Banking Awareness of 1 and 2 December 2024

Topic: Banking System

1. In October 2024, the growth of non-food credit slows down.

• According to RBI data on banks' non-food credit growth in October 2024, the economy is experiencing a downturn in credit demand.
• The growth of non-food credit from banks slowed to 12.8% year-over-year (y-o-y) in October 2024 from 15.5% in October 2023.
• According to the RBI's announcement on sectoral deployment of bank credit, this was because demand from the personal loan, services, and agriculture & allied services sectors had moderated.
• Industry was the only sector to see comparatively larger year-over-year growth within the overall credit growth.
• Compared to October 2023, when credit growth in agricultural and related businesses was 17.4% year over year, October 2024 saw a lesser growth of 15.5% year over year.
• In October 2024, credit growth to the services sector decreased from 20.4% in October 2023 to 14.1% year over year in October 2024.
• According to the RBI statement, this was mostly because of a slower growth in credit to "non-banking financial companies" (NBFCs) and the trade segment.
• In October 2024, credit growth (year-over-year) to "commercial real estate" increased.
• In October 2024, personal loan growth was 15.8% year-over-year, down from 18% of the previous year.
• This was mostly brought on by a slowdown in the rise of "other personal loans," "automobile loans," and "credit card outstanding."
• In October 2024, industrial credit growth was 8% year-over-year, which was greater than the 4.8% growth in the same month of the previous year.
• In October 2024, lending to ‘chemicals and chemical products’, ‘petroleum, coal products and nuclear fuels’, and ‘all engineering’ grew at a faster rate than other main industries.

Topic: RBI

2. Due to weaker investor bids, the RBI devolved the auction of the new Sovereign Green Bond (SGrB) to primary dealers (PDs).

• Because these bonds are relatively illiquid, this indicates a lack of interest in them.
• The central bank's cancellation of SGrB auction in May further highlights the lack of investor interest.
• In contrast to the stated amount of ₹6,000 crore, the government only accepted bids of ₹1,697 crore at the August 2 auction of these bonds.
• The RBI received 73 competitive bids totalling ₹9,630 crore and four non-competitive bids totalling ₹2 crore during the SGrBs auction on November 29, 2024, against the notified sum of ₹5,000 crore.
• All of the non-competitive bids were accepted by RBI. Only nine competitive bids totaling ₹1,500 crore were accepted, with ₹3,497 crore going to PDs.
• At the auction, the cut-off yield was 6.79 percent. The 10-year G-Sec's running yield, which was 6.81 percent, was little higher than this.
• PDs are financial intermediaries that offer liquidity in the secondary market and serve as a conduit between investors and debt managers.
• The devolved amount is absorbed by them as the underwriters at Government Security (G-Sec) auctions.
• SGrB's liquidity is lower. The SGrB is the same as regular bonds for Indian investors.

Topic: Taxation

3. GST collection increased by 8.5% to more than 1.82 lakh crore rupees in November 2024.

• The total gross GST collections increased 8.5% in November 2024 as compared to November 2023.
• The total gross GST revenue in November 2023 stood at 1.68 lakh crore rupees.
• The Central GST collection in November 2024 was 34 thousand 141 crore rupees.
• The State GST collection in November 2024 stood at 43 thousand 47 crore rupees.
• The Integrated IGST collected was at 91 thousand 828 crore rupees in November 2024 and cess was at 13 thousand 253 crores in November 2024.
• In October, Gross GST collection had grown 9 percent to over 1.87 lakh crore rupees.
• This was at its second-highest ever level and was chiefly due to increase in improved compliance and domestic sales.
• November data is related with services availed and goods consumed in October.

Topic: Reports and Indices

4. In November 2024, Manufacturing Purchasing Mangers’ Index (PMI) declined to 56.5.

• This was its 11 months low level. In October 2024, it stood at 57.5.
• Inflation impacted the manufacturing sector in November. However, job creation was good.
• PMI Manufacturing is based on survey of purchasing managers of 400 companies.
• According to survey report, input cost inflation intensified in the third fiscal quarter.
• About job, the report said that there was an increase in factory employment in India during November for the ninth month in a row.

