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Goaltide Daily Current Affairs 2021

Jan 07, 2021

Current Affair 1:
Current Status of NPA of Public and Private Sector Banks

Recently, the Reserve Bank of India (RBI) released the annual publication, “Statistical Tables Relating to Banks in India 2019-20”, which provides details about the non-performing assets (NPAs) of scheduled commercial banks (SCBs).

Over the past few years, there has been a discussion over NPAs of the SCBs and the yearly write-offs by banks.  Incidents of defaulters fleeing the country or closure of companies due to loan defaults etc. have raised concerns about the growing NPAs of banks and their impact on the financial health of banks. Furthermore, the number of write-offs, especially by the public sector banks have raised concerns among the general public.

Here is a look at the trends in NPAs and loan Write-offs over the years based on the information provided by RBI.

As per RBI’s data, the total Gross NPAs declared by the Public Sector, Private Sector, Foreign, Small Finance & Payments banks as on 31 March 2020, amounted to Rs. 8.99 lakh crores, less than the Rs. 9.36 lakh crores as of 31 March 2019. Gross NPAs have been on a declining trend over the last two financial years compared to 2017-18, the year when gross NPAs touched the highest of Rs. 10.39 lakh crores.

Over the last two years, apart from Gross NPA, there is also a fall in the Net NPA.

Gross NPA vs Net NPA

Gross non-performing assets refer to the sum of all the loans that have been defaulted by the borrowers within the provided period while net non-performing assets are the amount that results after deducting provision for unpaid debts from gross NPA.

 

Under Net NPA, Banks provide for some loans going bad. The net NPA is that portion of bad loans which has not been provided for in the books.

Net NPA is a better indicator of the health of the bank.

 

 

Apart from the fall in the total value of Net NPAs, the share of Net NPAs out of the gross NPAs has also shown a declining trend. In 2019-20, net NPAs accounted for 32% of Gross NPA, while it was 38% and 50% in the earlier years.

Gross NPAs of Public and Private Sector Banks

NPAs of Public Sector Banks constitute the major portion of the overall NPAs. The fall in the overall NPAs in the last two years compared to 2017-18 can be attributed to the lesser NPAs reported for Public sector banks.  By the end of 2019-20, the Gross NPAs of Public Sector Banks were Rs. 6.78 lakh crores compared to Rs. 7.39 lakh crores by the end of the previous financial year.

On the other hand, the Gross NPAs of Private Sector Banks show a worrying trend. By the end of 2019-20, the Gross NPAs of private sector banks was Rs. 2.09 lakh crores compared to Rs. 1.83 lakh crores by the end of 2018-19.  However, the increase was not as steep as observed in 2018-19, where around Rs. 54 thousand crores worth of Gross NPAs were added. Meanwhile, the NPAs of Foreign Banks have shown a consistent decline since their high by the end of 2015-16.          

Increase in new NPAs added during the year

While the overall value of Gross NPAs has come down in the last two years, the same cannot be said about the new NPAs added during 2019-20. A total of Rs. 3.78 lakh crores worth of NPAs were added in 2019-20, compared to Rs. 3.08 lakh crores in 2018-19.

Increase in the value of NPAs being written off

Banks have the provision for writing off NPAs. The RBI has laid down the rules regarding the recognition of the NPAs and the conditions for writing off these loans. The decrease in the overall NPAs at the end of 2019-20 despite an increase in the new NPAs during the year can be attributed to the increase in the loan write-offs.

As per the data provided by RBI, the total NPAs written off during 2019-20 was Rs. 2.37 lakh crores compared to Rs 2.36 lakh crores in 2018-19.

As per the information provided in the Economic Survey of India -2020, during the year 2017-18, 14.9% of the NPAs of SCBs (Scheduled Commercial Banks) were recovered through various recovery mechanisms. The Insolvency & Bankruptcy Code (IBC) has been the most successful compared to the earlier recovery regimes. For the year 2018-19, the recovery rate is provisioned at 15.5%.

Current Affair 2:
Longitudinal Ageing Study of India

Source Link

Recently, the Ministry of Health & Family Welfare has released the Longitudinal Ageing Study of India (LASI) Wave-1 Report on the virtual platform.

LASI is a full–scale national survey of scientific investigation of the health, economic, and social determinants and consequences of population ageing in India. It is India’s first and the world’s largest ever survey that provides a longitudinal database for designing policies and programmes for the older population in the broad domains of social, health, and economic well-being.

The evidence from LASI will be used to further strengthen and broaden the scope of National Programme for Health Care of the Elderly and also help in establishing a range of preventive and health care programmes for older population and most vulnerable among them.

In 2011 census, the 60+ population accounted for 8.6% of India’s population, accounting for 103 million elderly people. Growing at around 3% annually, the number of elderly age population will rise to 319 million in 2050.75% of the elderly people suffer from one or the other chronic disease. 40% of the elderly people have one or the other disability and 20% have issues related to mental health. This report will provide base for national and state level programmes and policies for elderly population.

