
  
  Under the deal signed in 2005, Antrix was to provide 70 MHz of the scarce S-Band wavelength to Devas for its digital multimedia services by leasing 90 per cent of the transponders in ISROs GSAT-6 and GSAT-6A satellites.

Government Exploring Ways For 'Satisfactory Resolution' To Kohinoor Diamond Issue

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  NEW DELHI:  India today said it is exploring "ways and means for obtaining a satisfactory resolution" to the Kohinoor issue with Britain, a day after the UK government claimed no legal ground exists for New Delhi to take back the famed diamond.
  
  "The Ministry of External Affairs is exploring ways and means for obtaining a satisfactory resolution to this issue (of bringing back Kohinoor) with the UK government," Culture Minister Mahesh Sharma said in a written reply in Rajya Sabha.
  
  He was responding to a query on steps taken by the government to bring back the 108-carat precious gem, which is currently set in a royal crown on display in the Tower of London.
  
  Replying to a query on whether the ministry had made a statement that Kohinoor diamond was a gift to Britain and that it was not taken away forcibly, he said, "No, Sir. It was a misinterpretation."
  
  The comments assume significance coming as they do against the backdrop of the UK Minister of Asia and Pacific Affairs Alok Sharma indicating that Kohinoor could probably never find it way to India.
  
  "As far as this issue is concerned, there is no legal grounds for restitution," he had said on Tuesday.
  
  Culture Ministry sources said bringing back the diamond faces legal and technical hurdles as the issue dates to pre-Independence period and thus does not fall under the purview of Antiquities and Art Treasures Act, 1972.
  
  Recently, Mr Sharma had a meeting with External Affairs Minister Sushma Swaraj where it was reportedly decided that India would approach Britain next month on the issue of bringing back the diamond.
  
  The Kohinoor issue snowballed into controversy after the government made a submission in the Supreme Court in April that it was neither "forcibly taken nor stolen" by the British but given as a "gift" to the East India Company by the rulers of Punjab.
  
  However, after receiving flak for its stand, the government had said all efforts would be made to get back the diamond estimated to cost a staggering over $200 million.
  
  Kohinoor, meaning mountain of light, is a large, colourless diamond which was found in southern India in the early 14th century.
  
  The gem is the subject of a historical ownership dispute and has been claimed by at least four countries, including India.

Business Affairs 

Bharti Airtel Q1 net profit falls 31% to Rs 1,462 crore

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  The consolidated revenues in the reported quarter grew on an underlying basis, adjusted for Africa divested operating unit and tower assets sale, the statement said.

  Consolidated mobile data revenues at Rs 4,640 crore grew by 34.1 per cent on year-on-year basis.

  Its capital expenditure spiked 23 per cent year-on-year to Rs 4,925 crore in the quarter under review.

  Airtel said its India revenues for in the reported quarter grew by 10.3 per cent at Rs 19,155 crore compared to corresponding period of 2015-16 due to healthy growth of 9.1 per cent in Mobile, 11 per cent in Homes Services, 22.2 per cent in Digital TV and 10.4 per cent in Airtel Business on yearly basis.

  
  

  "The year has begun well with revenue growth of 10.3 per cent Y-o-Y and continued revenue market share gains. In continuation of our Project Leap announcement, we have now transparently opened up our entire mobile network to our customers," Bharti Airtel MD and CEO for India and South Asia Gopal Vittal said.

Five reasons for the ongoing rise in Indian equity market

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  Every time when the equity market rises text messages start hitting my mobile inbox advising on buying stocks and profiting from it on an intra-day basis. Second,  personal finance guys start calling to give their advice to invest in equity market by picking direct stocks or mutual funds and third people start coming to you for advice on where to invest. When such uncommon things become common in your daily routine the first thing that comes into mind is has the equity market peaked and is a sharp correction underway? 
  
  For the past one week these uncommon things have become a part of my routine and has made me wary about the Indian equity markets, which has seen both the BSE Mid-Cap Index and the BSE Small-Cap Index continuing to hit its new all-time high while the broader BSE Sensex still some 2000 points away from its previous all-time of 30,024 that was touched on March 4, 2015. 
  
