Banking Awareness of 1, 2 and 3 June 2023

Topic: Indian Economy/Financial Market

1. Eight core industries output reached to a six-month low of 3.5% in April 2023.

• This was lower than the 9.5% growth recorded in April 2022 and 3.6% growth seen in March 2023.
• The overall core industries output for 2022-23 has been revised from 7.6% earlier to 7.7% now.
• This revision was mainly due to increase in January 2023 output growth from 8.9% earlier to 9.7%.
• The core industries growth was 10.4% in the previous fiscal.
• Four out of eight sectors have shown growth in April 2023. These sectors are coal, fertilisers, cement and steel.
• Four sectors have shown contraction. These are crude oil, refinery products, natural gas and electricity. 
• The combined Index of Eight Core Industries (ICI) grew by 3.5% (provisional) in April 2023 as against the Index of April 2022.

Topic: Indian Economy/Financial Market

2. FDI equity inflows declined by 22% to $46 billion in FY23.

• Total FDI Inflows have fallen by 16% to $70.97 billion in FY23.
• During March 2023 quarter, the overseas inflows have fallen by 40.55% to $9.28 billion.
• According to the Department for Promotion of Industry and Internal Trade (DPIIT) data, the decline in FDI into India is brought by lower inflows in computer hardware and software, and automobile industry.
• The FDI inflows were recorded at $58.77 billion during FY22.
• Total FDI inflows include equity inflows, re-invested earnings and other capital.
• As per the data, Singapore was the top investor with $17.2 billion in FDI during FY23.
• Singapore was followed by Mauritius ($6.13 billion), the US ($6 billion), and the UAE ($3.35 billion).
• The sector that attracted the highest inflows of $9.4 billion during the FY23 are computer software and hardware.
• However, FDI inflows to these sectors have declined as compared to $14.5 billion in FY22.
• Similarly, FDI in automobile industry, construction (infrastructure) activities and metallurgical industries has also declined.
• Sectors like services, trading, telecommunications, pharma and chemicals have recorded growth in FDI.
• Maharashtra received the highest FDI inflows of $14.8 billion during FY23.
• FDI inflows in Karnataka declined to $10.42 billion in FY23 as against $22 billion in FY22. FDI in Gujarat and Rajasthan has increased.

Topic: RBI

3. RBI has placed a fine of ₹2.2 crore on Indian Overseas Bank.

• RBI has imposed the fine for violation of multiple regulatory norms.
• The violated norms include guidelines on disclosure of NPA (non-performing assets) divergence, interest rates on deposits, and advisory on Man in the Middle (MiTM) attacks in ATMs.
• The Statutory Inspection for Supervisory Evaluation with respect to the Indian Overseas Bank’s financial position as on March 2021 was carried out by RBI.
• RBI found contravention of certain provisions. Indian Overseas Bank failed to do a minimum mandatory transfer of a sum equivalent to 25% of its disclosed profit for FY21 to its reserve fund.
• In some instances, Indian Overseas Bank offered interest on deposits at rates applicable to senior/super senior citizens.
• Control measures for ATMs about end-to-end encryption of communication involving the ATM terminal/PC and the ATM Switch were not implemented by Indian Overseas Bank within the prescribed timeline.
• In Man in the Middle (MiTM) attacks, the attacker inserts himself in communications between two parties (the user and application). Man in the Middle attack is a cyberattack.
• Indian Overseas Bank:
  • It is a nationalized bank headquartered in Chennai. It was founded in 1937.
  • It is a government-owned bank. Ajay Kumar Srivastava is its CEO.

Topic: Reports and Indices

4. Manufacturing PMI increased to 58.7 in May 2023.

• Manufacturing Purchasing Managers’ Index (PMI) reached to 31-month high level in May 2023.
• Manufacturing PMI was at 57.2 in April. Manufacturing sector has shown good performance due to increase in demand, domestically and from abroad.
• According to the report accompanying the index, employment growth rate improved to a six-month high.
• PMI is prepared by S&P Global. It is prepared on the basis of a survey carried out among executives of 400 manufacturing companies from different fields.

Topic: Indian Economy/Financial Market

5. JP Morgan has increased India's FY24 GDP forecast to 5.5%.

• However, it warned that global economic slowdown will still drag the economy.
• It also warned that tighter financial conditions will still drag the economy.
• It attributed the better-than-expected March-quarter GDP to higher growth in exports.
• SBI’s economic research department has revised its baseline forecast for FY24 GDP growth to 6.7% from previous forecast of 6.2%.
• It said demand rebalancing from private consumption to investment in FY23 will lead to faster growth in FY24.
• It projected Q1 GDP growth at 7.8%, Q2 at 6.5%, Q3 at 6.3%, and Q4 at 6.2%.
• In its report Ecowrap, ERD said that the better than expected growth is mainly due to 6.1% GDP growth in Q4 FY23 GDP.
• As per the report, scheduled commercial banks’ (SCBs) credit growth is strong as on 05 May, 2023.
• Except for Industry, credit to all other sectors has increased significantly. The credit-to-GDP gap narrowed.
• JP Morgan is an American multinational financial services company.

