RBI Issues Revised PCA framework for Banks
On November 02, 2021, the Reserve Bank of India (RBI) reviewed and revised the existing PCA framework for all Scheduled Commercial Banks (SCBs) excluding Small Finance Banks, Payment Banks and Regional Rural Banks.
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SBI will buy Yes Bank shares worth Rs 7250 crore
The State Bank of India has agreed to buy shares worth Rs 7250 crore of the cash-strapped Yes Bank. The purchase of the shares will be in accordance with the draft reconstruction scheme put forward by the Reserve Bank of India. SBI will purchase the 725 shares of Yes Bank at a price of Rs 10 per share. After the purchase, the shareholding of the State Bank of India (SBI) in Yes Bank will remain under 49% of the paid-up capital.
According to the reconstruction scheme put forwarded by RBI, the shareholding of the strategic investor would be not more than 49% and should not fall below 26% for a minimum period of 3 years from the date of capital infusion.
SBI removes minimum balance charges from all savings bank accounts
The State Bank of India has waived off the minimum balance charges on all savings bank accounts. SBI has waive charges for non-maintenance of Average Monthly Balance (AMB) for all 44.51 crore savings bank accounts. Earlier, SBI was levying a penalty of Rs 5 to Rs 15 along with taxes on non-maintenance of average monthly balance of Rs 3000, Rs 2000 and Rs 1000 in metro, semi urban and rural areas respectively. Along with the charges for non-maintenance of Average Monthly Balance, the public sector bank has also waived of SMS charges.
Aadhaar-enabled Payment System rolled out by Airtel Payments Bank
The Airtel Payments Bank has launched the Aadhaar-enabled Payment System (AePS). The facility has been launched by the payment bank at over 2,50,000 banking points across India. After the launch of AePS, the customers of any bank with Aadhaar-linked bank accounts will be able to do financial transactions at the designated banking points of Airtel Payments Bank. It will also allow the Airtel Payments Bank’s customers to do financial transactions at any AePS enabled bank. With the launch of the system, the Airtel Payments Bank will be able to service customers of any bank who have an Aadhaar-enabled bank account and hence, head towards the Government of India’s vision of financial inclusion.
External Benchmark Based Lending to Medium Enterprises
The Reserve Bank of India has directed all Scheduled Commercial Banks (excluding RRBs), all Small Finance Banks and all Local Area Banks to link all the new floating rate loans to medium enterprises with external benchmarks. The decision has been taken by the RBI to further strengthen the monetary policy transmission.
RBI has directed the banks that all the all new floating rate loans to the Medium Enterprises extended by banks shall be linked to the external benchmarks. The above directions will be effective from April 01, 2020.
Finance Secretary launches Baroda Startup Banking in 15 cities
Finance Secretary Rajiv Kumar inaugurated “Baroda Startup Banking”. It is an initiative aimed at making the Bank of Baroda (BoB) a preferred banking partner for the start-up community and establishing connect with at least 2,000 start-ups over the next two years. The initiative was launched simultaneously across 15 cities in the country.
It will include 15 Baroda Startup branches that will offer a bouquet of tailor-made banking products and services that have been designed keeping in mind the unique and specialized banking requirements of start-ups.
The products include customised current accounts, state-of-the-art payments gateways, corporate credit cards, corporate salary accounts and credit facilities apart from other existing products of the bank. In addition to end-to-end banking solutions for start-ups, the bank will also ensure that it meets the ancillary needs of start-ups by partnering with marquee service providers to assist start-ups by way of cloud credits, mentorship, co-working space, legal/accounting services and other support services.
RBI allows Bandhan Bank to open new branches without prior permission
The Reserve bank of India removes the restrictions placed on Bandhan Bank, allowing it to open new branches without prior permission. The RBI came up with some regulatory conditions & directed the bank to order about 25% of the total banking outlets to be opened in rural areas where banking facilities are not available.
