Welcome to Daily Banking Digest, your premier source for the latest news and insights on April 06, 2024, focusing on banking, the economy, and finance. Our platform offers a comprehensive overview of the day’s most critical financial stories, market trends, and economic developments. Whether you’re a professional in the financial sector, an investor monitoring market movement, or someone interested in staying informed about the economic landscape, Daily Banking Digest provides reliable, up-to-date information.

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UPI Payments via Third-Party Apps to be Enabled by RBI for PPI Wallets

The Reserve Bank of India (RBI) proposes to allow linking of Prepaid Payment Instruments (PPIs) to third-party UPI applications, enabling PPI wallet holders to make UPI payments more conveniently. This move aims to enhance customer convenience, boost digital payment adoption, and facilitate seamless integration of PPIs with UPI-enabled services.

Key Points:

1. Enhanced Customer Convenience: – PPI wallet holders can now make UPI payments through any third-party UPI application, not just the one provided by their PPI issuer.

2. Boosting Digital Payment Adoption: – The initiative encourages the use of digital payments for small value transactions, especially in non-urban and rural areas where UPI facilities may be limited.

3. Seamless Integration with UPI Services: – PPI users can seamlessly integrate their accounts with a wide range of UPI-enabled services, mirroring the convenience of bank account holders.

4. Simplified Payment Process: – The linkage of PPIs to third-party UPI applications simplifies the payment process for PPI users.

5. Increased Digital Payment Opportunities: – The initiative opens up a plethora of digital payment opportunities, particularly for small businesses.

6. Choice of Payment Source: – Customers can now choose to park funds in their PPI for payments, reducing the need for frequent debits from bank savings accounts.

7. Ease of Small Transactions: – The linkage of PPIs to third-party UPI applications makes it easier to make smaller transactions, boosting the overall volume of transactions.

RBI Monetary Policy Committee (MPC) Maintains Repo Rate at 6.50% in Inaugural Meeting of Fiscal Year 2025

The Reserve Bank of India (RBI) has maintained its policy repo rate at 6.50% in its first meeting of FY25,  citing persistent inflation above its 4% target. The MPC voted 5-1 to retain the “withdrawal of accommodation” stance.

Key Points:

Policy Repo Rate: – Maintained at 6.50%

Inflation: – Remains above RBI’s 4% target

MPC Decision: – 5-1 majority vote to keep repo rate unchanged – 5-1 majority vote to continue “withdrawal of accommodation” stance

Market Expectations: – Rate cuts anticipated in the second half of FY25 as inflation approaches the target

RBI Allows Foreign Investors in IFSC to Invest in Sovereign Green Bonds

The Reserve Bank of India (RBI) has expanded investment opportunities for foreign investors in the International Financial Services Centre (IFSC) by allowing them to invest in Sovereign Green Bonds (SgrBs). This move aims to attract non-resident participation in SgrBs and support India’s efforts to reduce carbon intensity.

Key Points:

1. Eligibility for Foreign Investors: – Eligible foreign investors in the IFSC can now invest in SgrBs.

2. Existing Investment Routes: – Foreign portfolio investors (FPIs) registered with SEBI can already invest in SgrBs under existing FPI investment routes for government securities.

3. New Scheme for IFSC: – A separate scheme for investment and trading in SgrBs by eligible foreign investors in the IFSC will be notified in consultation with the Government and the IFSC Authority.

4. Issuance of SgrBs: – The Government of India (GoI) issued SgrBs in January 2023 and FY24 as part of its borrowing calendar.

5. Purpose of SgrBs: – SgrBs aim to raise funds for public sector projects that reduce carbon intensity and promote a greener economy.

RBI Launches App to Enhance Retail Participation in Government Securities Market

The Reserve Bank of India (RBI) is developing a mobile application for its Retail Direct portal to enhance accessibility for retail investors in the government securities market. The app will allow investors to conveniently buy and sell government securities on the go.

