Moody’s releases report on Global Green Bonds Market

Moody’s Investors Service released a report on the global green bonds market titled ‘Third Quarter Issuance Lags, but COP21-Linked Increase Is Likely.’ The report says that in the third quarter (Q3) of 2015, the global green bond issuance reached 7.5 billion dollar, compared to bond issuance of 27.2 billion dollar in Q3 2014. But the increase is down from Q2, Moody’s expects issuance will pick up in the last quarter and exceed 40 billion dollar for the full year 2015.

Major highlights
Issuance continued to break new ground in the third quarter in terms of noteworthy and first-time transactions. 7.6 billion dollar issued in Q3 lagged the 13.4 billion dollar that came to market during the second quarter of the year, but did outpace the first quarter’s 6.3 billion dollar. Based on the 9-month average monthly volume of 3.02 billion dollar, green bonds would end the year at 36.3 billion dollar, or just shy of the 36.5 billion dollar issued in 2014. The organisation expects the volume will pick up towards the end of the year to coincide with the December 2015 United Nations Framework on Climate Change (UNFCC) Conference of the Parties (COP21) in Paris and is likely to exceed 40 billion dollar for the full year 2015. Moody’s further notes that nearly half of the third quarter’s issuance proceeds, or about 4 billion dollars, are being earmarked for renewable energy projects. This is followed by 18.8%, or about 1.7 billion dollar, earmarked for sustainable water management followed closely by 1.6 billion dollar allocated to energy efficiency projects. Investment-grade issuance continued to dominate in the third quarter, but high-yield green bonds gained as a share of all Moody’s-rated green bond transactions. Nearly 18% of issuance in the third quarter was attributable to below-investment grade issuers, up from just 5% in the second quarter.

Highlights in case of India
India has set a target of 175 GW of renewable energy capacity by 2022. India that came up as an early leader in Asia’s incipient green bond is expected to be a prominent driver of regional issuance in coming years. India has established itself as an early leader in Asia’s nascent green bond market, with three India-based issuers came to market in third quarter (July to September 2015). It is expected that along with China, India will be a prominent driver of regional issuance in coming years, given ambitious targets on building out renewable energy capacity

Green Bond
A green bond, like any other bond, is a fixed-income financial instrument for raising capital through the debt capital market. In its simplest form, the bond issuer raises a fixed amount of capital from investors over a set period of time, repaying the capital when the bond matures and paying an agreed amount of interest (coupons) along the way.

RBI forms Financial Inclusion Fund with Rs 2000 crore corpus
Reserve Bank of India (RBI) has established Financial Inclusion Fund (FIF) with Rs. 2000 crore corpus expanding reach of banking services. This fund will support the developmental and promotional activities covered under the financial inclusion initiatives. FIF has been established as a single entity (fund) by merging Financial Inclusion Fund (FIF) and Financial Inclusion Technology Fund (FITF). It will provide support for funding the setting up and operational cost for running financial inclusion and Literacy Centres. One of its major objective will be enhanced investment in Green Information and Communication Technology (ICT) solution. It will be administered by the reconstituted Advisory Board constituted by Union Government and will be maintained by NABARD. Contribution to FIF would be from the interest differential in excess of 0.5 per cent on Rural Infrastructure Development Fund (RIDF) and Short-Term Cooperative Rural Credit (STCRC) deposits. These deposits are held on account of shortfall in priority sector lending kept with NABARD by banks.

Asia’s oldest bourse BSE to prepare two indices
BSE is going to launch high frequency job and consumer sentiment data from 2016 to help policymakers and companies attain a better grip of the economy. The Indian unemployment rate and Indian consumer sentiment indices are being created by BSE in collaboration with CMIE and University of Michigan and will be released at high frequency on real time basis. Data will be released everyday on BSE from survey of more than 4000 adults from 1200 to 1500 households across the nation. Data based on survey of CMIE’s panel of 5 lakh people from 1.58 lakh households across 315 cities and 3000 villages was used. These indices will help investors, corporate groups and policymakers to analyse the health of the domestic economy.