Topic: MoUs/Agreements

5. India and ADB signed a $98 million loan agreement to promote plant health management in India.

• The Centre and the Asian Development Bank (ADB) signed a loan agreement to provide disease-free planting materials to horticulture crop farmers.
• It will boost crops’ yield and quality and make them more resilient to climate change.
• This project will support the government’s Atmanirbhar Clean Plant Programme (CPP) which enhances plant health management.
• It will also help in developing regulatory frameworks and institutional systems to effectively implement the CPP for horticulture in India.
• The project will involve consultation with private nurseries, researchers, state governments, and growers’ associations to ensure its success and sustainability.
• Plant health management is necessary for farmers to adapt to climate change.

Topic: Miscellaneous

6. On 28th November 2024, economic historian Amiya Kumar Bagchi passed away.

• He is known for his work on underdevelopment and imperialism.
• He authored books such as Private Investment in India 1900-1939, The Political Economy of Underdevelopment and Perilous Passage.
• In the starting, he was a mathematical economist and game theorist. He later turned to economic history.
• He was official historian of the State Bank of India (SBI) from 1976 to 1998.
• He was the founder-director of the Institute of Development Studies, Kolkata. He was awarded the Padma Shri in 2005.

Topic: Indian Economy/Financial Market

7. Real GDP is projected to grow by 5.4% in the second quarter of FY 2024-25.

• Real gross domestic product (GDP) is estimated to have grown by 5.4% in the second July-September quarter of the current financial year.
• According to the Ministry of Statistics and Programme Implementation, real gross value added (GVA) grew by 5.6% during the same period.
• In the second quarter, agriculture and allied sectors bounced back, recording a growth rate of 3.5%.
• The ministry said real GDP is projected to exceed Rs 44 lakh crore in the second quarter of 2024-25 as against Rs 41.86 lakh crore in the corresponding period of 2023-24, showing a growth rate of 5.4%.
• Real GVA is estimated at ₹40.58 lakh crore in Q2 of 2024-25, as against ₹38.42 lakh crore in Q2 of 2023-24, showing a growth rate of 5.6%.

Topic: Miscellaneous

8. E-Daakhil has been launched by centre across all states and union territories of India.

• This portal was launched by Department of Consumer Affairs, Government of India in Ladakh on 22nd November 2024.

• The portal is now operational in every state and union territory of India.
• Consumer Protection Act 2019 was notified and enforced on 20th July, 2020.
• E-Daakhil is an innovative online platform. It is designed to streamline the consumer grievance redressal process.
• E-Daakhil offers the facility to file complaints and track their status.
• National Consumer Dispute Redressal Commission first launched the e-Daakhil portal on 7 September 2020.
• It was launched in 35 States/UTs except Ladakh by the end of 2023.
• At present over 2,81,024 users have registered on the E-Daakhil portal.
• 1,98,725 cases have been filed. Out of these, 38,453 have been disposed of.

Topic: Indian Economy/Financial Market

9. Government proposed to increase the FDI limit in the insurance sector to 100%.

• The government has proposed to raise the Foreign Direct Investment (FDI) limit for Indian insurance companies from 74% to 100%.
• The FDI limit in the insurance sector was previously increased from 49 per cent to 74 per cent in February 2021.
• The government stated that the proposal to amend certain provisions of insurance laws aims to ensure the accessibility and affordability of insurance for citizens and foster the expansion and development of the insurance industry.
• The requirement of Net Owned Funds for foreign reinsurers is also proposed to be reduced from Rs 5,000 crore to Rs 1,000 crore.
• As per the economic survey, insurance penetration in India has slightly decreased from 4.2 per cent in FY22 to 4 per cent in FY23.
• The government is taking steps to open up the insurance market as part of a broader goal to achieve “Insurance for All” by 2047.

Topic: Miscellaneous

10. CII's Ease of Doing Business and Regulatory Affairs Portal launched by Union Minister Piyush Goyal.

• On November 28, the CII Ease of Doing Business (EODB) and Regulatory Affairs Portal was launched to receive and monitor information on India's business environment and suggestions for improvement.

• The portal was launched at the 2nd Department for Promotion of Industry and Internal Trade (DPIIT)-Confederation of Indian Industry (CII) National Conference on Ease of Doing Business in New Delhi.
• The portal seeks to provide status and updates on major Ease of Doing Business initiatives undertaken by both the Government and CII.
• With a dedicated members-only dashboard, users can track progress and submissions on a real-time basis, ensuring transparency, accountability, meaningful and timely resolution of concerns.

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