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Last Updated: February 9, 2021

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  • Government and Reserve Bank of India Cooperate to Privatize Banks

    62 days ago
    Union Finance Minister Nirmala Sitharaman addressed business leaders, chartered accountants and tax professionals in Mumbai that the central government will work with the Reserve Bank of India (RBI) to implement the bank privatization plan. Highlights: ♦ The minister further stated that the centre has not yet planned to establish any bank investment company to accommodate the government's bank assets. ♦ The Finance Minister recently announced the privatization of two banks when introducing the 2021 Union budget. ♦ The announcement was made in accordance with the Center’s disinvestment plan. But the bank union opposed the plan. ♦ The central government is planning to privatize more than half of state-owned banks. The government is planning to reduce the number of government-owned lenders to five.  ♦ Currently, India has 12 state-owned banks. In 2019, the government also merged ten state-owned banks into four large banks.    

    RBI Trend and Progress Report Provides the Performance Of The Banking Sector

    102 days ago
    The Reserve Bank of India's trend and progress report provides information on the banking industry's performance. This includes non-bank financial institutions and cooperative banks.  Highlights: ♦ The report also provides views on the development prospects of India's financial industry. The report is statutory compliance with the Banking Control Law of 1949. ♦ The report stated that the ratio of total non-performing assets of commercial banks dropped from 9.1% in March 2019 to 7.5% in September 2020. COVID-19 provisions and dividend returns will help protect its balance sheet. ♦ The ratio of capital to risk-weighted assets of fixed-term commercial banks increased from 14.3% in March 2019 to 15.8% in September 2020. This helps public sector banks to inject capital. ♦ After losses in previous years, regular commercial banks' net profit turned losses into profits in the 2019-20 fiscal year. The planned commercial banks consolidated their earnings after turning losses into profits in the 2018-19 fiscal year. ♦ The Reserve Bank of India has adopted a series of policy measures to mitigate the impact of covid-19.  The main efforts identified in the report are as follows: ♦ Legislative amendments strengthen the scope of supervision of the Reserve Bank of India. This provides the supreme bank with superior power over the cooperative bank. ♦ A series of measures have also been taken to strengthen the supervisory framework. ♦ The 2002 "Financial Asset Securitization and Reconstruction and Enforcement of Security Interests Act" resolved large accounts and helped the economic recovery process through the bankruptcy and bankruptcy law. ♦ The asset quality and profitability of state-owned cooperative banks have improved. ♦ The balance sheet growth of city cooperative banks has slowed in 2019-20. The report stated that the City Cooperative Bank's asset quality deteriorated, leading to a net loss.

    RBI December Montary Policy, Rates kept unchanged

    127 days ago
    The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) has kept the Repo rate unchanged in the December policy. The repo rate currently stands at 4%. The Reverse Repo rate is maintained at 3.35%. Also, the Marginal Standing Facility and Bank Rate also remain unchanged at 4.25%. The MPC announced this in view of reviving growth and mitigate the impact of COVID-19 and also aims to ensure inflation that remains within the target, going forward. Highlights: ♦ The committee has announced a set of additional measures with the objective of reviving the economy, enhancing liquidity support, deepen financial markets. It also focuses to conserve capital among banks and NBFCs, strengthen regulatory supervision, facilitate external trade, and upgrade payment system services. ♦ The existing guidelines on Credit Default Swap will be reviewed in order to facilitate the development of the credit derivatives market. ♦ Regional Rural Banks will now be permitted to access Liquidity Adjustment Facility (LAF) and Marginal Standing Facility of RBI and the call/notice money market.

    RBI to move to NGTA for managing forex, gold reserves

    181 days ago
    The Reserve Bank of India (RBI) has decided to move to the Next Generation Treasury Application (NGTA) for managing India's foreign exchange and gold reserves in order to improve its functioning.  Highlights: ♦ With this introduction, the NGTA will be a web-based application providing scalability, maneuverability and flexibility to introduce new products and securities along with multi-currency transactions and settlements. ♦ The main objectives of the the objectives of the proposed NGTA system includes: reserve management portfolio management workflow management integration with various third party and in-house systems dashboards, reports, widgets dealing in various asset classes like Fixed Income Securities, Money Market, Forex, and Gold ♦ Earlier, RBI has invited bids for NGTA from eligible vendors ♦ The NGTA would support various transactions in asset classes like Money Market (MM), Fixed Income (FI), Forex (FX), and Gold. ♦ The proposed NGTA would be used for managing the foreign exchange reserves in a more efficient way, mitigate risk, achieve operational efficiencies, dealing in various asset classes and reporting. ♦ Also, the proposed NGTA will automatically fetch all the relevant details of a security and contract from a trading platform.

    NABARD launched Structured Finance and Partial Guarantee Programme

    229 days ago
    National Bank for Agriculture and Rural Development (NABARD) has unveiled a Structured Finance and Partial Guarantee Programme to Non-Banking Finance Companies (NBFCs) and Microfinance Institutions (MFIs). It is a dedicated debt and credit guarantee product. The programme aims to ensure the undisturbed flow of credit in COVID-19-affected rural areas. To launch the programme, NABARD has signed agreements with Vivriti Capital and Ujjivan Small Finance Bank. Structured Finance and Partial Guarantee Programme: ♦ Under the Structured Finance and Partial Guarantee Programme, NABARD will provide partial guarantee on pooled loans extended to small and mid-sized Microfinance Institutions (MFIs).  ♦ It will help facilitate Rs.2,500 crore funding in the initial phase and is expected to be scaled up in the future.  ♦ The program will cover over 1 million households across 28 states and 650 districts. ♦ It is expected that the partially guaranteed loan facility will catalyze financing to millions of households, agricultural, and business markets to sustain in the post-COVID-19 situation.  ♦ With NABARD as a guarantor and a convincing product construct in place, the programme has attracted many banks and small finance banks to participate.

    ADB approves USD 3 million to India to fight against COVID-19 pandemic

    255 days ago
    Multilateral funding agency Asian Development Bank (ADB) has approved a $3 million (about Rs.22 crore) grant to India from its Asia Pacific Disaster Response Fund. They further support the government's emergency response to the COVID-19 pandemic. The grant is financed by the Japanese government. The funds will be used to procure thermal scanners and essential commodities to strengthen India's COVID-19 response. Highlights: ♦ The new grant is a move by ADB to the Government of India in strengthening its COVID-19 response.  ♦ It also enhances disease surveillance and helps in early detection, contact tracing, and treatment. ♦ It will also further supplement other public health measures. ♦ ADB approved a $1.5 billion COVID-19 Active Response and Expenditure Support (CARES) programme. The aim is to support India in its immediate pandemic response efforts, including disease containment and prevention, and social protection measures for the poor and economically vulnerable, particularly women and disadvantaged groups. ♦ COVID-19 pandemic response option (CPRO) under ADB's Countercyclical Support Facility funds the CARES programme. ♦ CPRO was established as part of ADB's $20 billion expanded assistance for developing member countries' pandemic response, which was announced on 13 April 2020.

