Daily Current Affairs December 12th 2024

 

CURRENT AFFAIRS : BANKING & FINANCE

All India Bank Employees’ Association proposes a 3-year ban on account openings for customers who assault bank branch staff

• The All India Bank Employees’ Association (AIBEA) has urged the Indian Banks’ Association (IBA) to blacklist customers who attack or abuse bank staff, closing their accounts and preventing them from opening new accounts for at least 3 years.
• AIBEA expressed concern over recent incidents where bank staff were physically assaulted and verbally abused by customers.
• They emphasized that staff are working to earn a living, not to be victims of such attacks.
• The attacks include both physical assaults and instances of abusive language directed at bank staff, including female employees.

Daily Current Affairs November 22nd 2024

 CURRENT AFFAIRS: BANKING & FINANCE

Private Consumption Resumes as Key Driver of Domestic Demand: Reserve Bank of India  

• As per the Reserve Bank of India’s (RBI) article ,the slowdown in the second quarter of FY 2024-25 has been overcome, with private consumption once again driving domestic demand.
• Festival-related consumption and a recovering agriculture sector are contributing to the economy’s resilience.

Key Highlights :

• Inflation Concern:The article emphasizes the need to reduce inflation to allow India to reach its growth potential.
• In October 2024, the Consumer Price Index (CPI) surged to a 14-month high of 6.21%, higher than 5.5% in September.
• Core inflation is also rising, along with a surge in food prices, including edible oils and processed foods, which affects household services and wages.
• Rural India and E-Commerce:Rural India is emerging as a key market for e-commerce, driven by increased kharif output and positive expectations for rabi production.
• E-commerce companies are targeting rural areas, especially with festival season sales.
• Retail Sector Performance:Retailers are witnessing a pickup in sales growth after the second quarter, with significant demand during festivals like Diwali.
• Premiumisation is visible, with luxury items, such as premium two-wheelers and luxury cars, gaining traction.
• Urban Growth:The urban population is expected to increase significantly, with half of India’s population projected to live in cities by 2025, further boosting urban demand.

Daily Current Affairs November 20th 2024

 

CURRENT AFFAIRS : BANKING & FINANCE

Reserve Bank of India to Launch Cloud Services in 2025, Aiming to Challenge Global Firms’ Dominance     

• The Reserve Bank of India (RBI) plans to launch a pilot programme for cloud services in 2025 to offer local cloud data storage for financial firms at affordable rates.

Key Highlights :

• Competitors:The initiative will challenge global cloud giants like Amazon Web Services, Microsoft Azure, Google Cloud, and IBM Cloud in India’s growing cloud services market.
• Market Insights:India’s cloud services market was valued at $8.3 billion in 2023 and is projected to grow to 24$.2 billion by 2028.
• Currently, the market is dominated by foreign firms.
• Target Audience:The service aims to cater to smaller banking and financial services firms unable to afford existing cloud solutions.
• Development and Funding:The project is spearheaded by the RBI’s research wing, Indian Financial Technology and Allied Services (IFTAS).
• EY has been appointed as an advisor to the project.
• Initial funding of ₹229.74 billion will come from the RBI’s Asset Development Fund.
• Financial firms may hold equity in the cloud service at later stages.
• Implementation Timeline:A small-scale implementation will begin in the coming months, with expansion in phases over the next few years.
• Focus on Localisation:The project aligns with the RBI’s push for localisation of financial data and payments infrastructure.
• Technology Collaboration:RBI will collaborate with local Indian IT firms experienced in building cloud solutions.
• Only Indian-incorporated companies or consortia are eligible to bid for the project.
• Data Centre Locations:Data centres for the project will be established in Mumbai and Hyderabad.
• Procurement:A procurement document was published on the IFTAS website in October 2024, inviting bids for the project.
• Background Announcement:RBI Governor Shaktikanta Das announced plans for a public cloud platform for the financial services industry in December 2023.

