Banking Current Affairs 2018

Welcome to Banking Current Affairs 2018 Section of GKToday. This section has current affairs on banking industry for IBPS Banking Recruitment, RBI Grade B, SBI PO, RRB and other banking examinations. An E-book compilation of latest 300 Banking Current Updates can be downloaded from This Link

Liberalised Remittance Scheme: RBI alters definition of relative to check outward remittances

The Reserve Bank of India (RBI) has narrowed the definition of relatives under the ‘maintenance of close relative’ category of Liberalised Remittance Scheme (LRS) to check outflow of funds and prevent misuse of facility. Henceforth, funds under this category can be sent only to immediate relatives such as parents, spouses, children and their spouses.

Key Facts

The definition of relatives under LRS has been now aligned with definition of relative with definition given in Companies Act, 2013 instead of Companies Act, 1956. Outward remittances under maintenance of close relatives had shot up to almost $3 billion in 2017-18 from mere $174 million in 2013-14. The funds sent under this category have more than doubled since 2015-16. Overall outward remittances under LRS went up to $11 billion from $1 billion in the same period. Earlier in June 2018, RBI had made PAN mandatory for anyone using LRS for remitting money outside the country. Earlier PAN was not insisted upon for putting current account transactions of up to $25,000.

Liberalised Remittance Scheme (LRS)

LRS is facility provided by RBI for all resident individuals including minors to freely remit upto certain amount in terms of US Dollar for current and capital account purposes or combination of both. The scheme was introduced in February 2004 and its regulations are provided under Foreign Exchange Management Act (FEMA), 1999. After it was launched, the LRS limit was US $25,000, but it has been revised in stages consistent with prevailing macro and micro economic conditions. At present, LRS limit for all resident individuals, including minors, is US $2,50,000 (Rs. 1.5 crore) per financial year.

Under LRS, individuals can make remittances for overseas education, travel, medical treatment, maintenance to relatives living abroad, gifting and donations. The remitted money can be used for purchase of shares and property as well. Individuals can also open, maintain and hold foreign currency accounts with overseas banks for carrying out transactions under it.

Restrictions: Under LRS, remittances cannot be used for trading on foreign exchange markets, purchase of Foreign Currency Convertible Bonds issued abroad by Indian companies and margin or margin calls to overseas exchanges and counterparties. Similarly, individuals are not allowed to send money to countries identified as ‘non cooperative jurisdictions’ by Financial Action Task Force (FAFT). It also prohibits remittances to entities identified as posing terrorist risks.

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Banks Board Bureau recommends 22 GMs for elevation as executive directors at PSU banks

Banks Board Bureau (BBB) has recommended 22 general managers to be elevated as executive directors at the various public sector banks (PSBs). This is the first major exercise undertaken by reconstituted BBB, headed by newly appointed Chairman BP Sharma, former Secretary, Department of Personnel and Training.

These recommendations were based on interactions held by BBB with eligible candidates from PSBs towards appointment against vacancies in PSBs for the period 2018-19. Now, Appointments Committee of Cabinet (ACC) headed by Prime Minister will take the final decision in this regard.

Banks Board Bureau (BBB)

BBB is super authority (autonomous and self-governing body) of Central Government comprising eminent professionals and officials to improve governance of PSBs. It was announced by Union Government in August 2015 as part of seven point Indradhanush Mission to revamp PSBs. It was set up in February 2016 under chairmanship of former CAG Vinod Rai based on recommendations of RBI-appointed Nayak Committee. It is based in Mumbai, Maharashtra.

Mandate: Its broad agenda is to improve governance at state-owned lenders. Its mandate also involves advising government on top-level appointments in PSBs and assisting banks with capital-raising plans through innovative financial methods and instruments as well as strategies to deal with issues of stressed assets or bad loans.

Composition: BBB comprises of three ex-officio members (from government) and three expert members, two of which are from private sector in addition to Chairman.

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