Current Affairs June 2013

Saudi Arabia switches weekend to Friday-Saturday

As per a royal decree, Saudi Arabia will switch its weekend to Friday-Saturday to better serve its economy and “international commitments”.

This move will make Saudi Arabia the last of the six-nation Gulf Cooperation Council (GCC)- which includes Bahrain, Kuwait, Oman, Qatar and United Arab Emirates – to abandon the Thursday-Friday weekend to be closer to the world’s Saturday-Sunday weekend. Saudi Arabia is the world’s largest oil exporter and a member of the G20 group of the globe’s biggest economies.

Why this change?

Initially, when the weekends in GCC were Thursday-Friday whereas rest of the world has it on Saturday- Sunday, it provided the stock market only three working days which coincided with the working week in the world’s major financial centres.  This made negative repercussion and caused opportunity loss for countries involved in trade.  The decision takes effect in ministries and government departments from next week, while it will be implemented by schools and universities from the start of the next academic year.

Edward Snowden leaves Hong Kong, arrives in Moscow

American whistleblower Edward Snowden who disclosed spying programmes of the US National Security Agency left Hong Kong where he had taken shelter to avoid arrest from the US and arrived in Moscow.

He was helped by the whistleblowing organization WikiLeaks even as Washington is try hard to extradite him.  Hong Kong didn’t extradite him as it cited some deficiencies in the document submitted by Washington for extradition which didn’t fully comply with the legal requirements under Hong Kong law.

Snowden further humiliated Washington by disclosing that the US had hacked into Chinese mobile phone companies to access millions of private text messages. Beijing jumped on the disclosure, calling U.S the world’s ”biggest villain” for IT espionage, pushing back at Washington’s charges about China’s ”cybertheft.”

Meanwhile, the US has warned of serious consequences to the countries that have or plan to host him.

RBI relaxed ECB norms for low cost housing projects

The RBI has eased the External Commercial Borrowing (ECB) norms for affordable housing projects by withdrawing the minimum capital requirement, and lowering total experience to three years, while extending the scheme till next financial year.

As per RBI notification:

  • Developers or builders should have a minimum of 3 years’ experience in undertaking residential projects as against five years prescribed earlier.
  • The condition of minimum paid-up capital requirement of not less than Rs.50 crore for Housing Finance Companies (HFCs) to avail themselves of ECBs has been withdrawn.
  • Condition of the minimum net owned funds of Rs.300 crore (for the HFCs) for the past 3 financial years was unchanged.
  • Aggregate limit for ECB under the low cost affordable housing scheme is extended for 2013-14 and 2014-15 with a ceiling of $1 billion in each of the two years, subject to review thereafter.
  • ECB availed of by developers and builders shall be swapped into rupee for the entire maturity on a fully-hedged basis.
  • Interest rate spread charged by the National Housing Bank (NHB) may be decided by the NHB, taking into account cost and other relevant factors.
  • HFCs while making applications for ECB should submit a certificate from NHB stating that use of ECB for financing prospective owners of individual unit is for low cost affordable housing.
  • HFCs should ensure that the cost of such individual units should not exceed Rs.30 lakh, and the loan should not exceed Rs.25 lakh; and units financed should have a maximum carpet area of 60 square metres.

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