Bandhan Bank was banned from opening a new branch on September 28, 2018, on behalf of the Supreme Court (SC) and the court ordered to freeze the salary of Chandra Shekhar Ghosh, the founder-cum managing director (MD) of the bank, after not fulfilling the shareholding rules. As per the RBI Licensing Guideline, Bandhan Financial Holdings Ltd, the bank promoter was to reduce the company’s share from 82 % to 40 % in 3 years. The deadline for the Bank was August 23, 2019, which it failed to meet.
“EASE 3.0” launched for tech-enabled banking for aspiring India
“Enhanced Access and Service Excellence (EASE) 3.0” has been launched by Finance Minister Nirmala Sitharaman along with the EASE 2.0 Annual Report at Indian Banks’ Association function. This has been launched for smart, tech-enabled banking for aspiring India.
EASE 3.0 is expected to provide advanced solutions to make the public sector banking smart and technology-enabled. Some key facilities like Palm Banking for “End-to-end digital delivery of financial service”, “Banking on Go” via EASE banking outlets at frequently visited spots like campuses, stations, complexes and malls will be provided by the EASE 3.0 reforms agenda. It also aims to digitize the customer’s experience at public sector bank branches.
NPCI launches UPI awareness campaign “UPI Chalega”
National Payments Corporation of India (NPCI) has launched an industry campaign named “UPI Chalega” to promote UPI as Easy, Safe, and Instant mode of payment. The “UPI Chalega” campaign is aimed to guide users towards the right usage of Unified Payments Interface (UPI) and help create a habitual change, use of UPI in their daily life. NPCI has launched the campaign in association with the payment ecosystem players.
The UPI, which is a real time fund transfer interface, has significantly scaled since its launch in August 2016 when 92,000 transactions worth Rs 3.1 crore were processed on the NPCI operated platform to over 1.3 billion transactions worth Rs 2.16 trillion in January 2020.
NABARD sanctions Rs 400.64 Cr to boost infrastructure in J&K
National Bank for Agriculture and Rural Development (NABARD) has sanctioned an amount of 400.64 crore rupees to UT of J&K during the current financial year for giving boost to the infrastructure in the rural areas. The funding is a part of the NABARD’s ‘Rural Infrastructure Development Fund (RIDF) - Trench XXV’ which aims at augmenting rural infrastructure.
"The Bank has sanctioned 209.87 crore rupees for construction of 82 rural roads and 03 bridges earlier this year. A road length of 291 kms will be constructed benefiting 9.15 lakh people in 19 districts of UT of J&K. The construction of roads and bridges would provide all weather improved connectivity to 461 remote villages. An amount of 143.66 crore rupees has been sanctioned for implementation of 38 water supply schemes. The schemes will benefit over 3.54 lakh people across 86 villages in 17 districts of UT of J&K. Similarly, the Bank has sanctioned an amount of 47.11 crore rupees towards improving the Animal and Sheep Husbandry sectors.
Finance Ministry notifies ‘Printing of One Rupee Currency Notes Rules, 2020’
The Government of India will release a new one rupee currency note in India soon. As per the recent notification of Ministry of Finance, these notes will be printed by the Finance Ministry. The new one rupee currency note will be equipped with various watermarks. The Reserve Bank of India does not issue this note like other Indian currency notes, but the Government of India print One Rupee currency notes.
Key Features of New One Rupee Currency Note
• The size of this one rupee currency note will be rectangular 9.7 x 6.3 cms. It will be 110 microns thick while its weight will be 90 GSM (Grams per Square Meter).
• The observe side of One Rupee Currency note will contain ‘Bharat Sarkar’ at the top in Hindi while ‘Government of India’ will be written in English below.
• There will be multi-tonal watermarks with Ashoka Pillar and without Satyamev Jayate. It will have hidden ‘1’ in the center and the hidden word ‘Bharat’ vertically arranged on the right-hand side.
• It will have the symbol of grains as a sign of agricultural dominance of the country.
