Banking Awareness of 11 and 12 March 2022

By PendulumEdu | Last Modified: 12 Mar 2022 18:51 PM IST
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Topic: Banking System

1. ICICI Bank will acquire 5% stake in National Asset Reconstruction Company Limited (NARCL).

  • On 10 March 2022, the bank has signed an agreement for investment in NARCL.
  • The deal is for a total cash consideration of up to Rs. 1, 37.5 crore, which will be paid out in installments.
  • The first tranche of equity investment of ₹70.45 crore will be completed by March 31, 2022.
  • ICICI Bank is a private sector bank. Girish Chandra Chaturvedi is the chairperson. Its MD & CEO is Sandeep Bakhshi.
  • National Asset Reconstruction Company Limited (NARCL):
    • Banks created NARCL to consolidate stressed assets for resolution. In NARCL, PSBs will have 51% ownership.
    • It was incorporated in July 2021. RBI has given license to NARCL on 04 October 2021.

Topic: Banking System

2. LivQuik has achieved full Interoperability as required by RBI for Prepaid payments Instruments.

  • LivQuik is the first PPI issuer to have achieved full interoperability.
  • According to RBI guidelines, PPI issuers must enable full-KYC wallet interoperability by March 31, 2022.
  • With full interoperability, LivQuik customers can optimize their payments across wallets by linking a card on Visa and RuPay networks.
  • LivQuik is a Prepaid Payment Instrument (PPI) issuer. It is a Fintech company headquartered in Mumbai. 

Topic: Corporates/Companies

3. Tata Steel Long Products (TSLP) has signed agreement to acquire 94% stake in Neelachal Ispat Nigam for ₹12,100 crore.

  • TSLP has emerged as the highest bidder to buy Neelachal Ispat Nigam Limited (NINL).
  • Three companies had put in financial bids to buy NINL.
  • They are JSW Steel, Tata Steel Long Products and a consortium of Jindal Steel & Power and Nalwa Steel and Power.
  • Debt and liabilities of NINL have exceeded Rs 6,600 crore as of March 31, 2021.
  • NINL has established a 1.1 million ton Integrated Iron and steel plant at Kalinganagar, Duburi, Dist-Jajpur, Orissa.
  • NINL is a company promoted by MMTC Ltd, Industrial Promotion and Investment Corporation of Orissa limited (IPICOL) and other government agencies.

Topic: Indian Economy/Financial Market

4. In January 2022, IIP increased 1.3% to 138.4 as per recent data from Ministry of Statistics & Programme Implementation (MoSPI).

  • During April-January period of fiscal year 2021-22, Index of Industrial Production (IIP) growth stood at 13.7% compared to a contraction of 12.0% in the corresponding period a year ago.
  • IIP had declined 0.6% in January 2021. The mining sector has shown an increase of 2.8% to 124.7 in January.
  • Manufacturing sector has shown a growth of 1.1% to 138.1 and the electricity sector increased 0.9% to 165.6.
  • In January last year, manufacturing and mining sector has shown a contraction of 0.9% and 2.4%, respectively.
  • In January last year, the electricity sector had seen an increase of 5.5%.

Topic: RBI

5. Paytm Payments Bank Ltd has been directed by RBI to stop onboarding new customers with immediate effect.

  • RBI has also directed it to conduct a comprehensive audit of its IT System.
  • RBI has taken the action based on certain material supervisory concerns observed in the bank.
  • RBI has given directions in the exercise of its powers under Section 35A of the Banking Regulation Act, 1949.
  • Section 35A of the Banking Regulation Act, 1949 gives RBI power to give directions to banks. 
  • Paytm Payments Bank obtained RBI approval in 2017. One97 Communications owns 49% equity interest in it, while the rest 51% is owned by Vijay Shekhar Sharma (Founder and CEO of Paytm).

Topic: Appointments

6. Ajay Bhushan Pandey has been appointed by ACC as Chairperson of National Financial Reporting Authority (NFRA).

  • Appointments Committee of the Cabinet (ACC) has also appointed Praveen Kumar Tiwari and Smita Jhingran as full-time members of NFRA.
  • Ajay Bhushan Pandey is a former Revenue Secretary. His appointment as NFRA Chairperson is for a period of three years or till he turns 65, whichever is the earliest.
  • Praveen Kumar Tiwari is a retired Indian Audit and Accounts Service official.
  • Smita Jhingran is an Indian Revenue Service officer.
  • National Financial Reporting Authority (NFRA):
    • The government formed NFRA on 01st October 2018.
    • It supervises the work of auditors, establishes and enforces standards of accounting and auditing.

Topic: Appointments

7. Debasish Panda has been appointed as IRDAI chairman.

  • His appointment has been approved by the Appointments Committee of the Cabinet (ACC) initially for a period of three years from the assumption of charge.
  • He is a former financial services secretary. He retired as the Secretary of the Department of Financial Services (DFS) in January 2022.
  • IRDAI Chairman Subhash Chandra Khuntia completed his term in May 2021. The post has been lying vacant since then.
  • ACC has also approved the appointment of Rakesh Joshi to the post of Whole-Time Member (Finance & Investment) at IRDAI.
  • Insurance Regulatory and Development Authority of India (IRDAI) is a 10-member body with a Chairman, five whole-time members and four part-time members.

Topic: RBI

8. RBI will regulate and supervise NaBFID as an All India Financial Institution (AIFI).

  • RBI said that NaBFID will be regulated and supervised as an AIFI under Sections 45L and 45N of RBI Act 1934.
  • NaBFID will be the fifth AIFI after EXIM Bank, NABARD, NHB and SIDBI.
  • On March 28, 2021, President gave assent to National Bank for Financing Infrastructure and Development (NaBFID) Act, 2021. The act became effective from April 19, 2021. 
  • Accordingly, National Bank for Financing Infrastructure and Development (NaBFID) was set up in the form of Development Financial Institution (DFI).
  • It was set up to support the development of long-term infrastructure financing in India.
  • In October 2021, K.V. Kamath was appointed as National Bank for Financing Infrastructure and Development (NaBFID) chairperson for three years.

Topic: Banking System

9. MDs & CEOs of three public sector banks completing their term this year.

  • MD & CEO of Union Bank of India, Rajkiran Rai G will complete his term on May 31, 2022.
  • MD & CEO of Punjab & Sind Bank, S Krishnan, will also complete his term on May 31, 2022.
  • MD & CEO of Indian Overseas Bank, Partha Pratim, will complete his term in the end of December 2022.
  • Union Bank of India is India’s 5th largest Public Sector Bank (PSB). Officers who have served as an ED for one year are eligible for promotion to MD & CEO.

Topic: Indian Economy/Financial Market

10. Crisil has maintained India’s GDP growth prediction for fiscal year 2023 at 7.8%.

  • It said average Consumer Price Index (CPI)-based inflation will remain at 5.4% in 2022-23 in case the price of crude oil average at $85-90/barrel.
  • Crisil has estimated GDP growth for this fiscal at 8.9% and CPI inflation at 5.4%.
  • The repo rate is expected to increase by 50 to 75 basis points next fiscal year, according to Crisil.
  • Morgan Stanley has decreased its GDP growth forecast for India by 50 basis points to 7.9% for the next fiscal and has increased the CPI inflation forecast to 6%.
  • In the coming fiscal year, it expects the current account deficit to reach a 10-year high of 3% of GDP.
  • Crisil is an Indian company that provides rating services and is a subsidiary of US Company S&P Global.
  • Morgan Stanley is an American multinational financial services company.

 

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