Banking Awareness of 12 and 13 May 2023

Topic: Indian Economy/Financial Market

1. India’s retail inflation declined to 4.7% in April 2023 as per data released by the National Statistical Office (NSO).

• This is the 18-month low level of retail inflation.
• The consumer food price index declined to 3.84% in April, as against 4.79% in March. 
• In April, the rural inflation stood at 4.68% and the urban inflation stood at 4.85%.
• As per NSO data, India’s industrial output in March grew 1.1%. Factory output grew 2.2% in March last year.
• The output of the manufacturing sector increased by 0.5% in March.
• The output of the mining sector increased 6.8% in March. Power sector output declined by 1.6% in March.
• In fiscal 2023, the Index of Industrial Production (IIP) increased 5.1%, as compared to 11.4% in FY2021-22.  

Topic: Regulatory Bodies/Financial Institutions

2. CCPA has issued orders against five e-commerce companies for selling car seat belt alarm stopper clips on their platforms.

• The names of these e-commerce companies are Amazon, Flipkart, Snapdeal, Shopclues, and Meesho.
• The Central Consumer Protection Authority (CCPA) passed orders against these five e-commerce platforms for violation of consumer rights and unfair trade practice.
• In a letter to the Department of Consumer Affairs, Ministry of Road Transport and Highways (MoRTH) highlighted the issue of sale of car seat belt alarm stopper clips.
• CCPA took cognizance of the matter and referred the matter to DG Investigation (CCPA).
• After the investigation report, CCPA directed the e-commerce platforms to permanently delist all car seat belt alarm stopper clips.
• Central Consumer Protection Authority (CCPA):
  • It was established with effect from 24th July 2020. It is headquartered in New Delhi. Nidhi Khare is current Chief Commissioner of CCPA.
  • The objective of CCPA is to promote, protect and enforce the rights of consumers as a class.

Topic: Indian Economy/Financial Market

3. The number of retail merchants on board ONDC increases from 800 in January to 35,000 in May (13 May 2023).

• The number of daily orders on the Open Network for Digital Commerce (ONDC) crossed the 25,000-mark in first week of May 2023.
• ONDC’s network participants increased from 26 in January 2023 to 46.
• These include PhonePe’s Pincode and Airpay, companies such as HUL and ITC.
• ONDC’s alpha testing commenced in April 2022. Its beta testing began with grocery and food delivery in Bengaluru in September 2022.
• Presently, it is beta-testing in Bengaluru and Meerut and alpha-testing in 236 cities.
• In April 2023, NPCI Bharat BillPay launched NOCS platform for processing of ONDC transactions.
• The NOCS platform is integrated with banks, fintechs and e-commerce players.

Topic: Banking System

4. EXIM (Export-Import) Bank will launch its GIFT City subsidiary for trade finance by Q3 of current Financial Year (FY24).

• The proposed subsidiary is set to be named India EXIM Finserv IFSC Private Ltd.
• In the starting, the subsidiary arm will focus on international export factoring.
• MD Harsha Bangari said that rupee-denominated trade is on the cards. Rupee facility for foreign trade is not available yet.
• EXIM Bank plans to raise $4 billion via overseas debt.
• It plans to raise ₹40.000-45,000 crore in the domestic market in FY24, against ₹52,000 crore in FY23.
• Export-Import Bank of India (Exim Bank):
  • Export-Import Bank of India (Exim Bank) was established in 1982. Its headquarters are located in Mumbai.
  • It is wholly owned by the government of India and was set up to finance, facilitate and promote India’s international trade.

Topic: Miscellaneous

5. Calcutta High Court has ruled that the death caused by mosquito bite cannot be termed as accident.

• It ruled that no insurance claim can be given under ‘Accident Insurance Policy’ in case of death caused by mosquito bite.
• A mother moved to the High Court after her son and Army man, Chayan Mukherjee, died in the Command Hospital. He was found to be suffering from Dengue.
• The mother’s claim for insurance was rejected by insurance company on the ground that the cause of death was ‘non-accidental’ and hence not covered under the policy.
• Single judge bench of High Court observed that the definition of accidental death includes accidental injuries, but excludes illness.
• The bench highlighted that the definition of an accident is provided in IRDA (Insurance Regulatory and Development Authority) Guidelines on Standard Personal Accident Insurance Product.
• The guidelines define an accident as “a sudden, unforeseen and involuntary event caused by external, visible and violent means”.

Topic: Banking System

6. RBI said banks will start a ‘100 Days 100 Pays’ campaign.

• Under the campaign, the banks will trace and settle the top 100 unclaimed deposits of every bank in every district within 100 days.
• ‘100 Days 100 Pays’ campaign is a campaign for return of unclaimed deposits.
• The banks will start the campaign from June 1, 2023.
• As of the end of February, RBI had Rs 35,012 crore of unclaimed deposits transferred to it by Public Sector Banks. These deposits have not been operated for 10 years or more.  
• Last month, RBI had announced a Web portal to enable search across multiple banks for possible unclaimed deposits based on user inputs.
• Unclaimed deposits:
  • Unclaimed deposits refer to balances in savings/current accounts which are not operated for 10 years.  
  • They also refer to term deposits not claimed within 10 years from date of maturity.
  • Banks transfer unclaimed deposits to the Depositor Education and Awareness (DEA) fund maintained by the Reserve Bank of India.
  • The list of unclaimed deposits is displayed by banks on their website.

Topic: RBI

7. RBI issues advisory to banks and other entities regulated by it on 12 May 2023.

• RBI has emphasized on the need to take steps to make sure a complete transition away from the London Interbank Offered Rate (LIBOR) from July 01, 2023.
• RBI has advised the banks/Financial Institutions to make sure that new transactions undertaken by them or their customers do not rely on or are not priced using the US$ LIBOR or the MIFOR.
• RBI said Financial Benchmarks India Pvt. Ltd. (FBIL) will stop to publish Mumbai Interbank Forward Outright Rate (MIFOR) after June 30, 2023.
• RBI has advised the banks/FIs to take all necessary steps to make sure insertion of fallbacks at the earliest in all remaining legacy financial contracts that reference US$ LIBOR.
• RBI had issued an advisory on ‘Roadmap for LIBOR Transition’ in July 2021.
• The banks/FIs were encouraged to carry out transactions using widely accepted Alternative Reference Rate (ARR) by December 31, 2021.
• On 05 March 2021, the Financial Conduct Authority (FCA), UK has announced that LIBOR will either cease to be provided by any administrator or no longer be a representative rate immediately after June 30, 2023, in the case of the remaining US dollar settings.
• Mumbai Interbank Forward Outright Rate (MIFOR) is a benchmark rate that commercial banks use for financial contracts in India. It is published by Financial Benchmarks India Pvt. Ltd.

Topic: World Economy

8. Bank of England has increased interest rates to highest level since 2008.

• The bank's nine-member Monetary Policy Committee decided to increase its main interest rate by a quarter of a percentage point to 4.5%.
• The increase was its 12th in a row. Higher interest rates help lower inflation.
• Like other central banks around the world, the Bank of England has tried to control high inflation in the UK.
• The Bank of England started raising interest rates in late 2021 from a low of 0.1%.
• The bank said that inflation would likely halve from current levels to nearly 5%.
• The Bank of England is the central bank of the United Kingdom. Its governor is Andrew Bailey.

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