Reserve Bank of India Current Affairs - 2019

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Centre fixes price for Sovereign Gold Bonds at Rs.3,443 per gram

Government of India has fixed the price at Rs.3,443 per gram for the new series of Sovereign Gold Bonds (SGBs) opening July 8.

Key Highlights

Union Finance Ministry recently announced that Centre in consultation with Reserve Bank of India (RBI) has decided to allow a discount of Rs.50 per gram from issue price to those investors who apply online and payment which is made via digital mode. This implies that for such investors, the issue price of gold bond will be Rs.3,393 per gram of gold.

On 30 may 2019 RBI announced calendar for issuance of SGB for 1st half of current financial year (2019-2020).

The SGB’s will be issued every month from June 2019 to September 2019.

About Sovereign Gold Bond Scheme

It was launched by Government of India in November 2015 with the goal of reducing the demand for physical gold and shifting a part of domestic savings, used for purchase of gold, into financial savings.

Under the SGB scheme, bonds are denominated in units of 1 gram of gold and multiples thereof.

Minimum Investment: in bonds is 1 gram and a maximum limit of subscription of 500 gram/person/fiscal year (April-March).

Maximum Limit: of subscription is 4 kg for an individual and Hindu Undivided Family (HUF) and 20 kg maximum subscription limit for trusts and similar entities per fiscal (April-March).

Annual Ceiling: includes bonds subscribed under different tranches during initial issuance by centre and those purchased from secondary market.

RBI constitutes panel to review Core Investment Companies

Reserve Bank of India (RBI) constituted a working group to review regulatory guidelines and supervisory framework for Core Investment Companies (CIC). The 6-member working group is chaired by Tapan Ray, non-executive chairman, Central Bank of India and former Secretary in Union Ministry of Corporate Affairs (MCA).

Key Highlights

Background: In August 2010, Central Bank on recognising the difference in business model of a holding company relative to other Non-Banking Financial Companies (NBFCs) had introduced a separate framework for regulation of systemically important.

RBI’s Objective behind forming Panel

Country’s Corporate Group structures have become more complex over the years. It now involves multiple layering and leveraging, which has further led to greater inter-connectedness with financial system through their access to public funds. Also, in light of recent developments, there is a need to strengthen corporate governance framework of CICs.

Troubled financial conglomerate Infrastructure Leasing and Financial Services (IL&FS) is registered with RBI as a CIC.

Terms of Reference for Panel

It will examine current regulatory framework for CICs in terms of efficacy, adequacy and effectiveness and will also suggest changes.

It will also suggest measures to strengthen corporate governance and disclosure requirements for CICs as well as measures to enhance RBI’s on-site supervision and off-sight surveillance over CICs.

To assess adequacy of supervisory returns submitted by CICs and also suggest changes.

Timeframe: Working Group must submit its report by 31 October 2019