Financial Awareness-March(11-20) 2017

  1. Public sector banks rush to get cyber insurance policies (Source: ET)
  • Public sector banks are pulling up their socks in cyber insurance. Many state-owned commercial banks are rushing to buy insurance for threats such as hacking, including data loss and associated liabilities.
  • This comes in the wake of the Reserve Bank of India tightening reporting for banks, which for long ignored cyber threats, as well as a greater realisation among banks about the potential dangers of living in a digital world without cover. Banks are seeking more cover for first-party costs related to forensics and cyber experts in case of a claim. This will pay for costs of post-breach investigations as well. Insurers said that in many cases, the cost of external experts was higher than the financial loss caused by a cyber breach. The RBI has issued guidelines to banks to ensure cyber security for addressing risks emerging from new technology.

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The planning commission which has a legacy of 65 years has replaced by NITI Aayog. The utility and significance of the Planning Commission had been questioned for long. The replacement seems to be more relevant and responsive to the present economic needs and scenario in the country.


The NITI Aayog was formed on January 1, 2015. In Sanskrit, the word “NITI” means morality, behavior, guidance, etc

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Universal Basic Income

What is a Universal Basic Income?
• A universal basic income (UBI) is an unconditional and universal right. It requires that every person should have a right to a basic income to cover their needs, just by virtue of being citizens.
•   The Economic Survey (ES) 2016-17 says the time has come to think of UBI for a number of following reasons
•    Social Justice – An UBI promotes many of the basic values of a society which respects all individuals as free and equal.
•   Poverty Reduction – Conditional in the presence of a well-functioning financial system, a Universal Basic Income may simply be the fastest way of reducing poverty.

Agency – The poor in India have been treated as objects of government policy. An unconditional cash transfer treats them as agents, not subjects.
•  By taking the individual and not the household as the unit of the beneficiary, UBI can also enhance agency, especially of women within households.

•  Administrative Efficiency –  It is a way of ensuring that state welfare transfers are more efficient so that the state can concentrate on other public goods. Continue reading “Universal Basic Income”

Real Estate Act, 2016

Why in news?

  • Central government has cautioned the States of a vacuum arising if necessary institutional mechanisms, as required by the Real Estate Act were not put in place before April 30, 2017.

What is Real Estate Act, 2016?

  • The Act which is envisaged to regulate both commercial and residential real estate projects, seeks to set up a state level regulatory authority called Real Estate Regulatory Authority (RERAs) for regulation and promotion of the real estate sector.
  • The Act makes it mandatory for uploading the details of a Real Estate project on the website of the RERAs. Real estate agents also need to register with the RERAs.
  • The Act also makes it mandatory for the builders to put 70% of the amount collected from buyers in a separate bank account. This must only be used for construction of the project. However, the state government can alter this amount to less than 70%.
  • The Act also seeks to establish fast track dispute resolution mechanisms for settlement of disputes through adjudicating officers and Appellate Tribunal.

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Financial Awareness-March(1-10) 2017

  1. Bank loan market could revive soon as bonds become costly (Source: BS)
  • Bank loans are becoming attractive for companies that had shifted to the bond market. Banks recently lowered their interest rates and are expected to hold on to current levels for some time, considering not all the monetary easing has been passed on to customers.
  • But bond yields have started rising in anticipation of a rate-hike scenario. Banks are clear that lending rates are not going to fall further.

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Decoding Union Budget 2017-18


Though the Union Budget is essentially a Statement of Account of public finances, it has historically become a significant opportunity to indicate the direction and the pace of India’s economic policy. The 2017-18 Union Budget was presented amidst a somewhat wobbly backdrop of the world economy facing considerable uncertainty, increasing signs of a retreat from globalization of goods the world over, and high expectations from people back home relating to good governance. Amidst all these developments, India has stood out as a bright spot in the world economic landscape. India‟s macro-economic stability continues to be the foundation of economic success. Continue reading “Decoding Union Budget 2017-18”