Banking Awareness of 1, 2 and 3 January 2025

Topic: Indian Economy/Financial Market

1. Rural poverty has significantly decreased, according to SBI's economic research department (ERD).

• Higher consumption growth in the lowest 0–5% decile is the reason for the significant drop in the rural poverty ratio.
• With very few cases of extreme poverty, India's poverty rates could currently be between 4 and 4.5 percent.
• ERD economists noted that the poverty line estimate was ₹1000 in urban areas and ₹816 in rural areas as of 2011–12.
• Accordingly, the revised estimated poverty line for 2023–2024 is Rs 1944 in urban areas and Rs1632 in rural areas.
• SBI Economists said that the difference between rural and urban monthly per capita consumption expenditure (MPCE) to rural MPCE is now at 69.7 per cent.
• This has shown a significant fall from 88.2 per cent in 2009-10.
• Due to the increased weights, the ERD predicted that inflation in November 2024 will be 5%.
• According to the ERD, the majority of high-income states have savings rates higher than the national average (31%).
• Bihar and Uttar Pradesh have low savings rates, which may be caused by increased out-migration.

Topic: Banking System

2. The market cap deadline for UPI apps has been extended by NPCI for a further two years, until 2026.

• The NPCI has given third-party Unified Payments Interface (UPI) apps an additional two years until December 31, 2026, to adopt a 30% volume cap.
• The NPCI has delayed the deadline for the third time.
• According to NPCI, the deadline for compliance for current third-party application providers (TPAPs) that exceed the volume cap has been extended by two years, or until December 2026.
• In November 2020, the National Payments Corporation of India (NPCI) first proposed capping the number of transactions that UPI apps could handle at 30%.
• The current players were given two years by NPCI to comply with the volume cap.
• Major TPAPs like PhonePe and Google Pay currently account for 80% of UPI transactions.
• The 30% cap will be determined on a rolling basis by taking the total number of UPI transactions performed over the previous three months.
• With immediate effect, NPCI has removed the cap on onboarding UPI users for WhatsApp Pay, a third-party app provider.
• WhatsApp Pay can now extend UPI services to its entire user base in India.
• The NPCI has removed the 100 million user cap that existed.

Topic: Committees/Commissions/Taskforces

3. A working group has been formed by the Ministry of Commerce and Industry for revision of the base year for the Wholesale Price Index (WPI) from 2011-12 to 2022-23.

• The working group has 18-members. It is chaired by Prof. Ramesh Chand, member, NITI Aayog.
• It includes representatives from various government departments, economic advisory bodies, and non-official experts.
• Some non-official members of the group are economist Dr Surjit Bhalla, Dr Shamika Ravi, member, Economic Advisory Council to PM, and Crisil’s chief economist Dr Dharmakirti Joshi.
• The working group will revise the commodity basket of WPI and Producer Price Index (PPI) in light of structural changes in the economy.
• It will also review the current system of price collection and recommend changes for improvement.
• It will also decide on the computational methodology to be adopted by WPI or PPI.
• It will suggest improvement in compilation and presentation and recommend roadmap for switchover from WPI to PPI.
• The Working Group will submit its final report to the Office of the Economic Adviser within 18 months of its notification.

Topic: RBI

4. Revised norms for deposit-taking housing finance companies (HFCs) have been implemented by the RBI.

• These norms require deposit-taking HFCs to maintain higher levels of liquid assets against their deposits.
• These companies are required to maintain liquid assets equal to 14% of their outstanding deposits as of January 1, 2025.
• As a percentage of public deposits, this comprises 8% of unencumbered approved securities.
• By July 1, 2025, the RBI has mandated that the need for total liquid assets rise to 15%, with 10% of that amount being unencumbered approved securities.
• Previously, HFCs that accepted deposits had to keep 13% of their public deposits in liquid assets.
• Deposit-taking HFCs mobilised ₹24,764 crore in March 2024. This is a significant decrease from ₹1,35,183 crore in the same month the previous year.
• Additionally, the RBI lowered the public deposit cap from 3.0 times to 1.5 times of net owned funds.
• RBI has also lowered maximum tenure of deposit to 60 months to align norms for HFCs with the norms applicable to NBFCs. Earlier, this tenure was 120 months.

Topic: Appointments

5. Manish Singhal has been appointed Secretary General of ASSOCHAM.

• Manish Singhal succeeds Deepak Sood. Deepak Sood recently resigned to pursue other interests.
• Singhal has 35 years of experience in Chamber and Corporate India.
• He had earlier worked as Deputy Secretary General of The Federation of Indian Chambers of Commerce and Industry (FICCI).
• Associated Chambers of Commerce and Industry of India (ASSOCHAM) is an apex business chamber.
• It is a non-governmental trade association and advocacy group. It is based in New Delhi. It was established in 1920.

