Issue: 1143
India-UK trade deal
implementation likely in April: The India-UK free trade
agreement signed last year is expected to come into force from April 2026, a
government official has said, raising hopes of a major boost to bilateral trade
and market access for Indian exporters. India and the United Kingdom
signed the Comprehensive Economic and Trade Agreement (CETA) on July 24, 2025.
Under the pact, 99 per cent of Indian exports will enter the British market at
zero duty. In return, India will reduce tariffs on select British goods, including
cars and Scotch whisky. (Moneycontrol)
India’s forex reserves slip
to $717 billion; gold takes the hit as RBI data flags a sharp drop: India's foreign exchange reserves dipped USD
6.711 billion in the week that ended February 6 to $717.064 billion, after
having reached a new all-time high in the prior week, according to the Reserve
Bank of India's latest data. Foreign exchange reserves dipped substantially in
the latest week, driven by a drop in gold reserves while foreign currency
assets rose. Over the past few weeks, the forex kitty has been largely in an
uptrend. Foreign exchange reserves touch record high of USD 723.774 billion
last week. For the reported week (that ended February 6), India's foreign
currency assets (FCA), the largest component of foreign exchange reserves,
stood at $570.053 billion, up $7.661 billion.
(Moneycontrol)
FPI inflows rebound to
?19,675 cr in early Feb on India-US trade deal: Foreign Portfolio Investors (FPIs) staged a
sharp turnaround in early February, pumping Rs 19,675 crore into Indian
equities in the first fortnight, supported by the US-India trade deal and
easing global macro concerns. The inflows follow three consecutive months of
heavy selling, with FPIs pulling out Rs 35,962 crore in January, Rs 22,611
crore in December, and Rs 3,765 crore in November, according to data from
depositories. Overall, in 2025, FPIs pulled out a net Rs 1.66 lakh crore (USD
18.9 billion) from Indian equities, marking one of the worst periods for
foreign flows. The selling was driven by volatile currency movements, global
trade tensions, concerns over potential US tariffs and stretched equity
valuations.
(Business Standard)
Religare
Enterprises to split financial services, insurance biz into two listed entities: Burman
family-backed Religare Enterprises (REL) has approved a plan to demerge its
financial services and insurance businesses into two separate listed entities,
in a move aimed at unlocking shareholder value and sharpening strategic focus. The
decision was approved at the company’s board meeting held on Saturday. The
group aims to complete the process and list Religare Finvest (RFL) by Q1 FY28. This
is the first major restructuring announced by the company since Burmans took
over REL in February, 2025.
(Business Line)
Banks to drive domestic
M&A as RBI eases financing norms: Banks, especially large public
sector lenders such as State Bank of India and Bank of India, have begun
seeking legal advice on reviving acquisition financing in the domestic market,
following the Reserve Bank of India’s (RBI) release of its final prudential
guidelines on acquisition financing. “Large PSU banks have shown a lot of
interest… they have a large appetite. The interest is already visible,” said a
senior partner at a law firm, stating that lenders have started internal
evaluations on how to operationalise the new framework. Banks are now preparing
board-approved policies, subject to risk department vetting and upgrades in
staffing and capabilities.
(Financial Express)
Reserve Bank of India
restores default loss guarantees for NBFCs: In a move that could support stronger
credit expansion, the Reserve Bank of India (RBI) has restored the use of
default loss guarantees (DLGs) for non-bank lenders, rolling back last year's
curbs that had forced them to make higher provisions on loans sourced through
fintech partners. Non-banking finance companies
(NBFC) can now factor in DLGs when setting aside buffers for potential loan
losses, provided the guarantee forms an integral part of the loan arrangement
(Economic Times)
RBI's new loan recovery
norms: NBFCs may incur extra cost to train agents: The Reserve Bank of India’s
(RBI) proposed stricter norms on loan recovery — whether undertaken in-house or
through outsourced agents — are expected to raise compliance costs for NBFCs,
given a significant number of these lenders, barring the larger ones, rely on
third-party recovery agencies, and aligning such agents with the central bank’s
proposed framework would entail additional training and monitoring expenses. “The
cost may go up for those that are outsourcing recovery activities to a third
party. Every outsourcing agent must be trained and certified, and adhere to the
governance standards of the bank or NBFC. This increases the cost for the
lender. If an NBFC does not have its own in-house team, the compliance burden
will be higher. However, from a customer’s perspective, these guidelines are
welcome,” said a senior executive at one of the largest NBFCs.
(Business Standard)
MCA to propose Corporate
Amendment Bill for LLP, Companies Act changes: The Ministry of Corporate Affairs (MCA) is
planning to propose a Corporate Amendment Bill covering changes in both the
Companies Act and the Limited Liability Partnership Act, with the main focus on
easing processes and the compliance burden on businesses, according to sources.
The MCA has finalised the Cabinet note covering comprehensive changes across
the two Acts. “The forms are being rationalised, and more action on
decriminalisation is being proposed for greater ease of doing business,” a
senior official said. The government is expected to table the Insolvency and
Bankruptcy Code Amendment Bill, also under the MCA, in the second half of the
ongoing Budget session.