    RBI - REPO points downs by 135

    275 days ago
    From February 2019 till COVID-19 began, the Reserve Bank of India ( RBI) has cut the repo rate by 135 basis points. That was shared by RBI Governor Shaktikanta Das while delivering his keynote address on July 11, 2020 at the 7th SBI Banking & Economics Conclave. Covid - 19's Adverse Effect on REPO Points The RBI Governor said repo rate has been cut overall since February 2019 by 250 basis points to alleviate liquidity stress and provide financial stability in the economy. The main aim behind the move was to tackle the economic growth slowdown. Das stated that during the Monetary Policy Committee (MPC) meeting, they had extensively touched on economic growth issues. The MPC has agreed to slash the policy repo rate by 115 base points cumulatively. Worst Health & Economic Crisis in 100 years Says RBI Governor The RBI Governor claimed that this is the worst health and economic crisis of the last 100 years with unparalleled negative impacts on employment, production, and well-being. Das said the existing world order, global value chains, labor, and capital movements across the globe have been dented. RBI Governor further claimed that the coronavirus pandemic has represented our economic and financial system 's largest test of resilience and robustness. The new RBI initiatives seek to accelerate a cyclical turnaround in economic activity at a time when COVID-19 has struck the world along with other calamities, causing poverty and endangering thousands of people's lives and livelihoods. According to Shaktikanta Das, COVID may result in higher non-performing assets (NPAs) and capital erosion of banks.

    RBI to conduct OMO to boost liquidity

    286 days ago
    The Reserve Bank of India (RBI) has announced that is is to conduct special "Open Market Operations (OMO)" on 2 July 2020. The aim is to pump up liquidity in the financial system. Highlights: ♦ RBI's special OMO session will see the simultaneous purchase and sale of government securities for Rs.10,000 crore.  ♦ RBI will sell short-term securities, that worth Rs.10,000 crore, that are maturing in the current band next year and purchase long-term securities of an equal amount maturing between 2027 and 2033. ♦ The move by the Central Bank is expected to improve both liquidity and bond yields. Open Market Operations (OMO): Open market operations (OMO) refers to a central bank's buying and selling of government securities in the open market in order to expand or contract the amount of money in the banking system. Securities' purchases inject money into the banking system and stimulate growth, while sales of securities do the opposite and contract the economy. In a multiple price-auction, each successful bidder pays the price stated in his bid. In case of 'uniform price' auctions, all successful bidders pay the same price that is the cut-off price at which the market clears the issue.

    ADB, India sign USD 177 million loan for state road improvements in Maharashtra

    318 days ago
    The Asian Development Bank (ADB) and the Government of India signed a $177 million loan to upgrade 450 kilometers of state highways and major district roads in Maharashtra. Highlights: ♦ The project aims to improve connectivity between rural areas and urban centers in Maharashtra. It will enable rural communities to better access markets, employment opportunities, and services.  ♦ It is expected that improved mobility will expand development and livelihood opportunities outside Maharashtra urban centers to second-tier cities and towns. It will reduce income disparities. ♦ The project plans to develop a road safety audit framework in order to develop vulnerable groups such as the elderly, women, and children. It will strengthen road safety measures in the state. ♦ The project is planned for a 5-year maintenance system to contractors to sustain asset quality and service levels. ♦ Under the project 2 major district roads and 11 state highways will be upgraded with a combined length of 450 km, to 2-lane standard across 7 districts of Maharashtra. ♦ The move aims to improve connectivity to national highways, interstate roads, seaports, airports, rail hubs, industrial areas, enterprise clusters, district headquarters, and agricultural areas. ♦ Under the project, the staff from the Maharashtra Public Works Department will be trained to build their capacity in climate change adaptation and disaster-resilient features in road design, road maintenance planning, and road safety. Asian Development Bank (ADB): Asian Development Bank (ADB) was established on 19 December 1966. The bank aims to achieve a prosperous, inclusive, resilient, and sustainable Asia and the Pacific. It also aims to eradicate extreme poverty. ABD has 68 members, 49 from the region. It is headquartered in the Philippines.

    RBI cuts repo rate to a record low by 40 bps

    325 days ago
    The Reserve Bank of India (RBI) cuts repo rate by 40 basis points (bps) to 4% from 4.4% on 22 May. The Central Bank also adjusted the reverse repo rate to 3.35% from 3.75%. The announcement was made by RBI Governor Shaktikanta Das. Highlights: ♦ The repo reduction marked the lowest repo rate or the key interest rate at which the RBI lends short-term funds to commercial banks. This is the reduction that has been recorded since 2000.  ♦ The reduction in the key interest rate will allow banks to reduce the Equated monthly installments (EMI) burden for their borrowers. ♦ RBI also extended the loan moratorium, which allows banks to defer EMI payments by their customers, by another three months till August 2020. Background: On 27 March 2020, RBI slashed the benchmark interest rate by 75 bps and also announced a 3-month moratorium to be given by banks to provide relief to borrowers whose income has been hit due to the lockdown. RBI also introduced several steps to ease the pressure faced by borrowers, lenders, and other entities. RBI took more initiatives to deal with the COVID-19 pandemic.

    RBI announced Rs.15,000 crore LoC to EXIM Bank to raise its resources

    325 days ago
    The Reserve Bank of India (RBI) announced Rs.15,000 crore line of credit (LoC) to the Export-Import Bank of India (EXIM) on 22 May. The move by RBI is to help the sagging foreign trade. EXIM Bank depends on foreign currency borrowings for its operations. The Bank has failed to raise the resources due to the COVID-19 pandemic. Highlights: ♦ The EXIM Bank will be given LoC of Rs.15,000 crore for a period of 90 days from the date of availing with rollover up to a maximum period of one year. ♦ It will the Bank to avail of a US dollar swap facility to meet its foreign exchange requirements. ♦ RBI has decided to increase the maximum permissible period of pre-shipment and post-shipment export credit sanctioned by banks from the existing one year to 15 months, for disbursements made up to 31 July 2020.

    NABARD released Rs.20,500 crore to co-operative banks, RRBs

    328 days ago
    National Bank for Agriculture and Rural Development (NABARD) released Rs.20,500 crore to co-operative banks and regional rural banks (RRBs) for on-lending. The disbursement to RRBs and Co-operative banks is the part of Rs.25,000 crore of special refinance plan which was approved by the Reserve Bank of India (RBI) to RRBs, Co-operative banks and Microfinance Institutions (MFIs). Highlights: ♦ Of the total, Rs.15,200 crore has been released to cooperative banks and Rs.5,300 crore to RRBs as special liquidity facilities in various states. ♦ The funds to the co-operative banks and RRBs aims to ensure the availability of liquidity with the Banks to finance farmers for taking up pre-monsoon and Kharif 2020 operations. ♦ Also, the banks have initiated a programme for Kisan credit cards and around 12 lakh new KCC cards have been issued by co-operative banks and RRBs in April 2020.

