Banking Awareness of 1, 2 and 3 April 2023

Topic: Reports and Indices

1. Purchasing Managers’ Index (PMI) for manufacturing for the month of March 2023 stood at 56.4.

• Manufacturing PMI for March increased from 55.3 in February 2023.
• PMI average for the final quarter of the fiscal year stood at 55.7. It was 56.3 in Q3.
• The PMI reading has remained above 50 for 21 straight months now.
• Overall, input costs grew at the 2nd-slowest rate since September 2020.
• The share of manufacturing sector in Gross Value Added (GVA) is over 15%. It is considered a sector for job multiplier.
• Purchasing Managers’ Index (PMI) is based on a survey by S&P Global.
• The survey is based on responses of 400 purchasing managers of different sub-sectors of manufacturing.

Topic: Indian Economy/Financial Market

2. India’s unemployment rate increased to three-month high level in March 2023 to 7.8% as per Centre for Monitoring Indian Economy (CMIE) data.

• As per CMIE s data, India’s unemployment rate increased to 8.30% in December 2022.
• It came down to 7.14% in January 2023. It increased to 7.45% in February 2023.
• As per CMIE data, urban unemployment remained at 8.4% and rural unemployment rate was 7.5%.
• Labour force participation rate (LFPR) declined from 39.9% to 39.8%.
• Unemployment rate was highest in Haryana at 26.8%. Haryana was followed by Rajasthan (26.4%), Jammu and Kashmir, Sikkim, Bihar and Jharkhand.
• Lowest unemployment was reported in both Uttarakhand and Chhattisgarh at 0.8%.
• They were followed by Puducherry, Gujarat, Karnataka, Meghalaya and Odisha.

Topic: Regulatory Bodies/Financial Institutions

3. IRDAI has granted certificate of registration to two more companies in its 121^st meeting.

• These companies can now commence life insurance business.
• The names of the companies are Acko Life Insurance Ltd. and Credit Access Life Insurance Ltd.
• With the approval of these two new life insurance companies, the total number of life insurers operating in India have now increased to 25.
• The total number of life insurers operating in India have remained stagnant since 2011.
• In its 120th meeting held in November 2022, IRDAI has granted registration to a general insurer.
• So, total three insurers have been added in the financial year 2022-23.
• The Life Insurance Corporation (LIC), GIC Re. and New India Assurance continue to be identified as Domestic Systemically Important Insurers (D-SIIs).
• D-SIIs refer to insurers whose failure will lead to a significant dislocation in the domestic financial system due to their size, market importance, and domestic and global interconnectedness.

Topic: Indian Economy/Financial Market

4. Core industries output increased 6% in February 2023.

• It was slightly higher than the 5.9% growth recorded in February 2022.
• Core sector growth for January 2023 has been revised upwards to 8.9% from 7.8% earlier.
• Core sector output for February 2023 is lower than the revised output (8.9%) for January 2023.
• During April-February 2022-23, the cumulative growth rate of eight core industries was 7.8% (provisional). This was 11.1% in the corresponding period of previous year.
• Only crude oil sector saw a contraction in output (4.9% contraction). Remaining seven sectors have shown growth.
• Contraction in crude oil sector can be explained by the low international prices. It was more economical to import oil from foreign markets.
• The eight core industries are coal, fertilisers, steel, cement, electricity, crude oil, natural gas and refinery products. They comprise 40.27% of the weight of items covered in the Index of Industrial Production (IIP).

Topic: Taxation

5. India’s monthly GST collections stood at the second highest ever in March 2023.

• It increased 13% from a year earlier to 1.6 lakh crore rupees. GST collection stood at 1.68 lakh crore in April 2022.  
• Gross GST collection has crossed ₹1.5 lakh crore mark for the fourth time in the current financial year.
• Total gross GST collection for FY23 was Rs 18.10 lakh crore. Yearly collection exceeded revised estimate of Rs 17-lakh crore.
• The gross revenues in 2022-23 were 22% higher than the last year.
• GST collection for March 2023 are 13% higher than the GST revenues in March 2022.
• The average monthly gross GST collection for Q4 of FY2022-23 has been ₹1.55 lakh crore against the average monthly collection of ₹1.51 lakh crore, ₹1.46 lakh crore and ₹1.49 lakh crore in Q1, Q2 and Q3, respectively.

Topic: Banking System

6. Non-food bank credit growth was 15.9% in February 2023.

• Non-food bank credit growth in February 2023 was much higher than 9.2% growth in the year-ago period.
• However, the growth was lower than the 16.7% year-on-year growth recorded in January as per RBI data.
• Credit growth to agriculture and allied activities increased from 10.3% to 14.9% in February 2023.
• Credit to industry grew at 7% as per data on Sectoral deployment of Bank Credit for February 2023.
• Credit to the services sector increased by 20.7% y-o-y in February 2023.
• Credit growth to the services sector was slightly slower than 21.5% y-o-y growth in January 2023.
• Credit growth to the services sector was much higher compared with 6.2% a year ago.  
• Credit growth to the services sector was much higher mainly due to the improved credit offtake to NBFCs.
• Credit growth to personal loans increased to 20.4% from 12.5% a year ago. This was mainly driven by housing loans.

