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Shanan Powerhouse

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Himachal Pradesh Chief Minister recently handed over legal documents regarding Shanan Powerhouse to the Union Power Ministry.

About Shanan Powerhouse:

  • Location: It is located in Joginder Nagar in the Mandi district of Himachal Pradesh.
  • Commissioned in 1932, the powerhouse was constructed as per a 99-year lease executed between Raja Jogendra Sen, the then king of Mandi, and Col BC Batty, Chief Engineer of the Punjab Government, in 1925.
  • This powerhouse was constructed against the backdrop of dense deodar forests.
  • It is one of the oldest powerhouses of the country, which used to feed the entire undivided Punjab, Lahore and Delhi before Independence.
  • After the reorganisation of states in 1966, the Shanan powerhouse was given to Punjab by the Centre as the lease agreement, signed in 1925 was yet to expire.
  • The project originally was of 48 MW capacity, but the Punjab government enhanced its capacity to 60 MW in 1982. Later, 50 MW more was added to make its capacity 110 MW.
  • The main attraction of the hydro project is the four-stage haulage trolley service. It was basically constructed for carrying construction material of Shanan powerhouse from Jogindernagar to Barot. It is a unique type of trolley based on pulley system with no engine, steering wheel or no gears or brakes.


Gift Tax

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Recently, the Central Board of Direct Taxes (CBDT) has exempted buyers from gift tax when they acquire equity shares in public-sector units (PSUs) through strategic disinvestment.

About Gift Tax:

  • The Parliament of India introduced the Gift Tax Act in 1958, and gift tax is essentially the tax charged on the receipt of gifts.
  • The Income Tax Act states that gifts whose value exceeds Rs.50,000 are subject to gift tax in the hands of the recipient.
  • The gift tax is also applicable on certain transfers that are not considered a gift.
  • The transfer of existing movable or immovable property in money or money’s worth qualifies for gift tax.
  • The gift is exempted from tax if it was given by a relative.
  • The income tax rule Parent, Spouse, Siblings, Spouse’s siblings, Lineal descendants Lineal descendants of the spouse can be considered as a relative
  • There are several other situations where gifts can be exempted from tax. Listed below are other situations in which the gift will be exempted from tax.
    • Gifts received during weddings are usually exempted from tax.
    • Gifts received as part of the inheritance are exempted from tax.
    • Cash or rewards received by local authorities or educational institutions based on merit is exempted from tax.


The Pandemic Fund

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India is believed to have placed a funding request of around $55 million in its first call with the Pandemic Fund of the World Bank.

  • Pandemic Fund is a multi-stakeholder global partnership officially established in November, 2022.
  • It is one of the Financial Intermediary Fund (FIF).
  • It is a collaborative partnership among donor countries, co-investors (countries that are eligible to receive funding), foundations and civil society organizations (CSOs).
  • Objective – It will provide a dedicated stream of additional, long-term financing to strengthen critical pandemic Prevention, Preparedness, and Response (PPR) capabilities in low- and middle-income countries.
  • Governing Structure
  1. Governing Board
  2. Technical Advisory Panel
  3. Secretariat – The World Bank
  4. Trustee – The World Bank
  • Funding – The financial volume of The Pandemic Fund depends upon contributions from donors. 
  • Founding financial contributors – Australia, Canada, China, European Commission, Germany, Indonesia, Italy, Japan, Republic of Korea, New Zealand, Norway, Singapore, Spain, United Arab Emirates, United States, Bill and Melinda Gates Foundation, Rockefeller Foundation, Wellcome Trust.

Contributions

Financial Intermediary Fund (FIF)

  • They provide independently governed multi-contributor collaboration platforms for the global development community.
  • It focuses on specific themes and each FIF is a type of trust fund for which the World Bank serves as trustee.
  • Examples of FIFs are: Adaptation Fund, The Pandemic Fund, Global Environment Facility, Green Climate Fund, etc.,
  • FIF Trusteeship does not involve overseeing or supervising the use of funds.


