Banking Awareness of 10, 11 and 12 October 2023

Topic: Banking System

1. RBI has directed Bank of Baroda to suspend onboarding of customers onto the bob World mobile application.

• RBI has directed the bank to do so in exercise of its power under section 35A of the Banking Regulation Act, 1949.
• RBI has directed the bank to do so with immediate effect on 10 October 2023.
• RBI’s direction is based on certain material supervisory concerns observed in the manner of onboarding of their customers onto this mobile application.
• RBI said further onboarding of customers on the bob World app will be subject to rectification of deficiencies observed.
• It will also be subject to strengthening of the related processes by the bank to the satisfaction of RBI.
• RBI has directed the bank to make sure that already onboarded ‘bob World’ customers do not face any disruption after this suspension.
• Bank of Baroda:
  • It is an Indian public sector bank. It is headquartered in Vadodara, Gujarat.
  • It was founded in 1908. Its chairman is Hasmukh Adhia. Debadatta Chand is its MD & CEO.

Topic: Appointments

2. Shiv Bajrang Singh has been appointed as Executive Director of Indian Bank.

• He has assumed charge as Executive Director, effective from October 9.
• He was previously chief general manager at Bank of India.
• Canara Bank has appointed Bhavendra Kumar as Executive Director.
• During his banking career, he has worked in different capacities in different states.
• Indian Bank was founded in 1907. Its headquarters are in Chennai. Shanti Lal Jain is its MD & CEO.
• From 1 April 2020, Allahabad bank has been merged with Indian Bank.
• Canara Bank was founded in 1906. It is headquartered in Bengaluru. K Satyanarayana Raju is its MD and CEO.
• Recently, the government has merged Syndicate bank with Canara bank.

Topic: Banking System

3. According to Sa-Dhan, 21% portfolio growth has been recorded in the microfinance sector as of June-end 2023.

• The portfolio grew by more than ₹7,000 crore in the first quarter of FY 2023-24.
• The total disbursements of all lenders increased 30% during Q1 (April-June) of FY 23-24.
• Five states accounted for 59% of total disbursement during the April-June quarter of FY 2023-24.
• These states are Bihar, Tamil Nadu, Uttar Pradesh, Karnataka, and West Bengal.
• All lenders recorded positive portfolio growth in the first three months of the year as per a report compiled by Sa-Dhan. Not-for-profit (NFP) institutions were an exception.
• NBFC-Micro Finance Institutions/ MFIs recorded 43% growth. They were followed by SFBs and NBFCs at 24% each. Banks’ portfolio growth was at 0.86%.
• The portfolio of Not-for-profit (NFP) MFIs contracted by 64%.
• Sa-Dhan has attributed decrease in NFP portfolio to shift of NFP Cashpor Micro Credit to NBFC-MFIs under the new regulatory framework for microfinance loans.
• Cashpor Micro Credit is a section 8 company. Under the new framework, Section 8 companies with portfolio above ₹100 crore were required to opt for NBFC-MFI registration.
• NBFC-MFIs recorded the highest growth in disbursement (48%), followed by SFBs, banks, and NBFCs. NFPs’ disbursements declined 32%.
• From market share of lenders in terms of portfolio, it is clear that NBFC-MFIs accounted for the largest share at 41.28%.
• Banks are the second largest provider of microcredit at 31.98%.
• Sa-Dhan is the association of inclusive finance institutions and SRO (Self-regulatory organizations) for microfinance sector.

Topic: Banking System

4. YES Bank has become the first lender to offer ‘ONDC Network Gift Card’.

• ONDC Network Gift Card is open for utilization and sponsorship by corporate and individual customers.
• ONDC Network Gift Card is issued in partnership with Open Network for Digital Commerce (ONDC).
• ONDC Network Gift Card is different from traditional gift cards.
• It empowers the users to use the gift card for purchasing products from any brand and any seller across variety of segments.
• This card leverages the Rupay network. It offers the flexibility to load up to Rs 10,000.
• YES Bank was founded in 2004. It is headquartered in Mumbai. Prashant Kumar is its MD and CEO.

