RBI Allows Settlement Of Trade Transactions With Sri Lanka In Indian Rupee

Top of the Morning

In this episode, find out why Equitas founder PN Vasudevan resigned, also find out about Indonesia’s decision to lift ban on edible oil exports

Business Term of the Day: GST

Equitas Small Finance Bank (ESFB) Founder and CEO P N Vasudevan has asked the lender to look for his successor as he wants to hang up his boots to pursue “a distinct set of goals”. He is also the Managing Director of Equitas, which began as a microfinance institution in 2007 and was later converted into the bank in 2016.

 

In view of difficulties being faced by exporters in getting payments from crisis-hit Sri Lanka, the RBI on Thursday allowed settlement of trade transactions in Indian rupee outside the Asian Clearing Union (ACU) mechanism. In March, the government had guaranteed a term loan of USD 1 billion extended by the State Bank of India (SBI) to Sri Lanka for financing purchase of essential goods by the island nation from India.

Indonesia, the world’s biggest supplier of palm oil, said on Thursday it will lift a ban on exports from Monday, likely helping India and other importers.

India annually imports around 13-13.5 million tonne of edible oils, of which around 8-8.5 million tonnes (around 63 per cent) is palm oil. Of this, 8-8.5 million tonnes of palm oil, 45-50 per cent comes from Indonesia and the rest from neighbouring Malaysia.

The Reserve Bank on Thursday asked banks to provide the option of Interoperable Card-less Cash Withdrawal (ICCW) at their ATMs, a move aimed at curbing frauds like skimming, card cloning and device tampering. Currently, cardless cash withdrawal through ATMs is offered by a few banks for their customers at their own ATMs (also known as on-us basis). It further said the National Payments Corporation of India (NPCI) has been advised to facilitate Unified Payments Interface (UPI) integration with all banks and ATM networks.

Supreme Court has held that recommendations by the Goods and Services Tax (GST) Council are not binding on states or the Centre and hold a persuasive value. The parliament, as well as state legislatures, possess equal and simultaneous powers to legislate on GST and the Council can advise suitably in the event of repugnancy between laws laid down by the two federal units, the court said. In such events, “GST Council must work in harmonious manner to achieve workable solution,” the bench added. (REMVE)

Moving on to markets

Benchmark Indian equity indices may open positive on Friday. The SGX Nifty was up 1.32%. On Thursday, the market mayhem caused a loss of around 2.6% for both the Sensex and Nifty.

Equities in Asia and US futures rose on Friday even as concerns over global economic outlook and China’s Covid-19 struggles persisted.

Crude oil prices hovered near $112 a barrel, gold held a rally and Bitcoin was near $30,000.

Business term of the day

The goods and services tax (GST) is a tax on goods and services sold domestically for consumption. The tax is included in the final price and paid by consumers at point of sale and passed to the government by the seller. The GST is a common tax used by the majority of countries globally.