    IMPS transfers in April dive to 2-year low due to lockdown

    336 days ago
    Data from the National Payments Corporation of India (NPCI) stated that April Immediate Payment System (IMPS) numbers have reduced to a two-year low. The dive in the retail interbank transfers is due to the COVID-19 lockdown.  Highlights: ♦ Transactions using the IMPS platform in April stood at 12.2 crore, while 24.7 crore transactions were done in February 2020.  ♦ The platform is used mostly by migrant labour and small businesses.  ♦ In the case of Unified Payment Interface (UPI), an app-based payment, there has been a significant drop as well from 132 crore in February to less than 100 crore in April. ♦ As the limit of IMPS is Rs.2 lakh, it is mostly used by small businesses. ♦ More than the limit, one has to use RTGS. Hence, larger corporates and mid-cap companies prefer RTGS for bulk payments such as salary credits to employees and vendor payment.

    SC places cooperative banks under Sarfaesi Act on a par with other lenders

    337 days ago
    The Supreme Court (SC) brought cooperative banks under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Act of 2002 (Sarfaesi Act) that empowers lenders to seize and sell defaulters’ assets. Sarfaesi Act: ♦ The move by the apex court aims to boost the cooperative banks that play a vital role in financial inclusion across large swathes of India. ♦ The cooperative banks come under the category of banks as defined under Section 2(1)(c) of the Sarfaesi Act. Hence, the recovery procedures mentioned under the law will be applied to the cooperative banks as well. ♦ Under Sarfaesi Act, the secured creditors can take possession of the assets of a borrower who fails to pay dues within 60 days of demanding repayment.  ♦ The judgment stated that cooperative banks were bound by the provisions of the Banking Regulation Act, 1949, and all the other legislation applicable to banks under the RBI Act. Now, the cooperative banks will have to comply with these rules. ♦ Cooperative banks will now be involved in banking activities that are covered u/s 5(c) & 56(a) of the Banking Regulation Act. ♦ As per the Reserve Bank of India (RBI) report, as of 31 March 2018, there are 1,551 urban cooperative banks (UCBs), and 96,612 rural cooperative banks (as on 31 March 2017). The rural cooperative banks account for 65.8% of the total asset size of all cooperative banks.

    SBI reduces benchmark lending rate by 15 basis points

    338 days ago
    State Bank of India (SBI) slashed the benchmark lending rate by 15 basis points (bps). With the newly announced cut, the MCLR (Marginal Cost of Funds based Lending Rate) reduced to 7.25%, from 7.40% with effect from 10 of May.  SBI Wecare Deposit: ♦ As a measure to safeguard the interests of senior citizens, the bank has introduced a new product 'SBI Wecare Deposit' in the retail term deposit segment.  ♦ Under the new product, an additional 30 bps premium will be payable for senior citizen's retail term deposits with Five Years and above tenure only. This scheme would be open until 30 September 2020. ♦ SBI also slashed its interest rates on retail term deposits by 20 bps for up to 3 years tenure, effective from 12 of May.

    Finance Minister launched INR-USD Futures and Options contracts in the International Exchanges at GIFT-IFSC

    339 days ago
    Union Minister for Finance and Corporate Affairs Nirmala Sitaraman launched INR-USD Futures and Options contracts on the two International Exchanges, namely BSE's India INX and NSE's NSE-IFSC, at GIFT International Financial Services Centre (IFSC) at Gandhinagar through video conference on 8 May. Background: ♦ The launch of INR-USD contracts at the exchanges in GIFT-IFSC is a step in bringing the international financial centres to India.  ♦ Earlier, the significant market share in financial services related to India has moved to other international financial centres.  ♦ The move will be available 22 hours across all time zones for all global participants from GIFT IFSC. ♦ It is expected that trading of INR-USD contracts will bring volumes to India.  ♦ The move would also bring larger global participation in India through IFSC and connect India's IFSC globally.

    RBI extends regulatory benefits announced under SLF-MF

    347 days ago
    The Reserve Bank of India (RBI) extended the regulatory benefits announced under the special liquidity facility for mutual funds (SLF-MF) scheme to all banks, irrespective of whether they avail funding from RBI or deploy their own resources under the scheme. Highlights: ♦ Any bank that meets with the liquidity requirements of mutual funds by extending loans and undertaking outright purchase or repos against the collateral of investment-grade corporate bonds, commercial papers, debentures and certificates of deposit held by mutual funds will be eligible to claim all regulatory benefits. ♦ To avail the regulatory benefits, the bank should submit a weekly statement containing consolidated information on entity-wise and instrument-wise loans and advances extended or investment made to eligible entities to financial markets and the Department of Supervision on every Monday till the closure of the scheme. ♦ On 27 April, the RBI announced the SLF-MF to ease liquidity strains on mutual funds. This intensified the redemption pressures related to the closure of some debt mutual funds and potential contagious effects.

    GoI, ADB signs USD 1.5 billion to figainst COVID-19 pandemic

    349 days ago
    The Government of India and the Asian Development Bank (ADB) signed a $1.5 billion loan that will support the government's response to the novel coronavirus disease (COVID-19) pandemic.  Highlights: ♦ The loan focuses on immediate priorities including disease containment and prevention, and social protection for the poor and economically vulnerable sections of the society, especially women and disadvantaged groups. ♦ Under this move, response measures to the coronavirus pandemic to implement COVID-19 containment plan to rapidly ramp up test-track-treatment capacity, and social protection for the poor, vulnerable, women, and disadvantaged groups to protect more than 800 million people over the next three months will be done. ♦ ADB's financial and technical support will contribute to the sound implementation of the government's far-reaching emergency response programs launched in March 2020. ♦ Earlier, the ADB's Board of Directors approved the loan to provide budget support to the government to counter and mitigate the adverse health and socio-economic impact of the pandemic.  

    RBI announced Rs.50,000 crore liquidity for Mutual Funds

    350 days ago
    The Reserve Bank of India (RBI) announced Rs.50,000 crore liquidity support for Mutual Funds (MFs) on 27 April 2020. It approved the funds under the special liquidity facility scheme effective from 27 April. RBI's move comes after Franklin Templeton's decision to close 6 debt funds and put redemptions on hold indefinitely. Highlights: ♦ Under this move, the RBI will conduct repo operations of 90 days tenor at the fixed repo rate. The facility will be on-tap and open-ended, and banks can submit their bids to avail funding on any day from 27 April- 1 May.  ♦ The funds availed under the scheme can be used by banks exclusively for meeting the liquidity requirements of MFs by extending loans, and undertaking the outright purchase of and/or repo against the collateral of investment-grade corporate bonds, commercial papers (CPS), debentures and certificates of Deposit (CDs) held by MFs.  ♦ The move by the Central Bank will increase confidence among investors. ♦ RBI has also added liquidity support that can be availed under the scheme which would be eligible to be classified as held to maturity (HTM), even in excess of 25% of the total investment that is permitted in the HTM portfolio.  ♦ Exposures under this facility will not apply under the Large Exposure Framework (LEF). The face value of securities kept in the HTM category will not be reckoned for computation of adjusted non-food bank credit (ANBC) for the purpose of determining priority sector targets. ♦ The support extended to MFs under the Special Liquidity Facility for Mutual Funds (SLF-MF) shall be exempted from banks' capital market exposure limits.