Topic: Banking System

7. India Post Payments Bank (IPPB) has launched WhatsApp Banking Services for its customers.

• IPPB has announced the launch of WhatsApp Banking Services in collaboration with Airtel.
• It enables IPPB customers to access banking services on their mobile phone.
• With the help of the newly launched IPPB WhatsApp Banking channel, the customers can connect with the bank on WhatsApp.
• They will be able to avail range of banking services including doorstep service request, locating nearest Post Office and much more.
• The service will be delivered to customers through Airtel IQ, which is a robust, intuitive and secure cloud communication suite.
• Airtel and IPPB are working to deliver as many as 250 million messages per month to the customers of the bank.
• Airtel is the world’s first telecom company that serves as a Business Service Provider (BSP) for WhatsApp.

Topic: Indian Economy/Financial Market

8. Union Minister Piyush Goyal released Foreign Trade Policy (FTP) 2023.

• Ministry of Commerce has unveiled Foreign Trade Policy (FTP) 2023 to raise India’s goods and services exports to two trillion dollars by 2030.
• India is likely to end this fiscal year with total exports of $760-770 billion as against $676 billion in 2021-22.
• It will replace Foreign Trade Policy 2015-20 and will become effective from 1 April 2023.
• The Foreign Trade Policy 2015-20 was extended due to the Covid-19 pandemic and volatile geo-political. The last extension was given in September 2022 till March 31, 2023.
• Earlier the duration of foreign trade policy was of five years. The latest policy has no end date and will be updated as per the need.
• Foreign Trade policy is based on 4 pillars, which are given below:
  • Incentive to Remission
  • Export promotion through collaboration - Exporters, States, Districts, Indian Missions
  • Ease of doing business, reduction in transaction cost and e-initiatives.
  • Emerging Areas – E-Commerce Developing Districts as Export Hubs and streamlining SCOMET policy.
• The FTP 2023 will encourage recognition of new towns through the “Towns of Export Excellence Scheme” and exporters through the “Status Holder Scheme”.
• The FTP 2023 has identified four new Towns of Export Excellence (TEE) — Faridabad, Moradabad, Mirzapur and Varanasi. These towns will be in addition to the already existing 39 TEEs.
• Battery electric vehicles (BEV) of all types, vertical farming equipment, wastewater treatment and recycling, rainwater harvesting system and rainwater filters, and green hydrogen will be now eligible for reduced Export Obligation requirements under the Export Promotion Capital Goods Scheme.
• Special outreach and training activities for small e-commerce exporters will be provided to promote e-commerce exports.
• The government is aiming to increase e-commerce exports to $200-300 billion by 2030.
• India's overall exports including services and merchandise exports is expected to cross 760 Billion dollars in 2023.
• The new FTP will try to make the Indian rupee a global currency and allow international trade settlement in the domestic currency.
• The new FTP is introducing a one-time Amnesty Scheme for exporters to close the old pending authorizations.

Topic: Banking/Financial Schemes

9. Government hiked interest rates on small savings schemes for April-June quarter.

• The government has increased the interest rates for post office savings schemes for the quarter April to June in 2023.
• The Department of Economic Affairs, Ministry of Finance has informed that the maximum interest rate has been increased on National Savings Certificate-NSC.
• It has increased from 7 percent to 7.7 percent.
• The interest rate on Sukanya Samriddhi Savings Scheme has now become eight percent, it was earlier 7.6 percent.
• The interest rates on PPF and Savings Deposit Scheme are 7.1 and 4 per cent.
• Savings scheme for senior citizens will get 8.2 percent interest instead of 8 percent.
• Interest rate on Kisan Vikas Patra has been increased from 7.2 percent to 7.5 percent.
• The maturity period of Kisan Vikas Patra has been reduced from 120 months to 115 months.
• The interest rate on one-year fixed deposits in post offices will increase from 6.6 percent to 6.8 percent. For two-year fixed deposits, it will be 6.9 per cent.
• The interest rate on the five-year recurring deposit, which was 5.8 per cent in the previous quarter, will be 6.2 per cent in the new quarter.
• The interest rate on Monthly Income Scheme has been increased from 7.1 per cent to 7.4 per cent.
• Interest rates were hiked in the last quarter as well. Interest rates for small savings schemes are notified quarterly.

Topic: Regulatory bodies/Financial Institutions

10. Upper age limit of ombudsman has been increased by PFRDA to 70 years.

• Under the Pension Fund Regulatory and Development Authority (Redressal of Subscriber Grievance) Regulations 2015, earlier limit was 65 years.
• PFRDA has now amended the regulation and changed upper age limit to 70 years.
• Amended regulations are Pension Fund Regulatory and Development Authority (Redressal of Subscriber Grievance) (Amendment) Regulations, 2023.
• PFRDA appoints ombudsman, which receives, considers and facilitates resolution of grievances.
• Ombudsman holds office for a period of three years. Ombudsman is eligible for reappointment for another two years.

Read Banking Awareness PDF - 1, 2 and 3 April 2023