Topic: Miscellaneous

5. Bima Vahak will be deployed by IRDAI in every Gram Panchayat.

• On October 9, the Insurance Regulatory and Development Authority of India (IRDAI) stated that it would deploy Bima Vahaks in every Gram Panchayat before December 31, 2024.
• As per the guidelines, each insurer will endeavor to engage individual insurance carriers and/or corporate Bima Vahaks with a focus on progressively achieving coverage of each Gram Panchayat.
• IRDAI issued guidelines for 'Bima Vahaks (BV)' with minor changes in the framework issued in May 2023.
• Under the new guidelines, there is no restriction on how many insurers a Bima Vahak is allowed to work with.
• IRDAI has removed the following clause: Work only with one life insurer, one general insurer, and one health insurer and in addition, where permitted by the authority, work with the Agricultural Insurance Company of India Limited.
• The aim of Bima Vahak continues to be woman-centric, and a dedicated distribution channel will ensure accessibility and availability of insurance in every corner of the country.
• An individual Bima Vahak could be any individual appointed by an insurer or appointed by a corporate Bima Vahak.
• A Bima Vahak shall be a legal person registered in accordance with relevant laws and appointed by the insurer.
• Both corporate and individual Bima Vahaks will be authorized to carry out activities such as collection of proposal information and Know Your Customer (KYC) documents and coordination of claims-related services.

Topic: Indian Economy/Financial Market

6. India’s unemployment rate declined to 6.6% in urban areas in the first (April-June) quarter of this fiscal.

• The quarterly bulletin of PLFS released by the Ministry of Statistics and Programme Implementation on 09 October, 2023 showed this.
• The unemployment rate for urban areas was at the lowest level since the launch of the Periodic Labour Force Survey (PLFS) bulletin in 2018.
• The urban unemployment rate, based on the current weekly status for persons above 15 years for males decreased to 5.9% in the April-June quarter from 6.0% in the previous quarter and 7.1% in the year-ago period.
• In the case of females, this rate declined to 9.1% in April-June from 9.2% in the previous quarter and 9.5% in the year-ago period.
• Employment of males and females increased in self-employed categories like helper in household enterprise.
• In the case of youth for urban females in the age group 15-29 years, the unemployment rate increased to 23.4% in April-June from 22.9% in the previous quarter.
• In the case of urban males in the 15-29 years age group, the unemployment rate increased to 15.9% in April-June from 15.6% in the previous quarter.
• About 14 states/UTs have shown a higher urban unemployment rate than the national average.
• These states/UTs include Himachal Pradesh (13.8%), Rajasthan (11.7%), Chhattisgarh (11.2%), Jammu and Kashmir (10.9%) and Kerala (10%).
• Delhi (2.7%), Gujarat (2.8%), West Bengal (4.4%), and Bihar (6.1%) are states/UTs which recorded a lower than national average unemployment rate.
• A sharp increase was seen in the unemployment rate during the lockdown in 2020 during the first wave of the pandemic.
• The unemployment rate for urban females in the 15-29 years age group stood at 36% in April-June 2020.
• The unemployment rate for urban males in the 15-29 years age group stood at 34.3% in April-June 2020.
• The key labour market indicators are Labour Force Participation Rate (LFPR), Worker Population Ratio (WPR) and unemployment rates.
• All key indicators improved in urban areas in the April-June quarter for persons aged 15 years and above compared to the pre-pandemic period.
• LFPR during April-June 2023 was 48.8%. This is higher than the LFPR observed in the quarters covered in the pre-pandemic period.
• WPR during April-June 2023 was 45.5%. This is higher than the WPR observed in the quarters covered in the pre-pandemic period.

