Current Affairs – November, 2013

Latest Current Affairs November, 2013 with Current Affairs, news summary on current events of National and International importance of November, 2013 for Banking, SSC, CLAT, UPSC, State PCS, IBPS, Railways and other Competitive Examinations.

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RBI relaxes group limit for NBFCs in insurance joint ventures

RBI has decided to consider a case-to-case basis relaxation of the 50% group limit norm for NBFCs (Non-Banking Finance Companies) in the equity of insurance joint venture (JV).

As per the norms of IRDA (Insurance Regulatory and Development Authority), if  an insurance company wants to enhance its capital it has to do be in compliance with the stipulations of the Insurance Act and the solvency requirements of the insurance company. As per these rules, the current restriction of a group limit of the NBFC to 50% of the equity of the insurance JV  which, according to the RBI, may act as a hindrance for the insurance company in satisfying the requirement of IRDA.

Under the current guidelines, if more than one company (irrespective of doing financial activity or not) in the same group of the NBFC intends to acquire a stake in the insurance company, the contribution by all companies in the same group have been counted for the limit of 50% equity investment in the insurance JV.

Keeping this in view, the RBI has decided that in cases where IRDA issues call for capital infusion into the insurance JV, it will consider need-based relaxation of the 50% group limit on case-to-case basis.

Issue of sugarcane pricing aggravating

The issue of sugarcane pricing is moving towards becoming a major crisis with farmers demanding a higher price for their produce and millers reluctant to give in to their demand.  After the Centre asked the state governments to resolve the matter, the Uttar Pradesh government asked millers to begin crushing by December 4, 2013 or face action.

Normally, crushing starts in October-November, but this year the “cash-starved” millers have decided not to crush, arguing that they cannot pay farmers the State Advised Price of Rs. 280 a quintal on account of surplus stocks and decline in sugar prices.

Although the UP government filed FIRs against four millers and threatened to act against those who have not cleared arrears, it agreed to consider the demand for linking the State Advised Price of sugarcane with sugar prices and announced a high-powered committee, headed by the Chief Secretary, to come up with a permanent cane price formula from the next sugar season (2014-15).

What is the ongoing issue of sugar cane pricing?

Sugarcane cultivating farmers are demanding better prices for their cane produce as the its prices have been declining. The demands are from the farmers of a number of states of the country like UP, Maharashtra, Karnataka etc. In UP, the government has suggested the millers to pay State Advised Price of Rs. 280 a quintal but the millers are not ready to pay more than Rs. 225 a quintal.

The situation is quite similar in Maharashtra where farmers have given an ultimatum to the state government for its failure to declare better prices for the crop, failing which the farmers have said they will organize a 48-hour bandh. They have demanded the government to announce Rs. 3000 as Minimum Support Price (MSP) for sugarcane this year.