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RBI to Reconstitute Oversight Committee to Tackle Bad Loans

The Reserve Bank of India is set to reconstitute Oversight Committee to operationalise the banking ordinance, which was recently cleared by the Union Cabinet to amend the Banking Regulation Act for the sake of giving more powers to Reserve Bank of India for effectively dealing with non-performing assets (NPAs) in the banking sector. The existing Oversight Committee was constituted by the Indian Banks’ Association (IBA). The move is aimed at containing the bad loans which have reached to over Rs 8 lakh crore.

Salient Highlights

In addition to reconstituting the Oversight Committee (OC), the RBI has also proposed to include some more members so that it can constitute requisite benches to deal with the volume of cases referred to the committee. the existing OC constituted by the IBA has only two members.
RBI is also working on a framework to facilitate consistent decision making in those cases which are referred for resolution under the Insolvency and Bankruptcy Code, 2016.

RBI envisages a vital role for the credit rating agencies and is exploring the feasibility of rating assignments being determined by the RBI itself. The agencies would be paid out of a fund constituted out of contributions from the banks and the Reserve Banks.

RBI envisages coordination among various stakeholders including banks, ARCs, rating agencies, IBBI and PE firms. The apex bank has already sought information on the present status of the large stressed assets from the banks.

Background

Recently, the union cabinet had authorised the RBI to issue directions to any banking company or banking companies to initiate insolvency resolution process under the provisions of the Insolvency and Bankruptcy Code, 2016. The ordinance also empowered the RBI to act against loan defaulters and defaulting companies under the bankruptcy code. Amendments will enable RBI to set up multiple oversight committees to deal with NPAs.

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Harsh Malhotra Committee on Scouts and Guides Submits Report to the Sports Ministry

A seven-member High-Level Committee on Scouts and Guides has submitted its Final Report to Minister for State (Independent Charge) for Youth Affairs & Sports, Vijay Goel with various recommendations.

Salient Highlights

The committee has suggested for the constitution of an Enquiry Committee to take stock of complaints and grievances and submit its report.

The committee has suggested for completely revamping the Bharat Scout & Guides and Hindustan Scouts and Guides. It has stressed upon the need for streamlining the organizational set up of Bharat Scouts and Guides and Hindustan Scouts and Guides. It has also said that it has observed a number of irregularities and anomalies in the financial management of the Scouts and Guides which are audited by the Chartered Accountant. So, the committee has recommended for the constitution of a permanent monitoring Committee to periodically assess the activities of both the organisations and submit report to the Union Sports Ministry.

The committee has suggested for the nomination of government nominees on the Boards of both the organizations.

Background

After receiving various complaints from various sectors against the Bharat Scouts and Guides and Hindustan Scouts and Guides, sports ministry had constituted a seven-member High Level Committee under the chairmanship of Harsh Malhotra in October 2016 to look into the infrastructure and assets of the two recognized Scouts and Guides Organizations.

The high level committee submitted its first interim report on January 31, 2017 recommending to make Scouts movement as an integral part of Youth movement.

Bharat Scouts and Guides and Hindustan Scouts and Guides are the two organizations recognized by the Sports Ministry for conducting scouting and guiding activities across the country. These two organizations also receives grant-in-aid for conducting the scouting/guiding activities.

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GST Council Finalises 4-slab Service Tax Structure

The GST Council headed by finance Minister Arun Jaitley has finalised a 4-slab service tax structure at the rates of 5, 12, 18 and 28 per cent as against the single rate of 15% levied on all taxable services. GST regime is scheduled to be implemented from July 1. In the next GST Council meeting, tax rates on gold and other precious metals will be taken up for discussion.

Salient Highlights

Luxury hotels, gambling, race club betting and cinema services will attract a tax rate of 28%.

Education, healthcare and non-AC rail travel will remain exempted from the GST tax regime. However, the states will be given the option to levy additional taxes on cinema to compensate for the revenue losses entailed due to merging of entertainment tax with GST. At present, the total tax incidence on cinema including entertainment and service tax is in the range of 55%. The states need to use the legislative route if it wants to levy additional tax on cinema.

States will also be permitted to levy any new tax as the taxation powers of the states have only been restricted and not abolished after the rollout of GST.

Telecom and financial services will be taxed at a rate of 18%.

Transport services will be taxed at the rate of 5%. Cab aggregators like Ola and Uber will have to pay 5% under GST in place of 6%. AC rail travel will attract 5% tax. Economy class air travel will attract 5 % GST while business class will attract 12%. Travelling on metro, local train and religious travel such as Haj Yatra would be exempted from GST.

The e-commerce players like Flipkart and Snapdeal would be required to shell out 1% Tax Collected at Source (TCS).

Non-AC restaurants and AC restaurants will attract a GST of 12% and 18% respectively.

Advertisements published in newspapers will attract 5% GST. At present it is exempt from service tax.

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