IDFC Bank to be named as IDFC First Bank  

IDFC Bank to be named as IDFC First Bank   IDFC Bank soon is renamed as IDFC First bank as it has been merging with NBFC Capital First.  The merger is at the advanced stage after getting approvals from the Competition Commission of India, RBI, Stock exchanges, creditors, stockholders and all the parties involved. After merging with Warburg Pincus-backed Capital First, IDFC bank would create a combined entity of Rs. 88,000 crore. The share swap ratio for the merger is fixed at 139:10, meaning IDFC Bank will issue 139 shares for every 10 shares of Capital First. IDFC had applied for a banking license in 2013 and got in-principle approval for the same from the RBI in the following year.

IMF predicts India to grow at 7.3% in 2018, 7.4% in 2019

IMF predicts India to grow at 7.3% in 2018, 7.4% in 2019 The International Monetary Fund forecasted a growth rate of 7.3% in the year 2018 and that of 7.4% in 2019 on the lines of increasing oil prices and tightening of global financial conditions. The international organization said that India's growth has rebounded from "transitory shocks" such as the demonetization of high-value currency notes and the introduction of the Goods and Services Tax. The IMF called for reforms in labor and land markets in the country, as well as improving the business climate. It also suggested that Government intervention in the foreign exchange market should be limited to addressing disorderly market conditions. Inflation is expected to rise because of the narrow gap in output and effects of exchange rate depreciation.

Government launches a sovereign gold bond scheme

Government launches a sovereign gold bond scheme The Government launched the Sovereign Gold Bond Scheme as an effort to reduce gold imports and to decrease the current account deficit of India which had widened to a four-quarter-high at 2,4% of GDP in April-June period because of the increasing crude oil prices. It will provide a superior alternative to holding gold in physical form by eliminating the risks and costs of storage. The scheme will offer 2.5% interest rate and redemption will be exempted from capital gains tax. Sovereign gold bonds will have a tenure of eight years with an exit option in the fifth, sixth and seventh year. They will be sold through various banks, Stock Holding Corporation of India Ltd, designated post offices and recognized stock exchanges as stated by the Finance Ministry.

Climate financing

Perhaps one of the most serious challenge that the global community as a whole faces today is that of the climate change. The average global temperature ride is on a steady path to cross the 2 deg. Celsius mark as compared to the pre industrial levels. To stop this from actually precipitating, the concept of climate financing becomes very important. Climate financing hence refers to financial aid for mitigation and adaptation activities to enable shift towards a low carbon and climate resilient growth. The main initiator in this regard has United Nations framework convention for climate change (UNFCCC). Under its aegis, global community has come forward to help each other out. Various climate funds have been launched at the behest of UNFCCC like Green Climate fund, special climate change fund, etc. The basic principle behind climate financing that UNFCCC proposes is that of historical responsibility that means the developed countries like the US, EU block, etc. which are substantially responsible for the present global warming are also financially liable to fund the path back to normalcy. This principle, however has been the most controversial as it has not gone down well the developed block. The commitments for financing were also reiterated during the COP 21 meet at Paris in December 2015. However, withdrawal of USA from this accord came as an absolute shocker to the global community. With the richest nation out of this financial ambit, doubts regarding the success of COP 21 have become strong. Apart from countries helping out each other, there are other mechanisms for climate financing. Carbon trading is one of the most popular of such mechanisms. Promoted by the obligations under Kyoto protocol, carbon trading has only grown in terms of reach. Polluting industries are made liable to buy carbon credits in order to offset the environmental deterioration on their part. The business community has also actively come forward with initiatives at their behest e.g. the Carbon pricing leadership coalition to expand the use of effective carbon pricing policies. The most recent addition in this area has been that of Green bonds. These are the bonds that are specifically issued to fund green projects. These are tax exempt and repayment is tied to the issuer, not the success of the projects.” This means the risk of the project not performing stays with the issuer rather than investor. Time line for green bonds in India: ·         In 2015, EXIM  bank launched India’s  first dollar denominated  green bond of $500 million. ·         In January  2016, SEBI also  released first Green  Bond guidelines relating  to listings, norms for raising money etc. ·         NTPC raised Rs. 2000 crores through issuance of green masala bonds in overseas markets. However, some challenges with regards to green bonds in India are- ·         Most green  bonds in India  have a shorter tenor  period of about 10 years ·         lack of viable and bankable projects owing to pricing issues ·         Standalone green projects such as rooftop solar still are unattractive to investors due to the small scale