State Bank of India Raises ₹10,000 Crore Through Seventh Infrastructure Bond Issuance at 7.23% Coupon Rate for 15-Year Tenure   

• State Bank of India (SBI) has raised ₹10,000 crore at a coupon rate of 7.23 per cent through its seventh infrastructure bond issuance, payable annually for a tenor of 15 years.
• The instrument is rated AAA with stable outlook.

Key Highlights :

• Advantages of Infrastructure Bonds:Funds raised through infrastructure bonds are exempt from regulatory reserve requirements like the Statutory Liquidity Ratio (SLR) and Cash Reserve Ratio (CRR).
• Unlike deposits, where banks must maintain 5% CRR and invest approximately 18% in securities for SLR compliance, the proceeds from infrastructure bonds can be fully deployed for lending activities, providing greater flexibility.
• SBI’s $500 Million Bond Issuance:SBI has issued $500 million in Senior Unsecured Fixed Rate Notes.
• The bonds have a maturity of 5 years and a coupon rate of 5.125%, payable semi-annually.
• These bonds will be issued through SBI’s London branch on November 25 and listed on the Singapore Stock Exchange and India International Exchange, GIFT City.
• Significance of Infrastructure Bonds:Infrastructure bonds are an essential funding source for banks, particularly for large-scale infrastructure projects, offering the advantage of exempting from CRR and SLR obligations.
• Use of Proceeds:The funds raised from the infrastructure bond issuance will be used for lending purposes, supporting the bank’s lending activities without the constraints of statutory reserve requirements.

About SBI :

• Founded : 1 July 1955
• Headquarters : Mumbai, Maharashtra, India
• Chairman : Challa Sreenivasulu Setty

State Bank of India to open 300-400 branches annually in the medium term    

• The State Bank of India (SBI) plans to open 300-400 branches annually in the medium term.
• The bank aims to increase financial service penetration in India by setting up branches in residential colonies and underserved areas.
• SBI conducted an extensive micro-market survey to identify areas lacking financial services, leading to the target of 500 new branches.
• SBI may relocate branches that are not performing well to more strategic locations, ensuring access to financial services, particularly in rural and semi-urban areas.
• As of September 2024, SBI has 22,640 branches, an increase from 15,870 branches in March 2014.

SBI’s Global Market Position:

• SBI is ranked 17th in the world in terms of market capitalization.
• The bank aims to be among the top 10 global banks in market capitalization within three years.
• SBI’s market capitalization stands at ₹7.26 trillion ($86 billion), while HDFC Bank’s market capitalization is ₹13.06 trillion ($154 billion).
• SBI aims for an annual net profit of ₹1 trillion and is targeting ₹1 trillion in operating profit for the current year.
• SBI recently concluded the centennial celebration of its main branch in Mumbai.

Daily Current Affairs November 17th & 18th 2024

 CURRENT AFFAIRS : BANKING & FINANCE

Reserve Bank of India Extends Deadline for Banks and ATM Operators to Implement Cassette Swap Mechanism 

• The Reserve Bank of India (RBI) has given banks and ATM operators some wiggle room for implementing the cassette swap mechanism for cash replenishment in ATMs.
• The banking regulator has exempted cash recycler machines (CRMs) from the cassette swap requirement for cash replenishment.
• Additionally, this exemption applies when banks don’t engage outsourced agencies for cash replenishment in ATMs.

Key Highlights :

• Original Plan (2018) : In 2018, the RBI had asked banks to implement the cassette swap mechanism in a phased manner, covering at least one-third of ATMs operated by them each year so that all ATMs would achieve cassette swap by March 31, 2021.
• However, the implementation has been tardy.
• New Deadline (2025) : Now, the RBI has asked banks to expeditiously implement the roadmap for cassette swap implementation by March 31, 2025.
• Cassette Swap Mechanism : Under the cassette swap mechanism, lockable cassettes filled with banknotes are used in ATMs that are swapped at the time of cash replenishment.
• This move to exclude the cash recyclers from the cassette swap process is, in fact, a step back and needs further discussion and debate.
• Cost Considerations: Each ATM typically requires three sets of five cassettes, with the cost of each cassette ranging from ₹15,000 to ₹20,000.
• This includes cassettes for the ATM itself, in transit, and stored at the branch or cash-in-transit (CIT) company.
• Current ATM Landscape: As of August 2024, there were 2.55 lakh ATMs in India, of which 2.20 lakh were bank-owned, and 35,000 were operated by White Label ATM Operators.
• Impact of the Exemption: The exemption for CRMs and in-house operations could delay the widespread adoption of the cassette swap mechanism and may raise questions regarding its efficiency and effectiveness.

