Daily Current Affairs including static notes - 12 JUNE

‘Govt. set to unveil 500 cr. credit enhancement fund (GS 3 Eco)

• The government is set to unveil a 500-crore credit enhancement fund next month to facilitate infrastructure investments by insurance and pension funds.

Details: India is launching a dedicated fund to provide credit enhancement for infrastructure projects which will help in upgrading credit ratings of bonds issued by infrastructure companies and facilitate investment from investors like pension and insurance funds.

The initial corpus of the fund, to be sponsored by IIFCL (India Infrastructure Finance Company), will be 500 crore, and it will operate as a non-banking finance company.

There is a “mismatch” at present, where bonds floated by infrastructure finance firms are typically rated BBB, whereas regulatory agencies mandate a rating of at least ‘AA’ for investments by the long-term pension and insurance funds.

IIFCL will hold a 22.5% stake in the NBFC, while the Asian Infrastructure Investment Bank (AIIB) has offered to pick up a 10%. SBI, Bank of Baroda and LIC will also have stakes in the firm.

What is NBFC? A NBFC is a financial institution that provides banking services without meeting the legal definition of a bank, i.e. one that does not hold a banking license.

It is established as a company registered under the Companies Act, 1956 but its operations are often still covered under a country’s banking regulations.

NBFCs may be engaged in the business of loans and credit facilities, savings products, investments and money transfer services. The Reserve Bank of India is entrusted with the responsibility of regulating and supervising the Non-Banking Financial Companies by virtue of powers vested under Reserve Bank of India Act, 1934.

NBFCs business activities are akin to that of banks as they can lend and make investments; however there are a few differences between them. NBFCs cannot accept demand deposits. They cannot issue cheques as they do not form part of the payment and settlement system. Also, deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs, unlike in case of banks.

About IIFCL: Infrastructure forms the backbone of a nation. With the noble aim of funding the most commercially viable infrastructure projects to extend access of roads, safe drinking water, electricity, sanitation, and other basic amenities to the people in mass in India, IIFCL came in to existence. Accordingly, IIFCL is established by the Government of India as a Special Purpose vehicle in January 2006 and it started its Operations from April 2006.

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CSCs to soon offer bank services (GS 3 Eco)

• The government will work to enable all 2.9 lakh common service centers (CSCs) in the country to operate as business correspondents of banks.

Details:  Business correspondents are retail agents engaged by banks for providing services at locations other than a bank branch or an ATM. Permitted services include identification of borrowers, collection and preliminary processing of loan applications, collection of small value deposit, disbursal of small value credit, sale of micro insurance, MF products and pension products.

Now, CSCs will also work as IRCTC agents and would also be able to book general tickets.

About Banking Correspondents: Business Correspondents are retail agents engaged by banks for providing banking services at locations other than a bank branch/ATM. BCs enable a bank to provide its limited range of banking services at low cost. They hence are instrumental in promoting financial inclusion.

BCs have to do a variety of functions viz, identification of borrowers, collection of small value deposit, disbursal of small value credit, recovery of principal / collection of interest, sale of micro insurance/ mutual fund products/ pension products/ other third party products and receipt and delivery of small value remittances/ other payment instruments, creating awareness about savings and other products, education and advice on managing money and debt counseling, etc.

About Common Service Centers: CSC is an initiative of Ministry of Electronics & IT (MeitY) and is a strategic cornerstone of the Digital India programme.

It is pan-India network catering to regional, geographic, linguistic and cultural diversity of country, thus enabling Government’s mandate of a socially, financially and digitally inclusive society. There are as many as 2.91 lakh CSCs operate in the country today.

They are mostly ICT enabled front end service delivery points at village level for delivery of government and private services.

These CSCs serve as access points for delivery of essential public utility services, social welfare schemes, finance, healthcare, education and agriculture services, apart from host of B2C services to citizens in rural and remote areas of the country.

