Banking Awareness of 13, 14 and 15 March 2022

Topic: RBI

1. Rs 12.75 lakh penalty has been imposed by RBI on eight cooperative banks.

• The penalty has been imposed for deficiencies in regulatory compliance.
• The names of cooperative banks on which penalty has been imposed are listed below. 
  • Rs 4 lakh penalty on Nabapalli Cooperative Bank.
  • Rs 3 lakh penalty on Baghat Urban Cooperative Bank.
  • Rs 2 lakh penalty on Manipur Women's Cooperative Bank.
  • Rs 1 lakh penalty on United India Cooperative Bank.
  • Rs 1 lakh penalty on Jila Sahakari Kendriya Bank.
  • Rs 50,000 penalty on Amravati Merchants’ Cooperative Bank.
  • Rs 25,000 penalty on Faiz Mercantile Cooperative Bank.
  • Rs 1 lakh penalty on Navnirman Cooperative Bank.

Topic: Banking System

2. RBI has removed ban on HDFC Bank’s business generating activities planned under Digital 2.0 programme.

• In December 2020, RBI has said HDFC Bank was not allowed to launch new digital products or services.
• RBI has also banned HDFC Bank from issuing new credit cards after outages in its mobile and internet banking services.
• Then, an external IT firm was appointed by RBI in February 2021 for carrying out a special audit of the IT infrastructure of HDFC Bank.
• HDFC Bank is headquartered in Mumbai. It is India’s largest private sector bank. It was founded in 1994. CEO of HDFC Bank is Sashidhar Jagdishan.

Topic: RBI

3. RBI has released harmonized framework for microfinance lenders.

• Reserve Bank of India (Regulatory Framework for Microfinance Loans) Directions, 2022, will come into effect from April 1, 2022.
• RBI said all collateral-free loans provided to households having an annual income of up to Rs 3 lakh will be considered microfinance loans.
• Previously, the income limits were set at 2.5 lakh in rural regions and 2 lakh in other areas.
• As per RBI, margin caps will no longer be applied to non-banking finance company-microfinance institutions (NBFC-MFIs) pricing.
• In other words, RBI has removed caps on the pricing of small loans given by NBFC-MFIs.
• All microfinance lenders must now implement a board-approved loan pricing policy.
• RBI has also raised the maximum limit on microfinance loans given by NBFCs that are not qualified as NBFC-MFIs from 10% earlier to 25%.
• For NBFC-MFIs, RBI has also reduced the minimum loan requirement of microfinance loans of total loan assets from 85% to 75%.
• There would be no prepayment penalty on microfinance loans. Maximum repayment value has been limited to 50% of monthly household income.

Topic: Appointments

4. N Chandrasekaran has been appointed as chairman of Air India.

• He is chairman of Tata Sons. The appointment of Alice GeeVarghese Vaidyan as an independent director on Air India’s board has also been approved.
• Mehmet Ilker Ayci has earlier declined the offer to be CEO of Air India.
• Air India was officially handed over to Tata Sons in January 2022.
• It was sold for Rs 18,000 crore along with its low cost carrier Air India Express and 50% of AISATS, a ground handling company.

Topic: Indian Economy/Financial Market

5. India’s goods exports in February 2022 have increased by 25% to $34.57 billion.

• In February 2022, good imports increased by 36.07% to $55.45 billion.
• As a result, the trade deficit for February 2022 increased to $20.88 billion. This was 59% higher than in February 2021.
• Petroleum imports increased 69 % to $15.28 billion. Gold imports declined 9.65 % to $4.8 billion.
• Goods exports for April-February 2021-22 were 46.09% higher at $374.81 billion.
• Goods imports for April-February 2021-22 were 59.33% higher at $550.56 billion. Trade deficit for same period doubled to $175.75 billion.

Topic: Agriculture

6. India is likely to achieve self-sufficiency in urea.

• India’s urea production is expected to increase to 31.8 million tonne as against 24 million tonne (mt) in 2018-19.
• India’s urea demand/consumption is around 33 mt. Urea production will exceed 34 mt when the urea plant at Talcher (Odisha) and another at Namrup (Assam) will be commissioned.
• Gorakhpur plant (Uttar Pradesh) will soon start producing a full capacity of 1.27 mt per annum.
• Ramagundam plant (Telangana) may be operational to full capacity around June.

Topic: Miscellaneous

7. EPFO’s CBT has recommended reduction in interest on provident fund deposits from 8.5% to 8.1% for 2021-22.

• This is the lowest interest rate since 1977-78. In 1977-78, EPF interest rate was at 8%.
• The lowest rate of 8.1% has been recommended by EPFO’s Central Board of Trustees (CBT), chaired by Labour and Employment Minister Bhupender Yadav.
• The rate must be ratified by the Finance Ministry before it is notified and credited to members’ accounts.
• The Minister said that EPFO Board will meet every three–four months and the next meeting will be in June or July in Bengaluru.
• In March 2021, Central Board of Trustees (CBT) has decided 8.5% interest rate on EPF deposits for 2020-21.
• It was approved by the Finance Ministry in October 2021.
• EPF accounts are mandatory for employees earning up to ₹15,000 a month in firms with over 20 workers.
• 12% of the basic pay and dearness allowance is deducted as employees’ contribution and another 12% is remitted by the employer.
• Central Board of Trustees (CBT) is the apex decision-making body of EPFO.
• EPFO is India’s largest retirement fund and the second largest non–banking financial institution.

Topic: Indian Economy/Financial Market

8.  As per the PLFS of April-June 2021, urban unemployment rate is rising in India.

• 12.7 persons out of 100 in labour force are unemployed according to Periodic Labour Force Survey (PLFS) of April-June 2021.
• As per PLFS report, the unemployment rate among labour force between 15-29 years is 25.5.
• It was 22.9 in the last quarter. It was 34.7 in corresponding quarter of 2020.
• Unemployment rate among women in the age group 15-29 years is 31 and among the men, it is 24.
• Unemployment rate among all ages is 12.7 during April-June 2021 period.
• Unemployment rate among women of all ages is 14.3 and men of all ages is 12.2.
• Urban unemployment rate for persons of all ages is highest in Kerala (24.4) followed by Chhattisgarh (19.2). Gujarat has the lowest (5.5).
• LFPR in the population of all ages is 37.1. WPR was 32.4.
• Labour Force Participation Rate (LFPR) is the percentage of persons in labour force (working or seeking or available for work).
• Worker Population Ratio (WPR) is the percentage of employed persons in the population of all ages.

Topic: Indian Economy/Financial market

9. India’s WPI inflation increased to 13.11% in February 2022 as per data from the Ministry of Commerce & Industry.

• Wholesale Price Index (WPI) increased to 12.96% during January 2022 and it increased to 14.27% in December 2021.
• Wholesale Price Index (WPI) in February 2021 was at 4.83%.
• Since April 2021, WPI inflation has remained in double digits for the 11th month in a row.
• India’s retail inflation increased to 6.07% in February 2022 as per data released by the Ministry of Statistics & Programme Implementation (MoSPI).
• The retail inflation measured by CPI was 6.01% for January 2022.
• This is the second consecutive time that CPI data has reached beyond RBI’s upper limit of 6%.
• Consumer Food Price Index (CFPI) or the inflation in the food basket also increased in February 2022 to 5.85%, from 5.43% in January 2022.
• Finance ministry said that despite the rise in global crude oil prices, retail prices of diesel and petrol have not been revised since November 2021.

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