(Business Standard)
RBI curbs loans extended to
brokers in blow to proprietary trading volumes: India’s central bank tightened rules for loans
taken by firms that undertake proprietary trading in shares and commodities and
offer leverage to clients, the latest measure aimed at reducing speculative
market activity in the South Asian nation. All credit facilities to securities
firms will have to be backed by collateral, while lending for trading on their
own account or investments by brokers will be prohibited, according to a
statement published on the Reserve Bank of India’s website late Friday. The
so-called prudential rules for capital market intermediaries such as stock and
commodity brokers will come into effect from April 1, the central bank said.
(Business Standard)
Cabinet approves ?1 trn
Urban Challenge Fund for market-led urban growth: The Union Cabinet has approved
the launch of the Urban Challenge Fund (UCF) with a total central assistance of
Rs 1 trillion, Union Minister Ashwini Vaishnaw said on Saturday. Under the
scheme, central assistance will cover 25 per cent of a project's cost, provided
that at least 50 per cent of the funding is mobilised from the market. In a
statement, the government said the initiative will lead to a total investment
of Rs 4 trillion in the urban sector over the next five years.
(Business Standard)
Amit Shah launches
e-Rupee–powered PDS, unveils 24x7 ‘Annapurti’ grain ATM in Gujarat: Union Home and Co-operation
Minister Amit Shah on Sunday inaugurated the country’s first Central Bank
Digital Currency (CBDC)-based Public Distribution System in Gandhinagar,
Gujarat, terming it a “leak-proof” reform that will digitise and secure India’s
flagship food subsidy programme. As part of the rollout,
Gujarat also inaugurated an “Annapurti Grain ATM” — an automated dispensing
machine that will operate 24×7. From March 2026, beneficiaries will be able to
collect one-kilogram packets of tur dal, chana, sugar and salt, along with up
to 25 kg of wheat and rice, directly from the machine. Officials say the
machine can dispense up to 25 kilograms of grain in roughly 35 seconds.
(Business Line)
Cabinet approves Startup
India Fund of Funds 2.0 to Mobilize Venture Capital for India’s Startup
Ecosystem: In a major boost to India’s growing startup
ecosystem, the Union Cabinet chaired by the Prime Minister, Shri Narendra Modi,
has approved the establishment of the Startup India Fund of Funds 2.0 (Startup
India FoF 2.0) with a total corpus of Rs. 10,000 crore for the purpose of
mobilizing venture capital for the startup ecosystem of the country. The
Startup India FoF 2.0 follows the strong performance of the Fund of Funds for
Startups (FFS 1.0), which was launched in 2016 to address funding gaps and
catalyse the domestic venture capital market for startups. Under FFS 1.0, the
entire corpus of Rs. 10,000 crore has been committed to 145 Alternative
Investment Funds (AIFs). Such supported AIFs have invested over Rs. 25,500
crore in more than 1,370 startups across the country in sectors such as
agriculture, artificial intelligence, robotics, automotive, clean tech,
consumer goods & services, e-commerce, education, fintech, food &
beverages, healthcare, manufacturing, space tech, and biotechnology amongst
others.
(PiB)
Phase out universal subsidies, target benefits better: ADB-PwC study: Governments should move away from universal subsidies towards tightly targeted transfers, backed by stricter eligibility norms, sunset clauses and periodic audits to curb leakages and improve spending efficiency, a joint study by Asian Development Bank and PwC has recommended. Submitted to the 16th Finance Commission, the report argues that sharper targeting, greater transparency and stronger accountability are essential to improve the quality of public expenditure while safeguarding fiscal stability. The study calls for a sharper pivot in India’s subsidy regime, from standardising what qualifies as a subsidy to phasing out universal benefits.
(Business Standard)
REAL Vs NOMINAL GDP
§ Nominal
GDP measures the total value of goods and services produced in a country using
current prices, while real GDP measures the same value adjusted for inflation.
Real GDP is considered a more accurate measure of a country's economic
performance.
§ Real GDP is calculated by adjusting nominal
GDP for inflation using a statistical tool called the price deflator.
§ Real
GDP is more accurate because it removes the effects of inflation. This allows
economists to see if the value of output has increased due to more production
or higher prices.
§ Real
GDP = (Nominal GDP/Price Index) × 100
RBI KEY RATES
Repo
Rate: 5.25%
SDF:
5.00%
MSF
/Bank Rate: 5.50%
CRR:
3.00%
SLR:
18.00%
FOREX RATES (RBI REF. RATE)
INR
/ 1 USD : 90.7415
INR
/ 1 GBP : 123.4459
INR
/ 1 EUR : 107.6218
INR
/100 JPY: 59.2000
EQUITY INDEX
Sensex: 82626.76 (-1048.16)
NIFTY: 25471.10 (-336.10)
Bnk NIFTY: 60186.65 (-553.10)
Historical events: February 16th
holds significant historical events, marking the 1944 death of Indian cinema
pioneer Dadasaheb Phalke and the 1931 Gandhi-Irwin pact talks, along with the
1959 inauguration of Fidel Castro in Cuba. Other major moments include the 1923
opening of Tutankhamun’s burial chamber and the 1927 launch of India-Nepal rail
links.
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