Banking Awareness of 13, 14 and 15 November 2024

Topic: RBI

1. Banks and ATM operators have been given more time by RBI for cassette swap mechanism.

• RBI has told banks to implement the roadmap for cassette swap implementation by 31 March 2025.
• In 2018, the banks were asked by RBI to implement the cassette swap mechanisms in a phased manner.
• They were asked to cover at least one-third of ATMs each year so that all ATMs would achieve cassette swap by 31 March, 2021.
• Now, RBI has asked the banks to implement the roadmap for cassette swap implementation by March 31, 2025.
• When currency is refilled, lockable cassettes containing banknotes are utilised in ATMs and exchanged under the cassette swap method.
• Three sets of five cassettes are estimated to be needed for each ATM: one set in the ATM, one in transit, and one at the branch/cash-in-transit (CIT) company (the one that is available for loading the following day).
• There were 2.55 lakh ATMs nationwide as of August 2024.
• Of these, 35,000 were owned by White Label ATM Operators, and 2.20 lakh were owned by banks.

Topic: RBI

2. RBI has announced that SBI, HDFC Bank and ICICI Bank will continue to be identified as Domestic Systemically Important Banks (D-SIBs).

• The banks which are identified as D-SIB shall maintain additional Common Equity Tier 1 (CET1) in addition to the capital conservation buffer.
• RBI has released the 2024 list of D-SIBs. It has prescribed additional CET 1 requirement of 0.80% for SBI, 0.40% for HDFC Bank, and 0.20% for ICICI Bank, as a percentage of their Risk Weighted Assets (RWAs).
• According to RBI, higher D-SIB surcharge will be applicable for SBI and HDFC from April 01, 2025.
• Within the CRAR (capital to risk-weighted assets ratio) of 11.5% for banks, the CET-1 is at 5.5%.
• SBI and ICICI Banks were classified as D-SIBs in 2015 and 2016.
• HDFC Bank was classified as D-SIB in 2017 along with SBI and ICICI Bank.
• Interconnectedness, substitutability and complexity are the indicators used for identifying a Bank as a D-SIB.

Topic: Indian Economy/Financial Market  

3. Wholesale price index (WPI)-based inflation for October increased to 2.36% on an annual basis.

• According to data released by the Ministry of Commerce & Industry, WPI-based inflation for October increased to 2.36% on an annual basis.
• WPI inflation was at 1.84% in September. It was at 1.25% in August.
• Inflation in October increased mainly due to increased prices in food articles, food product manufacturing, other manufacturing sectors and the production of motor vehicles.
• The Wholesale Price Index (WPI) tracks changes in the costs of goods that wholesale enterprises sell and trade in large quantities with other businesses.
• The WPI measures factory gate prices and retail prices, as opposed to the CPI, which measures the costs of products and services that consumers buy.

Topic: Indian Economy/Financial Market

4. India’s industrial output increased to 3.1% in September 2024.

• India’s industrial output increased to 3.1% according to the data released by the Ministry of Statistics and Programme Implementation.
• The increase in India’s industrial output has been driven by an improvement in manufacturing activity.
• The Index of Industrial Production (IIP) in India has shown a contraction of 0.1% in August.
• Out of the three major components of IIP, manufacturing output increased 3.9% in September.
• Electricity generation increased 0.5% and mining activity increased 0.2%, according to the data.
• In the April-September period, industrial output has grown by 4%.
• As per Use-based classification, growth rates of IIP stood at 1.8% in Capital goods and 4.2% in Intermediate goods.
• As per Use-based classification, growth rates of IIP stood at 3.3% in Infrastructure/ Construction Goods, 6.5% in Consumer durables and 2.0% in Consumer non-durable.

Topic: Indian Economy/Financial Market

5. India’s merchandise exports increase 17% in October.

• This is the fastest pace of growth in 28 months.
• India’s merchandise exports witnessed growth of 17.3% year-on-year (Y-o-Y) to reach $39.2 billion.
• The imports reached an all-time high of $66.34 billion in October. Imports have grown at 3.9%.
• This has led to widening of the trade deficit. Trade deficit is the gap between imports and exports.
• Trade deficit has widened to $27.1 billion from $20.8 billion in September.
• Non-petroleum and non-gems and jewellery exports grew 27.7% to reach $31.36 billion in October.
• Demand was higher for items like engineering goods (39.4%), chemicals (27.35%), electronic goods (45.7%), readymade garments (35.1%) and rice (85.8%). 
• Exports of petroleum products continued to contract in October (-22.1 per cent) at $4.6 billion.
• Petroleum products had a 12% share in India's export basket.
• On a cumulative basis, exports saw 3.2% growth at $244.5 billion during April-October.
• Imports grew 5.7% at $416.9 billion. This led to a trade deficit of $164.65 billion during April-October.
• Services exports saw 21.3% growth at $34 billion in October. Services imports witnessed 26.3% rise to $17 billion in October.

