Current Affairs India - 2 February 2015

1. Reliance Industries has teamed up with state run State Bank of India to apply for a payments bank licence. RIL and SBI have put in a joint application to the Reserve Bank of India (RBI) to set up a payment bank that can offer services such as remittances and deposits but not loans. SBI will hold 30% stake in the joint venture while the remaining 70% stake will be held by RIL.

Recently Airtel and Kotat have also announced Joint Venure to apply for a payments bank licence. Also Aditya Birla Nuvo Ltd, Future Group and Vakrangee Ltd apply to the Reserve Bank of India (RBI) to set up payments banks. A payments bank licence will allow companies to accept deposits of up to Rs.1 lakh and increase payment options, especially for people who have no bank accounts.

2. India-s core sector growth dropped to 3-month low of 2.4% in December 2014 compared to 6.7% growth witnessed in the previous month of November. Core sector growth dropped due to lower production in Crude oil and natural gas output. During April-December period of current financial year, the eight sectors grew by 4.4% compared to 4.1% growth in the same period of last year.

The production of crude oil declined by 1.4% natural gas by 3.5% and fertilizer by 1.6% and steel output dropped by 2.4% in December. Electricity generation also dropped by 3.7% in the same month. At the same time coal production grew by 7.5% and refinery products by 6.1%.

3. India-s manufacturing sector growth moderates in January as the HSBC compiled Purchasing Managers Index (PMI) for manufacturing sector dropped to 52.9 in January compared to two-year record high of 54.5 in December. Any reading higher than 50 indicates growth in the sector.

PMI reading drops mainly because of consolidation after two months of strong growth. With record low inflation, RBI may cut rates again in order to boost both economic and industrial growth.