Topic: Banking/Financial/Govt Schemes

6. Cabinet approved the extension of PM Fasal Bima Yojana, a weather-based crop insurance scheme till 2025-26.

• Government has decided to extend the timeline of the PM Fasal Bima Yojana and Restructured Weather Based Crop Insurance Scheme till 2025-26.
• The overall outlay of the scheme has been increased to 69 thousand 515 crore rupees.
• Under this scheme, 88 per cent of insured farmers are small and marginal farmers. 57 per cent of insured farmers are from OBC, SC, and ST.
• Union Cabinet has approved the extension of One-time Special Package on Di-Ammonium Phosphate (DAP) fertilizers beyond the Nutrient Based Subsidy.
• The government has also approved the proposal to extend the Special Package till further orders to ensure sustainable availability of DAP at affordable prices to the farmers.
• The farmers will continue to get DAP at one thousand 350 rupees per bag of 50 Kilogram.
• It will ensure the DAP availability to farmers at subsidized, affordable and reasonable prices.
• PM Fasal Bima Yojana was launched on 18 February 2016.

Topic: Appointments

7. Bhuvnesh Kumar took charge as CEO of UIDAI.

• On January 1, 2025, IAS officer Bhuvnesh Kumar took over as the CEO of the Unique Identification Authority of India (UIDAI), which administers Aadhaar.
• Mr. Kumar is Additional Secretary in the Ministry of Electronics and Information Technology (MeitY) and will continue to hold the same position after this appointment.
• Mr Kumar replaced Amit Agarwal.
• On December 25, Mr Agarwal was appointed secretary of the Department of Pharmaceuticals under the Ministry of Chemicals and Fertilizers as part of a bureaucratic reshuffle.
• Aadhaar was launched in India in 2009 by the Unique Identification Authority of India (UIDAI).

Topic: Miscellaneous

8. Chhattisgarh became the first state to link the forest ecosystem to green GDP.

• The state of Chhattisgarh has for the first time launched an innovative scheme that links ecosystem services of its forests to Green Gross Domestic Product (Green GDP).
• These measures were aimed at highlighting the direct link between the vital environmental contributions of forests, such as clean air, water conservation, biodiversity, and the economic progress of the state.
• The action plan is designed to ensure that economic development is achieved while preserving the pristine environment for future generations.
• The new approach assesses the often-overlooked benefits that forests provide, such as regulating climate, enriching soil quality, purifying water, absorbing carbon dioxide, etc.
• These services will now be formally included in the state's economic plan.
• 44% of Chhattisgarh's land area is covered with forests, and the natural resources of the state are the basis of livelihood for millions of people.
• Forest products such as tendu leaves, lac, honey, and medicinal plants contribute significantly to the rural economy, while forests also play an important role in mitigating climate change by absorbing carbon.
• Linking these benefits to Green GDP, Chhattisgarh seeks to improve budget planning and formulate policies that prioritise economic growth and ecological sustainability.

Topic: Miscellaneous

9. Russia introduced tourist tax from 1 January 2025.

• The Russian government has introduced a new tourist tax from January 1, 2025, to replace the previous resort fee.
• Now, travellers staying in hotels and other accommodations will have to contribute an additional 1 per cent of their lodging costs.
• This is the start of the plan to bolster regional tourism infrastructure.
• The tax was introduced as part of amendments to the Russian Tax Code in July 2024.
• Under the new plan, the tourist tax will begin at a rate of 1 per cent in 2025 and will be increased to 3 per cent by 2027.
• Many regions, particularly those with established or emerging tourism industries, have already adopted this initiative.
• Russia has also officially dropped export duties on anthracite, coking coal, and thermal coal starting January 1, 2025.

Topic: MoUs/Agreements

10. IIT Madras and Ministry of Agriculture collaborated on Project VISTAAR (Virtually Integrated System to Access Agricultural Resources).

• The initiative intends to enhance the efficiency and efficacy of the agricultural extension sector through digitisation.
• A Memorandum of Understanding was recently signed by the Ministry of Agriculture and IIT Madras to enhance the VISTAAR platform by adding data about start-ups in the agriculture and related industries.
• This will make it easier for farmers and other stakeholders to take use of these start-ups' capabilities and products.
• Information on more than 12,000 start-ups in the agriculture and farming sectors can be found on the startup information platform created by IIT Madras' Centre for Research on Startups and Risk Financing and its incubatee startup, YNOS Venture Engine.
• Through this partnership, farmers will have easy access to this wealth of knowledge.

Read Banking Awareness PDF -1, 2 and 3 January 2025