Wondering if you are up to speed with topics that are likely to pop up at your upcoming dinner meet? Here is an overview of whats trending in economy and finance this week:
When someone says bank stocks performed well this week you could say this was a direct impact of a government announcement to infuse Rs. 2.11 lakh crores into Public Sector Banks:
Indian banks have been facing a huge problem of unpaid loans (commonly called as NPA’s-Non Performing Assets) which has directly impacted the lending capacity of these banks. In order to help banks recoup from this problem the Government has decided to put in Rs. 2.11 lakh crores into Public Sector Banks. This infusion of capital will happen through a recapitalization process. Apart from this the government has strengthened the bankruptcy norms and imposed strict penalties on banks that do not adhere to these norms.
This comes in as a huge relief to banks and people’s faith in banks have improved. As a result bank stocks immediately rose up when this news hit the markets.
When someone says that Bitcoins have been at a record high you could say that cryptocurrency dealers might shut down in India
The RBI has been uncomfortable with cryptocurrencies due to the financial, operational and security risks it poses to its users. Moreover, there isn’t any central authority managing the transactions leading to cyberattacks. In case of any fraud, there’s no one to be contacted for help. The credential of the users is unknown and as a result, many fake currencies are also in circulation.
Recently a government panel has recommended shutting down cryptocurrency dealers in India with the view to restrict the use of these currencies, reports ET. This recommendation has come in at a time when Bitcoin- The oldest and most popular cryptocurrency has been at a record high.
When someone says India ranked 100th for ‘ease of doing business’ you could point out that this rank will further improve once G.S.T. has been factored in:
The World Bank Report on ‘Ease of Doing Business’ ranked India 100th among 190 countries. Last year India ranked 130th. This 30 step jump was achieved due to increased protection to minority investors, improved access to credit, adoption of new insolvency code and other positive reforms undertaken by the government.
The ranking of nations is based on 10 indicators: Starting a business, dealing with construction permits, Getting electricity, Registering property, Getting credit, Protecting minority investors, Paying taxes, Trading across borders, Enforcing contracts and Resolving insolvency. India has improved its standing in 6 out of these 10 indicators, according to the report. G.S.T the biggest tax reform in the country, was not factored in by World Bank for this ranking. Jailtey mentioned that once GST will be factored in the ‘Ease of Doing Business’ Report next year, the ranking will further improve.
When someone says Bank of England has increased its interest rates for the first time in 10 years you could link it to Brexit:
After Brexit, the value of Pound fell significantly leading to inflation. To curb this problem of increased prices the Bank of England had cut the interest rates from 0.50% to 0.25% in August 2016. This week the Bank reversed this emergency cut made in August 2016 and set the interest rate back to 0.50% again. Ever since the global financial crisis in 2007 this is the first time in 10 years that British has ever increased its interest rates.
For savers this is a positive move as they will get slightly more interests on their deposits, but for those who have taken loans this will be a negative move as they will have to pay more interests.
Bank of England also states that it will increase the interests rates further in the next 3 years.
When someone talks about Paradise Papers you can say that these papers have leaked the names of some of the richest people & companies in the world who have evaded tax by sending their money offshore
18 months back Panama Papers were leaked. These papers are 11.5 million documents containing financial information of some the richest people/companies most of whom had illegally siphoned off money to tax havens to avoid payment of taxes.
Similarly the Paradise Papers Leak contains 13.4 million documents revealing names like Queen Elizabeth, Madonna and Vijay Mallya among others who have hidden their cash offshore to avoid paying their taxes. There are 714 Indians on this list and market regulator SEBI stated that they will look into this matter further.
Read: Paradise Papers: A Case Of Data Leaks to know more about this.
Now that you know these topics, the next time someone mentions them you know what to say. If there are any such topics spoken about at a party that have made you feel out of the loop, write to us at firstname.lastname@example.org and we will cover it in our next edition.