Key Points:

Mobile Application for Retail Direct Portal: – The app will enable investors to buy and sell government securities (G-Secs, SDLs, T-Bills, and SGBs) at their convenience. – It will be available for use shortly.

Retail Direct Scheme: – Launched in November 2021, the scheme allows individual investors to open gilt accounts with RBI and invest in G-Secs. – Investors can participate in primary auctions and buy/sell securities through the NDS-OM platform.

Performance as of April 1, 2024: – 1,33,758 registrations and 1,19,669 accounts opened under the scheme. – Total primary market subscriptions: ₹4,222.98 crore. – Total traded volumes: ₹643.44 crore. – Total holdings: ₹2,023.29 crore.

Tamil Nadu Government Expands Automotive Industry with New Auto Cluster and EV Centers in Thoothukudi

Key Points:

New Auto Cluster in Thoothukudi – Tamil Nadu government plans to develop a new auto cluster in Thoothukudi to support VinFast’s EV manufacturing project and future auto investments.

VinFast EV Manufacturing Unit – Vietnam-based VinFast is establishing an EV manufacturing unit in Thoothukudi with an investment of ₹4000 crore and an annual capacity of 150,000 units.

Common Facilities for EV Battery and Vehicle Testing – The state plans to set up two common facilities for EV battery and vehicle testing.

EV Taskforce – The state’s EV Taskforce is focusing on building an ecosystem for motors, batteries, and power electronics.

Recycling Centers – The state is in discussions with companies to establish recycling centers for EV batteries.

Focus on EV Sector – Tamil Nadu is actively developing a strategy to cater to the increasing electricity demand from the mobility sector and the state’s overall development.

‘ICE to EV’ Transition – A report by iFOREST highlights the impact of the ICE to EV transition on auto component manufacturers in the Hosur cluster, with MSMEs being particularly vulnerable.

RBI to Authorize Non-Bank Entities to Provide Digital Rupee Wallets

The Reserve Bank of India (RBI) plans to allow non-bank payment system operators to offer Central Bank Digital Currency (CBDC) wallets, expanding access to CBDC-R (Retail) for a wider user base. This move aims to enhance user convenience, test the platform’s resilience, and solidify CBDC’s position in the digital economy.

Key Points:

1. Non-Bank PSOs to Offer CBDC Wallets: – RBI proposes allowing non-bank payment system operators to offer CBDC wallets. – This will increase accessibility and provide users with more choices.

2. Enhanced User Experience: – Non-bank PSOs can offer user-friendly interfaces and features, improving the overall user experience. – Faster transactions and increased flexibility will enhance the appeal of CBDC.

3. Testing Platform Resiliency: – Allowing multiple channels for CBDC transactions will test the platform’s ability to handle high volumes and diverse use cases.

4. CBDC Pilot Progress: – CBDC pilots in both Retail and Wholesale segments are ongoing with increasing use cases and participating banks. – Currently, only banks are authorized to issue CBDC wallets under the pilot.

5. RBI’s Cautious Approach: – RBI emphasizes safety, integrity, and efficiency before implementing CBDC on a full scale. – Pilots are being introduced in phases to ensure a smooth transition.

6. Growing CBDC Usage: – CBDC-R has gained traction with 40 lakh users and 4 lakh merchants. – Transaction volumes have increased, with a shift towards P2M payments.

7. Scalability and Accessibility: – RBI is addressing scalability issues to handle increased transaction volumes. – Expanding access to non-bank PSOs will make CBDC more accessible to diverse user groups.

8. Programmability and Offline Functionality: – RBI is exploring programmability and offline functionality for CBDC. – A pilot for programmable CBDC transfers to farmers has been launched. – Offline operationability is being tested and will be made available soon.

UPI-Enabled Cash Deposit Facility to Be Introduced by RBI

The Reserve Bank of India (RBI) plans to introduce UPI-based cash deposit facility at Cash Deposit Machines (CDMs), currently accessible only through debit cards. This move aims to leverage the popularity of UPI and enhance customer convenience, reducing the cash-handling burden on bank branches.