National Startup Awards 2023

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Recently, The Department for Promotion of Industry and Internal Trade (DPIIT) said it has extended the deadline for submission of applications for the National Startup Awards 2023 to June 15, 2023.

 About National Startup Awards 2023:

  • The National Startup Awards 2023 awards will focus on celebrating innovation from across the country, in line with Vision India @2047.
  • DPIIT has invited applications across 20 different categories including aerospace, retail and emerging technologies etc.
  • Aim: To reward and recognise outstanding startups and enablers in the ecosystem building innovative products and demonstrating measurable social impact.
    Award: Cash prize of Rs 10 lakh to one winning startup in each category.
  • The Winners and finalists will also be given exclusive government support, including investor and government connect, mentorship, international market access, and corporate and unicorn connect.
  • It was launched in 2020.


Offer For Sale (OFS)

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The Union government proposes to sell up to 3% stake in state-owned coal India through an offer for sale (OFS).

About Offer For Sale (OFS):

  • What is it? OFS is a simpler method of share sale through the exchange platform for listed companies.
  • The OFS method was brought in by the Securities and Exchange Board of India (SEBI) in 2012 as a simpler one to aid promoters of listed forms to dilute their stake  and comply with the minimum public shareholding norms by June 2013.
  • The method was largely adopted by listed companies, both state-run and private, to adhere to the SEBI order.
  • Later, the government started using this route to divest its shareholding in public sector enterprises.
  • Features:
    • Unlike a follow-on public offering (FPO), where companies can raise funds by issuing fresh shares or promoters can sell their existing stakes, or both, the OFS mechanism is used only when existing shares are put on the block.
    • Only promoters or shareholders holding more than 10 per cent of the share capital in a company can come up with such an issue.
    • The mechanism is available to 200 top companies in terms of market capitalisation.
    • In an OFS, a minimum of 25 per cent of the shares offered, are reserved for mutual funds (MFs) and insurance companies. At any point, no single bidder other than these two institutional categories is allocated more than 25 per cent of the size of the offering.
    • A minimum of 10 per cent of the offer size is reserved for retail investors.
    • A seller can offer a discount to retail investors either on the bid price or on the final allotment price.
    • It is mandatory for the company to inform the stock exchanges two banking days prior to the OFS about its intention.
    • Anyone can bid for these shares, be it foreign institutional investors, retail investors or companies.


CIBIL (Credit Information Bureau (India) Limited) score

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The Kerala High Court recently held that an application for education loan by a student could not be rejected on the ground of a low CIBIL (Credit Information Bureau (India) Limited) score.

About CIBIL (Credit Information Bureau (India) Limited) score:

  • It is a three-digit numeric summary of your credit history.
  • CIBIL or Credit Information Bureau (India) Limited maintains and calculates your credit score.
  • Value: The value of Credit Score may range between 300 to 900. 
  • Lenders can check the CIBIL report and CIBIL Score/CIBIL Rank to evaluate the risk of lending to applicants and accordingly approve or reject new loan/credit card applications
  • The closer a CIBIL Score is to 900, the higher are the chances of the consumer’s credit card or loan application getting approved.
  • How is CIBIL Score calculated?
    • It is derived using the credit history found in the CIBIL Report. 
    • It takes into account borrowers’ credit profile over the last 36 months.
    • The credit profile includes all kinds of loans such as home loans, credit cards, personal loans, automobile loans, overdraft facilities etc that one has availed and their payment history.

Credit Information Bureau (India) Limited (CIBIL):

  • It is the leading credit bureau and Credit Information Company (CIC) licensed by Reserve Bank of India.
  • Primary Function: To collect and maintain financial data as provided by the lenders to further generate and provide credit reports and credit scores for its customers.
  • It maintains credit files on 600 million individuals and 32 million businesses.
  • CIBIL India is part of TransUnion, an American multinational group. Hence credit scores are known in India as the CIBIL Transunion score.

