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Goaltide Daily Current Affairs 2022

Jan 03, 2022

Current Affair 1:
FRDI Bill To handle insolvency in financial companies

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Above is news article from Indian Express. It has already explained most of the things in better way but still I would like to reiterate certain points.

 

1) Insolvency and Bankruptcy Code (IBC) 2016 is not applicable to Financial Institutions like Banks, NBFCs, Pension Funds, Mutual Funds etc. This means that if Reliance Company has taken loan from a bank, and reliance company is not making repayment of its debt, of course the  bank can move to NCLT under IBC 2016 to declare the company bankrupt. But if the bank is not repaying money to its depositors (the deposited money is a kind of debt on banks) then the depositors cannot move to NCLT under IBC 2016 to declare the bank bankrupt.

2) But, as there were some major NBFCs like IL&FS, DHFL etc. facing crisis/default, so Ministry of Corporate Affairs, Govt. of India, on 15th Nov. 2019, notified section 227 of IBC 2016 (only temporary arrangement) to enable the resolution of NBFCs (Financial Service Providers) regulated by RBI, through NCLT under IBC 2016. This is just a temporary arrangement only for those NBFCs which are regulated by RBI and have asset size more than Rs. 500 crore. But still other smaller NBFCs and which are regulated by SEBI, IRDAI are not covered under IBC 2016.

3) For dealing with bankruptcy of financial firms, Govt. is planning to bring "Financial Resolution and Deposit Insurance (FRDI) Bill". This is in discussion since last 4/5 years, but still not passed by the Parliament. The reason is there is a "Bail-in" clause in the bill which says that in case there is bankruptcy/insolvency in bank, then the depositors will have to give up some part of their deposit to protect the bank (i.e., to keep the bank running and preventing from bankruptcy). There is disagreement on this clause.

Actually, there are two options.

First is, either allow the bank to fail and close it, then in that case the depositors will get Rs. 5 lakh insurance and some money from the liquidation of the bank’s assets. But of course, a lot of depositors will lose money in this case also.

Second case is, deduct some part of the depositor’s money and help the bank to again become financially sound and operational.

4) There are some NBFCs which are allowed to take TIME deposits but no NBFC can accept demand deposit. There are various classes of NBFCs, no need to go in detail. This is just for your information.

Current Affair 2:
How Much Gold Can You Bring in India?

 

Gold is a precious metal, and the central bank of India, RBI, regularly imports gold for its reserve. However, for individual passengers, the regulations to bring gold to the country are restricted by the government.

Amount of gold to bringing

One person can only bring 1 kg of gold (including ornaments), and the person can bring the gold at the time of arrival or the same be imported within 15 days of his arrival in India. Additionally, the passenger is also allowed to obtain the permitted quantity of gold from the Customs bonded warehouse of State Bank of India and Metals and Mineral Trading Corporation subject to conditions. In that case, a declaration note needs to be filed in the prescribed Form before the Customs Officer at the time of arrival in India. The passenger must state the intention to obtain the gold from the Customs bonded warehouse and also pay the duty before the clearance.

2021 Gold Import in India: Just remember its increasing.

Current Affair 3:
Khuntkatti’ system

 

A man was thrashed and later burnt alive in broad daylight in presence of police, allegedly for cutting trees illegally and selling them in the market, which is a violation of ‘Khuntkatti’ law.

Khuntkatti’ system is joint ownership or holding of land by tribal lineage. The Munda tribals would usually clear the forests and make the land fit for cultivation, which would then be owned by the whole clan and not a particular individual.

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