    Finance Minister attended 5th Annual Meeting of Board of Governors of NDB

    356 days ago
    Union Minister of Finance & Corporate Affairs Nirmala Sitharaman participated in the 5th Annual Meeting of Board of Governors of New Development Bank (NDB) through video-conference in New Delhi on 20 April. Conference Highlights: ♦ NDB's efforts to deliver its mandate successfully by taking a more sustainable and inclusive approach were highlighted. ♦ The Minister discussed the bank's effort on fast-tracking of financial assistance of about $5 billion to BRICS countries including Emergency Assistance of $1 billion India to combat COVID-19 pandemic.  ♦ The Bank has directed the bank's assistance under this facility to be enhanced to $10 billion.  ♦ The bank has initiated the creation of a COVID-19 Emergency Fund and supported India's efforts in supplying critical medicine to the needy countries to tackle the COVID-19.  ♦ The various measurements of the bank to support India in tackling the COVID-19 pandemic include an allocation of $2 Billion by GoI to strengthen the healthcare system. ♦ It also announced a scheme of social support measures amounting to $25 Billion to alleviate the hardship of the poor and the vulnerable and provided insurance cover of $67,000 per person to over 2.2 million frontline health workers. ♦ It also provides others provision of relief to firms in statutory and regulatory compliance matters and easing of monetary policy by the RBI. ♦ It was suggested that the bank take appropriate measures to join the G-20 forum along with other Multilateral Development Banks (MDBs) and the International Financial Institutions (IFIs). New Development Bank (NDB): NDB was established by the BRICS (Brazil, Russia, India, China, and South Africa) countries in 2014. The Bank aims to mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging market economies. It also supports the existing efforts of multilateral and regional financial institutions for global growth and development. NDB has approved 14 projects in India for an amount of $4,183 million, so far.

    RBI announced 2nd set of measures to preserve financial stability

    360 days ago
    The Reserve Bank of India (RBI) has announced the second set of measures to preserve financial stability and help put money in the hands of the needy and disadvantaged during the extended lockdown due to the COVID-19 crisis. The information was announced by the RBI Governor Shaktikanta Das.  Aim: The move by the Central Bank aims to maintain adequate liquidity in the system and its constituents in the face of COVID-19 related dislocations, facilitate and incentivize bank credit flows, ease financial stress, and enable the normal functioning of markets. Measures announced by RBI: 1) RBI has approved to conduct a second set of targeted long-term repo operations (TLTRO 2.0) for an initial aggregate amount of Rs.50,000 crore. This will facilitate funds flow to small and mid-sized corporates, including NBFCs and MFIs, who have been more severely impacted by the disruptions due to COVID-19. 2) Special refinance facilities for a total amount of Rs.50,000 crore will be provided to National Bank for Agriculture and Rural Development (NABARD), the Small Industries Development Bank of India (SIDBI) and the National Housing Bank (NHB) to enable them to meet sectoral credit needs. 3) Reverse repo rate has been reduced by 25 basis points (bps) from 4.0% to 3.75% with immediate effect. The move is to encourage banks to deploy surplus funds in investments and loans in productive sectors of the economy. 4) Ways and Means Advances (WMAs) Limit of states and union territories (UTs) has been increased by 60% over and above the limit as on 31 March 2020. The aims are to provide support to states/UTs for undertaking COVID-19 containment and mitigation efforts, and also to help them plan their market borrowing programs better. 5) RBI has decided that the payment moratorium period for the Non-Performing Assets (NPAs), which lending institutions have been permitted to grant as per RBI's announcement on 27 March 2020, will not be considered while classifying assets as NPAs. Hence, NBFCs will have flexibility under the prescribed accounting standards to provide such relief to their borrowers. 6) Resolution Timeline of stressed assets or accounts has been extended by 90 days.  7) Scheduled commercial banks (SCBs) and cooperative banks shall not make any further dividend pay-outs from profits pertaining to FY 2019-20 in order to enable banks to conserve capital so that they can retain their capacity to support the economy and absorb losses in an environment of heightened uncertainty. 8) Liquidity Coverage Ratio requirement for scheduled commercial banks has been brought down from 100% to 80% with immediate effect. It aims to improve the liquidity position for individual institutions. 9) The treatment available for loans to commercial real estate projects with respect to the date for commencement for commercial operations (DCCO) has been extended to NBFCs, in order to provide relief to both NBFCs and the real estate sector. 

    RBI released 49th round of OBICUS

    360 days ago
    The Reserve Bank of India (RBI) released the 49th round of quarterly OBICUS (Order books, inventories, and capacity utilization survey) of the manufacturing sector. The survey includes the reference period January-March 2020. OBICUS: ♦ The OBICUS survey will provide valuable input for monetary policy formulation. ♦ The Central Bank has conducted the OBICUS of the manufacturing sector on a quarterly basis since 2008. ♦ The data collected in the survey includes quantitative data on new orders received during the reference quarter, backlog of orders, pending orders, total inventories with a breakup between work-in-progress (WiP) and finished goods (FG) inventories and item-wise production.  ♦ RBI also stated that the company level data collected during the survey will be treated as confidential and never disclosed.  ♦ In the 48th round of the OBICUS for the quarter, October-December 2019 over 704 manufacturing companies were covered. The last survey showed that capacity utilization (CU) had declined to 68.6% in the third quarter of 2019-20 from 69.1% in the previous quarter. ♦ The orders that were received in the third quarter of the year 2019-20 were less when compared with the previous quarter.

    ADB announced USD 2.2 billion to support India to combat coronavirus pandemic

    367 days ago
    Asian Development Bank (ADB) has announced that it is to fiund $2.2 billion (about Rs.16,500 crore) support to India in its fight against the COVID-19 pandemic. ADB is committed to supporting India's emergency needs.  Aim: ♦ It aims to help the health sector of India and to help alleviate the economic impact of the pandemic on the poor. The fund will benefit informal workers, micro, small, and medium-sized enterprises, and the financial sector of India. ♦ This is straining a large number of micro, small, and medium-sized enterprises, and the livelihood of formal and informal labourers across the country. ♦ ADB has announced that is to meet India's needs by considering all financing option including emergency assistance, policy-based loans, and budget support to facilitate swift disbursement of ADB funds. ADB: Formed on: 19 December 1966 Headquarters: Philippines Membership: 68 countries President: Masatsugu Asakawa ADB aims to promote social and economic development in Asia. ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific and works to sustain its efforts to eradicate extreme poverty.

