Banking Awareness of 11, 12 and 13 April 2023

Topic: Banking System

1. Canara Bank and Bharat BillPay has partnered for cross-border bill payments for Indians in Oman.

• The launch of cross-border inward bill payment services for Indians in Oman has been announced by Canara bank and NPCI Bharat Bill Pay Ltd.
• NRIs can now use Bharat Bill Payment System’s platform for bill payments on behalf of their families through the Musandam Exchange.
• Canara Bank is the first public sector bank in India to offer inbound cross-border bill payments via Bharat Bill Payment System (BBPS).
• Musandam Exchange is managed by Canara Bank. It is the 1st exchange in Oman to go live on cross-border inbound bill payments.
• Another country in which cross-border bill payment service is already live is Kuwait. NRIs in Oman will now get these benefits for the first time.
• Canara Bank:
  • It was founded in July 1906. It is headquartered in Bengaluru.
  • K Satyanarayana Raju is its MD & CEO.
  • Recently, the government has merged Syndicate bank with Canara bank.
• Bharat Bill Payment System (BBPS):
  • It is an RBI conceptualised ecosystem driven by National Payments Corporation of India (NPCI).
  • NPCI functions as the authorized Bharat Bill Payment Central Unit (BBPCU). BBPS Pilot was launched in the year 2016.

Topic: RBI

2. The application process with regard to registration of core investment companies (CICs) has been simplified by RBI.

• The number of documents to be provided with the application form has been cut down from current 52 to 18.
• RBI has said that this has been done to make the registration process hassle free and smoother.
• RBI said the 18 documents to be provided along with the application are indicative and not exhaustive.
• RBI may ask for further documents to decide the eligibility of the company seeking registration as a CIC.
• If RBI calls for more documents, the applicant company is required to respond within a time period of one month.
• Core Investment Companies (CICs):
  • They are Non-Banking Financial Companies (NBFCs) having acquisition of shares and securities as their business.
  • CICs hold at least 90% of their net assets as investment in equity shares, preference shares, bonds, debentures, debt or loans in group companies. 
  • Investments in equity shares in group companies form at least 60% of net assets of a CIC.

Topic: MoUs/Agreements

3. HDFC Bank signed a "Master Inter Bank Credit Agreement" with Export Import Bank of Korea.

• The agreement has been signed at GIFT City in Gandhinagar for a USD 300 million line of credit.
• With the help of this agreement, HDFC Bank will raise foreign currency funds. It would extend the funds to Korea-related businesses.
• HDFC Bank would utilize this line of credit to fund companies having equity participation by Korean companies and companies having business relationship with Korean companies.
• The Export-Import Bank of Korea (Korea Eximbank) is an official export credit agency of South Korea.
• HDFC Bank:
  • HDFC Bank is India's largest private sector bank. It is India’s second largest lender after State Bank of India. 
  • It is headquartered in Mumbai. It was founded in 1994. The CEO of HDFC Bank is Sashidhar Jagdishan.

Topic: Indian Economy/Financial Market

4.  Consumer Price Index (CPI)-based retail inflation declined to 5.66% in March 2023.

• In February 2023, Consumer Price Index (CPI)-based retail inflation stood at 6.44%.
• Retail inflation has come below the upper tolerance level of RBI’s inflation range of 2-6% because of strong base effect and decline in vegetable and oil prices.
• As per Statistics Ministry data, the prices of vegetable and oils continue to be in the negative zone.
• Core inflation has also declined to 5.8% for March 2023 from 6.1% in February 2023.

• Index of Industrial Production (IIP)-based industrial growth moved up slightly to 5.6% in February 2023. In January 2023, it stood at 5.4%.
• Manufacturing sector supported overall industrial growth in February 2023.
• The output of consumer durables goods have contracted for the third straight month.
• Mining sector output increased 4.6% and power generation increased 8.2% in February 2023.
• The output of manufacturing sector increased 5.3% in February 2023.

Topic: Banking System

5. Citi and the Japan International Cooperation Agency (JICA) will provide a co-financing loan to IndusInd Bank Limited.

• This consists of $30 million loan by Citi and ¥13 billion loan by JICA.
• This financing to IndusInd Bank will be used by farmers to purchase farm equipment, crops, seeds, and fertilisers.
• This collaboration between Citi and JICA marks their first structured co-financing arrangement to support India’s agricultural sector.
• In this agreement, Citi acted as the co-financing lender, arranger, coordinator, and facility agent.
• Japan International Cooperation Agency is a governmental agency. It delivers most of the official development assistance for the government of Japan.
• IndusInd Bank:
  • It is a Pune-based bank. It was started in 1994.
  • Sumant Kathpalia is its CEO. Its tagline is we make you feel richer.

