Banking, Financial and Economic Awareness

Half Yearly (Jan - June 2021)
2021 Book

Banking Awareness

Topic: RBI

1. Timeline for submission of feedback and suggestions to Group of Advisors (GoA) assisting the Regulation Review Authority (RRA 2.0) extended by 15 days till June 30.

  • RBI has an extended timeline keeping in view Covid-19 related disruptions and based on requests received from stakeholders.
  • RRA 2.0 has been established for one-year period beginning May 1, 2021.
  • Deputy Governor of RBI, M Rajeshwar Rao, was appointed as the Regulations Review Authority in April 2021.
  • On 7 May, RRA constituted a six-member Advisory Group. It was headed by S Janakiraman, Managing Director, State Bank of India.

Topic: Banking System

2. Bank of Maharashtra is at top among PSU Banks in terms of loan, deposit growth during financial year 2020-21.

  • Bank of Maharashtra recorded a 13.45 % increase in gross advances at Rs 1.07 lakh crore in 2020-21.
  • Punjab & Sind Bank follows Bank of Maharashtra. It recorded an 8.39% increase in advances with aggregate loans at Rs 67,811 crore at end of March 2021.
  • Bank of Maharashtra recorded a 16% growth in deposit mobilization. It was ahead of State Bank of India, which is India’s largest bank. SBI recorded 13.56% increase in deposit mobilization.
  • SBI’s deposit base (at Rs 36.81 lakh crore) was 21 times higher than Rs 1.74 lakh of Bank of Maharashtra.
  • Current Account Savings Account (CASA) for Bank of Maharashtra recorded 24.47% rise. This was 54% of the total liability of bank and the highest among public sector banks.
  • Central Bank of India achieved second place by recording 11.46% growth in CASA.
  • Bank of Maharashtra’s asset quality improved significantly as gross NPAs decreased to 7.23% of gross advances by end of March 2021. Net NPAs also decreased to 2.48%.
  • Current Account Savings Account (CASA) ratio is the ratio of deposits in current and saving accounts to total deposits. CASA ratio reflects bank’s capacity to raise money with lower borrowing costs. A higher CASA ratio shows a lower cost of funds.

Topic: RBI

3. Scope and coverage of Bharat Bill Payment System expanded by RBI.

  • ‘Mobile prepaid recharges’ has been permitted by RBI as a biller category in Bharat Bill Payment System (BBPS).
  • This will be implemented on or before August 31, 2021. Till now, all categories of billers who raise recurring bills (except prepaid recharges) as eligible participants were included under the scope and coverage of BBPS.
  • BBPS is an interoperable platform for repetitive bill payments. Its pilot phase was launched on August 31, 2016. Its live operations started in October 2017.

Topic: Infrastructure and Energy

4. 7.2 million tonnes LNG terminal located offshore Kakinada in Andhra Pradesh to be developed by Norway’s Crown LNG.

  • Norway’s Crown LNG will build a 7.2 million tonnes LNG terminal located offshore Kakinada in Andhra Pradesh.  
  • Agreement has been signed between Crown LNG India AS, a subsidiary of Crown LNG Holding AS and East LNG to finance, build and lease infrastructure for their offshore LNG receiving terminal at Kakinada.
  • Kakinada is the sixth largest city of Andhra Pradesh. It lies on the coast of the Bay of Bengal.

Topic: Miscellaneous

5. Cashew Export Promotion Council’s power to issue or renew Registration-Cum-Membership Certificate (RCMC) suspended by government.

  • The power of the Cashew Export Promotion Council to issue or renew Registration-Cum-Membership Certificate (RCMC) suspended by government.
  • While suspending the power of the Cashew Export Promotion Council, government has designated APEDA as the agency authorized to issue RCMC for cashew kernels, cashew nutshell liquid and kardanol.
  • RCMCs are issued by export promotion councils and commodity boards to companies to help companies avail duty benefits under foreign trade policy.
  • Cashew Export Promotion Council was set up by government in 1955, with the active cooperation of cashew industry. 

Topic: Indian Economy/Financial Market

6. Consumer Price Inflation reached a six-month high of 6.3% and Wholesale Price Inflation reached 12.94% in May.

  • Consumer Price Inflation has reached a six-month high of 6.3% and Wholesale Price Inflation has reached 12.94% in May 2021.
  • Increase in commodity prices and crude oil prices has caused high retail and wholesale inflation levels.
  • In April, CPI had been at 4.23% and WPI had been at 10.49%. Edible oil, egg, meat and fish along with fruits have caused an increase in headline retail inflation.

Category

Retail inflation rate

Oil and fat

Around 31%

Eggs

Over 15%

Fruits

Nearly 12%

Meat & fish

Around 9%

  • Core inflation increased to 6.6% in May. Core inflation is headline inflation minus food and fuel inflation.
  • As per Department for Promotion of Industry and Internal Trade, the primary reasons for high rate of inflation in May are low base effect and rise in the prices of crude petroleum, mineral oils and manufactured products.

Topic: Corporates/Companies

7. Axis Bank may raise its stake in Max Life Insurance to about 20%.

  • Axis Bank may raise its stake in Max Life Insurance to about 20% during the next 12-18 months.
  • Axis Bank and its two subsidiaries (Axis Capital Ltd and Axis Securities Ltd) collectively own 12.99 % in Max Life Insurance after the approval of a deal in April 2021.
  • The bank has already increased its stake to 13 %. It will seek approval for acquiring the balance of 7%.
  • Max Life Insurance is the largest non-bank private-sector life insurer in India. It is headquartered in New Delhi.

Topic: Corporates/Companies

8. PhonePe files complaint against Ventureast Proactive Fund-II.

  • PhonePe has filed complaint against Ventureast Proactive Fund-II with SEBI over its acquisition of OSLabs.
  • PhonePe has accused Ventureast Proactive Fund-II of violations of SEBI’s code of conduct.
  • Ventureast Proactive Fund-II (VPF) is an Alternative Investment Fund (AIF) operating out of India.
  • PhonePe is a mobile payment platform. Sameer Nigam is its CEO and Founder.

 

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