Here are a key important highlights about the week, which are key and a short update out of all the news:
RBI launches retail digital rupee; how will it work?
RBI launched Indias first pilot digital currency "E-Rupee" – Central Bank Digital Currency (CBDC) on 01st December 2022 (Thursday). CBDC is an electronic version of cash, it is the same as fiat currency and exchangeable one-to-one. By launching a digital rupee, the government hopes to address problems related to existing fiat currency and cross-border transactions.
How will it work? It will be distributed through banks that will act as intermediaries. The digital wallet will be installed on mobile phones to transact with digital currency. The transaction can be both P2P (Person to Person) & P2M (Person to Merchant). Unlike Cryptocurrencies, the Digital rupee is issued in the same denomination as paper currency & coins.
CBDCs first pilot will initially cover four cities: - Mumbai, New Delhi, Bengaluru, And Bhubaneshwar. The first phase will begin with four banks- State Bank of India, ICICI Bank, Yes Bank, and IDFC First Bank across four cities of the country.
Adani group wins Dharavi redevelopment project, 5,069 crores bid.
The Adani Group already has a realty arm in the country, which has already executed or is in the process of executing projects in the financial capital cities. Now Adani Group has emerged as the highest bidder for the 259-hectare Dharavi Redevelopment Project. The bid is for the entire ₹20,000-crore project, and the total timeline for the project is 7 years to rehabilitate the 6.5 lakh slum dwellers who are spread over a 2.5 sq. km area right now.
New SEBI rule to make debt mutual funds less risky, more diversified
A Debt Mutual Fund scheme would not invest more than 10% of its NAV in debt and money market securities rated AAA issued by a single issuer. For AA, the exposure should not be more than 8% and for A and below-rated companies, the exposure will be capped at 6%.
These rules were made mandatory for passive funds and ETFs in May 2022 and now will be consistent in active funds as well. As per the SEBI Circular, these limits can be extended by another 2%. The idea of making Debt Mutual Funds more uniform is to enhance and deepen the Debt Market.
Debt Mutual Funds offer a way superior return compared to Fixed Deposits and Savings Bank Deposits, despite giving the same safety, liquidity and ease of use. The taxation benefits including indexation and capital gains, make it more attractive for those in higher tax brackets.
Author - Heetal Agarwal