Key Points:

UPI-Based Cash Deposit Facility: – RBI proposes allowing cash deposits at CDMs through UPI, eliminating the need for debit cards. – Users will only require a UPI-enabled bank account to complete the deposit process.

Benefits of UPI-Based Deposits: – Enhanced customer convenience and ease of banking transactions. – Reduced cash-handling load on bank branches, improving efficiency. – Opportunity for fintechs to leverage technology for financial service advancements.

Adoption of UPI for Cash Deposits: – ATM ecosystem players have been exploring the feasibility of UPI-based deposits since March 2024. – CDMs, unlike ATMs, can both dispense and accept cash deposits.

Impact on CRM Adoption: – UPI-based cash deposits will foster the widespread adoption of Cash Recycler Machines (CRMs) in India. – Customers can perform both cash withdrawal and deposit transactions using UPI on the same platform, enhancing accessibility and efficiency.

RBI to Enhance Liquidity Risk Management Framework for Banks

The Reserve Bank of India (RBI) plans to modify the Liquidity Coverage Ratio (LCR) framework to enhance banks’ liquidity risk management. The recent increase in depositors’ ability to withdraw or transfer funds digitally during stressful times has prompted the RBI to reconsider certain LCR assumptions.

Key Points:

1. LCR Framework: – Banks must maintain a stock of high-quality liquid assets (HQLA) to cover 30 days of net outflows under stressed conditions. – LCR of 100% is required as of January 1, 2019.

2. Level 1 HQLAs: – Include government securities allowed under Marginal Standing Facility (MSF) and Facility to Avail Liquidity for Liquidity Coverage Ratio (FALLCR). – Entire SLR-eligible assets are considered HQLAs for LCR.

3. Savings Deposits: – Typically attract a lower outflow rate of 5% in the next 30 days for LCR calculation. – Savings deposits mobilized through higher interest rates may be more prone to run-off.

4. LCR Framework Review: – RBI plans to review the LCR framework to address emerging risks. – May require banks to hold higher HQLAs, potentially impacting interest margins and credit-to-deposit ratios.

India Maintains Essential Goods Exports to Maldives Amidst Diplomatic Tensions

India has granted limited export exemptions for essential commodities to the Maldives, despite ongoing tensions between the two nations due to China’s growing influence. The move aims to maintain food security in the Maldives while balancing India’s domestic price concerns.

Key Points:

Export Exemptions:

• India has exempted exports of rice, wheat, sugar, onions, potatoes, and eggs to the Maldives from existing and future export restrictions.
• Specific quantities have been allocated for each commodity:
  • Rice: 124,218 metric tons
  • Wheat flour: 109,162 tons
  • Sugar: 64,494 tons
  • Potatoes: 21,513 metric tons
  • Onions: 35,749 tons
  • Eggs: 427.5 million

Other Exemptions:

• India has also allowed exports of 1 million tons each of stone aggregate and river sand to the Maldives.

Geopolitical Context:

• The Maldives has traditionally had close ties with India, but has recently shifted towards China.
• India’s export exemptions aim to maintain its influence in the region despite the growing Chinese presence.

RBI Governor: Heatwave May Affect Vegetable Prices, No Impact on Wheat

Reserve Bank of India (RBI) Governor Shaktikanta Das has expressed concern about the potential impact of high temperatures on vegetable prices, as predicted by the Indian Meteorological Department (IMD). The RBI will closely monitor the situation and assess its impact on food crops, particularly key vegetables. While wheat availability is not expected to be significantly affected, vegetable prices may rise. The RBI has retained its retail inflation forecast at 4.5% for the current fiscal, but has revised its quarterly inflation projections. The implementation of RBI’s directions on exchange traded currency derivatives (ETCD) linked to rupee has been deferred to May 3rd due to feedback from stakeholders. The RBI will also release a framework on FinTech Self-Regulatory Organization by the end of the month.

