GDP Current Affairs - 2019

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Departments to Conduct Review of Govt Guarantees

The Ministry of Finance has asked all the departments to undertake a review of government guarantees given by respective ministries to their Central Public Sector Enterprises (CPSEs) or entities.

Review of Government Guarantees

  • The review will look into aspects like whether the discharge of repayment obligations or interest obligations as per terms of the loan agreement and covenants and conditions met.
  • Further, the details of CPSEs or entities on due guarantee fee paid on time to the government should also be submitted.

Why there is a review of Government Guarantees?

  • Guarantees are contingent liabilities which have the potential to impact the financial performance of the government.
  • Further, the FRBM Rules stipulates that the government cannot guarantee more than 0.5 per cent of the GDP of the respective financial year to CPSE/entities.

Hence the Ministry of Finance has requested all ministries and departments to prioritised guarantee requirement for 2019-20 to include only such proposals where the loan agreement can be signed and guarantee agreement can be executed during the year.

Month: Categories: Business, Economy & BankingUPSC

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RBI Cuts Key Interest Rate

The Reserve Bank of India (RBI) has slashed the key interest rate, repo rate by 25 basis points or 0.25 per cent to 6 per cent and has decided to maintain the neutral policy stance.

Financial Statement of the RBI

The rate cut will provide commercial banks more room to pass on the benefit of lower lending rates to loan borrowers. At the same time, it would also translate into a lower interest rate earned by depositors.

Month: Categories: Business, Economy & BankingUPSC

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