RBI CONCEPT:WHAT IS A SHELL COMPANY?

Oracle IAS, the best coaching institute for RBI grade B/NABARD/SEBI in Dehradun (Uttarakhand), brings to you views on important issues.

  • Shell Company is a corporate entity without active business operations or significant assets. They are often created to avoid taxes and many big companies create shell corporations to avoid taxes without attracting legal actions.
  • It can’t be asserted that shell corporations are illegal. They are deliberate financial arrangements to avoid taxes.  But many shell companies park black money, carryout illegal transactions and sometimes act as facilitators of money laundering.  Continue reading “RBI CONCEPT:WHAT IS A SHELL COMPANY?”

RBI CONCEPT:SHADOW BANKING#56

Oracle IAS, the best coaching institute for RBI grade B/NABARD/SEBI in Dehradun (Uttarakhand), brings to you views on important issues.

What is shadow banking?

  • Shadow banking is that part of the financial system where ‘credit intermediation involving entities and activities remains outside the regular banking system’.
  • The term “shadow bank” was coined by economist Paul McCulley in 2007.  After the financial crisis, central banks including the US, UK and EU have introduced many strong measures to control shadow banking. A global institution called Financial Stability Board is coordinating and designing these measures at the request of the G20.

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RBI CONCEPT:WHAT IS LIQUIDITY ADJUSTMENT FACILITY; HOW IT WORKS?#55

Oracle IAS, the best coaching institute for RBI grade B/NABARD/SEBI in Dehradun (Uttarakhand), brings to you views on important issues.

What is Liquidity Adjustment Facility?

  • Liquidity Adjustment Facility is the mechanism by the RBI for managing the liquidity needs of the commercial banking system. The LAF is an important instrument of monetary policy.

Components of LAF

RBI CONCEPT:WHAT IS CAPITAL ACCOUNT CONVERTIBILITY?#54

Oracle IAS, the best coaching institute for RBI grade B/NABARD/SEBI in Dehradun (Uttarakhand), brings to you views on important issues.

  • Current account convertibility means freedom to convert domestic currency into foreign currency and vice versa to execute trade in goods and invisibles.
  • On the other hand, capital account convertibility implies freedom of currency conversion related to capital inflows and outflows.
  • Compared to current account convertibility, capital account convertibility is a complex issue because of the peculiar feature of capital account transactions.

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RBI CONCEPT:DIRECT INCOME SUPPORT SCHEME (PM-KISAN)#53

Oracle IAS, the best coaching institute for RBI grade B/NABARD/SEBI in Dehradun (Uttarakhand), brings to you views on important issues.

  • In agriculture, there are two major types of government support measures. The first one is price support measure and the second one income support measures.
  • Price support means the government is procuring the agricultural produce from farmers at a remunerative price. India’s Minimum Support Price based procurement is a classic example.

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RBI CONCEPT: CESS vs SURCHARGE

Oracle IAS, the best coaching institute for RBI grade B/NABARD/SEBI in Dehradun (Uttarakhand), brings to you views on important issues.
  • A cess imposed by the central government is a tax on tax, levied by the government for a specific purpose. Generally, cess is expected to be levied till the time the government gets enough money for that purpose.
  • For example, a cess for financing primary education – the education cess (which is imposed on all central government taxes) is to be spent only for financing primary education (SSA) and not for any other purposes.

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RBI CONCEPT:INFRASTRUCTURE DEBT FUND#51

Oracle IAS, the best coaching institute for RBI grade B/NABARD/SEBI in Dehradun (Uttarakhand), brings to you views on important issues.

What is Infrastructure Debt Fund?

  • IDFs are investment vehicles for channelizing investment into the infrastructure sector. They are sponsored by commercial banks and NBFCs in India in which domestic/offshore institutional investors, specially insurance and pension funds can invest through units and bonds issued by the IDFs.
  • According to the RBI, “IDFs would essentially act as vehicles for refinancing existing debt of infrastructure companies, thereby creating fresh headroom for banks to lend to fresh infrastructure projects.”

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RBI CONCEPT:SMALL SAVINGS SCHEMES#50

Oracle IAS, the best coaching institute for RBI grade B/NABARD/SEBI in Dehradun (Uttarakhand), brings to you views on important issues.

What are Small Savings Schemes (SSSs)?

  • An important component of India’s financial savings scenario is the large-scale participation of general public through various small saving schemes initiated by the central government.
  • In this context, the Small Saving Schemes (SSSs) are important source of household savings in India. Different small saving schemes have mobilized money from households and channelized it to government so that the centre and states can finance a part of their expenditure.

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RBI CONCEPT:DATED GOVERNMENT SECURITIES#49

Oracle IAS, the best coaching institute for RBI grade B/NABARD/SEBI in Dehradun (Uttarakhand), brings to you views on important issues.

What are Dated Government Securities?

  • Dated Government securities are long term securities or bonds of the government that carries a fixed or floating coupon (interest rate).
  • Securities are issued by the government (centre or state) for mobilizing funds. Mostly financing the fiscal deficit is the most important purpose for issuing the dated securities.
  • The remuneration for buying the dated securities is the interest payment which are called coupon. The interest payment is fixed and is a percentage of the face value of the security. Interest is paid at regular intervals (usually half-yearly). The tenor of dated securities can be up to 30 years. But the most common tenure is five year and ten year.

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RBI CONCEPT:ROBOT TAX#48

Oracle IAS, the best coaching institute for RBI grade B/NABARD/SEBI in Dehradun (Uttarakhand), brings to you views on important issues.

What is Robot tax?

  • The current automation wave driven by advanced robotics, artificial intelligence etc., are going to replace human labour dramatically. Already, several studies including that of the World Bank predict that robotics and machine learning will replace around 30 to 60 per cent of the jobs done by the humans. Continue reading “RBI CONCEPT:ROBOT TAX#48”