 

Important features of LASI:

The LASI has embraced state-of-the-art large-scale survey protocols and field implementation strategies including representative sample of India and its States, socioeconomic spectrum, an expansive topical focus, a longitudinal design, and the use of Computer Assisted Personal Interviewing (CAPI) technology for data collection, quality control, and Geographic Information System (GIS).

A unique feature of LASI is the coverage of comprehensive biomarkers. No other survey in India collects detailed data on health and biomarkers together with information on family and social network, income, assets, and consumption.

Agencies Involved:

The National Programme for Health Care of Elderly, Ministry of Health & Family Welfare has undertaken the Longitudinal Ageing Study of India, through International Institute for Population Sciences, (IIPS), Mumbai in collaboration with Harvard School of Public Health, University of Southern California, USA, United Nations Population Fund (UNFPA) and National Institute on Ageing.

About United Nations Population Fund (UNFPA)

UNFPA is the United Nations sexual and reproductive health agency. Our mission is to deliver a world where every pregnancy is wanted, every childbirth is safe and every young person's potential is fulfilled.

Current Affair 3:
Payment Infrastructure Development Fund Scheme

Source Link

Recently, the Reserve Bank of India (RBI) has announced the operationalization of the Payment Infrastructure Development Fund (PIDF) scheme.

PIDF is intended to subsidize deployment of payment acceptance infrastructure in Tier-3 to Tier-6 centres with special focus on North-Eastern States of the country. It envisages creating 30 lakh new touch points every year for digital payments.

An Advisory Council (AC), under the Chairmanship of the Deputy Governor, RBI, has been constituted for managing the PIDF.

Target Geographies

  1. The primary focus shall be to create payment acceptance infrastructure in Tier-3 to Tier-6 centres.
  2. North Eastern states of the country shall be given special focus.
  3. While setting parameters for utilization of funds, the focus shall be to target those merchants who are yet to be terminalized (merchants who do not have any payment acceptance device).

Implementation of targets under PIDF shall be monitored by RBI, MRO with assistance from Card networks, Indian Banks’ Association (IBA) and Payments Council of India (PCI).

The PIDF will be operational for three years from 1 January 2021, and may be extended for two more years based on progress. The fund has a corpus of ?345 crore, of which ?250 crore was contributed by RBI and ?95 crore by authorized card networks operating in India.

Current Affair 4:
Foundation stone laid for ‘New Anubhava Mantapa’

Source Link

Karnataka Chief Minister B.S. Yediyurappa laid the foundation stone for the ‘New Anubhava Mantapa’ in Basavakalyan, the place where 12th century poet-philosopher Basavanna lived for most of his life.

The project will showcase the 12th Century Anubhava Mantapa (often referred to as the “first Parliament of the world”) established by him in Basavakalyan, where philosophers and social reformers held debates.

The building will adopt the Kalyana Chalukya style of architecture.

About Basavanna, his thoughts and contributions:

 

  1. Basavanna was a 12th-century philosopher, statesman, Kannada poet and a social reformer during the reign of the Kalachuri-dynasty king Bijjala I in Karnataka,
  2. Basavanna spread social awareness through his poetry, popularly known as Vachanaas.
  3. Basavanna rejected gender or social discrimination, superstitions and rituals.
  4. He introduced new public institutions such as the Anubhava Mantapa (or, the “hall of spiritual experience”), which welcomed men and women from all socio-economic backgrounds to discuss spiritual and mundane questions of life, in open.
  5. As a leader, he developed and inspired a new devotional movement named Virashaivas, or “ardent, heroic worshippers of Shiva”. This movement shared its roots in the ongoing Tamil Bhakti movement, particularly the Shaiva Nayanars traditions, over the 7th- to 11th-century.
  6. Basava championed devotional worship that rejected temple worship and rituals led by Brahmins, and replaced it with personalized direct worship of Shiva through practices such as individually worn icons and symbols like a small linga.
  7. Basaveshwara is the first Kannadiga in whose honour a commemorative coin has been minted in recognition of his social reforms.

In November 2015, the Prime Minister of India Narendra Modi inaugurated the statue of Basaveshwara along the bank of the river Thames at Lambeth in London.

Basavanna and Sharana movement:

  1. The Sharana movement he presided over attracted people from all castes, and like most strands of the Bhakti movement, produced a corpus of literature, the vachanas, that unveiled the spiritual universe of the Veerashaiva saints.
  2. The egalitarianism of Basavanna’s Sharana movement was too radical for its times.
  3. He set up the Anubhava Mandapa, where the Sharanas, drawn from different castes and communities, gathered and engaged in learning and discussions.
  4. Sharanas challenged the final bastion of the caste order: they organised a wedding where the bridegroom was from a lower caste, and the bride a Brahmin.

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