Galaxy Health Insurance launches its first insurance product, ‘Galaxy Promise’          

• Galaxy Health Insurance Company Limited has launched its first health insurance product, ‘Galaxy Promise’.
• The product targets families seeking affordable health coverage.
• The company is jointly promoted by Venu Srinivasan, Chairman Emeritus of TVS Motor Company and Sundaram-Clayton Ltd, and V Jagannathan, founder of Star Health and Allied Insurance Company Ltd.
• Galaxy Health Insurance received approval from the Insurance Regulatory and Development Authority of India (IRDAI) earlier in 2024 to commence its operations.
• ‘Galaxy Promise’ offers sum insured options ranging from ₹3 lakh to ₹1 crore.
• The product is available in multiple plans: Signature, Elite, and Premier, offering flexibility to customers.
• Managing Director and CEO of Galaxy Health Insurance : G Srinivasan

JPMorgan establishes GIFT City unit to create derivative products   

• JPMorgan Chase & Co. has set up a unit in India’s Gujarat International Finance Tec-City (GIFT City), becoming the first global bank to establish such a unit aimed at developing derivative products.
• The unit will focus on creating derivative products to be offered to clients across Asia-Pacific and Europe.
• JPMorgan plans to hire five people in the next 12 months to lead the development of derivative products in GIFT City.
• JPMorgan opened its international business unit in GIFT City in 2022, enabling the bank to provide services to its group entities outside the free trade zone, without adding liabilities to its balance sheet, as per exemptions granted by the regulator for economic zones.

About JPMorgan Chase & Co :

• Founded : December 1, 2000
• Headquarters : New York City, United States
• Chairman & CEO : Jamie Dimon

World Bank Increases Lending Capacity by 50%, Pledges $150 Billion for Green Projects and Developing Economies Over the Next Decade   

• The World Bank has increased its lending capacity by 50%, enabling it to offer a record $150 billion over the next decade.
• The World Bank’s primary focus will be on supporting developing economies through this increased capacity.
• A major portion of the funding will be directed towards green projects, supporting climate action and the achievement of the Sustainable Development Goals (SDGs).
• The World Bank currently lends $5 billion annually, with the increased capacity significantly enhancing its ability to provide financial support for climate resilience and sustainable development.
• India, one of the World Bank’s largest clients, will receive a major share of this increased funding, especially for projects related to climate resilience, rural development, energy, healthcare, and digital education.

About World Bank :

• Established : July 7, 1944
• Headquarters : Washington, D.C., United States
• President : Ajay Banga

Asian Development Bank issues first biodiversity and nature-themed bond to fund projects across Asia and the Pacific  

• The Asian Development Bank (ADB) has issued its first biodiversity and nature theme bond to finance a pool of eligible projects across Asia and the Pacific.
• The bond, valued at A$150 million (approximately US$100 million), has a 10-year maturity and was purchased by Dai-ichi Life Insurance Company of Japan. It was arranged by Credit Agricole CIB.
• The bond was issued under ADB’s Theme Bonds for Sustainable Development program, in collaboration with its Environment group.
• ADB’s theme bonds for sustainable development act as a key vehicle to mobilize private capital in support of the United Nations Sustainable Development Goals and the Kunming-Montreal Global Biodiversity Framework.
• ADB will soon launch its Environment Action Plan 2024–2030: Towards a Nature Positive Asia and the Pacific that will create a road map for its activities to tackle climate change, biodiversity loss, and pollution.

