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MORNING BANKING & FINANCIAL NEWS UPDATES

ISSUE: 295 2023 14 August 2023

RBI KEY RATES FOREX (RBI REF. ) EQUITY /COMM. MARKET

Repo Rate: 6.50% INR / 1 USD : 82.7796 Sensex: 65322.65 (-365.53)
SDF: 6.25% INR / 1 GBP : 105.2349 NIFTY: 19428.30 (-114.80)
MSF /Bank Rate: 6.75% INR / 1 EUR : 91.0233 Bnk NIFTY: 44199.10 (-342.70)
CRR: 4.50% INR /100 JPY: 57.1900 Gold: 58,911.00 (+58.00)
SLR: 18.00% Silver: 70,017.00 (+36.00)

India's industrial growth falls to 3.7% in June: India's

industrial output grew by 3.7 percent in June, according to data
released by the Ministry of Statistics and Programme Implementation
on August 11.At 3.7 percent, the latest industrial growth figure as per
the Index of Industrial Production (IIP) is at a three-month low. It is
also below the consensus estimate of 5 percent.Industrial growth had
come in at 5.2 percent in May - now revised to 5.3 percent - and was
12.6 percent in June 2022.For the first quarter of 2023-24, IIP growth
stood at 4.5 percent, down from 12.9 percent in April-June 2022 when
the data was boosted by a favourable base effect.
(Moneycontrol)
RBI selects McKinsey and Company, Accenture
Solutions to use AI, ML to improve regulatory
supervision: The Reserve Bank has selected global consultancy
firms McKinsey and Company India LLP and Accenture Solutions Pvt
Ltd India to develop systems using artificial intelligence and machine
learning for its supervisory functions.The RBI is looking to extensively
use advanced analytics, artificial intelligence and machine learning to
analyse its huge database and improve regulatory supervision over
banks and NBFCs. For this purpose, the central bank plans to hire
external experts.In September last year, the RBI invited expressions
of interest (EoI) for engaging consultants for the use of advanced
analytics, artificial intelligence and machine learning for generating
supervisory inputs. Based on the scrutiny/evaluation set out in the
EOI document, the central bank had shortlisted seven applicants to
participate in the request for proposal process (RFP) for the selection
of consultant(s).
(Moneycontrol)
Retail inflation expected in the range of 5.6-6.6% for
July: Retail inflation based on Consumer Price Index (CPI) for July
could hover between 5.6 to 6.6 per cent mainly on account of higher
food prices, a quick poll among economists says. Government would
release the number on Monday.For June, retail inflation and food
inflation were 4.81 per cent and 4.49 per cent, respectively. Though
the estimated rise in retail inflation will be above the targeted range
of (2-6 per cent with median rate of 4 per cent), the possibility of rate
hike like the US Federal Reserve or some of the European Banks in
India is very remote. Instead, experts are saying that possibility of
rate revision is next fiscal (FY 25) only.
(Business Line)
Bank of Maharashtra tops PSU lenders chart in loan,
deposit growth in Q1: State-owned Bank of Maharashtra (BoM)
has emerged as the top performer among public sector lenders in
loan and deposit growth in percentage terms during Q1 FY24.The
deposit and advances of the Pune-based lender recorded almost 25
per cent rise, the highest by any public sector bank during the April-
June quarter. With a growth rate of 24.98 per cent, the gross domestic
advances of the bank rose to ₹1,75,676 crore at the end of June
2023, according to published quarterly numbers of the public sector
banks (PSBs). It was followed by UCO Bank with 20.70 per cent
growth, while Bank of Baroda with 16.80 per cent and Indian
Overseas Bank with 16.21 per cent growth were at third and fourth
spot, respectively.Country's largest lender State Bank of India stood
at fifth spot with 15.08 per cent rise in domestic advances growth.
(Business Line)
PFRDA integrates NPS statement with CAS: - Pension
regulator PFRDA in coordination with capital market regulator SEBI
has enabled the NPS subscribers to view their pension fund corpus
along with their demat securities and MF holdings under a single
consolidated account statement (CAS). This functionality that will
benefit over 1.35 crore NPS subscribers, is expected to provide a
simplified and secured way to stay informed on NPS investments
through CAS. Currently, CAS, which is provided by National
Securities Depository Ltd and Central Depository Services Ltd, offers
a consolidated view of personal investments in the securities market
with updated mark-to-market values.
(Business Line)
GST at par with personal income tax as share of GDP:
Goods & services tax (GST) as a share of gross domestic products
(GDP) has maintained parity with personal income tax, a report by
Finance Ministry shows. Economists attribute this to consumption
demand, compliance, and some impact of inflation. However,
another view is that this trend is not leading to an overall regressive
taxation regime. “GST has become the largest contributor to indirect
taxes, ever since its implementation in FY 2017-18, “ a Finance
Ministry report prepared to meet the obligations of the Government
under the Fiscal Responsibility and Budget Management Act, 2003,
said. It showed that the share of GST in GDP went up to 3.1 per cent
in FY23 from 2.8 per cent in FY21, During the same period share of
personal income tax rose from 2.5 to 3.1 per cent of GDP Apart from
GST, indirect taxes also include Custom Duty and Central Excise
Duty (levied mainly on petrol and diesel). At the same time, direct
taxes comprise corporate income tax (CIT) and personal income tax
(PIT).
(Business Line)
SoftBank Group in talks to acquire Vision Fund's 25%
stake in Arm: SoftBank Group Corp is in talks to acquire the 25%
stake in Arm Ltd it does not directly own from Vision Fund 1 (VF1), a
$100 billion investment fund it raised in 2017, according to people
familiar with the matter, potentially delivering a win for investors who
have waited years for strong returns.
(Business Standard)
 TODAY’S FINANCIAL TERMINOLOGY/CONCEPTS

PARETO'S EFFICIENCY

❖ Pareto's efficiency is defined as the economic situation when

the circumstances of one individual cannot be made better
without making the situation worse for another individual.
Pareto's efficiency takes place when the resources are most
optimally used. Pareto's efficiency was theorized by the Italian
economist and engineer Vilfredo Pareto.
❖ It is a purely economic concept and has no relationship with the
concept of equal or fair utilization of resources. It has wide
applications in the field of economics and engineering.
❖ It is the final optimum solution beyond which any change would
directly lead to loss in the allocation of resources. Pareto's
efficiency is, thus, the complete solution in itself. However, it is
almost impossible to achieve.

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