  Despite being wary about the rise in the Indian market where stock valuations is no way cheap, the party is going to continue because of these reasons.
  
  1) The rise in the Indian market is not a domestic phenomenon but a global phenomenon. The rise in the Indian equity market is comparatively much smaller than its peers in the emerging market. Year-to-date, the MSCI India Index has gained barely 4 per cent, which is better-off than China, Mexico, Greece, Turkey, Poland and Egypt. But, compared to markets like Brazil, Thailand, Philippines, Taiwan, Russia and Indonesia which have gained anywhere between 10 per cent to 56 per cent the rise in Indian Index is smaller. There are expectations that the world markets will remain firm until the US presidential election and US isn't expected to raise rates in the near future, at least not in 2016. This indicates that easy liquidity is still expected to float in the global market which would augur well for emerging markets including India.
  

  2) Low yielding asset other than equity including debt, commodities, gold and real estate will keep interest towards equities.

  3) Concerns over Chinese economy making a hard landing fading away.

  4) Markets do not expect the Brexit to have a huge repercussion on the Euro-zone and countries in the EU looks to remain united.

  5) Apart from global factors, strong domestic money flow also keep the party going. Domestic mutual funds investment through systematic investment plan (SIP) is seeing Rs 3,000-3,500 crore coming into equity market and another Rs 500-1,000 crore is coming from employee provident fund (EPFO). Both augur well for the Indian equity market.
  
  Historically easy liquidity in the system has overpowered fundamentals and therefore market may have legs for scaling higher, and with market being in uncharted territory staying put would still be the best option. While getting carried away becomes easy when one sees stocks especially in the mid and small cap space scaling new highs, it would be advisable to stick to frontline stocks which are generating positive cash flows rather than getting trapped in penny stocks. 

RBI imposes Rs 27-cr penalty on 13 banks for FEMA violations

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  In a major crackdown for FEMA violations and KYC lapses, the RBI has imposed Rs 27-crore penalty on 13 public and private sector banks, including PNB and HDFC Bank, while asking eight others including SBI and ICICI Bank to ensure strict compliance with guidelines.

  On the basis of inputs received from a public sector bank, the Reserve Bank had undertaken a scrutiny on advance import remittances in 21 banks in October and November 2015.

  In a statement issued today, the RBI said it has imposed monetary penalty on 13 banks for "violation of regulatory directions/instructions/guidelines, among other things, on KYC norms".

  These banks are: Bank of Baroda (Rs 5 crore), Punjab National Bank (Rs 3 crore), Syndicate Bank (Rs 3 crore), UCO Bank (Rs 2 crore), HDFC Bank (Rs 2 crore), Allahabad Bank (Rs 2 crore), Canara Bank (Rs 2 crore), IndusInd Bank (Rs 2crore), SBBJ (Rs 2 crore), Bank of India (Rs 1 crore), Corporation Bank (Rs 1 crore), RBL Bank (Rs 1 crore) and SBM (Rs 1 crore).

  The RBI further said eight other banks-Axis Bank, Federal Bank, ICICI Bank, Kotak Mahindra Bank, OBC, Standard Chartered Bank, SBI and Union Bank of India-have been "advised to put in place appropriate measures and review them from time to time to ensure strict compliance with KYC requirements and FEMA provisions on an ongoing basis".

  "In respect of eight other banks...based on written and oral submissions, it was decided to advise them to put in place appropriate measures and review the same from time to time to ensure strict adherence to KYC/AML requirements as well as FEMA provisions on an ongoing basis," the RBI said.

  It, however, added that "this action" is based on deficiencies in regulatory compliance and "is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank and its customers".

  The scrutiny in the 21 banks examined the alleged irregularities in opening and monitoring of accounts including violations under FEMA provisions.

  The RBI also looked into the effectiveness of systems and processes for implementation of KYC norms/AML standards.

  The findings, the apex bank said, revealed weaknesses in the internal control systems, management oversight and violation of certain regulatory guidelines.

  The weakness was revealed in non-adherence to KYC requirements like customer identification and risk categorisation, instructions on monitoring of transactions in customer accounts and the guidelines issued under the FEMA provisions.