India’s GDP projected to grow at 7.5 per cent in 2015
The United Nations Conference on Trade and Development (UNCTAD) projected that India’s gross domestic product (GDP) is expected to grow at 7.5 per cent in 2015. It was revealed by the UNCTAD in its Trade and Development Report 2015 entitled Making the international financial architecture work for development. As per the Report, the growth rate for world in 2015 is expected to remain more or less unchanged from last year, at 2.5 per cent.

RBI changes rules for loans to boost low cost housing
To benefit buyers of low cost housing, RBI raised the amount banks can advance for property purchase and lowered the risk weightage of various categories of home loans. This will attract customers to low cost housing sphere. Banks will also gain surplus funds for affordable housing loans as they have to set aside less capital for the segment. Banks can now provide home loans up to 90% for properties that cost INR 30 lakh or less from the earlier INR 20 lakh. LTV has been raised to 80% for properties between INR 30 lakh and 75 lakh and 75% for those above INR 75 lakh.

ADB lowers India’s Growth Forecast for 2016
Asian Development Bank (ADB) lowered India’s gross domestic (GDP) growth projections for the fiscal year (FY) 2016 to 7.4 per cent from 7.8 per cent projected in its March 2015 Outlook. For FY2015, Indian economy growth is forecasted at 7.8 per cent which is lower than the earlier forecast of 8.2 per cent. The causes for the lowering of growth projections has been the economic slowdown in industrial countries, weak monsoon, and stalled action of some key structural reforms.
RBI signs agreement with Bank of Botswana on information sharing
RBI has signed an agreement on information sharing with Bank of Botswana under the Supervisory Cooperation and Exchange of Supervisory Information. It has signed a MoU with Bank of Botswana with respect to this. RBI has entered into an agreement with other countries in a similar field. The apex bank has signed 28 such MoUs, one letter for supervisory cooperation and statement of cooperation.

Fourth Bi-monthly Monetary Policy Statement 2015-16 announced byRBNI
Fourth bi-monthly monetary policy statement 2015-16 was announced by the Reserve Bank of India (RBI). The monetary policy cut the repo rate, the rate at which RBI lends to commercial bank, by 0.50 per cent from 7.25 per cent to 6.75 per cent with immediate effect. As a result, the reverse repo rate, the rate at which RBI borrows from commercial banks, stands adjusted to 5.75 per cent, and the marginal standing facility (MSF) rate and the Bank Rate to 7.75 per cent. However, the cash reserve ratio (CRR) of scheduled banks was kept unchanged at 4 per cent of net demand and time liabilities (NDTL). Further, RBI will continue to provide liquidity under overnight repos at 0.25 per cent of bank-wise NDTL at the LAF repo rate and liquidity under 14-day term repos as well as longer term repos of up to 0.75 per cent of NDTL of the banking system through auctions; and continue with overnight/term variable rate repos and reverse repos to smooth liquidity.

RBI relaxes Change in Ownership Norms of Borrowing Entities
The Reserve Bank of India (RBI) announced relaxation in norms that allow banks to upgrade credit facilities extended to borrowing entities upon a change in ownership, only if the ownership has been changed outside Strategic Debt Restructuring Scheme (SDR). The Banker’s bank announced that the banks can treat loans to stressed companies that have undergone ownership changes as standard loans, provided the stress was due to operational or managerial inefficiencies. The relaxation will offer more flexibility to banks to bring in a change in ownership of borrowing entities which are under stress due to operational/ managerial inefficiencies despite substantial sacrifices made by the lending banks.

