Central Electronics Limited (CEL) has recently been awarded “Mini RATNA” status (Category-1).

Mini Ratna (category 1):

• Eligibility: To be eligible for Mini Ratna (Category-1) status, a company must have made a profit for the last three consecutive years, achieved a pre-tax profit of Rs. 30 crores or more in at least one of those three years, and have a positive net worth.

Category-I, Central Public Sector Enterprises (CPSE):

1        Airports Authority of India (AAI)

2        Antrix Corporation

3        Bharat Dynamics Limited (BDL)

4        Bharat Earth Movers Limited (BEML)

5        Bharat Sanchar Nigam Limited (BSNL)

6        Central Warehousing Corporation

7        Cochin Shipyard (CSL)

8        Dredging Corporation of India (DCI)

9        Garden Reach Shipbuilders & Engineers (GRSE)

10      Goa Shipyard (GSL)

11      India Tourism Development Corporation (ITDC)

12      Indian Railway Catering and Tourism Corporation (IRCTC)

13      IRCON  International

14      Mazagaon Dock Shipbuilders Limited

15      Grid Controller of India Limited (GRID-INDIA) 

Central Electronics Limited (CEL):

• It operates under the Department of Scientific and Industrial Research (DSIR) of the Ministry of Science & Technology.
• Objective: Established in 1974, its objective is to exploit indigenous technologies commercially.
• It is a pioneer in the country’s solar photovoltaic (SPV) field.

RBI unveils revised Currency Swap Arrangement for SAARC countries.

• Recently, the Reserve Bank of India (RBI) with the concurrence of the Government of India has decided to put in place a revised Framework on Currency Swap Arrangement for SAARC countries for the period 2024 to 2027.
• The Currency Swap Facility will be available to all SAARC member countries, subject to their signing the bilateral swap agreements.

Currency Swap Arrangement for SAARC Countries:

• A currency swap between two countries is an agreement or contract to exchange currencies with pre-determined terms and conditions.
• Launched: In November 2012

• Objective: To provide a backstop line of funding for short-term foreign exchange liquidity requirements or balance of payment crises of member countries.
• Availability: The currency swap window will be available to all SAARC member countries, provided they sign bilateral agreements.
• Multiple Windows: Under the Framework for 2024-27, a separate INR Swap Window has been introduced with various concessions for swap support in Indian Rupee.
• The RBI will continue to offer swap arrangements in US dollar and euro under a separate window with an overall corpus of $2 billion.

Currency Swap Arrangement

• Refers: Two parties exchange equivalent amounts of two different currencies and trade back at a later specified date.
• Currency swaps are often offsetting loans, and the two sides often pay each other interest on amounts exchanged.
• Currency swaps are over-the-counter (OTC) financial instruments. This means they are not traded on a centralized exchange.
• So far, the Commerce Ministry, Government of India, has finalized arrangements with some 23 countries with whom Indians can trade in local currencies such as Angola, Algeria, Nigeria, Iran, Iraq, Oman, Saudi Arabia, Yemen, Japan, Russia, etc.
• Conducted by: Financial institutions conduct most of the Foreign Currency (FX) Swap, often on behalf of a nonfinancial corporation.
• Significance: Swaps can be used to hedge against exchange rate risk, speculate on currency moves, and borrow foreign exchange at lower interest rates.

Uses of Currency Swaps

1. Allow companies to hedge their foreign exchange exposures.
2. Help to lower financing costs, as it may be cheaper to borrow in a foreign currency.
3. To gain access to a foreign currency.
4. To take advantage of interest rate differentials between two countries.

Limitations of Currency Swaps

• Like any financial instrument, currency swaps possess several limitations and risks.
• Counterparty Risk: It means there is a risk that one of the parties may default on their obligations.
• Complexity: Some financial institutions may find it difficult to use them effectively.
• Significant Associated Costs: There may be significant costs associated with entering and managing the swap agreement, depending on the structure. These costs may be attributed to swap fees and hedging costs.
• Limited Liquidity: It makes it difficult to enter or exit a swap agreement at a favorable rate.

Recently, Capital markets regulator Sebi approved norms to regulate unregistered financial influencers, also referred as finfluencers.

• These influencers often operate on a commission-based model.

Finfluencers:

• Finfluencers are people with public social media platforms offering advice and sharing personal experiences about money and investment in stocks.
• Their videos cover budgeting, investing, property buying, cryptocurrency advice and financial trend tracking.