Topic: Miscellaneous

6. According to the RBI Deputy Governor, digital transfers of cash for public services increased by 56% in 2024.

• In 2024, there were 56% more e-transactions on average per day to access public services in India than the year before.
• Through 314 initiatives and digitally enabled Direct Benefit Transfers (DBT), Rs 6.9 lakh crore has been transferred.
• In the fiscal year 2023–2024, this benefited 176 crore people.
• Speaking at a conference on "Digital Technology, Productivity, and Economic Growth in India," RBI deputy governor Michael Patra made these remarks.
• According to Patra, up until March 2023, these DBTs are expected to have saved a total of Rs 3.5 lakh crore in costs.
• By 2029–2030, generative AI is expected to add $359–438 billion to India's GDP.
• The percentage of Indian businesses incorporating AI into their production processes rose from 8% in 2023 to 25% in 2024.
• He stated that India has also pledged Rs. 1.25 trillion to the growth of its semiconductor industry.
• He stated that the cost of implementing the Know Your Customer procedure in India has been cut in half thanks to Aadhaar.

Topic: Banking System

7. In the first half of 2024–2025, Public Sector Banks (PSBs) had shown a growth of 11% year over year.

• The aggregate business of Public Sector Banks was 236.04 lakh crore rupees.
• According to the Finance Ministry, significant banking reforms have been implemented in recent years.
• These include the adoption of the Insolvency and Bankruptcy Code (IBC), the implementation of Enhance Access and Service Excellence (EASE), and the establishment of a strong governance framework.
• Year over year, the worldwide credit portfolio increased by 12.9%, while the deposit portfolio increased by 9.5%.
• Additionally, PSBs have made great strides in implementing cutting-edge technology like blockchain, AI, and the cloud.

Topic: Indian Economy/Financial Market

8. India’s retail inflation reached a 14-month high in October.

• India's retail inflation reached a 14-month high in October due to a sharp rise in vegetable prices.
• Annual retail inflation reached 6.21% in October, which is more than the tolerance band of 2%-6% for the first time in over a year.
• The October retail inflation rate was also higher than the 5.81% forecasted by economists.
• Rising food prices have decreased the purchasing power of middle-income households.
• The RBI has projected GDP growth of 7.2% for the financial year 2024-25.

Topic: Reports and Indices

9. India ranked among global top 10 for patents, trademarks and designs.

• In the World Intellectual Property Indicators 2024 report, India has ranked among the global top 10 countries in patents, trademarks and industrial designs.
• The report reveals significant growth in patent, trademark and industrial design applications in the top economies.
• India is consolidating its position as a global leader in the intellectual property and IP landscape, making substantial progress and setting new milestones in IP activity.
• India ranks sixth globally for patents with 64,480 applications, with more than half of the total submissions filed locally.
• In 2023, the patent office granted 149.4% more patents than the previous year, underlining the country's rapidly evolving IP ecosystem.
• The report indicates a steady growth of 36.4% in India's industrial design applications, in line with the increasing emphasis on product design, manufacturing and creative industries in India.
• The top three sectors – Textiles and Accessories, Tools and Machines, and Health and Cosmetics – account for nearly half of all design filings.

Topic: Infrastructure and Energy

10. India's renewable energy capacity increased by 13.5% to 203 gigawatts since October 2023.

• India's total renewable energy capacity grew by 13.5%, or 24.2 gigawatts, in a year to reach 203.18 gigawatts in October 2024, from 178.98 gigawatts in October 2023.
• A statement issued by the Ministry of New and Renewable Energy said that this increase is in line with India's ambitious targets in the renewable energy sector.
• It said total non-fossil fuel capacity, including nuclear power, increased to 211.36 GW in 2024, from 186.46 GW in 2023.
• The solar sector witnessed a significant increase of 20.1 GW (27.9 per cent), from 72.02 GW in October 2023 to 92.12 GW in October 2024.
• The combined total solar capacity, including under-implementation and tendered projects, now stands at 250.57 GW, a significant increase from last year's 166.49 GW.
• The total capacity in the pipeline for wind power projects has now reached 72.35 GW.
• India added 12.6 GW of renewable energy capacity from April to October 2024.
• 1.72 GW was installed in October 2024 alone, reflecting an accelerated shift towards renewable energy.

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