About ADB : 

• Established : 1966
• Headquarters : Manila, Philippines
• President : Masatsugu Asakawa
• Membership : 68 members, including 49 regional members (countries in Asia and the Pacific) and 19 non-regional members (countries outside the region)

IDFC FIRST Bank unveils exclusive Startup Lounge to support and empower early-stage entrepreneurs in India 

• IDFC FIRST Bank has launched a new Startup Lounge to support early-stage startups and entrepreneurs in India.
• The lounge is located in Koramangala, Bangalore.

Key Features of the Lounge:

• The FIRST Wings Startup Lounge provides mentorship, networking opportunities, and access to essential resources for entrepreneurs.
• It is equipped with state-of-the-art facilities, including meeting rooms and advanced video conferencing solutions.
• The space is designed to help entrepreneurs scale their businesses and facilitate collaboration with investors.

About IDFC FIRST Bank:

• Founded: October 2015.
• Headquarters: Mumbai, Maharashtra, India.
• MD & CEO: V. Vaidyanathan.
• IDFC FIRST Bank was formed through the merger of the banking arm of Infrastructure Development Finance Company (IDFC) and Capital First, a non-bank financial institution.

HDFC Bank and TOI Host Cyber Security Summit in New Delhi to Mark Fifth Year of Participation in International Fraud Awareness Week      

• HDFC Bank and Times of India (TOI) organized the Cyber Security Summit in New Delhi to mark the fifth year of HDFC Bank’s participation in International Fraud Awareness Week.
• Cyber frauds or cyber crimes are increasingly grabbing headlines and the need for individuals and institutions to stay vigilant has never been more pressing.
• HDFC Bank launched the ‘Stay Safe, Stay Vigil’ campaign, featuring ‘Vigil Aunty,’ a social media influencer who educates people on recognizing and avoiding common and innovative cyber frauds.
• The campaign is aimed at spreading awareness and informing the public about various types of cyber frauds to prevent financial losses.

About HDFC Bank :

• Founded : August 1994
• Headquarters : Mumbai, Maharashtra, India
• CEO : Sashidhar Jagdishan

Daily Current Affairs November 10th & 11th 2024

 

CURRENT AFFAIRS: BANKING & FINANCE

Cashfree Payments Pilots Cross Border Payments

• Months after receiving the Payment Aggregator Cross Border (PA-CB) licence, Cashfree Payments has launched a pilot program enabling overseas customers to transact with key Indian merchants using UPI and RuPay options, typically restricted to domestic use.

Key Partnerships with Major Indian Brands

Cashfree has partnered with several well-known Indian brands, including:

• Swiggy (foodtech)
• Zepto (quick commerce)
• Nature’s Basket (premium grocery)
• Nykaa (beauty and fashion)
• Bookmyshow (online ticketing)
• Redbus (travel reservations)
• Vedantu (edtech)

These partnerships aim to expand the availability of cross-border payments for UPI and RuPay users.

CEO’s Perspective on Cross-Border Transactions

• Akash Sinha, CEO of Cashfree, highlighted the convenience offered to SaaS customers handling payments of $10,000–$20,000 and above, where credit card fees may not be cost-effective.
• With Cashfree’s solution, merchants receive an account that simplifies the process, allowing money to be seamlessly collected from overseas customers.

Company Background and Recent Achievements

• Founded in 2015 by Akash Sinha and Reeju Datta, Cashfree Payments provides a full-stack digital payments solution and recently received the Prepaid Payment Instrument (PPI) licence from the Reserve Bank of India (RBI).
• This license supports purchases and fund transfers with a preloaded value.

Financial Overview (FY24)

In the financial year 2023-24 (FY24):

• Net Loss: Increased by 2.17% to INR 136 Cr from INR 133.1 Cr in FY23.
• Operating Revenue: Grew by 4.19% to INR 639.3 Cr from INR 613.6 Cr in FY23.

IRDAI Chairman Calls For 100% FDI In Insurance

• Debasish Panda, Chairman of the Insurance Regulatory and Development Authority of India (IRDAI), recently proposed allowing 100% foreign direct investment (FDI) in the insurance sector to accelerate the goal of achieving ‘insurance for all’ by 2027.