Reason for Rise in Numbers:

The rise of finfluencers can be attributed to

1. India’s low financial literacy rate of 27%
2. Influx of new investors during the Covid-19 pandemic.

• Many first-time investors turned to finfluencers for guidance: Due to Democratization of trading through new-age broking apps and Affordable smartphones.
• Filling the Vacuum: Lack of financial education and the focus on market updates by business news channels created a vacuum that finfluencers have been filling.

What’s the Issue?

• Indian stock market is booming: A surge in retail investors’ participation in equity markets during the pandemic has led to a rise in so-called influencers pushing financial advice via social media platforms.
• According to SEBI data, India had 154 million trading accounts as of April 2024
• This is a more than four times jump from the 36 million trading accounts in April 2019.
• Potential to influence a large number of people: This is increasing the popularity of so-called financial influencers who advise on stocks and other related investments through their channels on YouTube and Instagram.
• Some of these influencers have lakhs of followers with their investment advice being closely followed by millions of people across the country.

The Guidelines for Financial Influencers:

1. Norms on Financial Influencers

• It will be the responsibility of the regulated entity to ensure individuals with whom it is associated do not breach the rules of conduct set by SEBI.
• These guidelines stipulate avoiding the promise of assured returns.
• Under the new rules, brokers and mutual funds are prohibited from using the services of unregulated financial influencers for marketing and advertising campaigns.

Exemption: Financial influencers engaged in investor education will be exempted from the new restrictions.

2. Eased Delisting Rules

• Changes to delisting rules: This would make it easier for companies to exit from stock exchanges.
• Currently, delisting is carried out via reverse book-building.
• Companies can now offer shareholders fixed prices for shares as an alternative mechanism to delist from stock exchanges.

3. Derivative Trading Regulations

• New criteria introduced: To decide on stocks that can be linked to derivative products, such as futures and options.
• With the adoption of these guidelines, the total number of stocks eligible for derivative trading will rise marginally.

Risk Associated With Finfluencers

• The practices associated with finfluencers poses various impacts, few are mentioned below:
• Unregistered And Unauthorised: SEBI notes that while some of them may be genuine educators, “many of them are effectively unregistered and unauthorised Investment Advisers (IAs) or Research Analysts (RAs).”
• The number of ‘unregistered’ investment advisors giving unsolicited ‘stock’ tips on social media platforms has increased dramatically.
• Unethical Practices: If there is any kind of monetary transaction that happens between them and the entity they are promoting.
• Lack Knowledge or Expertise: Finfluencers not registered with relevant financial sector regulators may not possess the requisite qualifications or expertise on the subject.
• Definitions Clarity: Definition of Finfluencers should be clear, stand test of judicial – regulatory scrutiny.
• Price Manipulation: In addition, certain companies used social media platforms to boost their share prices through finfluencers.
• ASCI’s Guidelines violated: The Advertising Standards Council of India (ASCI) has issued guidelines for social media influencers and advertisers regarding virtual digital assets (VDAs), including cryptocurrencies and non-fungible tokens (NFTs).
• Non-Compliance: ASCI’s recent half-yearly report highlighted cases of non-compliance by social media influencers with advertising guidelines.
• Celebrity endorsements: A prominent Bollywood actor violated ASCI’s Guidelines guidelines who posted an ad about ‘Beyond Life NFT’.

High Speed Expendable Aerial Target ‘ABHYAS’ successfully completes developmental trials.

Recently, the Defence Research and Development Organisation (DRDO) has successfully completed six consecutive developmental trials of High Speed Expendable Aerial Target (HEAT) ‘ABHYAS’ in Chandipur, Odisha.

ABHYAS:

• It is a High Speed Expendable Aerial Target (HEAT).
• It has been designed by DRDO’s Aeronautical Development Establishment, Bengaluru, and developed through Production Agencies - Hindustan Aeronautics Limited & Larsen & Toubro.

Features

• It offers a realistic threat scenario for weapon systems practice.
• This indigenous system is designed for autonomous flying with the help of an autopilot, a laptop-based Ground Control System for aircraft integration, pre-flight checks, and autonomous flight.
• It also has a feature to record data during flight for post-flight analysis.
• The booster has been designed by Advanced Systems Laboratory and the navigation system by Research Centre Imarat.

Key Facts about DRDO

• It was formed in 1958 from the amalgamation of the then-existing Technical Development Establishment (TDEs) of the Indian Army and the Directorate of Technical Development and Production (DTDP) with the Defence Science Organisation (DSO).
• It is the R&D wing of the Ministry of Defence, Govt. of India, with a vision to empower India with cutting-edge defence technologies and a mission to achieve self-reliance in critical defence technologies and systems.
• It has a network of laboratories engaged in developing defence technologies covering various fields, like aeronautics, armaments, electronics etc.
• Headquarters: New Delhi.