Topic: Reports and Indices

6. Cost Inflation Index (CII) for Financial Year 2023-24 has been kept at 348.  

• This is an increase of 5.14%. CII was kept at 331 for Financial Year 2022-23.
• The index has been notified by the Central Board of Direct Taxes (CBDT).
• CBDT said the notification shall be effective from 1st April, 2024. It shall apply in relation to the assessment year 2024-25 and subsequent assessment years.
• CII number helps in finding out the long term capital gains an assesse shall pay taxes when he/she files ITR (Income Tax Return) next year.
• Cost Inflation Index (CII) is also a way to calculate inflation (estimated increase in prices of a good/service over the years).
• Central government notifies the CII each year. It is defined under Section 48 of the Income Tax Act, 1961. The base year for CII is 2001.
• With the help of indexation, the purchase price of an investment is adjusted to reflect the effect of inflation on it. The inflation rate to be used for indexation can be obtained from CII.
• Recently, Finance Act 2023 removed the indexation for debt mutual funds.

Topic: Regulatory Bodies/Financial Institutions

7. SEBI unveiled its new logo on its 35th Foundation Day.

• The new logo was introduced at a ceremony conducted at the SEBI Head Office in Mumbai on the occasion of SEBI Foundation Day.
• The new logo reflects the combination of rich traditions of SEBI and new data and technology-based approach to all three areas of its mandate in the securities market.
• These areas are the development and regulation of the securities market and investor protection.
• The new SEBI logo retains its traditional blue colour palette.
• Securities and Exchange Board of India (SEBI):
  • It was established on 12 April, 1988. It was established under the Ministry of Finance. It was granted statutory powers in 1992.
  • It functions as a quasi-judicial body. Madhabi Puri Buch is the first woman to lead the SEBI in its 35-year history. 

(Source: SEBI)

Topic: Corporates/Companies

8. Solar Energy Corporation of India gets 'Miniratna Category-I' status.

• On 10th April, Miniratna Category-I Central Public Sector Enterprise (CPSE) status has been accorded to Solar Energy Corporation of India.
• SECI is committed to achieving the target of 500 GW of non-fossil fuel-based capacity by 2030.
• Till date, project capacities of more than 56 GW have been awarded to SECI.
• ICRA has given the highest credit rating of AAA to Solar Energy Corporation of India.
• As of December 2022, 66 companies are Miniratna I CPSE.
• Solar Energy Corporation of India Ltd (SECI):
  • It was founded on 9 September 2011 to promote solar energy in India.
  • It was set up to facilitate the implementation of the National Solar Mission (NSM).
  • It is the only Central Public Sector Undertaking (CPSU) dedicated to the renewable energy sector.

Topic: RBI

9. RBI has released the framework for the acceptance of Green Deposits.

• RBI has announced this framework to foster and develop a green finance ecosystem in India.
• As per RBI, the finance sector can play a pivotal role in mobilizing and allocating resources for green activities/projects.
• Under the framework, RBI-regulated entities can accept green deposits from customers.
• The entities shall allocate the proceeds from green deposits for projects in sectors like energy efficiency, renewable energy, promoting climate resilience, and improvement of natural ecosystems and biodiversity.
• As per the framework, all deposit-taking banks shall put in place a comprehensive Board-approved policy.
• This policy shall detail aspects of the issuance and allocation of green deposits.
• The boards shall also put in place a financing framework for the effective allocation of green deposits.
• The financing framework will be subject to independent third-party verification. The third-party verification shall be conducted annually.
• RBI has allowed the banks to decide on the tenor, size, and interest rate as per norms.
• On maturity, customers will be given the option of renewing or withdrawing the green deposits.
• RBI has specified that green deposits shall be accepted in Indian Rupees only.

Topic: Reports and Indices

10. IMF lowered India’s FY 2023-24 growth forecast to 5.9%.

• The International Monetary Fund (IMF) has cut down India’s economic growth forecast for the current financial year to 5.9% from its earlier estimate of 6.1%.
• According to the World Economic Outlook of IMF, the Indian economy is projected to grow by 6.8% in the financial year 2022-23.
• World Bank and the Asian Development Bank have also lowered India’s economic growth forecast due to an increase in borrowing costs and risks from global factors.
• IMF’s projection of India’s economic growth for the current financial year is the lowest among forecasts of different agencies.
• IMF projected that India’s headline retail inflation will ease to 4.9% in 2023-24 from 6.7% in the previous year.
• The IMF also cut down the world economic growth projection for 2023 by 10 basis points at 2.8%. The global economic growth is projected to be 3% in 2024.
• Advanced economies' growth is expected to slow from 2.7% in 2022 to 1.3% in 2023.
• Global headline inflation will decrease from 8.7% in 2022 to 7% in 2023 due to lower commodity prices.

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