Key Points:

Vegetable Prices: – RBI will monitor the impact of high temperatures on vegetable prices. – Vegetable prices may rise due to adverse climatic conditions.

Wheat Availability: – Wheat harvesting is largely complete, and availability is not expected to be affected by heat waves.

Inflation Forecast: – RBI retains retail inflation forecast at 4.5% for FY25. – Quarterly inflation projections revised: – April-June: 4.9% – September: 3.8% – December: 4.6% – March: 4.7%

ETCD Implementation: – Implementation of RBI’s directions on ETCD linked to rupee deferred to May 3rd. – Decision made based on feedback from stakeholders.

FinTech Self-Regulatory Organization: – RBI to release framework on FinTech Self-Regulatory Organization by month-end.

CBDC Transactions: – 2.2 crore CBDC transactions made by 46 lakh users and 4 lakh merchants.

RBI Imposes Penalties on IDFC First Bank and LIC Housing Finance

The Reserve Bank of India (RBI) has imposed penalties on IDFC First Bank and LIC Housing Finance for violating regulatory norms. Additionally, the RBI has canceled the registration certificates of four NBFCs and accepted the surrender of CoRs from five others.

Key Points:

IDFC First Bank Penalty: – Penalty of Rs 1 crore imposed for non-compliance with directions on loans and advances.

LIC Housing Finance Penalty: – Penalty of Rs 49.70 lakh levied for non-compliance with provisions of RBI directions for housing finance companies.

Cancellation of NBFC Registrations: – Kundles Motor Finance, Nithya Finance, Bhatia Hire Purchase, and Jiwanjyoti Deposits and Advances have had their CoRs canceled.

Surrender of NBFC CoRs: – Growing Opportunity Finance (India), Invel Commercial, Mohan Finance, Saraswati Properties, and Quicker Marketing have surrendered their CoRs.

Bandhan Bank CEO Chandra Shekhar Ghosh Steps Down, May Assume Role in Holding Company

Chandra Shekhar Ghosh, the founder and CEO of Bandhan Bank, will retire on July 9, 2024, after nearly 25 years of leading the financial institution. The bank has not yet announced a successor or initiated the process of selecting one. Ghosh plans to continue playing an active role at the group level.

Key Points:

Retirement of Chandra Shekhar Ghosh: – Ghosh will retire as MD & CEO of Bandhan Bank on July 9, 2024. – He has been leading the bank since July 10, 2015. – Ghosh is 64 years old.

Reason for Retirement: – The Reserve Bank of India (RBI) did not approve Ghosh’s reappointment as MD & CEO for three years. – RBI typically clears appointments to top posts at least three months ahead of the scheduled date.

Bank’s Performance under Ghosh’s Leadership: – Bandhan Bank has over three crore customers and over 75,000 employees. – Deposits stood at Rs 1.35 lakh crore and advances at Rs 1.28 lakh crore as of March 2024.

Ghosh’s Future Plans: – Ghosh will assume a larger strategic role at the Bandhan Group level. – He does not specify where he is headed in his resignation letter.

History of Bandhan Bank: – Ghosh founded Bandhan in 2001 as an NGO to empower women and alleviate poverty. – In 2006, Bandhan acquired a finance company and became the largest MFI in 2010. – In 2014, it received a license to operate a bank and launched operations in 2015. – Bandhan Bank got listed in 2018 and acquired Gruh Finance in 2019.

RBI Emphasizes Governance and Regulatory Compliance for Banks and Finance Companies

RBI Governor Shaktikanta Das emphasized the importance of governance and regulatory compliance in the financial sector, particularly for banks and NBFCs. He highlighted the need for financial institutions to prioritize public trust and adhere to guidelines. While RBI is working to simplify regulations, financial stability remains a shared responsibility between regulators and regulated entities.

Key Points:

Governance and Compliance: – Banks and NBFCs must prioritize governance and regulatory compliance. – Financial institutions operate with public money and should be mindful of this responsibility.

