Banking Awareness of 1, 2 and 3 July 2023

Topic: Corporates/Companies  

1. Digital payment facility has been introduced by Tata AIA Insurance.

• It has launched digital payments through WhatsApp and Unified Payments Interface (UPI).
• With this feature, customers will be able to pay policy premiums digitally.
• They will instantly receive confirmation acknowledgment.
• This digital payment option is first-of-its kind in the insurance industry.
• Tata AIA is the life insurance arm of Tata Group. It has enabled renewal premium collections via multiple Digital modes.
• The company has performed well in terms of claim settlement ratio and persistency ratio, which shows the percentage of consumers who renew their policies with Tata AIA.

Topic: Banking System

2. Unified Payments Interface (UPI) transactions declined 0.9% in June 2023.

• This is the first decline in transaction volume since February 2023.
• UPI transactions in June 2023 declined both in terms of volumes and value of transactions.
• UPI transaction amount in June 2023 declined to ₹14.75 lakh crore and 933 crore transactions were processes in the same month as per NPCI data.
• In May 2023, UPI transactions count had crossed the number of 900 crore per month.   
• In its annual report for 2022-23, RBI said UPI-led retail digital payments increased at a compounded annual growth rate (CAGR) of 50% in terms of volume between 2016-17 and 2021-22.
• In the same report, RBI said UPI-led retail digital payments grew at a CAGR of 27% in terms of value between 2016-17 and 2021-22.
• According to a report by PwC India, UPI transaction will cross 100 crore transactions per day by FY27.

Topic: Indian Economy/Financial Market

3. The centre’s fiscal deficit at the end of May 2023 was 11.8% of budget estimates for FY24.

• It was 12.3% of the FY23 budget estimate in the same period of the last year.
• According to the data of the Controller General of Accounts (CGA), the fiscal deficit was ₹2,10,287 crore (₹2.1-lakh crore) at end of May 2023.
• As per Union Budget, the government’s aim is to reduce the fiscal deficit during the FY24 to 5.9% of GDP. The deficit was 6.4% of the GDP in FY23.
• In end of March 2024, the fiscal deficit is estimated at ₹17.86 lakh crore as per the Budget.
• CGA released the revenue-expenditure data of the Union government for the first two months (April-May) of the FY24.
• It said the net tax revenue was ₹2.78 lakh crore or 11.9% of the Budget Estimate.
• Government’s total expenditure was ₹6.25 lakh crore or 13.9% of the estimates in the Union Budget for FY24.

Topic: Indian Economy/Financial Market

4. Growth in the core sector remained stable at 4.3% in May 2023.

• The pace of growth of eight key infrastructure sectors remained at 4.3% due to decline in the production of crude oil, natural gas and electricity.
• The core sector growth was same in April 2023. It was 19.3% in May 2022.
• As per the data released by the government, during April-May of this fiscal, the output growth of these eight sectors has slowed down to 4.3% against 14.3% of same period of last 2022.
• The output of crude oil has contracted by 1.9%. Natural gas production declined by 0.3%.
• Petroleum refinery production grew by 2.8%. Electricity production declined marginally by 0.3%.
• The coal output growth rate declined to 7.2% in May as compared to last year.
• The rate of growth in the production of fertilizer, steel and cement slowed down to 9.7%, 9.2% and 15.5%, respectively.

Topic: Banking/Financial/Govt Schemes

5. The interest rates on key small savings schemes have been kept unchanged for Q2 (July 1-September 30, 2023).

• Interest rates on two term deposits (one-year and two-year) and 5-year recurring deposit have been slightly increased for Q2.
• The highest increase is for the five-year recurring deposit (RD) from 6.2% to 6.5%.
• Interest rate on a one-year term deposit with post offices has been changed from 6.8% to 6.9%.
• Interest rate on a two-year term deposit has been increased from 6.9% to 7.0%.
• The aim of the government is to issue securities worth more than ₹4.71-lakh crore against small savings this fiscal. It was around ₹4.39-lakh crore for FY23.