• The value of note would be written in 15 Indian languages. An image of the oil exploration platform ‘Sagar Samrat’ will also be there.
• The colour of this note will be pink-green from the front while many colors will be mixed at the back.
Signature on One Rupee Note
One rupee currency note is signed by the Finance Secretary while the other notes are signed by the Governor of the Reserve Bank of India. The one rupee currency note for the year 2020 will be signed by Finance Secretary Atanu Chakraborty.
Printing stopped in 1926
According to the Reserve Bank of India’s (RBI) website, the printing of this note was first stopped in 1926 because its printing was costlier than its value. After that, its printing was resumed in 1940 which continued till 1994. Once again, its printing was started in 2015.
Minimum net worth for pension fund managers has been raised to Rs 50 cr by PFRDA
The Pension Fund Regulatory and Development Authority (PFRDA) has decided to increase the minimum net worth criterion for pension fund managers. The minimum net worth criterion for pension fund managers has been increased from Rs 25 crore to Rs 50 crore. This enhancement in the minimum net worth criterion for pension fund managers will bring pension funds on par with mutual funds which have to meet a minimum net worth requirement of Rs 50 crores as per Securities and Exchange Board of India (SEBI) rules.
The fresh guidelines states that the licenses issued to the pension fund managers will remain valid until cancelled by the regulator as compared to the five years validity of the previously granted licenses. So, new guidelines will made provision for licenses to have indefinite validity and hence, will help the pension sector to grow to new levels.
WhatsApp receives NPCI’s approval to expand its UPI project to 10 million users
National Payments Corporation of India (NPCI) has permitted the instant messaging platform WhatsApp to expand its Unified Payment Interface (UPI) services to 10 million users. “WhatsApp Pay”, a payment feature of WhatsApp has been designed to run on Unified Payment Interface (UPI). The UPI is developed by the National Payments Corporation of India. This facility enables the users do business transactions or to pay others directly through their bank accounts.
Since 2018, WhatsApp is running its pilot project “WhatsApp Pay” for one million users and has finally got the approval from NPCI to expand its customer base.
RBI enhances scope of Non-Resident Rupee Accounts
The Reserve Bank of India (RBI) has enhanced scope of ‘Special Non-resident Rupee’ (SNRR) by allowing persons residing outside India to open such accounts for purposes such as- (a) external commercial borrowing (ECB), (b) trade credit and and (c) Trade (Export/ Import) Invoicing, in domestic currency. The step is taken to popularise cross-border transactions in Indian rupee (INR).
RBI supersedes DHFL board to initiate insolvency proceedings
The Reserve Bank of India superseded the board of debt-laden Dewan Housing Finance Corporation Limited (DHFL) as it intends to shortly initiate the process of resolution of the company under the insolvency and bankruptcy rules. The company is all set to become India’s first financier to land up in bankruptcy courts.
The central bank superseded the board “owing to governance concerns and defaults by DHFL in meeting various payment obligations. R Subramaniakumar, ex-MD and CEO of Indian Overseas Bank has been appointed as the administrator.
New rules framed under IBC for rescue of non-bank lenders
The Government of India has issued fresh rules under the Insolvency and Bankruptcy Code (IBC) to govern the rescue of non-bank lenders. The new rules are likely to help out distressed shadow banks and housing financiers, which have been battling a liquidity crunch for a year. These entities will be covered by a special window under the bankruptcy code, which will be notified from time to time.
Reserve Bank of India has been given the authority to decide which companies will be taken up to a bankruptcy tribunal under these rules. The bankruptcy tribunal will appoint an administrator who will be nominated by the regulator, will try to stitch together a turnaround plan. In case a turnaround of the financial institution is not possible, the tribunal will gather the views of the regulator before deciding to liquidate it.