RBI’s Engagement: – RBI is engaging with regulated entities to simplify regulations and reduce compliance burden. – RBI supervises major entities and takes corrective actions when necessary.

Recent Regulatory Actions: – RBI has recently restricted IIFL Finance, JM Financial Products, and Paytm Payments Bank for regulatory violations. – These actions are not indicative of a “spate of regulatory action” but should be viewed in context.

Importance of Oversight: – Strong oversight by boards of directors and committees is crucial for improving governance.

Shared Responsibility for Stability: – Financial stability is a shared responsibility between regulators and regulated entities. – Risks in one part of the market can spread to others, necessitating collective action.

RRA’s Impact: – RBI has implemented suggestions from the Regulations Review Authority (RRA). – Over a thousand circulars have been withdrawn based on RRA and Internal Review Group recommendations.

India’s Foreign Exchange Reserves Soar to Record High of $645.58 Billion

India’s foreign exchange reserves witnessed a significant increase of $2.951 billion, reaching $645.583 billion for the week ending March 29. This marks the sixth consecutive week of growth in the reserves.

Key Points:

• Overall Reserves: Increased by $2.951 billion to $645.583 billion.
• Foreign Currency Assets: Rose by $2.354 billion to $570.618 billion.
• Gold Reserves: Increased by $673 million to $52.16 billion.
• Special Drawing Rights (SDRs): Declined by $73 million to $18.145 billion.
• Reserve Position with IMF: Decreased by $2 million to $4.66 billion.
• All-Time High: The reserves reached an all-time high of $642.453 billion in September 2021.
• Central Bank Intervention: The reserves have been utilized by the central bank to defend the rupee against global pressures.

India Aims for Urea Self-Sufficiency by 2025: Mansukh Mandaviya

India aims to end urea imports by 2025 through increased domestic production and promotion of alternative fertilizers. The government has revived closed urea plants and increased production capacity to reduce the gap between supply and demand. Nano liquid urea and other alternate fertilizers are being promoted for their benefits to crops and soil health.

Key Points:

Domestic Urea Production: – India’s annual urea demand is around 35 million tonnes. – Domestic production capacity has increased from 22.5 million tonnes in 2014-15 to 31 million tonnes. – Four closed urea plants have been revived, and one more is being revived.

Import Reduction: – Urea imports have declined from 9.136 million tonnes in 2021-22 to 7.58 million tonnes in 2022-23. – The government aims to end urea imports by 2025.

Alternative Fertilizers: – Nano liquid urea and nano liquid di-ammonium phosphate (DAP) are being promoted as alternatives to chemical fertilizers. – Nano urea consumption has increased, leading to a decline in conventional urea consumption.

Fertilizer Subsidy: – The government provides subsidies on fertilizers to protect farmers from rising global prices. – The fertilizer subsidy for 2024-25 is allocated at Rs 1.64 trillion.

Other Initiatives: – The PM-PRANAM scheme incentivizes states and UTs to promote alternative fertilizers. – Urea is imported on a government account, while P&K fertilizers are imported under the Nutrient Based Subsidy Scheme.

Indian Employees Anticipate Salary Increases of 8-11% in 2023: Randstad India

The average corporate salary increment in India is expected to be between 8-11% this year, with junior professionals receiving the highest increments. The demand for freshers and junior professionals remains high, while senior professionals may see lower increments. Sectors such as internet/e-commerce, manufacturing, and BFSI are likely to offer higher increments, while IT/ITeS may witness lower hikes. Attrition is expected to recover to pre-pandemic levels in the next 12-18 months.

