Current Affairs – February, 2019

Latest Current Affairs February, 2019 with Current Affairs, news summary on current events of National and International importance of February, 2019 for Banking, SSC, CLAT, UPSC, State PCS, IBPS, Railways and other Competitive Examinations.

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RBI withdraws 20% limit on investments by FPIs in Corporate Bonds

The Reserve Bank of India (RBI) has withdrawn the earlier order which stipulated a 20% limit on investments by FPIs in Corporate Bonds.

Why the limit was imposed and why it is being withdrawn?

During the review of the FPI investment in corporate debt in April 2018, the limit was introduced to incentivize the FPIs to maintain a portfolio of assets. But the market feedback suggested contrary. The market feedback suggested that foreign portfolio investors (FPIs) have been constrained by this stipulation.

As a result, to encourage a wider spectrum of investors to access the Indian corporate debt market, RBI has decided to withdraw the 20% limit on investments by FPIs in Corporate Bonds.

Foreign portfolio investment (FPI)

FPI consists of securities and other financial assets passively held by foreign investors. FPI does not provide the investor with direct ownership of financial assets. In India, FPIs are allowed to invest in various debt market instruments such as government bonds, treasury bills, state development loans (SDLs) and corporate bonds, but with certain restrictions and limits. FPI is part of countries capital account and is listed on its balance of payments (BOP).

Differences between FPI and FDI

FPI allows the investor to purchase stocks, bonds or other financial assets in a foreign country and the investor does not actively manage investments or companies that issue investment. Also, the investor does not have control over securities or business.

Whereas in FDI, the investor has a direct business interest in the entity into which the investment is made. The investor controls his monetary investments and actively manages the company into which the investments are made. FPI is more liquid and less risky than FDI.

Guidelines on Electric Vehicle Charging Infrastructure

The government has issued a set of guidelines to upgrade the charging infrastructure in the country to boost the electric vehicles. The Union Housing and Urban Affairs Ministry has made amendments to the Model Building Byelaws (MBBL) 2016 and Urban Regional Development Plans Formulation and Implementation (URDPFI) Guidelines 2014, making provisions for establishing EV charging infrastructure.

Key Features of the Guidelines

  • A public charging station should be on both sides of the highways or roads on every 25 km.
  • For long range and heavy-duty electric vehicles, there should be at least one station on each side of the highway every 100 kilometres.
  • The guidelines also advocate for charging points in residential areas.

These guidelines will act as a guiding document to the state governments and Union Territories (UTs) to incorporate the norms and standards of electric vehicles in their respective laws.

What necessitated new guidelines?

The centre estimates that 25 per cent of the total vehicles on roads will be electric vehicles by 2030. This necessitates the erection of robust electric vehicle (EV) charging infrastructure across the country. The guidelines are a step forward in this direction.