DAILY GK UPDATE 17TH JULY

1.    RBI hikes short term interest rates to support rupee

i.The Reserve Bank of India hiked short term rates in the first strong measure to support the Indian rupee.

ii. These measures, aimed to curb the rupee's decline by tightening liquidity, came after Governor D Subbarao met Finance Minister P Chidambaram yesterday.

Here's what the central bank has done

i. The RBI has increased banks' cost of borrowing short term money through the Marginal Standing Facility (MSF) rate and Bank Rate each by 200 basis points (2 per cent) to 10.25 per cent.

ii. The measure will make it unattractive for banks to borrow rupee (at cheap rates) and buy dollars (in the forward markets). This will reduce the pressure on the rupee.

iii. The RBI has capped the amount banks can borrow from overnight markets to Rs. 75,000 crore. This is aimed to suck liquidity from the system. This will prevent banks from taking speculative position in forward markets (will support the rupee).

iv. The RBI will conduct Open Market Sales of bonds of Rs. 12,000 crore on Thursday to further suck out liquidity from the system. Bond prices will fall and yields will rise. Higher yields will attract foreign investors in the debt market. 

v. The RBI does not set a target for the rupee, which hit a record low of 61.21 to the dollar last week, but it does take measures to manage volatility.

vi. However, the latest measures will weigh on long term interest rates.

vii. That's because banks may hike deposit rates to attract cheap funds, but the step will lead to higher interest rates driving up home and auto loan rates.

viii. Economist say liberalizing FDI rules will help attract foreign investment into the country, which is badly needed at a time when the rupee is the worst performing currency in Asia.

ix. A weak rupee also poses political challenges for the government, seeking to win a third straight mandate early next year.

RBI CURRENT RATES:

1. Repo  Rate: 7.25%

2. Reverse repo Rate: 6.25%

3. CRR – 4%

4. SLR – 23%

5. Bank Rate – 10.25%

6. MSF (Marginal Standing Rate)– 10.25%

2.    100 percent FDI in Telecom Sector

i. The Union Government of India on 16 July 2013 raised the FDI limit in Telecom Sector from 74 percent to 100 percent. ii. Government also cleared that the FDI in the Insurance and Telecom sectors will be up to 49 per cent through automatic route. 

iii. The Union Government also mentioned that FDI the single brand retail would be up to 49 percent through automatic route and remaining investments would be directed through Foreign Investment Promotion Board (FIPB) route.

iv. FDI in asset reconstruction companies will be up to 49 per cent through automatic route.

v. FDI in Credit Information Companies has been raised to 74 per cent from 49 per cent. 

vi. The Government also confirmed that the FDI in Defence Production will continue to be 26 percent.

vii.  However, it will be directed through FIPB route for state of art technologies, and investment beyond that will go to Cabinet Committee on Security.

3.    RBI opens special liquidity window for mutual funds

i. The Reserve Bank opened a special borrowing window of Rs 25,000 crore to help the crisis-ridden mutual funds tide over liquidity problems.

ii. RBI has decided to conduct a special 3-day repo auction under which banks would be encouraged to raise funds totaling Rs 25,000 crore at 10.25 per cent for on lending to the mutual funds.

iii. The mutual fund industry has been facing consistent equity folio closures in the past few months mainly due to profit booking and various merger schemes in the industry.

iv. The mutual fund industry lost more than 36 lakh investors in 2012-13

v. According to latest SEBI data, mutual funds lost 10 lakh investors, measured in terms of individual accounts or folios, in April-June 2013-14. The total investor accounts with 44 fund houses, fell to around 4.18 crore at the end of June 2013, from 4.28 crore in the last fiscal (2012-13).

vi. "This facility will be made available for a temporary period until further notice," RBI said in a notification.