  Based on the findings, the Reserve Bank had issued a show-cause notice to 21 banks.

  
  

  The central bank came to the conclusion that "some of the violations of serious nature were substantiated" and warranted imposition of monetary penalty on 13 banks, as the failure on the part of these banks to take timely remedial measures had aggravated the seriousness of the contraventions.

JSW's pipe mill in the US close to shut down

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  JSW Steel's pipe mill in the US is near to a shut down as its capacity utilisation has fallen to just 3 per cent in the first quarter of this financial year due to the gloomy oil and gas industry in the country.

  The capacity utilisation at the plate mill also fell to 16 per cent during the period. The capacity utilisation was a bit higher in the last financial year at 10 per cent for pipes and 21 per cent for plates, respectively. It produced 37,859 net tonne of plates and 4,598 net tonne of pipes in the June quarter, while the sales volumes was lower at 27,542 net tonne of plates and 5,618 net tonne of pipes. It reported an EBITDA loss of $5.45 million (Rs 36.62 crore) for the quarter.

  For the entire FY 2015/16, the US mill's performance has been severely impacted due to lack of orders for pipes from the hydrocarbon sector. The unit produced 197,408 tonne of plates and 54,262 tonne of pipes in the last financial year. In view of the continuing losses at the plate and pipe mill operations, JSW Steel USA had carried out an impairment assessment of its fixed assets (at Rs 905 crore) in the third quarter of the last financial year. The US mills posted a net loss after tax of Rs 1,361 crore in 2015/16 after provisioning of impairment charges, compared to Rs 302 crore in the previous year.

  In 2007, Sajjan Jindal's JSW Steel bought three steel mills in the US, controlled by his elder brother Prithvi Raj Jindal, at an enterprise value of $900 million. It planned to sell the excess steel slabs from its Indian plant, convert them into pipes and sell them at $1,500-1,600 a tonne in the US. The revenues target was $800 million in 2007/08 and $1.5 billion in 2008/09. But it became a drag, largely because of poor demand, despite being located in the heart of the US oil and gas industry located in the Gulf of Mexico. They enjoy the advantage of their own barge unloading facility and good rail and truck transportation facilities.

  
  

  JSW group posted a net profit of Rs 1,109 crore for the June quarter as compared to Rs 21.19 crore in the same period last year. Total income marginally increased to Rs 12,919.23 crore from Rs 12,683.60 crore same period last year. The share price of JSW Steel rose 6 per cent after the result and closed at Rs 1,738.30 on Bombay Stock Exchange.

60% probability of GST bill passage in current session: Nomura

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  The constitutional amendment that allows for a Goods and Services Tax (GST), is more likely to be passed in this Monsoon Session of Parliament , says Japanese financial services major Nomura.

  According to Nomura, the expected timeline for the passage of GST is by August 12 and there is a 60 per cent probability for this.

  "We believe a constitutional amendment that allows for a goods and services tax (GST) is more likely than not to be passed during the ongoing Monsoon Session of parliament (July 18-August 12)," Nomura said in a research note.

  The GST bill, which intends to convert 29 states into a single market through a new indirect tax regime, was earlier planned to be introduced from April 1 this year, but the deadline was missed as the legislation to roll it out remains in limbo in the Opposition-dominated Rajya Sabha.

  "We believe a compromise can be reached on the 18 per cent GST cap demand if the Congress either agrees to include the tax rate cap in the central government's GST bill (instead of the constitution) or if the Congress agrees to a much higher tax rate cap," Nomura said, adding in the scenario where a consensus is not reached, we would expect the BJP to bring the constitutional amendment GST bill to vote in the upper house.

  "According to the report, GST would have a mixed impact in the short term, because it may temporarily reduce growth, push up inflation and hurt state tax collections."

  However, "we believe medium-term impact is unambiguously positive," the report said.

  "Once the constitutional amendment is passed in the Upper House, it will need to be ratified by more than 50 per cent of the 29 state assemblies," it added.

  This would then be followed by passage of the central government GST laws in both lower and upper houses, as well as passage of state GST laws in their respective state assemblies.

