Current Affairs - Finance

The Asian Development Bank (ADB) signed two key loans with the Government of India, totalling USD 850 million. The first loan of USD 500 million will support green and sustainable infrastructure through the India Infrastructure Finance Company Limited (IIFCL), addressing areas like urban projects, education, and healthcare. The second loan of USD 350 million under the SMILE program focuses on enhancing India's manufacturing sector and logistics efficiency, promoting economic growth, and fostering gender inclusion. These initiatives align with India's climate commitments and economic development goals.

Bajaj Housing Finance has introduced Dual Rate Home Loans and Loans Against Property, featuring a fixed interest rate for the initial three years. This structure ensures predictable EMIs for borrowers during the initial period. After three years, the loans switch to a floating interest rate tied to BHFL’s Floating Rate Reference (FRR), offering market-linked benefits. This innovative product aims to provide stability and flexibility, making it easier for individuals to manage homeownership or property investments effectively.

NPCI International Payments Ltd (NIPL) plans to expand UPI services to 6 additional countries in 2025. This move aims to broaden UPI's global reach, which already includes countries like Nepal, Bhutan, UAE, and France. The expansion targets nations such as Qatar and Thailand, along with several Southeast Asian countries. Furthermore, collaborations in regions like Peru, Namibia, and Trinidad and Tobago are in progress to establish sovereign payment systems, enhancing the adoption of UPI on a global scale.

The Reserve Bank of India (RBI) has increased the collateral-free agricultural loan limit from ₹1.6 lakh to ₹2 lakh, effective January 1, 2025. This initiative is aimed at benefiting farmers and allied activities by reducing borrowing costs and improving credit access, especially for small and marginal farmers. The increase in loan limits also enhances the uptake of Kisan Credit Card (KCC) loans, allowing farmers to avail loans up to ₹3 lakh at a 4% effective interest rate. This move supports agricultural growth and financial inclusion.

The Asian Development Bank (ADB) approved a loan of $789 million for the development of Amaravati, aiming to transform it into a smart, green capital city with world-class infrastructure. This loan is intended to boost job creation, private investment, and inclusive economic growth while positioning Amaravati as a model for sustainable urban development. The program highlights the collaborative efforts of ADB and other Multilateral Development Banks (MDBs) to bring global expertise to the city's development.