4.    SC refused to reduce the Age of Juvenile from 18 to 16 Years

i. The Supreme Court of India on 17 July 2013 refused to reduce the age of juvenile from 18 to 16 years and dismissed a plea that minors involved in heinous crimes should not be protected under the law. 

ii. A bench headed by Chief Justice Altamas Kabir ruled that interference in the Juvenile Justice Act is not necessary and dismissed a batch of PILs which were filed in the aftermath of the 16 December 2012 brutal gang-rape and murder case in which a minor was also allegedly involved.

iii. In the wake of the huge hue and cry over the alleged involvement of the minor in the 16 December 2012 case, a batch of PILs was filed in the apex court pleading that the Act should be amended and a minor, involved in heinous crimes, should not be protected under the law.

iv. The plea in the apex court was opposed by various child activists, including former Chairman of the Delhi Commission for Protection of Child Rights Amod Kanth.

NOTE: On 16 December 2012, a 23-year-old girl was brutally gang-raped and assaulted in a moving bus allegedly by six persons, one of whom is a minor and is facing proceedings before a Juvenile Justice Board which is scheduled to pronounce its verdict on 25 July 2013.

5.    Special UN meet to honour Mandela on 95th birthday

i. A special meeting of the UN General Assembly will mark the Nelson Mandela International Day on 18th July

ii. Honouring the ailing South African anti-apartheid leader's contributions to democracy, racial justice and reconciliation.

iii. Speakers at the meeting to be held  on Mandela's 95th birthday are expected to include former US President Bill Clinton, Reverend Jesse Jackson, singer, actor and social activist Harry Belafonte, and Andrew Mlangeni, who was imprisoned with Mandela and remains a close friend.

iv. The General Assembly meeting starting at 10 a.m. on 18th July is part of a series of events to take place in the UN and around the world.

v. "This year's commemoration comes at a sensitive time for President Mandela and his family," said Secretary-General Ban Ki-moon in his message for the day.

NOTE: Every year on 18th July, individuals around the world are encouraged to devote 67 minutes to helping others by volunteering in a hospital, tutoring a child, providing food for the homeless, or any other community service.

6.    ICT awards death sentence to Mujaheed for war crimes

i. The second International Crimes Tribunal today sentenced war crime indicted Ali Mohammed Mujaheed, General Secretary of Jamaat e Islami to death. 

ii. Mujaheed who was a leader of Jamaat's student wing Islammi Chattra Sangha in 1971 was indicted of 7 war crimes including murder, genocide and conspiracy to kill intellectuals during the Bangladesh War for Liberation. 

iii. The tribunal found him guilty of crimes against humanity including murder, genocide and conspiracy to kill intellectuals during the 1971 Liberation War. 

About  Ali Ahsan Mohammed Mojaheed:

i. Ali Ahsan Mohammad Mojaheed is a Bangladeshi politician and presently the Secretary General of Bangladesh Jamaat-e-Islami.

ii. He was accused of helping to form the militant groups Al-Badr (the moon) and the Al-Shams (the sun) and committing crimes against humanity during the Bangladesh Liberation War. 

iii. He is currently held prisoner and standing trial at the International Crimes Tribunal of Bangladesh.

iv. He was Minister of Social Welfare from 2001 to 2007 in the four-party alliance Bangladesh government.

About ICT:

The International Crimes Tribunal (ICT) is a war crimes tribunal in Bangladesh established in 2009 to investigate and prosecute suspects for the genocide committed in 1971 Bangladesh Liberation War by the Pakistan Army and their local collaborators, Razakars, Al-Badr and Al-Shams.

7.    HAUSLA Scheme launch for Family Health Campaign in U.P

i. The Chief Minister of Uttar Pradesh, Akhilesh Yadav,  launched a state-wide campaign to improve family health across 75 districts of the state.

ii. HAUSLA (meaning “spirit” or “determination”), the campaign’s twin goals include galvanizing state health systems to deliver high-quality, accessiblehealth programs and services, while also increasing awareness and utilization of services by families and communities across the state’s 75 districts.

iii. To achieve its goal, HAUSLA will strengthen health systems and the supply of programs and services, while also increasing awareness and utilization of these programs by families.

iv. The government has already set in motion a comprehensive set of healthprogrammes and services based on the “Reproductive, Maternal, Child Healthand Adolescents+” (RMNCHA+) framework which was formally adopted by the Government of India early this year.

v. The HAUSLA campaign theme song, “Mujhse Bada Mera Hausla”, is sung by popular Bollywood singer Shaan.