Key Highlights from Panda’s Address

• Need for Capital:
  • Panda emphasized that insurance is a capital-intensive industry, which requires substantial financial input to grow.
  • Achieving broader insurance penetration will necessitate more players and significant capital influx.
• Current FDI Cap:
  • Presently, the FDI limit stands at 74% for general, life, and health insurance sectors.
  • Panda highlighted that opening up 100% FDI would allow foreign companies to invest directly without requiring an Indian partner, which could boost competition and innovation.
• Potential Benefits of Full FDI:
  • Opening up to 100% FDI could increase the number of market players, drive competition, and ultimately enhance insurance accessibility across the country.
  • This move could also supplement domestic investments, preventing the crowding out of local capital.

Supporting India’s Long-term Vision

• Panda linked the expansion of the insurance sector to India’s larger vision of a ‘Viksit Bharat’ by 2047 (a fully developed India), indicating that universal insurance will play a pivotal role in social and economic growth.

Role of Bima Sugam Digital Platform

• The Bima Sugam digital platform, an initiative by IRDAI, aims to be a comprehensive public infrastructure to simplify policy access and management for policyholders.
• Panda noted that Bima Sugam would be instrumental in transforming the insurance sector, making policies more accessible, user-friendly, and transparent for all citizens.

RBI imposes penalty on South Indian Bank

• The Reserve Bank of India (RBI) has imposed a penalty of Rs 59.20 lakh on South Indian Bank due to non-compliance with directives on interest rate on deposits and customer service standards.

Reasons for the Penalty

• Non-Compliance in Customer Notification:
  • South Indian Bank failed to notify certain customers via SMS, e-mail, or letter regarding penal charges levied for non-maintenance of minimum/average minimum balance.
• Improper Lien Marking:
  • The bank placed liens against specific Non-Resident External (NRE) savings accounts, which was found to be against RBI’s regulatory norms.

Supervisory Inspection and Findings

• A statutory inspection was conducted by the RBI, based on the bank’s financial status as of March 31, 2023.
• Following the inspection, RBI issued a notice based on supervisory findings indicating non-compliance.
• After considering South Indian Bank’s responses and oral submissions, the RBI concluded that the bank had indeed violated regulatory directives, justifying the monetary penalty.

Daily Current Affairs November 08th 2024

 CURRENT AFFAIRS : BANKING & FINANCE

Reserve Bank of India Updates Know Your Customer Norms to Comply with Anti-Money Laundering Regulations   

• The Reserve Bank of India (RBI) has announced amendments to the Master Directions on Know Your Customer (KYC) on November 6, 2024 and the amended provisions in the Master Direction shall come into force with immediate effect.
• According to the Amendment to the Master Direction – KYC Direction, 2016, regulated entities (REs) will have to apply the customer due diligence (CDD) procedure at the unique customer identification code (UCIC) level.

Daily Current Affairs November 01st & 02nd 2024

 

CURRENT AFFAIRS : BANKING & FINANCE

Reserve Bank of India’s Diwali Initiative: Covertly Transporting 102 Tonnes of Gold from England to India

• On Dhanteras (October 29, 2024), the Reserve Bank of India (RBI) transported an additional 102 tonnes of gold from the Bank of England to secure storage facilities within India.

Key Highlights :

• RBI’s Gold Holdings:As per the RBI’s 43rd Half Yearly Report on Management of Foreign Exchange Reserves (April – September 2024), the RBI holds a total of 854.73 metric tonnes of gold.
• 46 metric tonnes of this gold is stored domestically, while 324.01 metric tonnes are held overseas with the Bank of England and the Bank for International Settlements (BIS).
• An additional 26 metric tonnes are held in the form of gold deposits.
• Gold Repatriation:Since September 2022, approximately 214 tonnes of gold have been brought back to India due to increased focus on asset security amid global geopolitical tensions.
• In May 2024, around 100 tonnes of gold were repatriated from the Bank of England.
• Gold’s Role in Forex Reserves:The share of gold in India’s total foreign exchange reserves increased from 15% in March 2024 to 9.32% in September 2024.
• Reason for Storing Gold Overseas:India and other nations store gold with the Bank of England primarily due to immediate access to the London bullion market, which facilitates liquidity.
• The Bank of England is the second-largest custodian of gold globally, after the New York Federal Reserve.