Topic: Regulatory Bodies/Financial Institutions

6. IRDAI has selected SBI Life Insurance as acquirer insurer of the life insurance business of SILIC.

• IRDAI has asked SBI Life to take over the policy liability of around two lakh policies of Sahara India Life Insurance Co Ltd (SILIC).
• It has directed SBI Life to take adequate steps to reach out to the policyholders of SILIC.
• IRDAI said it will continue to monitor the situation. It will also issue necessary directions as required in the interest of the policyholders of SILIC.
• SILIC was granted a Certificate of Registration in 2004 for carrying out life insurance business.
• In 2017, IRDAI appointed an Administrator to manage the business of SILIC due to some regulatory issues.

Topic: RBI

7. RBI and IIT Madras will launch voice-banking solution.

• Reserve Bank Innovation Hub (RBIH), IIT Madras Research Park (IITMRP) and IIT Madras Incubation Cell (IITMIC) have come together to launch voice-banking solutions.
• Voice-banking solutions will eliminate language barriers across the country.
• The aim of initiative of RBI and IIT Madras is to conduct basic banking transactions through voice-controls in Hindi, Tamil, Telugu and English.
• Voice-banking will help the illiterate and the visually impaired in their banking needs.
• A codefest on voice-banking called ‘Vaulter Voice’ was conducted at the IIT Madras Research Park by State Bank of India (SBI), Axis Bank, Kotak Mahindra Bank and IDFC First Bank. Nine teams have been selected for solutions.

Topic: Indian Economy/Financial Market

8. India’s GDP growth in the quarter ending March 2023 reached 6.1%.

• According to data released, India’s expected GDP growth for 2022-23 is 7.2 per cent. It is higher than NSO’s advance estimates of 7 per cent for 2022-23.
• The unexpected increase in GDP growth is due to better-than-expected performance in the last quarter of the fiscal. Services, exports, and agriculture sectors led the growth.
• Growth in the services sector was led by the construction, and trade, hotels, transport sectors.
• India’s GDP growth in FY 23 will be lower than the growth rate of 9.1 per cent in 2021-22.
• The Indian economy grew by 13.1 per cent in the April-June quarter, 6.2 per cent in the July-September quarter and 4.5 per cent in the October-December quarter.
• Export and import numbers suggest that the economy has gained significantly due to the slowing of imports and increasing of export.
• Goods and services exports grew at 11.1% and 11.9% in the quarters ending December 2022 and March 2023 respectively.
• Inflation has shown a downward trend and CPI inflation will return to the Reserve Bank of India’s target of around 4% in 2023-24.
• Private consumption showed 2.8% growth during the fourth quarter.

Topic: Indian Economy/Financial Market

9. Government's fiscal deficit for FY23 decreased to 6.4% of GDP.

• The fiscal deficit of the government decreased from 6.71% of GDP to 6.4% of GDP in 2022–23.
• In the Union Budget, the government had said that it aims to further reduce the fiscal deficit to 5.9% of gross domestic product (GDP) during the current fiscal year 2023-24.
• Unveiling the government's revenue-expenditure figures for 2022-23, the CGA said the fiscal deficit in absolute terms stood at ₹17,33,131 crore (provisional), slightly less than the amount estimated in the Revised Estimates (RE) in the budget.
• The government received ₹24.56 lakh crore (101% of total receipts relating to RE 2022-23) during 2022-23.
• This includes ₹20.97 lakh crore tax revenue (net from the Centre), ₹2.86 lakh crore non-tax revenue and ₹72,187 crore non-debt capital receipts.
• The Centre's total expenditure was ₹41.89 lakh crore (100% of the corresponding RE 2022-23), of which ₹34.52 lakh crore was on the revenue account and ₹7.36 lakh crore on the capital account.
• Of the total revenue expenditure, Rs 9.28 lakh crore was in the form of interest payments and Rs 5.31 lakh crore in the form of major subsidies.
• The revenue deficit for the fiscal year ending March 2023 was 3.9% of GDP while the effective revenue deficit was 2.8% of GDP.

Topic: Appointments

10. Ashwani Kumar has been appointed as MD & CEO of UCO Bank.

• Ashwani Kumar will lead the UCO Bank for three years.
• His appointment has been approved by the Appointments Committee of the Cabinet (ACC).
• He has replaced Soma Sankara Prasad, who superannuated on May 31.
• His term could be extended by two years or until further orders, whichever is earlier, after the review of performance.
• UCO Bank:
  • It is a Kolkata-headquartered public sector bank. It was established in 1943.
  • It was put under the PCA framework in May 2017 due to high net non-performing assets and a negative return on assets.
  • In September 2021, it was taken out of the PCA framework.

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