Economy & Business MCQs

Concerns regarding the valuation of illiquid assets held by AIFs and potential conflicts of interest for fund managers are common areas addressed by regulatory enhancements.

Stricter regulations often involve reassessing minimum investment thresholds to ensure that only suitable investors participate in AIFs, thereby enhancing investor protection.

The proposed stricter regulations aim to strengthen investor protection, particularly for sophisticated investors, and ensure greater transparency and accountability within the AIF industry.

The RBI guidelines emphasize that all lending activities must be performed by the Regulated Entity (RE) or through outsourcing arrangements where the RE retains full control and oversight, prohibiting outright outsourcing of credit risk.

The guidelines stipulate that Regulated Entities (REs) are responsible for conducting due diligence on Digital Lending Apps (DLAs) and ensuring their compliance with regulatory norms.

The RBI's guidelines aim to enhance transparency, fairness, and consumer protection in the digital lending ecosystem, addressing concerns about predatory lending practices.

The PLI scheme covers 14 key sectors including Advanced Chemistry Cell (ACC) Battery, Automobiles & Auto Components, Pharmaceuticals, Textiles, Food Products, High-Efficiency Solar PV Modules, White Goods, etc., but not primary education services.

The PLI scheme offers incentives, usually calculated as a percentage of incremental sales (over a base year) of goods manufactured in India, to eligible companies for a period of 4-6 years.

The PLI scheme aims to incentivize domestic manufacturing in key sectors, reduce import dependence, create jobs, and enhance India's export capabilities, thereby making India a global manufacturing hub.

The RBI clarified that penal interest should be levied as 'penal charges' and not as 'penal interest' that capitalizes and adds to the principal. These charges should be reasonable and not usurious, and there should be no capitalization of penal charges. This was a significant move to ensure fairness and transparency.