Banking Awareness of 12 and 13 June 2022

Topic: Banking System

1. RBI has doubled housing loans limit in case of cooperative banks.

• It has also allowed rural cooperative banks to finance residential real estate projects.
• It has given urban cooperative banks permission to provide doorstep banking services to meet the needs of customers, particularly senior citizens and differently-abled persons.
• RBI has changed the limit for tier-I Urban Cooperative Banks (UCBs) from Rs 30 lakh to Rs 60 lakh.
• The limit for tier-II UCBs has been raised from Rs 70 lakh to Rs 1.40 crore.
• RBI has changed the limit for Rural Cooperative Banks (RCBs) with an assessed net worth less than Rs 100 crore from Rs 20 lakh to Rs 50 lakh.
• For other RCBs, the limit has been raised from Rs 30 lakh to Rs 75 lakh.

Topic: Appointments

2. RBI has given approval to the appointment of R Subramaniakumar as MD and CEO of RBL Bank.

• RBI has given approval to his appointment for a tenure of three years with effect from date of his taking charge.
• R Subramaniakumar was earlier appointed by RBI as administrator of Dewan Housing Finance Corporation Limited (DHFL).
• RBL Bank is a Mumbai-based Indian private sector bank. It was earlier known as Ratnakar Bank.
• Rajeev Ahuja, Executive Director is serving as Interim MD and CEO of RBL Bank.

Topic: Banking System

3. Equitas Small Finance Bank has received observation letters from stock exchanges.

• The Small Finance Bank has received letters for the amalgamation of Equitas Holdings with itself.
• Both BSE and NSE have given no objection to the proposed scheme.
• The scheme involves an amalgamation between Equitas Holdings Limited, Equitas Small Finance Bank Limited and their respective shareholders.
• Equitas Small Finance Bank is a small finance bank. It is headquartered in Chennai.

Topic: Indian Economy/Financial Market

4. Factory output increased to 7.1% in April 2022.

• This is an eight month high level. High level of factory output is mainly driven by higher electricity and mining output.
• On a sequential basis, industrial production has shown a decline of 9.2%.
• On a sequential basis, manufacturing output has shown a contraction of 8.8% and mining output has shown 19.7% contraction. 
• Index of Industrial Production (IIP) had shown a growth of 2.2% in March 2022.
• In comparison to April 2019, industrial output has shown a growth of 6.8%.
• In comparison to February 2020, it grew by just 0.7%. IIP values in absolute terms are given below.

• Manufacturing output accounts for 77.6% of the weight of the IIP. It grew 6.3% in April. Mining and electricity increased 7.8% and 11.8%, respectively.
• In absolute terms, the index for electricity output was at an all-time high (2012 series) of 194.5.

Topic: Indian Economy/Financial Market  

5. Fitch Ratings has changed India’s rating outlook from Stable to Negative after two years.

• It has lowered the economic growth forecast to 7.8% for FY23. It has projected economic growth forecast at 8.5% in March. 
• The change in outlook from negative to stable means that downside risks to medium-term growth have diminished due to India's rapid economic recovery.
• In June 2020, Fitch Ratings changed India’s outlook from stable to negative. 
• Fitch Ratings has kept the rating unchanged at BBB-. India’s rating has remained BBB- since August 2006.
• It forecast growth of around 7 percent between FY24 and FY27.
• It forecast the debt-to-GDP ratio to decline to 83% in the current fiscal from a peak of 87.6% in 2020-21.  

Topic: Infrastructure and Energy

6. Coal Ministry aims to produce 140 million tonnes of coking coal by FY30 to reduce imports.

• It is also targeting to increase the supply of washed coking coal for the steel sector to 25.33 mt by FY30.
• Coal Ministry has launched coking coal mission to increase coking coal production from 45 mt in FY21 to 140 mt in FY30.
• Out of this 140 mt, 105 mt will come from Coal India Limited.
• As of April 2021, India’s total coking coal resources stood at 35,100.17 mt.
• Coal Ministry is also aiming to increase the supply of washed coking coal to steel sector from 4.42 mt in FY21 to 25.33 mt by FY30.

Topic: RBI

7. RBI has cancelled licence of Mudhol cooperative bank, Bagalkot, Karnataka.

• RBI has prohibited it from conducting the business of banking including acceptance of deposits and repayment of deposits.
• RBI announced cancellation of its licence and said that the bank does not have adequate capital and earning prospects.
• Over 99% of depositors of the banks are eligible to receive full amount of their deposits from Deposit Insurance and Credit Guarantee Corporation (DICGC).

Topic: Appointments

8. Saraswat Co-operative Bank has appointed two managing directors.

• It has created the position of two MDs after the retirement of Smita Sandhane as MD on March 31, 2022.
• The bank has appointed Abhijit V Prabhu and Arti A Patil as MDs.
• The appointment of Patil and Prabhu as MDs is with effect from April 1, 2022.
• Saraswat Co-operative Bank is India’s biggest urban co-operative bank. It is headquartered in Mumbai.

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