  
  

  For the GST to be implemented by April 2017, the constitutional amendment bill would need to be passed in the ongoing monsoon session of parliament, otherwise there are risks it could get delayed even further.

General Awareness

Indian Banks and their Taglines

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  Nationalized Banks	Head Office	Teglines
  Allahabad Bank	Kolkata, West Bengal	A tradition of trust
  Andhra Bank	Hyderabad, Andhra Pradesh	Much more to do with You in focus
  Bank of Baroda	Vadodara, Gujarat	India’s International Bank
  Bank of India	Mumbai, Maharashtra	Relationships beyond Banking
  Bank of Maharashtra	Pune, Maharashtra	One Family One Bank
  Bhartiya Mahila Bank	New Delhi, India	Empowering Women
  Canara Bank	Bengaluru, Karnataka	Together we Can
  Central Bank of India	Mumbai, Maharashtra	Build A Better Life Around Us
  Corporation Bank	Mangalore, Karnataka	Prosperity for all
  Dena Bank	Mumbai, Maharashtra	Your Trusted Family Bank
  IDBI	Mumbai, Maharashtra	Aao Sochein Bada
  Indian Bank	Chennai, Tami l Nadu	Taking Banking Technology to Common Man
  Indian Overseas Bank	Chennai, Tami l Nadu	Good people to grow with
  Oriental Bank of Commerce	Gurgaon, Haryana	Where every individual is committed
  Punjab National Bank	New Delhi, India	The Name you can Bank Upon
  Punjab and Sind Bank	New Delhi, India	Where service is a way of life
  Syndicate Bank	Manipal, Karnataka	Your Faithful And Friendly Financial Partner
  UCO Bank	Kolkata, West Bengal	Honors Your Trust
  Union Bank of India	Mumbai, Maharashtra	Good people to Bank with
  United Bank of India	Kolkata, West Bengal	The Bank that begins with “U”
  Vijaya Bank	Bengaluru, Karnataka	A Friend You can Bank Upon
  State Bank Group
  State Bank of India	Mumbai, Maharashtra	The Nation Banks on us; Pure Banking Nothing Else; With you all the way
  State Bank of Bikaner and Jaipur	Jaipur, India	The bank with a vision
  State Bank of Hyderabad	Hyderabad, Andhra Pradesh	You can always Bank on us
  State Bank of Mysore	Bengaluru, Karnataka	Working for a better tomorrow
  State Bank of Patiala	Patiala, Punjab	Blending Modernity with Tradition
  State Bank of Travancore	Trivandrum, Kerala	A Long Tradition of Trust
  Private Bank
  Axis Bank	Mumbai, Maharashtra	Badhti Ka naam Zindagi
  Bandhan Bank	Kolkata, West Bengal	“Aapka Bhala, Sabki Bhalai”
  Catholic Syrian Bank	Thrissur, Kerala	Support all the way
  City Union Bank	Kumbakonam, Tamil Nadu	Let's get it done.
  Development Credit Bank	Mumbai, Maharashtra
  Dhanalakshmi Bank	Thrissur, Kerala	Tann. Mann. Dhan.
  Federal Bank	Kerala	Your Perfect Banking Partner
  HDFC Bank	Mumbai, Maharashtra	We Understand Your World
  ICICI Bank	Mumbai, Maharashtra	Hum Hain Na!
  Indusind Bank	Lower Parel, Mumbai	We Make You Feel Richer
  J & K Bank	Sri Nagar, J & K	Serving to Empower
  Karnataka Bank	Mangalore, Karnataka	Your Family Bank. Across India
  Karur Vyasa Bank	Karur, Tamil Nadu	Smart way to Bank
  Kotak Mahindra Bank	Mumbai, India	Lets Make Money Simple
  Lakshmi Vilas Bank	Karur, Tamil Nadu	The Changing Face of Prosperity
  Nainital Bank	Nainital, Uttarakhand	Banking with personal touch
  South Indian Bank	Thrissur, Kerala	Experience next generation Banking
  Tamil Nad Mercantile Bank	Tuticorin, Tamil Nadu
  Yes Bank	Mumbai, Maharashtra	Experience our Expertise