Daily Financial News Analysis – 18th Nov’20 – Free PDF Download


Lakshmi Vilas Bank

  • DBS Bank India Ltd (DBIL) will take over ailing Lakshmi Vilas Bank (LVB) in a bailout proposed by the Reserve Bank of India (RBI).
  • DBS Bank will gain access to borrowers and small businesses through LVB’s 560 branches with the “scheme of amalgamation.”
  • As part of the bailout, depositors and bond holders in general will get their money back.
  • The RBI had imposed a one-month moratorium on the lender with a cap on deposit withdrawal at ₹25,000 per account.
  • LVB became the third major lender to face such a moratorium in less than two years.
  • The bank had not been able to raise adequate capital to address its negative net worth and continuing losses.

Digital India

  • India now has 75 crore internet connections, of which 70 crore are broadband connections.
  • This represents around 50 crore subscribers
  • As high a proportion as 97% of internet connections in India are through mobile phones.
  • Rural India accounts for two-thirds of the population and one-third the internet connections
  • The government launched GST with a digital operating framework.
  • The government has innovated services such as Jeevan Pramaan, for pensioners to obtain a digital life certificate remotely.
  • A plan to digitise health records and make them portable across the land is underway.
  • Ration cards are already portable.
  • Many more such services will flourish and make life simpler and government services more transparent.
  • When handloom sarees or Gond paintings find new markets, it changes the lives of the artisans involved, and creates extra business for website developers, graphic artists, payment processors, server farms, packaging material suppliers, logistics companies and delivery personnel.
  • However, broadband speeds are patchy and uneven.
  • Server capacity, even of banks, is suboptimal. These niggles should go.

Limited deal

  • The proposed interim India-US trade agreement is designed to cover barely 15% of the trade between the two countries.
  • The proposed “limited deal” with the US could cover an annual trade of about $13 billion.
  • Washington seems in no great hurry to clinch even this limited deal.
  • Analysts are expecting a further delay in the clinching of the deal, as even some of the settled issues may also be reviewed by the new administration.
  • Indian however, indicated that New Delhi is willing to wait for a win-win deal for both.
  • The US is India’s largest export destination.
  • The limited deal may be converted into a preferential trade agreement involving dozens of key products, which will set the stage for an FTA subsequently.
  • According to the source, India may consider opening up its dairy and poultry sectors partially if it gets a good deal from the US in textiles and garment and pharmaceuticals.
  • As part of the limited deal, India is learnt to have offered to reduce tariffs on high-end bikes like Harley Davidson, extend greater market access in farm products, including cherry, and sweeten its initial offer on easing price caps in medical equipment.
  • However, negotiations on the American demand for India to scrap duties on seven ICT products, including high-end phones and smart watches, are yet to be concluded, said the source.
  • New Delhi had earlier estimated that any such move would mean a potential customs revenue loss of $3.2 billion or more a year.
  • The US has been pressing India to abolish/cut “not justified” tariff on motorcycles (50%), automobiles (60%) and alcoholic beverages (150%).

Oversight Body for AI

  • The government will soon frame guidelines and standards for public procurement of artificial intelligence (AI) across sectors.
  • The NITI Aayog has proposed setting up of an oversight body that will set up standards and benchmarks for use of AI.
  • National Strategy for Artificial Intelligence (NSAI) in June 2018
  • The oversight body must play an enabling role in the broad areas of research, technical, legal, policy and societal issues related to AI.
  • It should provide clarity on responsible behaviour through design structures, standards and guidelines, and enable access to responsible AI tools and techniques.
  • The body is expected to have field experts from computer science, AI, legal experts, sector specialists and representatives from civil society, humanities and social science.
  • The oversight body would also be responsible for educating and creating awareness on responsible AI, coordinate with various sectoral AI regulators as well as identify gaps and harmonise policies across sectors.
  • Further, it would represent India (and other emerging economies) in international AI dialogue on responsible AI.


  • Logistics Ease Across Different States (LEADS) index
  • The commerce department is considering adding new indicators such as rail and road connectivity, railway track and highway length, average speeds, performance of toll roads, and number and capacity of warehouse facilities to its LEADS index
  • The purpose of the ranking is to increase competition and improve performance.
  • The first two editions of the LEADS index had ranked Gujarat number one.
  • The exercise comes amid the department developing an integrated logistics planning and performance monitoring tool to reduce transaction costs and support logistics infrastructure planning and track logistics performance in the country.




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