    ICRA says Banks, NBFCs to see bad loans pile up post moratorium period

    374 days ago
    Rating company ICRA stated that Banks and Non-Banking Finance Companies (NBFCs) will face a bad pile-up in bad loans post the moratorium period. It will worsen the credit profile of the Banks. ICRA Highlights: ♦ ICRA stated that lenders with a higher share of asset classes like microfinance, commercial vehicles, and small companies will be more vulnerable as their repayment ability depends on immediate cash flows. ♦ It stated that the asset quality stress of the banks will reflect with a lag of 1-2 quarters after the removal of the moratorium. The stress will vary across segments. ♦ ICRA estimated the GDP growth will be slowed down to 2.0% in the current fiscal from an estimated 4.4% in fiscal 2020. ♦ It is expected that the profitability (RoA) of financial sector entities will be adversely affected by 50-90 basis points (bps) this fiscal. ICRA Limited (ICRA): Founded on: 1991 Headquarters: Gurgaon, India Non-Executive Chairman and independent director: Arun Duggal The credit rating agency is a joint venture (JV) between Moody's and various Indian commercial banks and financial services companies. Moody's Corporation owns a 50.06% majority stake, as of 2014.

    RBI increased short-term borrowing limit for states, UTs by 30 percent

    374 days ago
    The Reserve Bank of India introduced new measures to relax the impact of the COVID-19 induced lockdown. The Central bank focused on the finances of the states, that have announced the staggered payment of salaries. Measures: ♦ Short-term borrowing limits of States or ways and means advances (WMA) have been increased by 30%. It aims to enable the state governments to tide over the situation arising from the outbreak of the COVID-19 pandemic. ♦ The states have faced pressure on revenues as the economic activity came to a halt and the transfers from the Central government and less Goods and Services Tax (GST) collection. ♦ The decision came as the Banks that bear the moratorium would get some reprieve in meeting regulatory norms with respect to the capital needs. ♦ The revised limits came into force on 1 April 2020. It will be valid until 30 September 2020.

    Chief executives of OBC, UBI designated as OSD in PNB

    374 days ago
    After the merger of the Oriental Bank of Commerce (OBC) and the United Bank of India (UBI) into Punjab National Bank (PNB), the government has designated Chief Executives of OBC and UBI as "officers on special duty" in Punjab National Bank. The officers are not assigned any portfolio so far. The PNB merger has created the country's second-largest state-owned bank with Rs 7.7 lakh crore advances. Also, OBC chief executive Mukesh Kumar Jain, who is now in PNB will be retiring in July.  Punjab National Bank: Founded on: 12 April 1894 Headquarters: New Delhi, India Chairman: Sunil Mehta MD & CEO: S.S. Mallikarjuna Rao PNB has over 11,000+ branches and 13,000+ ATMs post, 115 million customers after the merger with United Bank of India and Oriental Bank of Commerce. The merger came with effect from 1 April 2020.

    RBI introduced relief measures to deal with coronavirus pandemic

    375 days ago
    The Reserve Bank of India (RBI) has announced relief measures for state governments, exporters. The Central Bank also provides relief to banks' capital concerns.  RBI Measures: 1) RBI extended the deadline for realization and repatriation period of export which is made up to or on 31 July. The period of export has been relaxed for up to 15 months from 9 months (at present).  The move by RBI will enable exporters to realize their receipts within the extended period. It will also provide greater flexibility to exporters to negotiate future contracts with buyers abroad. 2) RBI constituted an advisory committee to review ways and means limits for states and Union Territories (UTs). As per the committee's report, it has been decided to increase the ways and means limit by 30% from the existing threshold for all states/UTs.  The move is expected to cause the relief to state governments to get through the pandemic. The revised limits by the Central Bank came into force with effect from 1 April and will be valid till 30 September 2020. 3) RBI cancelled the counter-cyclical capital buffer for banks for a period of one year. RBI's framework views the credit-to Gross domestic product (GDP) gap as the main indicator, along with other supplementary indicators.  The counter-cyclical capital buffer framework was introduced by RBI in 2015. The framework aimed to build up capital that may be used by them to maintain the flow of credit in difficult times. The framework aimed to prevent banks from indiscriminate lending in periods of excess credit growth.

    Merger of 10 PSBs into 4 comes into from 1 April

    376 days ago
    The Reserve Bank of India (RBI) announced that the merger of 10 state-run banks into four lenders came into effect on 1 April amid the lockdown triggered by coronavirus outbreak. The branches of merging banks will operate as of the banks in which the banks have been amalgamated. Highlights: ♦ On 4 March 2020, GoI announced the amalgamation schemes for 10 state-owned banks into four as part of its consolidation plan. The move aimed to create bigger size stronger banks in the public sector. ♦ The amalgamation of 10 PSBs into four Banks include: (i) United Bank of India and Oriental Bank of Commerce (OBC) into Punjab National Bank (PNB) (ii) Syndicate Bank into Canara Bank (iii) Corporation Bank and Andhra Bank into Union Bank of India (iv) Allahabad Bank into Indian Bank ♦ The customers of the merging banks will be treated as customers of the banks in which these banks have been merged. Benefit: The major objective of the merger is to achieve India's vision to make a $5 trillion economy. The merger will reduce the lending cost and enhance the capacity in order to increase credit. It will also improve the ability to raise market resources.

    ADB to invest $100 mn in NIIF FOF

    377 days ago
    Asian Development Bank (ADB) has joined the Government of India (GOI) and Asian Infrastructure Investment Bank (AIIB) as an investor under the instruments of the National Investment and Infrastructure Fund (NIIF) of India. Under the move, ADB will invest $100 million equivalent in the NIIF Fund of Funds (FOF).  ADB's investment: ♦ With the investment now made by ADB into the NIIF platform, the FOF has now secured $700 million in commitments. NIIF's FOF is targeted at India-focused PE fund managers who rely on international investors for large-scale fundraising. ♦ The FOF invests in various sectors and strategies through third-party managed funds. FOF is committed to three funds, aggregating to over $350 million (Rs.2,600 crores), that focus on green energy and climate, middle-income and affordable housing and entrepreneur-driven mid-market growth companies, operating across diversified sectors.  NIIF FOF: NIIF FOF was established in 2018. The main objective of NIIF FOF is to create a vehicle to provide India-focused private equity fund managers with a go-to institutional investor operating at scale and based in India.

