Economy News Notes:

Andhra Pradesh has secured another feather in its cap by becoming the first State in the country to obtain banking licences for all the District Cooperative Central Banks (DCCBs) from the Reserve Bank of India.
The Committee on Financial Sector Assessment chaired by Dr. Rakesh Mohan recommended the need for drawing a roadmap to ensure that only licensed banks were in operation in the cooperative sector.
Of the total 22 DCCBs, three were licensed at the time of announcement of the RBI's annual policy statement for 2009-10.
Due to proper planning and coordination between NABARD and cooperative banks, the remaining 19 obtained licences four months ahead of the March 2012 deadline set by the RBI.

The Centre is gearing up to notify 100 per cent foreign direct investment (FDI) in single-brand retail.
Foreign investors are already required to own the brand they intend to retail, the brand must be present in other countries and the retailer must source 30 per cent of the products to be retailed from small industries.
The guidelines could make it clear that such a condition will not apply to high tech goods that small and medium scale industries cannot manufacture.
The 51 per cent FDI in the single-brand retail sector had not been able to attract many big names
We are now hopeful that the enhancement of 100 per cent limit will ensure that big names in single-brand will now seek to penetrate the huge potential of the Indian markets in various brands and segments, which will ensure a good flow of FDI into the country
The government has already put on hold the decision to allow 26 per cent FDI in the aviation sector.
The issue of enhancing the limit in insurance and defence sectors from 26 per cent to 49 per cent is also hanging fire due to objections from various sections of the government.

“Driven by moderation in growth, decline in profitability and subdued funding prospects in their core business, several MFIs are starting new ventures that are focussed on secured asset classes or leveraging their branch networks to offer other retail products,” said Crisil, a leading rating agency
The Reserve Bank of India's (RBI's) recent guidelines are a positive step in this regard, and are aimed at structurally strengthening the MFI sector over the long run.
The RBI's revision in provisioning norms and change in recognition of non-performing assets (to 90 days overdue from 180 days overdue) is unlikely to impact the profitability
MFIs are, therefore, diversifying their business models by starting new ventures aimed at entering other asset classes (mostly secured, such as loans against gold jewellery, housing and vehicle finance).
While most of these new business initiatives are at an early stage, MFIs' ability to develop systems and processes, and scale up operations will shape their business risk profiles
The RBI's recent guidelines have created a new category of non-banking financial companies (NBFCs) called NBFC-MFIs.

The Cabinet Committee on Economic Affairs (CCEA) has approved foreign direct investment (FDI) proposals worth Rs.6,500 crore of two power sector entities.
These proposals are for downstream investments and transfer of the entire equity shares of Grid Equipment and Energy Grid from Areva T&D India and other resident shareholders.