Topic: Awards and Prizes

7. Claudia Goldin won the Nobel Economics Prize in 2023.

• The Nobel Memorial Prize in Economic Sciences 2023 will be awarded to Claudia Goldin.
• She has received the award “for having advanced our understanding of women's labour market outcomes".
• She is only the third woman to win the Nobel economics prize. Elinor Ostrom and Esther Duflo are the two women who have received the Nobel Economics Prize.
• Understanding women’s role in the labour market is important for society.
• Claudia Goldin’s research increased understanding of the underlying factors, which have to be addressed in the future.
• The economics award was created in 1968 by Sweden’s central bank. It is formally known as the Bank of Sweden Prize in Economic Sciences.
• The prizes will be awarded in ceremonies in December in Oslo and Stockholm. The prize money is a cash award of 11 million Swedish kronor (about $1 million).
• Winners also receive an 18-carat gold medal and diploma.
• Katalin Kariko and Drew Weissman are winners of the 2023 Nobel Prize in Medicine for their work on messenger RNA (mRNA) technology that paved the way for groundbreaking COVID-19 vaccines.
• Moungi G Bawendi, Louis E Brus, and Alexei Ekimov have won the Nobel Prize in Chemistry for 2023 for their discovery and synthesis of quantum dots.
• Norwegian writer John Fosse received the 2023 Nobel Prize for Literature for his innovative plays and prose, which give voice to the unsayable.
• The Nobel Prize for Physics 2023 has been given to Pierre Agostini, Ferenc Krausz, and Anne L’Huillier for their “experimental methods that generate attosecond pulses for the study of electron dynamics in matter.”
• Nobel Peace Prize 2023 awarded to Iranian human rights activist Narges Mohammadi for her fight against the oppression of women in Iran and her fight to promote human rights and freedom for all.

(Source: News on AIR)

Topic: Summits/Conferences/Meetings

8. The 8^th BRICS International Competition Conference started in New Delhi from 11 October 2023.

• The theme of the conference is New issues in competition law and policy, dimensions, perspectives, and challenges.
• Chairperson of Competition Commission of India (CCI) Ravneet Kaur said, the conference is a seminal event to be held in India after a decade.
• Over 600 delegates from the competition authorities of BRICS and non-BRICS nations, competition law experts, non-government advisors and domestic invitees are taking part in the conference.
• The heads of BRICS competition authorities will address the closing ceremony on 13 October 2023 and sign a Joint Statement.
• The conference is hosted biennially by the BRICS competition authorities.
• It provides a platform for promoting cooperation, experience sharing and mutual learning amongst the competition authorities of BRICS countries.

Topic: Reports and Indices

9. IMF raised India's FY24 GDP growth rate forecast by 20 basis points.

• IMF predicted that India’s GDP growth would be 6.3% in FY 2024. It raised India’s GDP growth forecast by 20 basis points.
• It has increased the GDP forecast due to stronger consumption between April and June.
• IMF had projected a growth rate of 6.1 per cent for India in FY24.
• IMF’s latest World Economic Outlook (WEO) kept its global growth forecast unchanged at 3 per cent for 2023.
• The global growth projection for 2024 will be 2.9 per cent.
• Earlier, the World Bank has predicted that India will grow at 6.3 per cent in FY24.
• The finance ministry and Reserve Bank of India (RBI) have retained their 6.5 per cent GDP growth estimate for FY24.

Topic: RBI

10. The prompt corrective action (PCA) framework has been extended by RBI to government NBFCs.

• Govt NBFCs except those in the base layer will be subject to the PCA framework with effect from October 1, 2024.
• The extension of the PCA framework for NBFCs to government NBFCs (except those in the base layer) will be based on the audited financials of these NBFCs as of March 31, 2024, or thereafter.
• Prompt corrective action (PCA) framework for non-banking financial companies (NBFCs) became effective on October 1, 2022.
• At that time, PCA became effective based on the financial position of NBFCs on or after March 31, 2022.
• RBI had issued a circular to this effect to NBFCs in December 2021.
• The PCA framework is aimed at enabling a supervisory intervention at an appropriate time.
• It requires the supervised entity to initiate and implement remedial measures in a timely manner to restore its financial health.
• It also aims to act as a tool for effective market discipline.

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