Banking Awareness of 11, 12 and 13 September 2024

Topic: Indian Economy/Financial Market  

1. Index of Industrial Production (IIP) has shown a growth of 4.8% in July on an annual basis.

• IIP has shown a growth of 4.7 percent in June, according to data of the Ministry of Statistics and Programme Implementation. 
• It is lower than 6.2 per cent growth of July last year.
• The three major components of IIP are mining, manufacturing and electricity.
• Manufacturing and power sectors were key drivers of the growth.
• Mining registered a growth of 3.7%, manufacturing grew at 4.6% and electricity grew at 7.9%.
• A growth of 12% have been recorded in the capital goods segment in July 2024, according to the use-based classification data.
• In July, the month-over-month growth in consumer durables fell to 8.2 percent from 8.6 percent in June.
• Consumer non-durable goods decreased by 4.4%. Goods related to infrastructure and construction decreased to 4.9%.

Topic: Indian Economy/Financial Market

2. India’s retail inflation, based on Consumer Price Index (CPI), increased to 3.65% in August.

• This is marginally higher than the 3.6 percent reported in July this year.
• According to Ministry of Statistics and Programme Implementation (MoSPI), this is the second-lowest retail inflation in the past five years.
• The inflation rate was within the RBI’s tolerance range of 2-6%.
• Provisionally, the food inflation rate for August 2024 is 5.66 percent.
• This is the second-lowest since June 2023. The food inflation rate is based on the All India Consumer Food Price Index (CFPI).
• Inflation has decreased in a number of subgroups, such as spices, meat and fish, and legumes and products.
• The rate of vegetable inflation increased from 6.8% in July to nearly 10% in August.
• Fruit inflation increased to more than 6% during the period, up from roughly 3.5%.
• Core inflation, which is headline inflation less the inflation of food and fuel, stayed constant at 3.4%.

Topic: Banking System

3. Deposits of all scheduled banks fell during the reporting fortnight that ended August 23.

• This is the case even when their advances showed strong growth, suggesting that there is still a large growth gap between them.
• Over the past few quarters, the growth of deposits at all scheduled banks has lagged behind the growth of credit.
• According to RBI data, during the reporting fortnight that concluded on August 23, the deposit growth of all scheduled banks decreased by ₹5860 crore while the credit growth increased by ₹66,655 crore.
• Bank credit to agriculture and allied activities grew by 18.1 per cent (year-on-year/y-o-y).
• In July 2024, credit to industry increased by 10.2% (year over year) compared to July 2023, when credit increased by 4.6%.
• Within industry, credit to MSMEs also expanded at 14.4 per cent (y-o-y).
• In July 2024, bank credit has been fairly robust for businesses like infrastructure, petroleum, coal products, nuclear fuels, food processing, chemicals and chemical goods, and petroleum.

Topic: RBI

4. RBI has imposed a monetary penalty of ₹1.91 crore and ₹1 crore on Axis Bank and HDFC Bank, respectively.

• RBI has imposed these penalties for non-compliance with certain regulatory directions.
• RBI had imposed monetary penalty on Axis Bank for non-compliance with directions on ‘Interest Rate on Deposits’, ‘Know Your Customer (KYC)’ and ‘Credit Flow to Agriculture- Collateral free agricultural loans’.
• RBI had imposed monetary penalty on HDFC Bank for non-compliance with directions on ‘Interest Rate on Deposits’, ‘Recovery Agents engaged by Banks’ and ‘Customer Service in Banks’.
• RBI observed that the Axis Bank opened certain savings deposit accounts in the name of ineligible entities.
• It allotted multiple customer identification code to certain customers in place of a Unique Customer identification Code (UCIC) for each customer.
• RBI noted that the HDFC Bank gave gifts costing over ₹250 to the depositors at the time of accepting certain deposits.
• It opened certain savings deposit accounts in the name of ineligible entities.
• It failed to make sure that customers are not contacted after 7 pm and before 7 am.

Topic: Banking System

5. NaBFID has been notified by the Centre as a ‘Public Financial Institution’.

• National Bank for Financing Infrastructure and Development (NaBFID) has been notified by Corporate Affairs Ministry as a ‘Public Financial Institution’ under Company law.
• With PFI status, NaBFID would gat various benefits under the Company Law, Income Tax law, SARFAESI law etc.
• Under the National Bank for Financing Infrastructure and Development Act 2023, NaBFID was established as a Development Finance Institution (DFI).
• With effect from December 29, 2022, NaBFID had started its commercial operations.
• It was established to aid in the growth of India's long-term non-recourse infrastructure finance.
• NaBFID expects its total sanctions loan book to touch ₹2 lakh crore by March 2025, while disbursements are likely to be around ₹ 1 lakh crore.
• By March 2025, NaBFID expects that the total sanctioned loan book will reach ₹2 lakh crore, with disbursements expected to be approximately ₹ 1 lakh crore.