Topic: Taxation

6. Goods and Services Tax (GST) collection in June 2023 reported at over ₹1.61 lakh crore by Finance Ministry.

• This collection is 12% higher than June 2022 and around 3% higher than May 2023.
• The gross GST collection crossed the ₹1.6 lakh crore mark for the 4th time since GST inception.
• The gross GST collection crossed the ₹1.4 lakh crore for 16 months in a row since GST’s inception.
• The average monthly gross GST collection for Q1 of FY24 is ₹1.69 lakh crore.

Topic: Reports and Indices

7. Manufacturing PMI declined to 57.8 in June 2023.

• It stood at 58.7 in May 2023. It declined in June 2023 mainly on account of base effect.
• New job creation increased in June. However, its pace was moderate, just like in May.
• The rising demand for Indian goods led to higher sales for manufacturers.
• The PMI is based on a survey carried out among purchasing managers in a panel of 400 manufacturers.
• Survey responses are collected in the second half of each month.
• The PMI is a weighted average of the following five indices:
  • New Orders (30%)
  • Output (25%)
  • Employment (20%)
  • Suppliers’ Delivery Times (15%)
  • Stocks of Purchases (10%)

Topic: Banking System

8. Transaction Banking Hubs has been launched by State Bank of India for efficient solutions.

• The aim of these hubs is to provide comprehensive solutions for transactions, payments, and collections.
• They also aim to facilitate connectivity with other financial services within the SBI Group.
• Total 34 Transaction Banking Hubs has been launched in the top 21 district centres across the country.
• Dinesh Kumar Khara, Chairman, SBI, launched the Transaction Banking Hubs on SBI’s 68th foundation day (1 July).

Topic: Appointments

9. Sudipta Roy will become MD & CEO of L&T Finance Holdings with effect from January 24, 2024.

• This is subject to necessary regulatory and/or statutory approvals.
• The Board of Directors of L&T Finance Holdings announced appointment of Roy as the company’s Chief Operating Officer (COO).
• He joins the non-banking finance company (NBFC) from ICICI Bank.
• His appointment as COO and elevation as MD & CEO is part of the NBFC’s succession planning. 
• Dinanath Dubhashi, MD & CEO, L&T Finance Holdings, will superannuate from the Company on April 30, 2024.
• SBI has appointed Kameshwar Rao Kodavanti as Chief Financial Officer (CFO). He has been appointed with effect from July 1, 2023.
• Debadatta Chand took charge as MD & CEO of Bank of Baroda with effect from July 1, 2023.

Topic: Indian Economy/Financial Market

10. India's external debt increased to $624.7 billion at the end of March 2023.

• According to the data released by the RBI on 30 June, India's external debt rose marginally to USD 624.7 billion at the end of March 2023, although the debt-to-GDP ratio declined.
• External debt stood at US$ 619.1 billion at the end of March 2022, which has increased further by US$ 5.6 billion by March 2023.
• The ratio of external debt to GDP declined to 18.9% at the end of March 2023 from 20% at the end of March 2022.
• The valuation gain stood at US$ 20.6 billion due to appreciation of the US dollar against the Indian rupee and major currencies such as yen, SDR and euro.
• The long-term debt (with an original maturity of more than one year) was stood at US$496.3 billion at end-March 2023, a decline of US$ 1.1 billion compared to end-March 2022.
• The share of short-term debt (with an original maturity of up to one year) in total external debt increased from 19.7% at end-March 2022 to 20.6% at end-March 2023.
• Similarly, the ratio of short-term debt (original maturity) to foreign exchange reserves increased from 20% at end-March 2022 to 22.2% at end-March 2023.
• Loans remained the largest component of external debt with a share of 32.5%, followed by currency and deposits (22.6%), trade loans and advances (19.9%) and debt securities.

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