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Economy/Business

India-Bangladesh Inked Pact for Enhanced Trade Faci litation and Combating Tax Evasion

India and Bangladesh inked an agreement for enhanced trade facilitation and for combating evasion of duties

and taxes. The agreement was signed during the India-Bangladesh Joint Group of Customs meet in Dhaka.

The agreement was signed by India's Revenue Secretary, Sumit Bose and Md. Ghulam Hussain, Chairman of

the Bangladesh National Board of Revenue.

This was the ninth meeting under the Secretary-level Joint Group of Customs. The next meeting will take

place in New Delhi in 2014.

About the Agreement

• Under the agreement, India and Bangladesh identified 16 Land Customs Stations of high bilateral trade for

synchronisation of working hours and days, and extension of Car Pass System thereby allowing movement of

trucks for unloading up to the point of Land Custom Station.

• India-Bangladesh also agreed to allow custom officials of both countries to cross the borders to each other's

land Custom Stations for coordination and resolving operational issues.

• Both countries also agreed to keep the Land Customs Stations at Petrapole, Benapole, Agartala and

Akhaura operational for 7 days a week from 1st January, 2014.

• They also agreed to improve institutional linkages between their customs administrations at operational and

policy levels to facilitate trade and protect revenues.

Union Finance Ministry Announced to Infuse Rs. 1400 0 Crore Equity in Banks

The Finance Ministry announced that it would infuse Rs. 14,000 crore capital in 20 public sector banks during

the current financial year (2013-14). The government had infused Rs. 12,517 crore in 13 public sector banks

in the financial year that ended in March 2013. Beyond the capital support from the government, public sector

banks have the headroom to raise Rs. 10,000 crore from the market though rights issue, qualified institutional

placement (QIP) or follow-on public offer (FPO) without diluting the existing government stake.

The largest lender of the country State Bank of India will get Rs. 2000 crore equity capital from the

government. The Central Bank of India and IDBI Bank will get Rs. 1800 crore each. The government will

provide Rs. 1200 crore equity capital to Indian Overseas Bank, and Bank of India will get Rs. 1000 crore.

Punjab National Bank and Union Bank of India will get Rs. 500 crore each. United Bank of India will get Rs.

700 crore, Vijaya Bank Rs. 250 crore and Syndicate and UCO Bank will get Rs. 200 crore each. Other lenders

who will benefit from the government's equity infusion programme include Allahabad Bank (Rs. 400 crore),

Andhra Bank Rs. 200 crore, Bank of Baroda (Rs. 550 crore), Bank of Maharashtra (Rs. 800 crore), Canara

Bank (Rs. 500 crore), Corporation Bank (Rs. 450 crore) and Dena Bank (Rs. 700 crore). The capital infusion

had been done with the twin objective of adequately meeting the credit requirement of the productive sectors

as well as to maintain regulatory capital adequacy ratios in public sector banks (PSBs). The government of

India, as the majority shareholder, is committed to keep all PSBs adequately capitalised.

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Government Approved Singapore Airlines' Aviation Ve nture with Tata Sons

FIPB approved Singapore Airlines’ proposal to start an aviation venture with Tata Sons. The joint venture

called TATA SIA will have initial foreign investment of 49 million US dollars. In the new venture, Tata SIA

Airlines Ltd, Tata Sons will be holding 51 percent stake while Singapore Airlines (SIA) will have 49 percent.

The Corporate Affairs Ministry has already approved the venture. Tata SIA carrier can now launch operations

as a full service air carrier in India. The new venture is likely to take off in 2014. The FIPB is headed by

Economic Affairs Secretary Arvind Mayaram. FIPB is an inter-ministerial panel which approves Foreign Direct

Investment (FDI) across sectors. The Foreign Investment Promotion Board (FIPB) is a national agency of the

Government of India.

Axis Bank Rolled out Paperless Banking Facility to Aadhaar Card Holders

Axis Bank Ltd. launched the e-KYC initiative to facilitate paperless banking to Aadhaar Card holders at

Mumbai. With this step, Axis Bank became the first bank to allow customers to open an account with just their

Aadhaar number. The Reserve Bank of India (RBI) allowed paperless electronic authentication or electronic

know-your-customer (e-KYC), provided by the Unique Identification Authority of India (UIDAI) as officially

valid. Axis Bank has partnered with Visa to launch first ‘eKYC’ facility in the country.

The same process will soon be offered to sell insurance, mutual funds and other financial products as well for

mobile phone connections, transferring money or even to pay taxi fare.

Initially, this facility will be available in 1000 branches of Axis Bank and in a week to 10 days, it will become

functional in more than 2000 Axis Bank branches across the country.

Reserve Bank of India Increased the Repo Rate by 25 Basis Points to 7.75 % from 7.50%

The Reserve Bank of India (RBI) released the Second Quarter Review of Monetary Policy 2013-14. According

to a statement released by the RBI, the Repo rate is increased by 25 basis points from 7.5 percent to 7.75

percent.

