Current Affairs on Finance

High denomination notes of Rs 500 and Rs 1000 are discontinued

1. As per Prime Minister Narendra Modi announcement on 8th November 2016 high denomination notes of Rs 500 and Rs 1000 will no longer be legal tender from midnight of 9th November 2016.
2. He has declared a "decisive" war against black money and Fake currency and currency that is supposed to be used for the funding of Terrorrism and corruption.
3. All notes in lower denomination of Rs 100, Rs 50, Rs 20, Rs 10, Rs 5, Rs 2 and Re 1 and all coins will continue to be valid. 

Important facts about Rs 500 & Rs 1000 notes banned from 08 November 2016 from 12 PM

• They will cease to be legal tender from tonight;
• Existing currency can only be deposited in banks account, head and sub-post offices;
• You can exchange them in banks & post offices between Nov 9 and Dec 30, 2016;
• ATMs will dispense only Rs 2000 a day, later to be increased to Rs 4000 per day;
• Those who miss the Dec 30 deadline, can exchange old Rs 500 and Rs 1000 notes through RBI on the basis of declaration;
• Till Nov 11 midnight, Hospitals will accept Rs 500 & Rs 1000 notes and on basis of prescription can buy medicines from drug stores on hospital shops;
• Govt buses ticket booking counter, airlines will accept them for booking tickets till Nov 11 midnight;
• Petrol & CNG outlets, crematoriums, international airports will also have leeway to accept Rs 500 & Rs 1000 notes till Nov 11;
• Non-cash transactions (cheques, demand draft, card payments) not to be affected;
• ATMs to be closed on Nov 9 & 10;
• All banks closed on Nov 9 for public transactions

HCC became India's 1st company for debt recast under Scheme for Sustainable Structuring of Stressed Assets (S4A)

1. Construction company Hindustan Construction Company (HCC) on 5 November 2016 became India’s first firm to get Reserve Bank of India's (RBI) approval for debt recast under Scheme for Sustainable Structuring of Stressed Assets (S4A) and • These measures will now go for approval from HCC’s shareholders.
2. The RBI-mandated Overseeing Committee (OC) under the S4A approved HCC’s 5107 crore rupees debt recast that was passed by ICICI Bank-led joint lender forum in September 2016. 
3. The S4A scheme was launched by RBI to resolve the corporate debt problem and strengthen the lenders’ ability to deal with stressed assets.
4. Under this scheme, a company’s debt is bifurcated into two parts sustainable and unsustainable based on the cash flows of the company’s project.

GST council approved four tier tax structure

1. The GST council on 3 November 2016 approved four tier tax structure of 5, 12, 18 and 28 percent under the proposed Goods and Services Tax (GST).
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3. There will be two standard tax rates- 12 percent and 18 percent under the GST.
4. Under the tax structure of 5, 12, 18 and 28 percent, the lower rates will be applicable for essential items and the highest for luxury and de-merits goods that will also attract an additional cess.

Main Highlights

• Essential items including food, which presently constitute roughly half of the consumer inflation basket, will be taxed at zero rate.
• The lowest rate of 5 percent will be for common use items while there will be two standard rates of 12 and 18 percent under the Goods and Services Tax (GST) regime.
• Most white goods like washing machines, air conditioners, refrigerators, shampoo, shaving stuff and soap will be taxed at 28 percent (with riders).
• The highest tax slab will be applicable to items which are currently taxed at 30-31 percent (excise duty plus VAT).
• Demerit goods or sin goods such as luxury cars, pan masala, aerated drinks, and tobacco and tobacco products, will invite a tax of 28 percent plus the cess which could vary between 40 percent and 65 percent. 
• There has been no consensus yet on tax rate for gold.
• The collection from this cess as well as that of the clean energy cess will create a revenue pool which will be used for compensating states for any loss of revenue during the first five years of implementation of GST.
• The cess will be lapsable after five years.

RBI allowed banks to issue Masala Bonds

1. RBI on 3 November 2016 allowed the banks to issue rupee denominated bonds or Masala Bonds, in the overseas market to shore up their capital base as well as for financing infrastructure and affordable housing.
2. The RBI had first announced that banks may tap the overseas market with rupee bonds on 25 August 2016.

Bank has to inform CVC for all loan frauds involving funds over one crore rupees

1. Till date, all such reports were shared with the Reserve Bank of India (RBI) only but now Central Vigilance Commission (CVC) in October 2016 has asked the public sector banks to share their reports relating to all loan frauds involving funds over one crore rupees. 
2. Besides, the commission also decided to call regular monthly meetings of senior officials of Reserve Bank of India (RBI), CBI and banks to monitor probe in suspected bank frauds of 50 crore rupees and above.