Banking and Financial Awareness Digest: June 2022

SEBI issues norms for Dispute Resolution

Markets regulator SEBI has issued new Standard Operating Procedures (SOP) for dispute resolution under the stock exchange arbitration mechanism.
This mechanism will help to resolve the disputes between a listed firm or Registrars to an Issue and Share Transfer Agents (RTAs) and its shareholders. The new framework will come into force with effect from June 1.
The process of appointment of an arbitrator is required to be completed by the stock exchange within 30 days from the date of receipt of the complete application from the applicant. An arbitral award will be issued within four months from the date of appointment of the arbitrator.

During the period of January-March period of 2021-22, India’s economy grew 4.1% even though the rate of growth slowed with the Omicron wave-induced restrictions,
National Statistics Office clipped down the overall growth estimate for FY22 to 8.7% from 8.8% in February. Private final consumption expenditure decreased to 1.8%, and government spending increases to 4.8%. Gross value added (GVA) at basic prices grew at 3.9% in the fourth quarter and 8.1% in FY22.
Nominal GDP is estimated to grow 19.5% in FY22 which amounts to Rs 236.4 trillion.

As per the RBI data report, credit to the industry enhanced to 8.1% in April 2022 which is, higher than 7.1% in March 2022. Credit to medium-sized industries registered a growth of 53.5%, micro, and small industries rose to 29.0% and the large industries segment also showed growth of 1.6%.
There has been major growth in the services sector mainly due to finance companies, trade, tourism, hotels & restaurants, and transport operators.
Credit growth in agriculture and allied activities has also shown an increase of 10.6 percent in April 2022.

Collection of goods and services tax (GST) is recorded as Rs 1.41 trillion in May which is 16% lower than the record collection of Rs 1.68 trillion in April.
The collection in May is, however, 44% higher than Rs 97,821 crore a year ago, and also is still the fourth-highest since the beginning of GST in July 2017. Maharashtra contributed the most to GST collections.
The total revenue after settlements is Rs 52,960 crore for CGST and Rs 55,124 crore for the SGST. In addition, the Centre has also released GST compensation of Rs 86,912 crores to states which were pending.

SEBI has issued new rules for the initial public offering in a bid to ensure that only genuine entities participate.
Some large institutional investors and high net worth individuals were putting in bids only to increase the subscription numbers and not to get allotments.
Now the IPO applications should only be processed if there are supporting funds in an investor's bank account. This rule will apply to all categories of investors including retail, qualified institutional buyers (QIBs), non-institutional investors, and other reserved categories that will come into effect on or after 1st September.

The government has hiked the insurance premium rates for Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY) which will get effective from June 1, 2022.
The premium rates for both schemes have been increased i.e for PMJJBY being increased from Rs. 330 to Rs. 436 and PMSBY being increased from Rs. 12 to Rs. 20.
The hike in premium would make the schemes sustainable and encourage other private insurers to come on board for implementing PMJJBY and PMSBY.

SEBI streamlined the process of providing its approval to the proposed change in control of a portfolio manager.
Portfolio managers who are involved in the scheme of arrangement must need the sanction of the National Company Law Tribunal. The prior approval granted by the regulator will be valid for six months.
The option to exit without any exit load, within at least 30 calendar days from the date of such communication.

According to SBI research, it has projected the Indian economy to grow by 7.5 percent in 2022-23.
The report has shown positive results on corporate revenue and profit, the growing bank credit, etc.
Listed companies reported 29%top line growth and a 52 percent jump in net profit. Construction including cement, steel, etc reported 45% growth in revenue and 53% in net income. The inflation target was kept at 6.5-6.7% for FY23.

S&P Global India Services Purchasing Managers’ Index rose to 58.9 in May from 57.9 in April
The main reason behind it was Strong Services and manufacturing activity boosted the composite index to such a high level. Apart from that country’s economy expanded 4.1% year-on-year in the January-March quarter.
Besides we all knew that India’s economy is grappling with eight-year high inflation in April RBI must come up with strong policy rates to tackle it.

The government has approved an 8.1% rate of interest on employees' provident fund (EPF) deposits for 2021-22.
Employees Provident Fund Organisation had decided to lower the interest on provident fund deposits for 2021-22 to 8.1%. The interest rate on provident fund deposits has also gone down to a seven-year low in March 2020. i.e 8.5%.

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