Key Points:

Salary Increments: – Average corporate salary increment: 8-11% – Junior professionals: 10-11% – Medium-level professionals: 9-10% – Senior professionals: 8-9%

Demand for Freshers and Junior Professionals: – High demand across Tier 1 and Tier 2 cities

Skill-Based Compensation: – Monetary compensation becoming more skill and outcome-based

Hiring and Skilling Strategy: – Companies hiring freshers and junior-level candidates and skilling them according to organizational needs

Sector-Wise Increments: – Highest increments: Internet/e-commerce, manufacturing, BFSI (10-12%) – Lowest increments: IT/ITeS (7-9%)

Attrition: – Expected to recover to pre-pandemic level (11-12%) in 12-18 months – Currently at 18-20% – Companies investing heavily in retention strategies

Understanding Re-KYC: Essential Information for Investors

The Securities and Exchange Board of India (SEBI) has mandated the revalidation of Know Your Customer (KYC) for mutual fund investors in India. The deadline for revalidation was March 31, 2024, and non-compliance could result in suspension of investments. However, existing investors who continue investing with their current intermediaries are no longer required to redo their KYC.

Key Points

What is KYC? – KYC is a process to authenticate investors’ identities and safeguard financial transactions.

OVDs for KYC – SEBI has updated the accepted documents for Proof of Identity (OVDs) to include Aadhaar, passport, driving licence, voter ID card, job card, and other documents specified by the Central government.

Re-KYC Deadline – The deadline for re-KYC was initially set for December 31, 2023, but was extended to March 31, 2024.

Consequences of Non-Compliance – Non-compliance could result in suspension of lump sum and SIP investments for mutual fund investors whose KYC needs to be revalidated.

Confusion Regarding OVDs – There has been confusion among distributors due to inconsistent guidance from RTAs regarding the acceptable forms of OVDs.

Relief for Existing Investors – Existing investors are no longer required to redo their KYC if they continue investing with their current SEBI-registered intermediaries.

Validation of Mobile Number and Email ID – Investors must ensure the validation of their mobile number and email ID to avoid their KYC status being put on hold.

Revalidation Process – Investors can revalidate their KYC online by visiting the website of a KRA (KYC Registration Agency).

IOB’s Business Surges Past ₹5 Lakh Crore Milestone in FY24

Indian Overseas Bank (IOB) has achieved a significant milestone by surpassing ₹5 lakh crore in total business for the first time in its history. This marks a remarkable turnaround for the bank, which had faced financial challenges in recent years. The growth was driven by strong performance across various segments, including retail, MSME, and priority sector.

Key Points:

Total Business: – IOB surpassed ₹5 lakh crore in total business for the year ended March 31, 2024.

Growth Momentum: – The bank’s total business crossed ₹2.5 lakh crore in 2010-11 and maintained growth until FY15.

Financial Crisis: – IOB faced financial challenges due to a pile-up of bad loans, leading to losses and PCA status in 2015.

Turnaround Strategy: – From 2017, IOB implemented a multi-pronged strategy to improve its financial health.

Government Support: – The Centre infused ₹24,074 crore into IOB through recapitalisation bonds, enabling the bank to increase its provision cover and exit PCA in 2021.

Profitability: – IOB reported a turnaround in FY21 with a net profit of ₹831 crore, after six years of losses.

Current Performance: – For the quarter ended December 31, 2023, IOB reported a net profit of ₹723 crore, with gross NPA at 3.90% and net NPA at 0.62%.

Future Outlook: – IOB aims to maintain net NPA below 1% in the coming quarters, driven by improved asset quality and low credit costs.

Overnight Swap Rates Suggest Rate Cut Expectations Unlikely

Overnight indexed swap (OIS) rates indicate that financial markets no longer expect interest rate cuts in 2024, as the Reserve Bank of India (RBI) remains focused on reducing inflation to its target of 4%. The market anticipates a spread of 20-25 basis points over the expected repo rate, suggesting that the benchmark policy rate is unlikely to be reduced from its current level of 6.50%.

Key Points:

OIS Market Pricing: – OIS rates have priced out all rate cuts in aggregate. – Nominal rate cuts towards the end of 2024 are not currently priced in.

RBI’s Inflation Target: – RBI aims to bring inflation down to 4% on a sustainable basis. – CPI inflation is forecast to ease to 4.1% in FY26.

Economic Growth: – India’s robust economic growth allows the RBI to focus on inflation without compromising GDP growth.