The highlights of the Second Quarter Review of Mone tary Policy 2013-14

• RBI reduced the marginal standing facility (MSF) rate by 25 basis points from 9.0 percent to 8.75 percent

with immediate effect.

• RBI also increased the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points from

7.5 percent to 7.75 percent with immediate effect.

• The liquidity provided through term repos of 7-day and 14-day tenor has been increased from 0.25 percent

of net demand and time liabilities (NDTL) of the banking system to 0.5 percent with immediate effect.

• Cash Reserve Ratio (CRR) unchanged at 4 percent

• Repo rate hiked due to upturn of inflation and other factors.

• Food price pressures may ease with the arrival of summer crop harvest and seasonal moderation.

• RBI downward FY14 GDP growth to 5 percent from 5.7 percent.

• Both WPI (wholesale price index) and CPI (consumer price index) inflation may stay range-bound around the

current levels that remain above comfort levels.

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RBI Allowed Banks to Revise Periodicity of Interest Payments

The Reserve Bank of India allowed the commercial banks to revise the periodicity of interest payments and

thus enabling savings bank account and term deposit holders to earn interest at shorter intervals.

The Second Quarter Review of Monetary Policy 2013-14 released by the RBI Governor, Raghuram Rajan

revealed that as all commercial banks are now on core banking platforms, it has been decided to give banks

the option to pay interest on savings deposits and term deposits at intervals shorter than quarterly intervals.

Presently, banks are required to pay interest on savings and term deposits at quarterly or longer intervals.

The savings deposit rate for most banks is 4 percent per annum, while in some cases, it is as high as 7

percent. The interest rate on savings bank accounts is calculated on a daily basis. Term deposit rates are 8-9

percent for tenures of one year and above.

The Reserve Bank of India gave freedom to commercial banks to fix savings bank deposit rates in 2011.

While giving banks this freedom, the RBI kept one condition that a uniform rate will have to be offered on

deposits of up to Rs. 1 lakh, on higher amounts banks are allowed to offer differential rates to depositors.

CCEA Approved the Launch of the IPDS for Textiles I ndustry

The Cabinet Committee on Economic Affairs approved the launch of the new Integrated Processing

Development Scheme (IPDS) during the 12th five-year plan with an investment of Rs. 500 crore. The IPDS

was approved for establishment of four to six brownfield projects and three to five greenfield projects that

address the environmental issues faced by the Textile Processing Units.

The projects are eligible under the scheme that cov ers the following:

• Common Effluent Treatment Plant (CETP)

• Captive power generation on technology preferably renewable/green technology

• Infrastructure such as storm water management, necessary roads and pipelines for water and wastewater

• Facility for testing and R&D centers

The scheme would make possible for the textiles industry to become globally competitive by using the

processing standards and technology, which are environment friendly and by creating new processing parks.

It will also help in upgradation of the processing clusters/centres in existence, specifically in the areas of water

and waste water management. The scheme will also encourage the research and development work in the

textiles processing sector.

General Awareness

Bhubaneswar and Imphal Airports were Declared as In ternational Airports

The Union Cabinet of India gave its approval for declaring the Bhubaneswar and Imphal airports as

international airports to fulfill the long pending demand of people as well as the State Governments of Odisha

and Manipur. Declaration of these airports as international airports will offer improved connectivity, wider

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choice of services at competitive cost to air travellers resulting in boosting of international tourism and

economic development of the region and the country.

Bhubaneswar Airport:

Biju Patnaik Airport or Bhubaneswar Airport belongs to Airport Authority of India and is suitable for operation

of Code `D` aircraft of type B-767-400. The airport is also equipped with facilities for night operations, runway

14/32 of dimensions 2743 m X 45 m, apron to park six aircrafts and navigational aids. A new domestic

terminal building with all modern amenities for handling 400 arriving and 400 departing passengers has been

constructed and inaugurated in March 2013. The modification/renovation of the existing domestic terminal

building into an international terminal building with an area of 6264 sq. m suitable for handling international

operations has been completed.

Imphal Airport:

Imphal Airport belongs to Airports Authority of India and is suitable for `C` type (A-320/321) of aircrafts

operations in all weather conditions. Major facilities including night operations, runway of dimensions 2746 m

X 45 m, apron to park 3 A-320 and 1 ATR-72 at a time, terminal building has an area of 6592 sq. m modified

into integrated terminal building, navigational aids, nineteen check-in counters, custom counters, immigration

and sufficient space for health services, and animal and plant quarantine are being provided at the airport.

India and Peru Signed MoUs to Strengthen Bilateral Cooperation

India and Peru signed 4 documents/MoUs during the official visit of the Vice President of India, Mohammad

Hamid Ansari to Peru. The Vice President of India visited Peru to celebrate the 50th year of establishment of

diplomatic ties between the two countries.