What is  CIBIL Report?

  • It is a consolidated credit report that includes the consumer’s CIBIL Score and credit summary, personal information, contact information, employment information, and loan account information.
  • It is important to note that lenders consider both the CIBIL Score and Report to assess a person’s loan eligibility.


Small Finance Banks (SFBs)

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The Reserve Bank of   India (RBI)-appointed director, recently resigned from the board of Ujjivan Small Finance Bank (SFB).

About Small Finance Banks (SFBs):

  • SFBs are specialized banks that are licensed by RBIto provide financial services and products to low-income individuals and underserved communities, including microfinance and micro-enterprise services, as well as other basic banking services. 
  • Aim:
    • To provide financial inclusion to these segments of the population who are often excluded from the traditional banking system. 
    • SFBs help them to have access to financial products such as small loans, savings, insurance, and other basic banking services.
  • SFBs are registered as public limited companies under the Companies Act, 2013 and governed by Banking Regulations Act, 1949; RBI Act, 1934 and other relevant Statutes and Directives from time to time. 
  • The guidelines for SFBS were introduced in 2014 by RBI. RBI Guidelines on SFBs in India are:
    • SFBs are granted the scheduled bank status after being operational and are deemed suitable under section 42 of the RBI Act,1934.
    • SFBs are required to primarily focus on providing access to financial services to the unbanked and underbanked segments of the population.
    • They are required to maintain a minimum Capital to Risk-Weighted Assets Ratio (CRAR) of 15%.
    • They are required to extend 75% of their Adjusted Net Bank Credit to Priority Sector Lending.
    • SFBs are required to open at least 25% of their total branches in unbanked rural areas.
    • The minimum paid-up voting equity capital for small finance banks shall be Rs.200 crore.
    • SFBs are required to maintain at least 50% of their loan portfolio as microfinance and advances of up to Rs. 25,00,000.
    • SFBs are required to comply with various prudential norms and regulations related to income recognition, asset classification, and provisioning.
    • SFBs are encouraged to adopt technology to improve their operational efficiency and reach the target segments.


Lightweight and portable payment system

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The Reserve Bank of India (RBI) is developing a lightweight and portable payment system designed to operate during catastrophic events.

About Lightweight and portable payment system:

  • The RBI has conceptualized this system which it is calling a bunker which is an equivalent of digital payments that can be operated from anywhere by a bare minimum staff in exigencies such as natural calamities or war.
  • It is expected to operate on minimalistic hardware and software and would be made active only on a need basis.
  • The infrastructure for this system will be independent of the technologies that underlie the existing systems of payments such as UPI, NEFT, and RTGS.
  • The system is expected to process transactions that are critical to ensure the stability of the economy, including government and market-related transactions.
  • The existing conventional payment systems such as RTGS, NEFT, and UPI are designed to handle large volumes of transactions while ensuring sustained availability.
  • As a result, they are dependent on complex wired networks backed by advanced IT infrastructure.

What is NEFT?

  • The National Electronic Funds Transfer is an electronic method of transferring money online.
  • It enables transferring funds from the account maintained with any bank to any other bank branch, provided the transaction is attempted between the banks that participate in the NEFT payment system.
  • The payments made via NEFT are processed and settled half hourly batches and transactions can be performed 24*7.
  • Minimum Transfer Value: Rs. 1
  • Maximum transfer value: No limit
  • Money transfer made through NEFT does not require any additional transaction costs.

What is RTGS?

  • It stands for Real-time Gross Settlement, which is a payment mode where the money is transferred from one bank account to the other in real time, without any delay. 
  • It is mostly used for transactions of high value.
  • When using the banking method, RTGS is the fastest possible way to transfer money.
  • Transactions made through RTGS are processed on a one-to-one basis and transactions can be performed 24*7.
  • Minimum Transfer Value: 2 lakh
  • Maximum transfer value: No upper limit is there, but can vary between banks.