External Risks: – The RBI is wary of external risks to inflation, such as rising global crude oil prices.

Market Expectations: – The OIS market no longer expects rate cuts due to the RBI’s commitment to its inflation target and the rollback of US rate cut expectations.

PNB and BoB Witness Strong Loan Growth in Q4

Punjab National Bank (PNB) and other public sector banks, including Bank of India and Bank of Baroda, reported strong growth in credit and deposits during the March quarter. PNB’s credit growth stood at 11.5%, while Bank of India and Bank of Baroda recorded growth of 13.56% and 12.41%, respectively. Total deposits also increased significantly for all three banks.

Key Points:

Punjab National Bank (PNB)

• Credit growth: 11.5% to Rs 9.85 lakh crore
• Total advances: Rs 8.84 lakh crore
• Total deposits: Rs 13.70 lakh crore
• Total business: Rs 23.56 lakh crore
• Credit Deposit (CD) ratio: 72%

Bank of India

• Credit growth: 13.56% to Rs 5.86 lakh crore
• Outstanding credit: Rs 5.15 lakh crore
• Total deposit: Rs 7.37 lakh crore

Bank of Baroda

• Global advances: Rs 10.89 lakh crore
• Total deposits: Rs 13.26 lakh crore

Department of Telecommunications (DoT) Unveils 5G Lab Module and Grants 1,500 Permits for 5G Trials

The Department of Telecom (DoT) has launched an experimental license module for 100 5G Labs in India. This initiative aims to simplify the licensing process for academic institutions, fostering innovation in the 5G domain. The licenses are issued through the Saralsanchar portal on a self-declaration basis, and around 1,500 licenses have been granted since the program’s launch in July 2021.

Key Points:

• Experimental License Module for 100 5G Labs:
• Launched by Telecom Secretary Neeraj Mittal at IIT Madras.
• Aims to simplify licensing requirements for academic institutions.
• Self-Declaration Mode:
• Licenses issued through the Saralsanchar portal of DoT.
• Applicants must provide details of the experiment, setup, equipment, and frequency band.
• 1,500 Experimental Licenses Granted:
• Since the launch of the program in July 2021.
• Facilitates trials and testing of 5G use cases.

Tesla Abandons Affordable Car Plans Due to Intense Chinese EV Competition, Despite Musk’s Denial

Tesla has abandoned plans for an affordable electric car, known as the Model 2, and will instead focus on developing self-driving robotaxis. This decision marks a departure from Tesla’s long-standing goal of producing affordable electric vehicles for the mass market.

Key Points

Cancellation of Model 2 – Tesla has canceled the development of the Model 2, an affordable electric car that was expected to start at around $25,000. – The decision was made after a meeting attended by numerous employees, where Elon Musk directed the company to focus on robotaxis.

Focus on Robotaxis – Tesla will continue developing self-driving robotaxis on the same small-vehicle platform that was intended for the Model 2. – The company believes that robotaxis have a greater potential for profitability and represent the future of mobility.

Competition from Chinese Automakers – Tesla faces fierce competition from Chinese electric-vehicle makers, who have flooded the market with affordable cars priced as low as $10,000. – Tesla’s delay in pursuing an affordable car has made it more difficult to compete in this segment.

Musk’s Diversions – Elon Musk’s attention has been divided between Tesla and his other ventures, including SpaceX, Neuralink, and Twitter. – This has contributed to the delay in the development of the affordable Tesla.

Impact on Sales Goals – The cancellation of the Model 2 raises questions about Tesla’s ability to achieve its ambitious sales targets. – Analysts had projected that the affordable car would be key to driving Tesla’s growth into a mass-market automaker.

Tesla’s Stock Performance – Tesla shares have declined after the news of the Model 2 cancellation, reflecting investor concerns about the company’s future growth prospects.

Challenges with Self-Driving Cars – Tesla has yet to prove that it can produce a fully autonomous car, despite years of predictions by Musk. – The company faces lawsuits and investigations into crashes involving its Autopilot and Full Self-Driving driver-assistance systems.

