Business, Economy & Banking Current Affairs

Fitch raises India’s GDP forecast to 7.8% from 7.4% for FY19

Fitch Ratings in its Global Economic Outlook has revised up India’s growth forecast for current fiscal year (2018-19) to 7.8% from 7.4% projected earlier. However it has flagged tightening of financial conditions, weak bank balance sheets and rising oil bill as headwinds to growth.

Key Highlights

Growth Projections: Fitch’s upward revision in growth forecast comes in backdrop of GDP expanding 8.2% in the April-June period, higher than its expectation of 7.7%. This robust performance was partly attributable to a powerful base effect, with GDP growth dampened in 2Q17 (April-June) by companies de-stocking ahead of rollout of goods and services tax (GST). It has however cut growth forecasts for FY 2019-2020 and FY 2020-2021 growth by 0.2 percentage points to 7.3%.

Inflation Forecast: It is also picking up to upper part of Reserve Bank of India’s (RBI) target band (4%, plus-minus 2%) within forecast horizon on relatively high demand-pull pressures and rupee depreciation.

Rupee: It has been worst-performing major Asian currency so far this year. Despite RBI’s greater tolerance for currency depreciation, interest rates have been raised to higher levels, more than anticipated.

Fiscal policy: It should remain quite supportive of growth in run-up to elections likely to be held in early 2019. The investment to GDP ratio has stopped trending down, helped by ramped-up public infrastructure outlays, in particular by state-owned enterprises (SOEs).

Fitch Ratings

It is one of Big Three credit rating agencies in the world, the other two being Moody’s and Standard & Poor’s. Fitch Ratings is smallest of the “big three”. It is headquartered in New York (US) and completely owned by Hearst Corporation.

Credit rating agency is company that assigns credit ratings, which rate debtor’s ability to pay back debt by making timely interest payments and likelihood of default.

Month: Categories: Business & Economy Current Affairs 2018

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IPPB ties up with Bajaj Allianz to offer life insurance products

State-owned India Post Payments Bank (IPPB) and private life insurer Bajaj Allianz Life Insurance Co Ltd (BALIC) have entered into strategic partnership to provide life insurance solutions. It will allow IPPB customers across segments to access wide array of life insurance products and services especially at doorstep. BALIC is the first life insurer to partner with IPPB. This partnership will allow BALIC to leverage IPPB’s last mile reach for building awareness about life insurance.

India Post Payments Bank (IPPB)

IPPB has been set up as Public Limited Company under Department of Posts (DoP) with 100% Government of India (GOI) equity. It was launched on September 1, 2018 in New Delhi. It has begun operations with 650 branches and 3,250 access points across the country. It leverages DoP’s network, resources and reach to make low-cost, quality and simple financial services easily accessible to customers in the country.

It offers basic banking services acceptance of demand deposits, remittance services, internet banking and other specified services. It does not lending services. It can accept deposits up to Rs. 1 lakh per account from individuals and small businesses. It can issue ATM/debit cards but not credit cards. It can also issue other prepaid payment instruments. It can also distribute non-risk sharing simple financial products like mutual funds and insurance products.

Month: Categories: Banking Current Affairs 2018

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