    RBI to implement Mega Bank Consolidation Plan on 1 April

    378 days ago
    The Reserve Bank of India (RBI) stated that the schemes for the merger of 10 state-run banks into four lenders will come into force from 1 April. RBI also stated that the branches of merging banks will operate as of the banks in which the banks have been amalgamated. The banks sought to defer the merger schemes of lenders due to the lockdown triggered by coronavirus outbreak. Union Finance Minister Nirmala Sitharaman announced that the megabank consolidation plan would take effect from 1 April 2020 despite the COVID-19 pandemic. Background: On 4 March, the government of India notified the amalgamation schemes for 10 state-owned banks into four as part of its consolidation plan. The move aimed to create bigger size stronger banks in the public sector. The amalgamation of 10 PSBs into four Banks include: (i) Oriental Bank of Commerce (OBC) and United Bank of India into Punjab National Bank (PNB) (ii) Syndicate Bank into Canara Bank (iii) Andhra Bank and Corporation Bank into Union Bank of India (iv) Allahabad Bank into Indian Bank

    RBI announced 3 month moratorium on repayment of term loans means for borrowers

    381 days ago
    The Reserve Bank of India (RBI) has announced that all banks and Non-bank financial institutions (NBFCs) have been permitted to allow a moratorium of 3 months on repayment of term loans outstanding on 1 March 2020. As per RBI's move, the tenure or time period of the loans will be increased by 3 months.  Highlights: ♦ All lending institutions including banks and NBFCs will allow a moratorium on loan repayments for 3 months.  ♦ A moratorium of this kind generally implies that the Equated monthly installments (EMI) repayment of loans of individuals will not be deducted from their bank accounts till the moratorium period is over.  ♦ The loan EMI payments will resume only when the moratorium time period of 3 months expires.  ♦ RBI stated that the moratorium will enable the borrowers to balance the economic fallout from COVID-19.  Note: Moratorium period, also known as EMI holiday, is the time during which an individual does not have to pay an EMI on the loan taken. These breaks are offered to help individuals facing temporary financial difficulties to plan their finances better.

    Cabinet approved the continuation of recapitalization of RRB scheme

    382 days ago
    The Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi approved to continue the process of recapitalization of Regional Rural Banks (RRBs). Highlights: The Cabinet approved to provide minimum regulatory capital to RRBs for another year, that is, up to 2020-21 for those RRBs which are unable to maintain minimum Capital to Risk-weighted Assets Ratio (CRAR) of 9% which was set as per the regulatory norms prescribed by the Reserve Bank of India (RBI). The CCEA also approved the RRB's to utilize Rs.670 crore as central government share for the scheme of Recapitalization of RRBs that are subject to the condition that the release of the Central Government’s share will be contingent upon the release of the proportionate share by the sponsor banks. Earlier, it was decided that 50% of the total recapitalization support of Rs.1340 crore will be shared by the government. Background: RBI introduced disclosure norms for CRAR of RRBs with effect from March 2008. Based on the recommendation of Dr. K.C. Chakrabarty chaired the committee, a Scheme for Recapitalization of RRBs was approved by the Cabinet on 10 February 2011.  As per the scheme, the National Bank for Agriculture and Rural Development (NABARD) will identify the RRBs that require recapitalization assistance to maintain the mandatory CRAR of 9%. The scheme will provide recapitalization support of Rs.2,200 crore to 40 RRBs. Also, an additional amount of Rs.700 crore will be given as a contingency fund to meet the requirement of the weak RRBs, particularly in the North-Eastern and Eastern Region.

    RBI extends restrictions on PMC Bank for three more months

    386 days ago
    Reserve bank of India extended the regulatory restrictions on Punjab and Maharashtra Cooperative Bank (PMC) Bank by another three months. The central bank also added that it has been in talks with various authorities for the quick sale of securities and recoveries of loans. The validity of the directive dated 23 September 2019, stands modified from 23 March 2020 to 22 June 2020. RBI imposed restrictions on PMC bank under Section 35A of the Banking Regulation Act. This was aimed at preventing a run on the bank that could end up endangering the stability of the entire financial system because of a contagion effect.These curbs were put in place after the central bank saw gross under-reporting of bad loans, financial irregularities by the bank’s officials, and failure of internal controls and systems. RBI superseded the board and the management of the bank and appointed an ex-RBI official as the administrator at the bank.RBI has offered a plan where depositors can invest in a bond called innovative perpetual deposit instrument (IPDI) with a lock-in period of 10 years.The extension of the restrictions comes at a time when RBI and government put in place a bailout package for Yes Bank in no time, while it still has not succeeded in doing so in the case of PMC due to the constraints of dual regulation. Regulation of urban cooperative banks is split between the RBI and the Registrar of Co-operative Societies. In contrast, that of smaller co-operative banks are divided between National Bank for Agriculture and Rural Development (Nabard) and RCS. RCS reports to the central government.

    DBS Bank, Bharti AXA join hands for insurance plan covering Covid-19

    386 days ago
    DBS Bank India tied-up with Bharti AXA to roll out a complimentary insurance plan covering all medical conditions. The plan would cover all medical conditions, including Covid-19, and up to 10 days of hospitalization, with a cover of Rs 5,000 per day, for 30 days, DBS Bank India said in a release. DBS customers can purchase health insurance products that are currently offered on the digibank app through their general insurance partners. The bank is conducting periodic meetings with its insurance partners to ensure seamless and end-to-end online access to these facilities and improvisation to the products.The guarantee of payments for hassle-free hospitalization and arrangement of emergency medical evacuation for NRIs with dependents in the country.

    RBI chalks out contingency plan for smooth functioning of services

    387 days ago
    Reserve Bank of India (RBI) put in place a contingency plan to ensure that crucial information technology (IT) services for the delivery of digital banking, treasury services.It includes measures to prepare for anticipated disruptions, ensure smooth flow of operations and staffing, identify critical resources, and form crisis management groups while keeping all staff insulated from exposure to the virus. NEFT This plan launched to ensure continuity of critical services like National Electronic Funds Transfer (NEFT), Real Time Gross Settlement (RTGS), e-Kuber for government transactions, and so on. The BCP ensures that all critical functions of the financial system continue to be available to individuals, businesses, and governments under all circumstances. Central Bank RBI has created a team of 37 officials comprising key personnel from essential functions like debt management, reserve management, monetary operations, and 113 officials from service providers, and moved them to a hotel near the primary data center (DC). The central bank’s DC runs critical systems that operate payments across different segments. Typically, around 600 personnel of third-party service providers are deployed at DCs for various IT and non-IT services, apart from 60 officials from the bank. As per the plan, the RBI team and hotel staff isolated to ensure their safety and health.RBI made similar arrangements at other DCs to run systems with the maximum services possible. The central bank also asked other banks to put in place BCPs to prevent any disruptions of services.

    SBI reduced FD rates, MCLRs rates for a second time in a month

    390 days ago
    State Bank of India (SBI) has announced a reduction in its Marginal Cost of Funds based Lending Rates (MCLR) upto15 basis points (bps) across tenors. This is the second time the lender is announcing the rate cut in its fixed deposit (FD) interest rates. This is the second reduction in a month and the tenth cut in the current fiscal year. Highlights: ♦ SBI has reduced retail term deposits (less than Rs.2 crore) by 10 to 50 bps for a few tenors. The new rates for home loans and FDs took effect from 10 March. ♦ The one-year MCLR reduced to 7.75% from 7.85% with effect from 10 March 2020.  ♦ EMIs on eligible home loan accounts that are linked to MCLR will come down by around Rs.7 per 1 lakh on a 30-year loan. It also said that EMIs on car loans would also be reduced by Rs.5 per 1 lakh on a seven-year loan.  ♦ SBI's FD rates have been reduced by 10-50 bps due to adequate liquidity in the system. It had reduced the interest rates applicable to retail term deposit by 10 bps for maturities of one year and above, and by 50 bps for the rates up to 45 days. SBI also reduced FD rates by 15 bps for deposits with tenors of 180 days and above.