India signes 123.51 Million US dollar Loan Agreement with ADB
India signed a 123.51 million US dollar loan agreement with Asian Development Bank (ADB) to upgrade tourism infrastructure and services in Punjab, Uttarakhand and Himachal Pradesh. The loan will be used for development and conservation of the places of tourist attractions. It will also be used to improve basic tourism facilities and to build the capacity of sector agencies and local communities in the States of Himachal Pradesh, Uttarakhand and Punjab. It will also support conservation of important heritage structures including some century-old structures, new facilities including centres for arts and crafts in the three states. Eco-parks and eco-tourism will also be developed to help the states attract more tourists. Moreover, to improve income opportunities for the local communities, more than 4000 community members will be trained in tourism-related skills such as guides, crafts, and other recreational activities. And at least 30 community-based societies will be made operational to manage heritage sites. This is the third tranche loan agreement and it is a part of the 250 million US dollar multi-tranche financing facility named Infrastructure Development Investment Program for Tourism that was approved by ADB in 2010.

London’s Financial Times releases data on FDI in H1 2015
London-based business daily Financial Times (FT) released Foreign Direct Investment (FDI) data for the period January – June (H1) of 2015. As per the data, India in the first half of 2015 surpassed China to emerge as the most-favoured destination for FDI. India received 31 billion dollar of foreign capital inflows through FDI during January-June 2015 while China with 28 billion dollars is placed at number two position. India and China are followed by the US with 27 billion dollars at third place.

Cabinet approves MoU between ITA in Taipei and TECC in India
The Union Cabinet approved the Memorandum of Understanding (MoU) between India-Taipei Association (ITA) in Taipei and Taipei Economic and Cultural Center (TECC) in India. The memorandum was signed for the cooperation in the field of Micro, Small and Medium Enterprises (MSME). The memorandum provides a structured framework and enabling environment to the MSME sector of the two parties to understand each other’s strengths, markets, technologies, policies etc. The MoU also includes an agreement between the two parties to enable their respective MSMEs to participate in each other’s trade fairs/exhibitions and to exchange business delegations with the other party. The agreement will eventually help the parties understand the policy and explore markets so that joint ventures, tie-ups, technology transfer etc. could take place. However, the memorandum does not involve any financial, legal or political commitment on the part of either party.

RBI relaxes norms of FPI investment in Government Securities
The Reserve Bank of India (RBI) relaxed the norms of Foreign Portfolio Investors (FPIs) of government debt and also announced higher investment limits in rupee terms in government securities with a view to bring in an additional 1.2 lakh crore rupees by March 2018. The RBI fixed the FPI investment limits in rupee terms and raised the limits in phases to reach 5 per cent of the outstanding stock by March 2018.

High Level Panel suggests Uniform Tax Treatment for CSR Works
Union Government appointed committee chaired by Anil Baijal, former Union Home Secretary submitted its report on how to improve monitoring of CSR spending to government. The panel was set up by the Union Corporate Affairs Ministry to suggest steps to improve monitoring of CSR spending. The panel in its report recommended uniform tax treatment for all CSR (Corporate Social Responsibility) activities under Companies Act 2013 and leniency towards non-compliant companies in the first 2 to 3 years of the law.

EPFO increases maximum insurance cover to 6 lakh rupees.

The Labour Ministry has agreed to significantly enhance insurance benefits under the Employees Deposit Linked Insurance (EDLI) Scheme of the retirement fund body EPFO. The proposed new limit is Rs 6 lakh, an over 66% from the current limit of Rs 3.6 lakh. The ministry has also agreed to do away with the mandatory requirement of continuous employment of one year under current employer before being eligible for insurance benefits.

2000 crore rupees to EPS- 95 as contribution for 2015-16.

The Union Government released 2000 crore rupees to Employee Pension Scheme, 1995 (EPS-95) as its
contribution for the year 2015-16. Further, a sum of 250 crore rupees was contributed as grant-in-aid for
providing minimum pension of 1000 rupees to the pensioners of EPS-95. The additional grant-in-aid became necessary as the Union Government directed the Employees’ Provident Fund Organisation (EPFO) to provide for guaranteed minimum pension of 1000 rupees per month.