Tesla’s Image – Tesla’s image as a climate-friendly innovator has been tarnished by Musk’s political views and polarizing public statements. – This has turned away some prospective Tesla buyers.

Slowing EV Demand – Tesla and other established automakers are facing slowing EV demand growth in the United States and Europe. – The affordable-car project’s cancellation comes at a time when Tesla is struggling to meet its production targets.

China’s FDI Decline Doesn’t Automatically Benefit India: OECD

Despite the “China-plus one” strategy, India’s share of global FDI inflows has declined significantly, while countries like the US, Canada, and Mexico have gained. The US has emerged as the top beneficiary of China’s FDI loss, driven by semiconductor investments and geopolitical tensions.

Key Points:

1. India’s FDI Share Declines: – India’s share of global FDI inflows fell from 3.5% to 2.19% in the first nine months of 2023.

2. China’s FDI Loss: – FDI inflows to China have plummeted from 12.5% to 1.7% in the same period.

3. US Gains from China’s Loss: – The US has gained the most from China’s FDI loss, with its share rising to 29.4%.

4. Government Incentives in the US: – Government schemes under the CHIPS Act have provided significant subsidies for the semiconductor industry in the US.

5. Geopolitical Tensions: – Geopolitical tensions between the US and China have encouraged companies to relocate manufacturing operations to the US.

6. Other Beneficiaries: – Canada, Mexico, Brazil, Poland, and Germany have also gained from China’s FDI loss.

7. India’s Limited Success: – India has had some success in attracting FDI through production-linked incentives and semiconductor policies.

8. Assembly Line Operations: – FDI inflows in assembly line operations, such as mobile exports, are limited.

Maharashtra GST Department Issues Tax Demand of Over Rs 263.70 Crore to United Breweries

United Breweries Ltd. (UBL) has received a tax demand of over Rs. 263.70 crore from the Maharashtra State Goods & Service Tax Department for the financial year 2019-20. The demand includes additional tax, interest, and penalty related to debit notes raised by UBL for reimbursement of state excise duties and non-submission of declaration forms for concessional tax rates. UBL believes it has a strong case to defend the issue and does not expect any significant financial impact.

Key Points:

Tax Demand: – UBL received a tax demand of over Rs. 263.70 crore, including interest and penalty.

Reason for Demand: – Levy of 60% CST on debit notes raised for reimbursement of state excise duties. – Non-submission of declaration forms for concessional tax rates.

UBL’s Response: – UBL believes it has a strong case to defend the issue. – Does not expect any significant financial impact, except for a minimal statutory pre-deposit.

Previous Similar Case: – UBL faced a similar tax demand of Rs. 275 crore for the financial year 2018-19.

EPA: Aviation Fuel Emissions Model Nearing Completion

The U.S. Environmental Protection Agency (EPA) is finalizing revisions to the Greenhouse Gases, Regulated Emissions and Energy Use in Technologies (GREET) model, which measures emissions from biofuel feedstock production. The revisions, initially delayed due to agency disputes, are expected to be released soon. The updated model will be used to determine the eligibility of ethanol for a sustainable aviation fuel tax credit.

Key Points:

Revisions to GREET Model: – Revisions to the GREET model are expected to be released “in the very near future.” – The revisions were delayed due to disputes among agencies.

Sustainable Aviation Fuel Tax Credit: – The Inflation Reduction Act includes a $1.25 per gallon tax credit for sustainable aviation fuel. – The GREET model is used to measure ethanol emissions to determine eligibility for the tax credit.

Lobbying Battle: – The tax credit has sparked a lobbying battle between biofuel and farm groups and environmental organizations. – Environmental groups argue that producing fuel from crops is counterproductive to combating climate change.

Agency Involvement: – The EPA, DOE, Department of Agriculture, Federal Aviation Administration, and White House have been involved in discussions about implementing the tax credit.

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