    RBI to use swap transactions, LTRO to infuse liquidity

    390 days ago
    The Reserve Bank of India (RBI) has announced that, in the wake of the epidemic Covid-19, the central bank would use Forex swap and long-term repo operations (LTROs) to mitigate the effects of the Covid-19 on the Indian Economy.  Highlights: ♦ RBI will conduct a sell/buy swap auction worth $2 billion to provide dollar liquidity. RBI also stated that it would not hesitate to persist with LTROs to infuse long-term rupee liquidity, amounting to Rs.1 lakh crore. ♦ RBI is to undertake another six-month US dollar sell/buy swap auction that aggregates to $2 billion on 23 March. The move by RBI aims to provide liquidity to the foreign exchange market. ♦ RBI is to conduct LTRO in multiple tranches of appropriate sizes up to a total amount of Rs.1 lakh crore at the policy repo rate. It aims to counterbalance the domestic liquidity effects of the swap and to improve monetary policy transmission further.

    The 39th GST Council meeting was held

    392 days ago
    The 39th GST Council meeting was held under the Chairmanship of Union Finance & Corporate Affairs Minister Smt Nirmala Sitharaman on 14 March in New Delhi. Union Minister of State for Finance and Corporate Affairs Anurag Thakur, along with Finance Ministers of States/UTs and seniors officers of the Ministry of Finance, participated in the meeting. Highlights: ♦ The officials discussed the issues faced by the taxpayers in the GST system. A summary of the recently observed IT issues, and the way forward to resolve them was submitted. ♦ The meeting focused on smoothening the rollout of the new return system and ensured the transition to the new return system is made in an incremental manner.  ♦ The meeting addressed the compliance-related issues so that the problem of tax evasion and gaming of the system due to non-linking of FORM GSTR-1 and FORM GSTR-3B is addressed immediately.  ♦ The officials stated that in order to tackle and prevent the gaming of the system, implementation of Aadhaar authentication and spike rules would be initiated. GST Council: GST Council governs the tax rates, rules, and regulations in the country. It is chaired by the Finance Minister of India. The council consists of the finance ministers of the central government and all the states. 

    RBI revised exposure limits for UCBs

    393 days ago
    Reserve Bank of India (RBI) revised exposure limits for urban cooperative banks (UCBs) to a single borrower and a group of borrowers to 15% and 25%, respectively, of tier-I capital.  Highlights: ♦ Previously, the UCBs were permitted to have exposures of up to 15% and 40% of their capital funds to a single borrower and a group of borrowers, respectively.  ♦ The revised exposure limits will be applicable to all types of fresh exposures taken by UCBs, and they will have to bring down their existing exposures, which are in excess of the revised limits, by 31 March 2023.  ♦ The preceding financial year will be considered for the purpose of fixing the exposure limits, tier-I capital as on 31 March.  ♦ Tier-I capital will remain the same as that prescribed for computation of capital adequacy of UCBs. The banks can have at least 50% of their aggregate loans and advances comprising loans of not more than 0.2% or Rs.25 lakh of their tier 1 capital, as per the borrower.

    SBI announced rate cuts on FD

    397 days ago
    State Bank of India (SBI) has announced a rate cut of the fixed deposit rates across multiple tenors for general customers and senior citizens. It has reduced a rate cut up to 50 basis points (bps) in some tenors, and for some tenors, it has announced a reduction of 10 bps.  Highlights: ♦ The new rates were made effective from 10 March.  ♦ The fixed deposit (FD) rate for a period of 7 days to 45 days has been reduced to 4% from the earlier 4.50%, while it has been reduced to 4.50% from 5% for senior citizens.  ♦ For the FD rates for 1 year to less than 2 years, 2 years to less than 3 years, 3 years to less than 5 years, and 5 years to up to 10 years tenors, the rates have been reduced by 10 bps.  ♦ For general customers, the interest rate has been reduced to 5.90% from the earlier 6%. For senior citizens, in this case, it has been reduced to 6.40% from 6.50%. ♦ The last rate cuts on FDs were made applicable on 10 February.

    Centre imposes withdrawal limit for depositors of Yes Bank

    399 days ago
    The government of India has imposed a withdrawal limit of Rs.50,000 for depositors of Yes Bank for one month. The notification regarding this was issued by the Ministry of Finance. The cap will be in effect till 3 April. GoI has allowed a few exemptions in cases like higher education, medical emergency, marriage, and unavoidable emergency for the limit on withdrawal. RBI's announcement: Reserve Bank of India (RBI) stated that Yes Bank's board has superseded for a period of 30 days that owes to a serious deterioration in the financial position of the bank. Former Chief Financial Officer (CFO) of SBI Prashant Kumar has been appointed as administrator for Yes Bank. RBI assured depositors of Yes Bank that their interest would be fully protected. RBI stated that it would explore and draw up a scheme for the bank's reconstruction or amalgamation in terms of the provisions of the Banking Regulation Act. Yes Bank scam: The founder of crisis-hit Yes Bank Rana Kapoor was arrested by the Enforcement Directorate (ED) on 7 March for the alleged bank scam worth Rs.4,300 crore. Prevention of Money Laundering Act (PMLA) was filed against him.

    NABARD infused Rs 1.46 lakh crore in the rural banking system during current

    403 days ago
    National Bank for Agriculture and Rural Development (NABARD) has infused Rs.1.46 lakh crore in the rural banking system during the current fiscal. The bank stated that it had given Rs.66,397 crore in short-term credit and Rs.6,704 crore in long-term credit to rural cooperative banks.  Regional rural banks (RRB) have availed Rs.14,141 crore in short-term credit and Rs.8,417 crore in long-term credit. Also, other small finance banks have obtained long-term refinance of Rs.37,895 crore. Short-term refinance is essentially production credit, and long-term refinance aimed at supporting sectors like dairy, poultry, fishery, farm mechanization, irrigation, and non-farm sectors, etc.

    Cabinet approved amalgamation of PSBs with effect from 1 April

    403 days ago
    The Union Cabinet led by Prime Minister Narendra Modi approved the consolidation of ten Public Sector Banks (PSBs) into four. The amalgamation of the PSBs will be effective from 1 April 2020.  The banks include: (i) amalgamation of Oriental Bank of Commerce (OBC) and United Bank of India into Punjab National Bank (PNB) (ii) amalgamation of Syndicate Bank into Canara Bank (iii) amalgamation of Andhra Bank and Corporation Bank into Union Bank of India (iv) amalgamation of Allahabad Bank into Indian Bank Highlights: ♦ The amalgamation is aimed to create seven large PSBs with scale and national reach, with each amalgamated entity having a business of over Rs.8 lakh crore. The move is expected to help create banks with a scale that can be compared to global banks and capable to compete effectively in India and globally.  ♦ It will lead to cost benefits, which should enable the PSBs to enhance their competitiveness and positively impact the Indian banking system. ♦ The consolidation will provide impetus to amalgamated entities by increasing their ability to support larger lending and greater financial capacity.  ♦ It will also enable the banks to improve their cost efficiency and risk management, and thus, boosting the goal of financial inclusion through wider reach. ♦ It will lead to adopting technologies across the amalgamating banks, access to a wider talent pool, and a larger database. 

