Banking Awareness of 12, 13 and 14 July 2023

By Priyanka Chaudhary | Last Modified: 14 Jul 2023 19:20 PM IST
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Topic: Indian Economy/Financial Market

1. Retail inflation increased to 4.81% in June 2023.

  • It remained within the tolerance range of the RBI (2-6%) for the fourth consecutive month.
  • It increased to 4.81% after declining to a 25-month low of 4.25% in May.
  • It increased to 4.81% on the back of a rise in vegetable prices.
  • Consumer Food Price Index (CFPI) increased to 4.49% in June from 2.96% in May.
  • Rural inflation was at 4.72%. Urban inflation was at 4.96%.
  • The Inflation rate of vegetables recorded a contraction of 0.93% in June 2023.
  • The Inflation rate for cereals increased marginally to 12.71%. The inflation rate for food & beverage segments stood at 4.63%. The inflation rate for fuel segment stood at 3.92%.
  • Industrial growth, based on Index of Industrial Production (IIP), increased from 4.4% in April 2023 to 5.2% in May 2023.

Topic: RBI

2. RBI Deputy Governor T Rabi Sankar said RBI is targeting 10 lakh CBDC transactions per day by the end of the current year.

  • Presently, the CBDC-R system processes about 5,000–10,000 transactions per day.
  • It has a user base of 13 lakh customers and 3 lakh merchants.
  • The 13 banks involved in the retail CBDC pilot have rolled out partial interoperability.
  • They are likely to implement it completely by the end of July.
  • CBDC, or Digital Rupee, is a tokenised digital version of the Indian Rupee issued by the RBI.
  • Central Bank Digital Currency (CBDC) has the features of both a currency and bank deposits.

Topic: Committees/Commissions/Taskforces

3. The tenure of the Committee on Digital Competition Law has been extended by the centre by one more month.

  • Committee on Digital Competition Law’s earlier extended term was to end on 5 July.
  • It was constituted in February 2023 to frame draft Digital Competition Law. It has now been given third extension.
  • Committee on Digital Competition Law was initially given three months to submit its report.
  • It has invitees from 6 Ministries and other government departments. It has total 10-members.
  • Government expects the digital economy of the India to touch $1 trillion by 2025-26.
  • Ex-ante framework to regulate ‘Systemically Important Digital Intermediaries’ (SIDIs) under a new Digital Competition Act was suggested by the Standing Committee on Finance.

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Topic: Banking System

4. Rural areas have least number of functioning offices of payments banks according to Crisil Market Intelligence and Analytics (MI&A).

  • On the other hand, urban areas have the highest number of functioning offices (44%).
  • At the end of December 2022, semi-urban areas have second highest (40%) number of functioning offices of payments banks.
  • Urban and semi-urban areas were followed by metropolitan (11%) and rural areas (5%). 
  • Six payments banks had a total number of 741 functioning offices at the end of December 2022.
  • Six payments banks that are currently in operation are Airtel Payments Bank, India Post Payment Bank (IPPB), Fino Payments Bank, PayTM Payments Bank, NSDL Payments Bank and Jio Payments Bank.
  • The share of total credit outstanding is about 8% in rural areas, 13% in semi-urban and 79% in urban areas as of March 31, 2023.
  • Mutual fund penetration has grown from 4.3% in 2001-02 to about 14.5% in 2022-23.
  • Mutual fund penetration is defined mutual fund assets under management as a percentage of GDP.
  • Payments banks:
    • They are allowed a maximum balance of ₹2 lakh per individual customer at the end of the day.
    • They are allowed to function as a business correspondent of another bank.
    • They can distribute simple financial products like mutual fund units and insurance products. They cannot undertake lending activities.

Topic: Banking System

5. DCB Bank and Max Life Insurance have entered into partnership.

  • As part of the partnership, a variety of life insurance products will be offered to the customers of DCB Bank.
  • Under this partnership, term, savings and retirement plans will also be offered.
  • Max Life Insurance is the largest non-bank private-sector life insurer in India.
  • DCB Bank is a private sector bank. It is headquartered in Mumbai. Murali M. Natrajan is its MD & CEO.
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Topic: Taxation

6. GST Council has exempted cancer-fighting drugs, medicines for rare diseases and food products for special medical purposes from GST.