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PM’s maternity scheme benefits 23.6 lakh (GS 2 Gov)

• After initial hiccups in implementing the maternity benefit programme Pradhan Mantri Matru Vandana Yojana (PMMVY), the government has finally made some headway and provided cash incentives to nearly 23.6 lakh beneficiaries out of an estimated 51.6 lakh a year.

Details: The scheme was approved by the Union Cabinet in May 2017 and was expected to be rolled out in September that year. However, until January 2018, the government programme had covered only 90,000 women — a mere 2% of the target.

Under the scheme, pregnant women and lactating mothers are offered a cash incentive of 6,000 on the birth of their first child as partial compensation for wage loss, to reduce maternal mortality and malnutrition levels among children.

Many States like Tamil Nadu, Telangana, Odisha and West Bengal have not yet come on board to implement the scheme. These States account for nearly 25% of the total beneficiaries. The scheme has been able to serve 23.6 lakh of the 38 lakh beneficiaries or more than 60% of women.

However, due to a huge backlog from last year, the government needs to provide cash benefits to over 100 lakh estimated beneficiaries by the end of the financial year 2018-19.

An amount of 673 crore has been transferred to the accounts of the beneficiaries out of the total budget of 2,594 crore set aside for the scheme last year, and another 2,400 crore allocated for the current fiscal. The scheme is being implemented on a 60:40 cost-sharing basis with the State governments.

While States like Tamil Nadu, Telangana, Odisha and West Bengal have their own maternity benefit schemes and have been reluctant to implement the PMMVY, they were bound to comply because the scheme was a by-product of the National Food Security Act.

About Pradhan Mantri Matru Vandana Yojana: Pradhan Mantri Matritva Vandana Yojana was previously known as Indira Gandhi Matritva Sahyog Yojana. The draft guidelines provides for Direct Benefit Transfer of Rs. 6000 in beneficiary’s bank/post office account in three installments:  at the stage of early registration of pregnancy;  after six months of pregnancy on at least one antenatal check-up and registration of child birth & first cycle of immunization of the child.

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India to host first BIMSTEC war games (GS 2 IR)

• India will host the first military exercise of the BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) group focusing on counter-terrorism in September.

Details: As part of this, a conclave of the Army chiefs of all seven member-states is being planned. The exercise is scheduled to be held in Pune in the second week of September.

The aim is to promote strategic alignment among the member-states and to share best practices in the area of counter-terrorism.

The initial planning conference to work out the modalities is scheduled to be held next week and the final planning conference is scheduled in August.

BIMSTEC was set up in 1997 and includes India, Bangladesh, Bhutan Myanmar, Nepal, Sri Lanka and Thailand. The theme includes counter-terrorism in semi-urban terrain and cordon and search, and each side will bring in some 30 soldiers.

The conclave of Army chiefs is scheduled on the last two days of the exercise.  The chiefs will debate the challenge of terrorism and transnational crime, which is a major concern among all the states and on how they can promote collective cooperation.

BIMSTEC countries held a disaster management exercise in 2017, but this is the first military exercise of the grouping.

About BIMSTEC: BIST-EC (Bangladesh, India, Sri Lanka, and Thailand – Economic Cooperation) was formed at a meeting in Jun 1997 in Bangkok. Myanmar was admitted in Dec 1997 and the organization was renamed as BIMST-EC. The grouping expanded when Nepal and Bhutan were admitted in Feb 2004. The grouping’s name was changed to BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) at 1st Summit Meeting held in Bangkok in Jul 2004.

Few of the organization’s goals are to create an enabling environment for rapid economic development through identification and implementation of specific cooperation projects in the sectors of trade, investment and industry, technology, human recourse development, tourism, agriculture, energy, and infrastructure and transportation; To accelerate the economic growth and social progress in the sub-region through joint endeavors in a spirit of equality and partnership and to promote active collaboration and mutual assistance on matters of common interest in the economic, social, technical and scientific fields.