Banking Awareness of 12, 13 and 14 November 2022

Topic: Indian Economy/Financial Market

1. India’s industrial production increased 3.1% in September.

• In September 2021, Index of Industrial Production (IIP) had grown 4.4%.
• A contraction of 0.8 percent was recorded in the previous month (August). 
• According to the IIP data released by National Statistical Office, manufacturing sector’s output increased by 1.8% in September 2022.
• The mining output grew 4.6% and power generation increased 11.6% during September 2022.
• The rise in September industrial growth to 3.1% was led by better performance of mining and electricity sectors.

Topic: Indian Economy/Financial Market

2. Moody’s Investor Services has cut India’s economic growth forecast for the calendar year 2022 to 7%.

• In the report titled Global Macro Outlook 2023-24, the agency said the downward revision assumes higher inflation, high interest rate and slowing global growth.
• This is not the first downward revision of the Indian economy.
• International Monetary Fund (IMF) cut India’s GDP forecast for the current fiscal (FY 23) to 6.8% from 7.4% estimated earlier.
• Earlier, World Bank cut the forecast to 6.5%, Asian Development Bank (ADB) to 7%, Fitch to 7% and RBI cut the forecast by 20 basis points to 7%.
• About the global economy, Moody’s said that global growth will slow in 2023 and remain sluggish in 2024.

Topic: Taxation

3. Gross direct tax collections till the 10th November 2022 remained at 10.54 lakh crore rupees.

• They were 30.69% higher than the gross collections of over ₹8 lakh crore for the corresponding period of last year.
• After adjusting refunds, the Direct Tax collection stands at 8.71 lakh crore rupees.
• This is 25.71% higher than the net collections for the corresponding period of last year.
• This collection is 61.31% of the total Budget Estimates of Direct Taxes for the current fiscal.
• As per the finance ministry, refunds amounting to one lakh 83 thousand crore rupees have been issued during 1st April to 10th November of this fiscal.
• It is nearly around 61% higher than refunds issued during the same period in the preceding year.

Topic: Banking System

4. HDFC Bank has entered into an agreement to sell 3.2% stake in Lentra AI for ₹54 crore.

• As per the agreement, the sale will be completed by the end of December.
• After the share sale, HDFC Bank will hold 6.6% stake in the company.
• Lentra AI is involved in designing, licensing and implementation of software products for the financial services sector.
• HDFC Bank is headquartered in Mumbai. Its CEO is Sashidhar Jagdishan.

Topic: RBI

5. RBI governor has called a meeting with the chiefs of public sector banks and select private sector banks on November 16.

• The meeting has been called to take stock of sustainability of the robust credit growth.
• RBI will also try to find out details on slow growth in deposits and asset quality of retail and MSME loans.
• As per RBI data, all scheduled banks have registered a double-digit credit growth of 17.68% year-on-year (yoy) as on October 21, 2022.
• However, deposit growth has not kept pace with credit growth.
• Banks’ have recorded single digit deposit growth of 9.22% year-on-year (yoy) as on October 21, 2022.

Topic: Banking System

6. Bank of Maharashtra has topped the list of public sector lenders in terms of loan growth in percentage terms during Q2 FY23.

• Bank of Maharashtra recorded 28.62% increase in gross advances at ₹1,48,216 crore at the end of September 2022.
• It was followed by Union Bank of India with 21.54% growth to ₹7,52,469 crore.
• State Bank of India is placed at third with 18.15% growth in gross advances.
• On the other hand, SBI’s total loans were about 17 times higher at ₹25,47,390 crore as compared to ₹1,48,216 crore of Bank of Maharashtra in absolute terms.     
• Regarding Retail-Agriculture-MSME (RAM) loans, Bank of Maharashtra recorded the highest growth of 22.31%.
• It was followed by Bank of Baroda with 19.53% and SBI at 16.51% during Q2.
• In terms of Current Account Savings Account (CASA) deposits, Bank of Maharashtra topped the list. It was followed by Canara Bank.
• Net Interest Margin (NIM) is a key profitability parameter.
• Bank of Maharashtra and SBI with 3.55% NIM stood at the top among PSBs.
• It was followed by Bank of India at 3.49% and Central Bank of India at 3.44%.
• In terms of gross non-performing assets (NPAs) and net NPAs, Bank of Maharashtra and SBI were in the lowest quartile.
• They reported gross NPAs at 3.40% and 3.52% of their total advances, respectively, in second quarter.
• Their net NPAs came down to 0.68% and 0.80%, respectively, at the end of September 2022.
• Bank of Maharashtra has 16.71% Capital Adequacy Ratio, the highest among PSBs. It was followed by Canara Bank at 16.51% and Indian Bank at 16.15% at end of September 2022.

Topic: RBI

7. RBI has cancelled Certificate of Registration of two NBFCs.

• The names of NBFCs are Grihastha Finance Limited and Pawan Motor and General Finance Private Limited.
• Five Non-Banking Financial Companies (NBFCs) have surrendered the Certificate of Registration (CoR) granted to them by RBI.
• RBI, in exercise of powers conferred on it under Section 45-IA (6) of the Reserve Bank of India Act, 1934, has cancelled their CoR.

Topic: RBI

8. The licence of Yavatmal-based Babaji Date Mahila Sahakari Bank has been cancelled by RBI.

• The bank ceased to carry on banking business from the close of business on November 11.
• The bank did not have adequate capital and earning prospects.
• RBI has requested the Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra to issue an order for winding up the bank and appoint a liquidator for the bank.
• On liquidation, every depositor would get deposit claim amount of his/her deposits up to a limit of Rs 5 lakh from Deposit Insurance and Credit Guarantee Corporation (DICGC).

Topic: Infrastructure and Energy

9. Ministry of Road Transport and Highways (MoRTH) allocated work for the first Multi Modal Logistics Park in the country.

• The MoRTH along with 16 Union Ministries initiated work to improve multi-modal connectivity and last mile connectivity across the country.
• The MoRTH is setting up 35 Multi Modal Logistics Parks (MMLP) in the country, out of which 15 will be set up in the next three years.
• An MMLP is being set up in an area of 184.27 acres at Mappedu, Chennai.
• The work of this first MMLP has been allotted to M/s Reliance Industries Limited.
• The estimated cost of this project is Rs 1424 crore. The construction and maintenance period of this project will be 45 years.
• The Chennai-based MMLP will be built at a distance of 52 km from Chennai Port, 80 km from Ennore Port and 87 km from Katupally Airport and will be a vital logistics point in the southern region of the country.
• It is estimated to transport 7.17 Million Metric Tonnes (MMT) of goods over its 45-year period.     

Topic: Miscellaneous

10. Pakistan will implement an interest-free banking system by 2027.

• Pakistan’s Finance Minister Ishaq Dhar announced this recently.
• Pakistan government has decided to withdraw appeals against the Federal Shariat Court’s April decision of eliminating interest from the country in five years.
• According to the Federal Shariat Court (FSC), the prevailing interest-based banking system in Pakistan is against the Sharia law.
• In its decision, the FSC specified 31 December 2027 as the day on which riba (interest) would be completely removed from Pakistan.

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