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.