About RBI :

• Established : 1 April 1935
• Headquarters : Mumbai, Maharashtra, India
• Governor : Shaktikanta Das

Daily Current Affairs October 25th 2024 | Latest News

 

CURRENT AFFAIRS : BANKING & FINANCE

Reserve Bank of India Study Shows Private Banks at the Forefront of Artificial Intelligence Adoption    

• Artificial Intelligence (AI) adoption in India is gaining momentum, particularly among private banks, with asset size and CRAR (Capital to Risk Weighted Assets Ratio) being key factors influencing the rate of adoption.
• The size and financial health of a bank, measured by CRAR, positively influence the bank’s focus on AI. Larger banks benefit from economies of scale and have more investment capacity for AI technologies.

Key Highlights :

• Text Mining Study (2015-16 to 2022-23): A text mining analysis of Indian banks’ annual reports from 2015-16 to 2022-23 shows a significant increase in AI emphasis across both private and public sector banks.
• However, the rate of AI adoption is faster for private banks.
• AI Adoption Challenges for Smaller Banks: Smaller banks face difficulties in adopting AI due to higher fixed costs and lack of economies of scale, making AI adoption relatively more challenging.
• Capital Adequacy and AI Adoption: Banks with higher CRAR are better positioned to invest in AI, as they have adequate capital buffers and confidence to pursue AI solutions.
• Increase in AI-Related Keywords: The usage of AI-related keywords in private banks’ annual reports increased by six-fold in 2022-23 compared to 2015-16.
• For public sector banks (PSBs), the emphasis on AI increased more than three-fold during the same period.
• Technologies Employed by Banks: Major technologies being employed include cloud computing, big data, automation, and data analytics, with increasing focus on newer AI technologies like Robotic Process Automation (RPA), Internet of Things (IoT), and Natural Language Processing (NLP).

Department of Financial Services Revamps Middle Management Structure in Nationalised Banks    

• The Department of Financial Services (DFS) in the Finance Ministry announced a major revamp of the middle level management structure in nationalised banks.
• This restructuring aims to significantly increase promotion opportunities for employees at the Chief Manager (Scale IV) and above levels.
• Through the latest revamp of the middle management structure, the Finance Ministry has sought to level the playing field among public sector banks (PSBs) and sort out the employee level promotion discrepancies that had crept in, post the mega consolidation exercise leading to 11 PSBs in the country.

Key Highlights :

• New Framework: The new framework introduces a substantial increase in the number of Chief General Managers (CGMs), General Managers (GMs), Deputy General Managers (DGMs), and Assistant General Managers (AGMs) across the 12 nationalized banks.
• Executive Posts Based on Business Mix: The number of executive posts (CGM/GM/DGM/AGM) will be determined based on the banks’ business mix as of March 31, 2023.
• CGM Post Availability: Under the revamped guidelines, the post of CGM (scale VIII) would henceforth be available in all the nationalised banks, below Board level, irrespective of the business mix.
• Categories Based on Business Mix: Nationalized banks are categorized based on their business mix:
• Category A: Business Mix of less than ₹10 lakh crore.
• Category B: Business Mix of ₹10 lakh crore and above.
• CGM Distribution:
• Up to ₹4 lakh crore: 4 CGMs
• ₹4 lakh crore to ₹10 lakh crore: 8 CGMs
• Over ₹10 lakh crore: Minimum 10 CGMs, plus 1 additional CGM for each ₹1 lakh crore increase in business mix.
• Corporate Office Placement: At least 50% of CGMs must be placed at corporate offices for Category A banks.
• Ratios of Executives:CGM ratio is set at 1:4 for all categories of nationalized banks.
• GM:DGM ratio is 1:3:9.
• Review Timeline: The methodology for computing CGM positions may be reviewed by DFS in FY27-28, based on the banks’ business mix as of March 31, 2027.
• Concerns About Saturation: A former chairman of a public sector bank expressed that despite the increase in middle management posts, the “saturation issue” may still persist.