SBI’s economic research team revised India’s FY20 GDP forecast to 5%
State Bank of India's economic research team, in the latest edition of 'EcoWrap' has sharply cut India's Gross Domestic Product (GDP) forecast for FY2020 to 5% from 6.1%. It also noted that it expects Q2 GDP growth at 4.2%. The acceleration rate for 33 leading indicators at 85% in October 2018 is down to just 17% in September 2019, with such decline gaining traction from March 2019. The bank expects growth rate to pick up pace in FY21 to 6.2%.
Bajaj Allianz General Insurance launches ‘Farmitra’ mobile app for farmers
Bajaj Allianz General Insurance has launched a new mobile app called ‘Farmitra’ for the ease of farmers. This app intends to help the farmers needs and address their worries. It also resolves with relevant information, which they can use in optimizing their farming practices.
The app ‘Farmitra’ provides services for even those who are not customers of Bajaj Allianz. Besides crop insurance, the farmers can buy other covers from the private insurer and also obtain information like weather forecasts and market price of crops and locators for agriculture inputs. The application is currently implemented in 6 states, namely Rajasthan, Madhya Pradesh, Uttar Pradesh, Karnataka, Maharashtra and Haryana.
Exim Bank grants $30 million line of credit to Ghana
The Export-Import (Exim) Bank has provided a USD 30 million (about Rs 210 crore) line of credit to Ghana for a potable water project in the country. Under the arrangement, financing of export of eligible goods, works and services from India would be allowed subject to their being eligible for export under the Foreign Trade Policy of India and whose purchase may be agreed to be financed by the Exim Bank. As per the agreement, the terminal utilisation time is 60 months period after the scheduled completion date of the project.
Moody’s revises India’s economic outlook to “negative” from “Stable”
Global ratings agency Moody’s cut its outlook for India’s credit ratings to “negative” from “stable”, citing the ongoing economic slowdown, financial stress among rural households, weak job creation, and the liquidity crunch in non-banking financial companies.
Karnataka Gramin Bank initiates ‘mobile ATMs’ in rural areas
The Karnataka Gramin Bank (KGB) has launched 'mobile ATMs' in Kalaburagi among several other districts in the state.
The special vehicle includes an ATM and a screen to show videos of different banking schemes.
The mobile ATMs will go to the doorsteps of the farmers and make them aware of the banking schemes and digital operating systems.
Banks cannot charge on NEFT transactions from January 2020
As per the report titled “Furthering Digital Payments” released by the Reserve Bank of India (RBI), With a view to promoting digital transactions on the 3 anniversary of demonetisation, the Reserve Bank has moved a proposal in this regard. From January 2020, banks can no longer charge savings bank account holders for online transactions in the NEFT system. The Reserve Bank of India (RBI) has now mandated banks to do this. RBI stated that it is doing this to promote digital payments.
Ujjivan Small Finance Bank launches Instant Digital Savings and Instant FD Account
The finance service company, Ujjivan Small Finance Bank(SFB) has launched an instant digital savings account (SA) along with Fixed Deposit (FD) and Privilege Savings Account to offer distinctive banking and digital services to its customers.
Instant Digital SA account: This account has the restriction of Rs 1 lakh deposit & has the unlimited free transactions on the bank's own ATM (automated teller machine) and 6 free transactions for other bank ATMs per month.
Instant Fixed Deposit (FD): With interest rate ranging from 5.5% (7days to 29 days) & up to 8.3% (799 days), the customers can invest in this account up to a maximum of Rs. 1 Lakh without a Savings Account.
Privilege SA: This account comes with the eligibility for a monthly salary of Rs. 30,000 or above /on maintaining a Monthly Average Balance of Rs 25,000 / opening a Fixed Deposit of Rs. 10 Lakh. It provides a higher accidental insurance cover of Rs. 2 Lakh.
RBI Fined Rs 35 lakh penalty on Tamilnad Mercantile Bank
The Reserve Bank has imposed a penalty of Rs 35 lakh on Tamilnad Mercantile Bank for violating norms on frauds classification and notification.
The bank has been penalised for non-compliance with certain provisions of directions issued by RBI on frauds classification and reporting by commercial banks and select FIs directions 2016.