    RBI directed banks to link all new floating rate loan

    410 days ago
    The Reserve Bank of India (RBI) directed banks to link all the new floating-rate loan to medium enterprises with external benchmark. It will be effective from 1 April 2020. The floating rate loans of the micro and small enterprises are already linked with external benchmarks. Aim: The move by RBI is aimed to further strengthen the monetary policy transmission. The benefits of a reduction in key lending rates can be passed on to medium enterprises. Highlights: ♦ The external benchmarks will include RBI repo rate, Treasury bill yields, and the market interest rate published by the Financial Benchmark India Private Ltd (FBIL). ♦ The floating rate loans to micro and small enterprises, personal and retail loans have already been linked to external benchmarks. ♦ RBI states that the monetary policy transmission has improved in respect of the sectors where new floating rate loans have been linked to external benchmarks.

    RBI lifted its ban on Bandhan Bank

    410 days ago
    The Reserve Bank of India (RBI) lifted its ban on Bandhan Bank after considering the efforts made by the Bank to comply with the licensing conditions on 25 February. Now, the Bank can expand its branch network.  Background: In September 2018, RBI had banned Bandhan Bank from expanding its network as the Bank failed to reduce the promoters' stake to 40% from close to 82% within the stipulated three-year time frame of commencing operations. The Bank has not complied with the licensing condition on dilution yet. But considering the efforts taken by the private lender, the ban was lifted by the RBI. Bandhan bank ensured at least 25% of the total number of banking outlets opened during a financial year are opened in unbanked rural centres.  Bandhan Bank: Established on: 23 August 2015 Founded by: Chandra Shekhar Ghosh Headquarters: Kolkata, West Bengal Chairman: Dr. Anup Kumar Sinha MD & CEO: Chandra Shekhar Ghosh Currently, the bank has 4,288 banking outlets, including branches. The Bank shares closed at Rs.403.85 on BSE, down 1.15% from the previous close.

    NABARD approves Rs.400 crore to boost infrastructure in JK

    412 days ago
    National Bank for Agriculture and Rural Development (NABARD) sanctioned an amount of Rs.400.64 crore to the Union Territory of Jammu & Kashmir during the current financial year. The aim is to boost the infrastructure in rural areas. The funding is a part of the NABARD's 'Rural Infrastructure Development Fund (RIDF)-Trench XXV' which aims at augmenting rural infrastructure. Background: ♦ Earlier in 2020, NABARD has sanctioned Rs.209.87 crore for the construction of 82 rural roads and 3 bridges.  ♦ A road length of 291kms has been proposed to be constructed benefiting 9.15 lakh people in 19 districts of UT of J&K.  ♦ The construction of roads and bridges will provide all-weather improved connectivity to 461 remote villages.  ♦ A sum of Rs.143.66 crore has been sanctioned for the implementation of 38 water supply schemes.   ♦ The schemes are expected to benefit over 3.54 lakh people across 86 villages in 17 districts of UT of J&K.  ♦ Similarly, NABARD has also sanctioned an amount of Rs.47.11 crore towards improving the Animal and Sheep Husbandry sectors.

    RBI unveiled a 2019-24 National Strategy for Financial Inclusion

    415 days ago
    The Reserve Bank of India (RBI) unveiled a National Strategy for Financial Inclusion 2019-24. The RBI's Strategy is aimed at providing access to formal financial services in an affordable manner. It aims to promote financial literacy among customers.  Formed by: The Financial Inclusion Advisory Committee of the RBI in consultation with the Government of India, Securities Exchange Board of India (SEBI), Insurance Regulatory and Development Authority of India (IRDAI), and Pension Fund Regulatory and Development Authority of India (PFRDA) provided the National Strategy for Financial Inclusion 2019-24. National Strategy for Financial Inclusion 2019-24: ♦ National Strategy for Financial Inclusion method recommends many ways in which the objective can be fulfilled.  ♦ It suggested methods to provide access to financial service provides in every village within a range of 5 km. ♦ Every adult registered under Pradhan Mantri Jan Dhan Yojana (PMJDY) should be enrolled in insurance, pension schemes.  ♦ The public credit registry should be made fully operational by March 2022. The strategy directed to strengthen the digital financial services to facilitate less-cash society. ♦ Every new entrant should be given information on government livelihood programme.

    NESFB began its service and operation

    419 days ago
    North East Small Finance Bank (NESFB) which is the first small bank of North India has started its services on 16 February. On 31 March 2017, Rashtriya Gramin Vikas Nidhi (RVGN) (North East) Microfinance Limited received the Small Finance Bank License from the Reserve Bank of India (RBI).  North East Small Finance Bank (NESFB): ♦ Assam's finance minister Himanta Biswa Sarma and TATA Trust chairman Ratan Tata launched the first 28 branches of NESFB.  ♦ Tata has invested Rs.40 crore through his investment arm RNT Associates in the bank. ♦ North East Small Finance Bank Ltd has a net worth of Rs.300 crore. ♦ The bank is supported by the infusion of funds from domestic and overseas investors. ♦ The bank will carry out banking services in remote and unbanked areas of India's eight northeastern states and in West Bengal.

    SEBI approves proposal to segregate investment advisory, distribution services

    419 days ago
    The Securities and Exchange Board of India (SEBI) approved the proposal to segregate investment advisory and distribution services. Under this, individual investment advisors cannot provide distribution services to clients.  Highlights: ♦ An individual or a company should opt either providing advisory services or distribution services for investment products including portfolio management products, mutual funds, and alternative investment funds from now.  ♦ SEBI also announced that it is to introduce an upper limit on the fees charged to clients by investment advisers. ♦ It will provide enhanced eligibility criteria for registration as an investment advisor, including net worth, qualification and experience requirements.  ♦ The aim is to facilitate the use of the latest fintech innovations in capital markets.

    SEBI introduces a system to track client securities

    423 days ago
    The Securities and Exchange Board of India (SEBI) has introduced an in-house system to track the movement of client securities that are collected as collateral by brokers.  New Tracking system: ♦ SEBI has developed the in-house capabilities to track the movement of client securities collected by the broker as collateral online.  ♦ It will raise alerts with exchanges if diversion of clients' securities is noticed. ♦ So far, three 'mismatch reports' has been forwarded to the stock exchanges for reconciliation with members. SEBI: Formed on: 12 April 1988 Headquarters: Mumbai, Maharashtra Chairman: Ajay Tyagi SEBI is the regulator for the securities market in India. It was established through the SEBI Act, 1992.

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