  • Finance Minister Nirmala Sitharaman announced this after chairing the 50th GST Council meeting in New Delhi on 11 July 2023.
  • GST rates on uncooked, unfried extruded snack pallets have been cut from 18% to 5%.
  • GST rates on fish-soluble paste have also been cut from 18% to 5%.
  • Rates on imitation zari threads have been cut from 12% to 5%. 
  • 28% tax will be levied on online gaming, horse racing, and casinos.
  • GST Council has also exempted GST on satellite launch services by private operators.
  • GST Council is chaired by the Union Finance Minister. It comprises ministers from every state and Union Territory.

Topic: Reports and Indices

7. 415 million Indians came out of multidimensional poverty in 15 years: UNDP

  • United Nations Development Programme (UNDP) and Oxford Poverty and Human Development Initiative (OPHI) released the latest update of the global Multidimensional Poverty Index (MPI).
  • As per the report, a total of 415 million people in India have come out of poverty from 2005-06 to 2019-21.
  • The incidence of multidimensional poverty has fallen from 55.1 per cent to 16.4 per cent. In India, more than 230 million people are still poor.
  • Among the three dimensions of the Multidimensional Poverty Index (MPI), the "standard of living" dimension contributed 39.7 per cent, highest contribution to poverty in India.
  • Health deprivation contributed 32.2 per cent and education deprivation 28.2 per cent.
  • Around 1.1 billion people, or about 18% of the world's population are acutely multidimensionally poor.
  • 25 countries, including India, have successfully decreased their MPI values by 50% in the last 15 years.
  • Apart from India, a large number of people were lifted out of poverty in China (2010–14, 69 million) and Indonesia (2012–17, 8 million).
  • Sub-Saharan Africa has 534 million and South Asia has 389 million poor people.
  • Around two-thirds of all poor people (730 million people) live in middle-income countries.
  • According to the MPI report, the poverty rate among children is 27.7 per cent, while among adults it is 13.4 per cent.
  • The MPI measures poverty across 10 indicators in three dimensions- health, education, and standard of living. The MPI value ranges from 0 to 1, and higher values imply higher poverty.

Topic: Corporates/Companies

8. ONGC became the first PSU in India to get certified for Anti-Bribery Management System.

  • Oil and Natural Gas Corporation (ONGC) has become the first Central Public Sector Enterprise (CPSE) in India to get certified for Anti-Bribery Management System (ABMS).
  • ABMS has been given to ONGC by an internationally accredited certification body InterCert USA.
  • ABMS Certification became another significant milestone in the journey of Energy Maharatna toward strengthening its stature as a preferred business partner.
  • ABMS has been given after complete assessment and validation by InterCert USA.
  • ABMS has been implemented in 10 departments of ONGC's Corporate Office in Delhi in the first phase as per ISO 37001:2016 international standard under the guidance of Digital Edge, an international consulting firm.
  • Anti-Bribery Management System aims to help the organizations in the fight against bribery.
  • Oil and Natural Gas Corporation Limited (ONGC):
    • It was formed in 1956. It is headquartered in New Delhi. Arun Kumar Singh is its Chairman and CEO.
    • It comes under the Ministry of Petroleum and Natural Gas. Hindustan Petroleum Corporation is a subsidiary of ONGC.

Topic: Corporates/Companies

9. Elon Musk launched his new artificial intelligence company, xAI.

  • Elon Musk, CEO of Tesla and SpaceX, and owner of Twitter, launched a new artificial intelligence company, xAI.
  • Alumni of DeepMind, OpenAI, Google Research, Microsoft Research, Twitter and Tesla are members of xAI.
  • xAI has been launched to compete with companies like OpenAI, Google and Anthropic.
  • Musk has repeatedly expressed concern about AI's potential for "the destruction of civilization".
  • Musk said that he would launch TruthGPT or a maximum truth-seeking AI.
  • Elon Musk was the co-founder of OpenAI. He stepped down from the company board in 2018.

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