RBI CONCEPT:NEW CLASSIFICATION OF MSMES #30

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

What is the new Classification of MSME?

How MSMEs are classified?

The government has given a new turnover based classification of MSMEs in February 2018. As per this new classification, the MSMEs are categorized in term of business turnover. This is in place of the previous classification based on investment made in plant and machineries if they are operating in the manufacturing sector and investment in equipment for service sector companies. As per the new classification, the same turnover based criteria have been applied for all type of MSMEs including those operating in the services sector.

Though the primary responsibility of promotion and development of MSMEs is of the State Governments, the center has passed an Act in 2006 to empower the sector and also has formed a Ministry (Ministry of MSMEs).  It was the Micro, Small and Medium Enterprises Development (MSMED) Act which was notified in 2006 that defined the three tier of micro, small and medium enterprises and set investment limits. The new turnover criteria will better suit with the GST Network (GSTN) and other formats of segregating the MSMEs.

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RBI CONCEPT: GOVERNMENT VS RBI CONFLICT ON CAPITAL RESERVES TRANSFER#29

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

What is the capital reserve with the RBI now?

  • The RBI maintains various types of reserves in the form of capital to cover various risks including market risk, operational risk, credit risk and contingency risk. All these risks may arise as the RBI has to interact with banks and government by providing financial support to them.  For the financial year ending June 2018, the RBI has a reserve of Rs 9.59 lakh crore. This reserve is comprised of mainly currency and gold revaluation account (Rs 6.91 lakh crore) and the contingency fund (Rs 2.32 lakh crore).
  • The foreign exchange reserve and the minimum reserves are not part of this capital reserves.

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RBI Gr-B News – Banks recapitalization plan #3

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

==> Context

• The Centre has sought Parliament’s approval to infuse an additional ₹41,000 crore into public sector banks that are starved of precious capital to remain afloat.

• Along with another ₹42,000 crore that is already budgeted for infusion, this tranche will take the total planned funds infusion into banks this year to ₹83,000 crore.

Mission Indradhanush is a scheme of GOI for revamping the banking sector. Continue reading “RBI Gr-B News – Banks recapitalization plan #3”

RBI CONCEPTS:The Monetary Policy Committee #9(PART-3)

  • Oracle IAS, the best coaching institute for RBI grade B/NABARD/SEBI in Dehradun (Uttarakhand), brings to you views on important issues.
What is Monetary Policy Committee?
  • It is the committee which will decide India’s Monetary Policy.
  • The formation of the monetary policy committee was mooted by the Urjit Patel committee(2016). The current mandate of the committee is to maintain 4% annual inflation until March 31, 2021, with an upper tolerance of 6% and a lower tolerance of 2%.
  • The committee suggested that monetary policy be rule-based and not discretion-based. The final decision on monetary policy should not lie with the RBI governor alone but on a group of people.

 

  • Composition of MPC
    MPC will be a 6 member committee:
    • 3 members will be from RBI. These 3 members would include the governor who will also be the ex-officio chairperson of the committee.
    • 3 members will be appointed by the central govt. These members should be experts in the field of finance or banking or economics or monetary policy. They will have a tenure of 4 years and will not be eligible for reappointment.

    Contact us for:-

    RBI GradeB/NABARD/SEBI coaching in Dehradun (Uttarakhand), Current Affairs classes in Dehradun (Uttarakhand), For best guidance and study material call 7088873675, 9997453844

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RBI CONCEPTS:The Monetary Policy Framework #8 (part 2)

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

The Monetary Policy Framework Continue reading “RBI CONCEPTS:The Monetary Policy Framework #8 (part 2)”

RBI CONCEPTS: MONETARY POLICY #7(Part-1)

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

What is monetary policy?

Monetary policy refers to the use of monetary instruments under the control of the central bank to regulate magnitudes such as interest rates, money supply and availability of credit with a view to achieving the ultimate objective of economic policy. Continue reading “RBI CONCEPTS: MONETARY POLICY #7(Part-1)”

RBI Gr-B News – Role of RBI Governor #2

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

==> Context

• The Reserve Bank of India governor’s unexpected resignation has created concern among the media, academicians and investors about the continuity of policy.

• Lack of appropriate transition has been covered, to some extent, by the quick appointment of the new governor. Continue reading “RBI Gr-B News – Role of RBI Governor #2”

RBI Concepts: Role and Functions of EXIM Bank and ECGC #9

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

Role and Functions of EXIM Bank(Export–Import Bank ):-
1) Line of Credit:
Line of credit refers to the credit required by the importers and exporters to carry on with their regular business. EXIM bank provides various types of pre-shipment and post-shipment finance especially to exporters to ensure that they are able to fulfil their export orders as planned. Continue reading “RBI Concepts: Role and Functions of EXIM Bank and ECGC #9”

RBI Concepts: Types of Bank Deposits and Advances for NRIs/NRIs/PIOs/OCBs #8

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

1) Ordinary Non-Resident Rupee Accounts (NRO Accounts):
These are Rupee denominated non-repatriable accounts and can be in the form of savings, current recurring or fixed deposits. These accounts can be opened jointly with residents in India. When an Indian National / PIO resident in India leaves for taking up employment, etc. outside the country, his bank account in India gets designated as NRO account. Continue reading “RBI Concepts: Types of Bank Deposits and Advances for NRIs/NRIs/PIOs/OCBs #8”

RBI CONCEPTS: Role of commercial banks #7

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

1) Credit Creation:
Commercial banks have to ensure that enough credit is available for people to borrow from the bank to carry out their daily business activities. Wherever a shortage of credit is observed, the commercial banks are expected to provide additional funds and make sure that the shortage gap is filled. Continue reading “RBI CONCEPTS: Role of commercial banks #7”