The Vice President of India held detailed discussions with the President of the Republic of Peru, Ollanta

Humala Tasso and the first Vice President of Peru, Marisol Espinoza and the Minister of Foreign Affairs of

Peru, Ms. Eda Rivas Franchini.

India and Peru signed documents in the field of education, defence cooperation, in the fields of Museum

Development, Conservation of Movable Cultural Property and Dissemination and Promotion of Cultural

Heritage.

Government of India Decided to Appoint Arup Raha as Chief of the Indian Air Force

The Government of India decided to appoint Air Marshal Arup Raha as the next Chief of the Air Staff.

He will take the charge after the retirement of present Chief of Air Staff, NAK Browne in December 2013. Air

Marshal Arup Raha is presently the Vice Chief of Air Staff.

About Air Marshal Arup Raha

• Arup Raha was commissioned into the IAF on 14 December, 1974 in the Fighter Stream of the Flying

Branch. During a career spanning over nearly 39 years, he held various command, staff and instructional

appointments.

• He has served as Air Attache at the Embassy of India, Ukraine. Besides various technical courses, Air

Marshal Raha has done National Defence College, Staff College, Strategic Nuclear Orientation Course and

Junior Commanders’ Course.

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• He has commanded Central Air Command and Western Air Command. He is one of the Honorary ADCs to

the Supreme Commander.

P.S. Raghavan Appointed as the Next Russian Ambassa dor

P.S. Raghavan was appointed as the next Ambassador of India to Russia. At present, Raghavan, the IFS of

1979 batch, is serving as the current Secretary in the Ministry of External Affairs (MEA). He will succeed Ajai

Malhotra, who will retire in November, 2013.

Raghavan is expected to join the assignment shortly.

Turkey Opened World’s First Underwater Rail Link be tween Two Continents

Turkey opened world’s first underwater rail link that connects Asia and Europe. The length of the rail link is 13

kilometres and is about 60 metres below the Bosphorus Strait. Named Marmaray tunnel is the first world’s

subway to connect two continents. The Tunnel is engineered to withstand the earthquakes.

The railway tunnel beneath the Bosporus Strait has been opened in Turkey and has created the link between

the Asian with European shores of Istanbul.

The rail link was inaugurated on the 90th anniversary of the Republic of Turkey. This project of development of

the undersea rail link was visualised in 1860 by an Ottoman Sultan. The work on the tunnel started in the year

2004, but the construction was delayed because of archeological excavation. Marmaray will carry the subway

commuters in the biggest city of Europe and eventually serve high-speed and freight trains.

The tunnel project of 2.8 billion dollars was financed by the Japan Bank for International Cooperation.

India and China Signed 9 MoUs Including the Border Defence Cooperation Agreement

India and China signed 9 MoUs/agreements including the Border Defence Cooperation Agreement (BDCA) to

maintain peace and tranquility on the Line of Actual Control, during the official visit of Indian Prime Minister

Manmohan Singh to China.

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List of Agreements/MoUs signed between India and Ch ina during PM’s Official Visit to China

S. No. Name of Agreement / MoU Gist of Agreement / MoU

1. Agreement on Border Defence

Cooperation

An additional confidence building measure to ensure peace and

tranquility on the border.

2. MoU on Nalanda University Cooperation on Nalanda as part of East Asia Summit process.

3.

MoU to Strengthen Cooperation

on Trans-Border Rivers

Provides for expanded cooperation on trans-border rivers.

4. Cultural Exchange Programme

2013-15 A listing of cultural exchanges till 2015.

5.

MoU on Cooperation in Road

Transport and Highways

Enabling agreement for cooperation in the roads sector.

6.

MoU on Power Equipment

Service Centres in India

Provides for establishment of Chinese power equipment service

centres in India.

7.

Agreement between Delhi-Beijing

on Establishment of Sister City

Relationship

Establishes sister city relations between Delhi and Beijing.

8.

Agreement between Bengaluru –

Chengdu on Establishment of

Sister City Relationship

Establishes sister city relations between Bengaluru and Chengdu.

9.

Agreement between Kolkata –

Kunming on Establishment of

Sister City Relationship

Establishes sister city relations between Kolkata and Kunming.

Extradition Treaty Between India and Bangladesh Cam e into Effect

The extradition treaty between India and Bangladesh came into effect with the handing over of the

instruments of ratification. The treaty came into effect after Bangladesh Home Secretary C.Q.K. Mostaq

Ahmad and Indian High Commissioner Pankaj Saran signed the documents in Dhaka. The treaty was signed

between two nations in January 2013. With this treaty in place, India will now be able to extradite ULFA leader

Anup Chetia from Bangladesh. Under the treaty, the two countries will be able to exchange convicts and

undertrials as required. The treaty provides for extradition of convicts sentenced to more than one year of

imprisonment, but is not applicable to political prisoners and asylum seekers. Both countries can cancel the

treaty at six months notice. The treaty will allow India to extradite ULFA leader Anup Chetia, while it will allow

Bangladesh to take back fugitive criminals from India and put them to trial.