Topic: Banking/Financial/Govt Schemes

6. On September 11, the Union Cabinet has approved measures that will cost over ₹1.02 lakh crore.

• The Union Cabinet approved the fourth phase of the Pradhan Mantri Gramin Sadak Yojana (PMGSY) with an estimated outlay of around Rs 70,125 crore over the next five years.
• A total of about 62,500 km of rural roads will be constructed during this phase.
• The aim of this scheme is to generate 40 crore human-days of employment.
• A scheme worth Rs 12,461 crore has been approved by the Cabinet to promote hydropower.
• This scheme will run from FY 2024-25 to FY 2031-32.
• The budgetary support limit has been revised to Rs 1 crore per MW for projects up to 200 MW and Rs 200 crore plus Rs 0.75 crore per MW for projects above 200 MW.
• ‘Mission Mausam’ has been approved. It aims to create a more weather-ready and climate-smart Bharat.
• The total outlay of ‘Mission Mausam’ is ₹2,000 crore over two years.
• PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme has been approved with an outlay of Rs.10,900 crore over a period of two years.
• Under the scheme, Rs.500 crore have been allocated for the deployment of e-ambulances. This is a crucial step towards integrating EVs in to the health sector.
• The Scheme now includes e-vouchers for EV buyers to avail demand incentives.
• Union Cabinet extended the Ayushman Bharat scheme to around 6 crore senior citizens over the age of 70 years.
• Under the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB PM-JAY), the government has approved health coverage of ₹5 lakh for all senior citizens aged 70 and above.
• All citizens above 70 years would be eligible to avail the benefits of AB PM-JAY irrespective of their socio-economic status.
• Senior citizens aged 70 and above will receive a distinct card under the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB PM-JAY).
• Persons covered under AB PM-JAY will get an additional top-up of ₹5 lakh per annum for senior citizens in their families.

Topic: Appointments

7. Open Network for Digital Commerce (ONDC) has announced the appointment of RS Sharma as its non-executive chairperson.

• He has held many important positions in his career in the Indian Administrative Service (IAS).
• These positions include Director General and Mission Director of UIDAI, Chairman of TRAI, and CEO of the National Health Authority.
• He was a member of the ONDC Advisory Council and the ONDC Technology & Strategy Review Council.
• ONDC was incorporated as a Section 8 company in December 2021, with the Quality Council of India and Protean eGov Technologies Limited as Founding Members.
• Its mission is to dramatically increase e-commerce penetration in the country. T Koshy is its MD & CEO.

Topic: Banking System

8. Union Bank of India is first major Indian Bank to sign Partnership for Carbon Accounting Financials (PCAF).

• Union Bank of India has shown its dedication to tracking and controlling its funded emissions by joining PCAF.
• RBI's recently released draft rules on 'Disclosure framework on climate-related financial risks, 2024' (published on February 28, 2024) emphasise the significance of monitoring funded emissions.
• The RBI's proposed rules indicate a change in direction for Indian banks' climate risk reporting requirements.
• The framework requires information on four major categories to be disclosed by regulated companies.
• Governance, strategy, risk management, and measurements and targets are the four main categories.
• PCAF is a global alliance of financial institutions collaborating to create and execute a standard method for evaluating and disclosing greenhouse gas emissions related to investments and loans.

Topic: Banking/Financial/Govt Schemes

9. Government relaxed exclusion criteria under the Pradhan Mantri Awas Yojana-Gramin (PMAY-G).

• The “automatic exclusion” criteria under the Pradhan Mantri Awas Yojana-Gramin (PMAY-G) has been revised by the government.

• Families owning “two-wheelers, motorized fishing boats, refrigerators, and landline phones and earning up to Rs 15,000 per month can now avail the benefits of the rural housing scheme.
• The person owning motorised three- or four-wheelers; mechanised three- or four-wheeler agricultural equipment; or a Kisan Credit Card with a credit limit of Rs 50,000 or above are in the “automatic exclusion” of PMAY-G.
• Households with any member as a government employee; households with non-agricultural enterprises registered with the government; and any member of the family paying income tax are excluded from the PMAY-G.
• The exclusion criteria of the PMAY-G have been revised as the government aims to construct two crore additional houses under the rural housing scheme by 2028–29.
• Pradhan Mantri Awaas Yojana—Gramin (PMAY-G) was launched in 2016 to achieve the objective of providing “Housing to All”.

Topic:  Reports and Indices

10. In the first half of 2024, India surpassed the US to become the second-largest market for 5G smartphones, behind China, according to a Counterpoint Research report.

• According to data from the Counterpoint Research report, worldwide shipments of 5G network-enabled smartphones rose by 20% year over year in the first half of 2024.
• Due to the popularity of the iPhone 15 and 14 series, Apple accounted for almost 25% of all 5G handset shipments worldwide. With this, Apple led 5G handset shipments globally.
• Apple was followed by Samsung with a market share of over 21% due to the robust sales of the Galaxy A and S24 series. Xiaomi came at third place.
• According to Counterpoint, Xiaomi saw triple-digit growth in India. India was the main growth driver for Vivo also.
• Motorola has the fastest growth rate among the top ten brands.
• With a YoY growth rate of 63%, the Caribbean and Latin America was the region with the fastest growth.
• According to the data, the CALA region accounted for 14% of worldwide net additions in 5G handset shipments in the first half of the year.
• Asia-Pacific captured 58% of 5G shipment share and contributed 63% of worldwide net additions overall.

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