Banking Awareness of 13, 14 and 15 June 2023

Topic: Indian Economy/Financial Market

1. Retail Inflation declined to 4.25% in May 2023.

• This is lowest level of 25 months (more than two years). This is the fourth continuous month when retail inflation has declined.
• This is the third continuous month when Consumer Price Index (CPI)-based inflation has been within RBI’s zone of below 6%.
• CPI-based inflation was 4.7% in April 2022. It was 7.04% in May 2022.
• Retail inflation is at lowest level of 4.25% since April 2021 when it was 4.23%.
• Food inflation (inflation for the food basket) was at 2.91% in May and lower than 3.84% in April. The food basket accounts for nearly half of the CPI.
• Fuel and light inflation eased from 5.52% in April to 4.64% in May.

Topic: Indian Economy/Financial Market

2. India’s industrial production grew to 4.2% in April 2023.

• It stood at 1.7% in March 2023. The growth is mainly due to good performance by the manufacturing and mining sectors.
• The factory output growth stood at 6.7% in April 2022.
• As per National Statistical Office (NSO) data, the manufacturing sector's output grew 4.9% in April 2023. This is against a 5.6% expansion a year ago.
• Power sector output declined 1.1% in April 2023. Mining output increased by 5.1% during April 2023.
• Capital goods segment has shown a 6.2% growth in April. 
• Consumer durables output in April 2023 declined by 3.5%. Consumer non-durable goods output grew 10.7%.
• Infrastructure/construction goods have shown a growth of 12.8%. Primary goods output recorded 1.9% growth in April 2023.
• Intermediate goods output in April 2023 grew by 0.8%.
• For fiscal year 2022-23, the growth in IIP is 5.2%, lower than 11.4% in the preceding year.

Topic: Reports and Indices

3. The final Cost Inflation Index (CII) for FY24 (Assessment Year 2024-25) has been notified by Finance Ministry at 348.

• According to the Central Board of Direct Taxes (CBDT), the notification will be effective from 1st April 2024.
• It will apply to assessment year 2024-25 and subsequent assessment years.
• The provisional index was also 348. It was notified in April.
• This year, the index is higher by over 5% as against that of FY22.
• As a result, the long-term capital gain liability on the sale or transfer of any capital asset, such as land, property, trademarks, patents, and so on, is likely to be reduced during the current fiscal year.
• CII number helps in finding out the long term capital gains an assesse shall pay taxes when he/she files ITR (Income Tax Return) next year.
• Cost Inflation Index (CII) is also a way to calculate inflation (estimated increase in prices of a good/service over the years).
• Central government notifies the CII each year. It is defined under Section 48 of the Income Tax Act, 1961. The base year for CII is 2001.

Topic: Indian Economy/Financial Market

4. Wholesale inflation declined to -3.48% in May 2023.

• This is the lowest level of 90 months. WPI inflation has remained in the negative zone for the second consecutive month.
• Wholesale Price Index (WPI) inflation was -0.92% in April 2023.
• Fall in prices of mineral oils, basic metals, food products, textiles, non-food articles, crude petroleum & natural gas, and chemical & chemical products mainly contributed to fall in inflation rate in May.
• WPI inflation was at 16.63% in May, 2022. Wholesale inflation was at (-) 3.37% in May 2020.
• Inflation in food articles declined to 1.51% in May 2023. Fuel and power basket inflation declined to (-) 9.17% in May 2023.
• In manufactured products, the inflation rate was (-) 2.97% in May 2023.

Topic: Reports and Indices

5. India will take over China by 2027 with respect to annual growth in crude oil demand, said the International Energy Agency (IEA) report.

• This will be aided by four factors. These factors are growing industrial and economic base, rising urbanization and expanding middle class.
• As per IEA, Indian oil demand will increase by over 1 million barrels per day between 2022 and 2028.
• The share of Gasoil in the product mix will rise from 32% to 35%.
• Malaysia and Indonesia will see similar increases in oil consumption of about 20% between 2022 and 2028.
• According to IEA, China will continue to account for one-sixth of the world’s oil demand. It will continue to account for half of the global oil consumption growth.
• Oil 2023 is International Energy Agency’s outlook for the next five years.
• It said China’s demand will decline continuously from 2024 after a huge rise this year.
• World’s top three oil consumers are the United States (1st), China (2nd), and India (3rd).
• IEA revised its forecast for global oil growth demand to 2.4 million barrels per day in 2023.
• In 2023, China will account for about 60% of global growth in il demand.
• Global oil demand is at 102 million b/d in 2023. Overall global oil demand growth is expected to peak in 2028 at 105 million b/d.
• International Energy Agency (IEA):
  • It is an autonomous body within the Organization for Economic Co-operation and Development (OECD).
  • It recommends policies to enhance the security, affordability and sustainability of energy.
  • It was established in 1974 and currently, it has 30 members.
  • India is an associate member of the IEA. It releases the World Energy Outlook report.

Topic: Banking System

6. Microfinance industry’s gross loan portfolio increased 22% in FY23 to ₹3.5-lakh crore.

• According to the data released by MFIN (Microfinance Institutions Network), active microfinance loan accounts increased 14.6% to 13 crore as on March 2023.
• NBFC-MFIs are the largest provider of micro-credit in terms of loans outstanding.
• Their share of the total industry portfolio increased to 40% from 35.2% in FY22.
• Banks occupy 2nd position with a market share of 34% followed by small finance banks at 16.6%.
• The share of other NBFCs and other MFIs is 8.5% and 1.0%, respectively.
• East and North-East and South India accounted for 63% of the total portfolio.
• Share of East and North-East declined continuously over FY23.
• Bihar replaced Tamil Nadu as the largest State with respect to microfinance industry’s loan portfolio outstanding. Uttar Pradesh occupied third place.
• MFIN (Microfinance Institutions Network) is an association for the microfinance sector in India.

Topic: Banking System

7. Fino Payments Bank has entered into an association with Hubble to introduce first spending account of India.

• In this account, customers can park their funds. They can spend on categories like food ordering, shopping, travel, entertainment etc.
• They can save up to 10% on all purchases made from the account.
• Customers can track spends across categories of over 50 brands that Hubble has partnered with.
• The spending account is linked with the bank’s digital savings account operated through its mobile app FinoPay.
• Hubble is a Sequoia Capital-backed fintech.
• Fino Payments Bank is a wholly-owned subsidiary of Fino Paytech Limited (FPL). It was launched in 2017.

Topic: RBI

8. Reserve Bank of India has opened a sub-office at Kohima, the capital of Nagaland.

• It has also announced its aim to have an office in Itanagar, the capital of Arunachal Pradesh, to strengthen its presence in North East India.
• The sub-office at Kohima was inaugurated by Deputy Governor Michael Debabrata Patra.
• This will help increase RBI’s presence in the north-eastern region.
• RBI is present in Assam, Manipur, Meghalaya, Mizoram, Tripura and Nagaland in the north-eastern region. 
• The RBI's Guwahati office will continue to serve Arunachal Pradesh's needs until the Itanagar office opens.
• The Kohima sub-office has Financial Inclusion and Development Department (FIDD), Consumer Education and Protection Cell (CEPC), Market Intelligence Cell and Human Resource Management Department (HRMD).
• The currency management for Nagaland will continue from the Guwahati office.
• General manager Paresh Chauhan is the head of the newly inaugurated sub-office.

Topic: Corporates/Companies

9. NTPC’s rank in Forbes 'The Global 2000'- List for 2023 improves by 52 places.

• It has secured 433rd rank in Forbes 'The Global 2000'- List for 2023.
• It was on 485th rank in the Forbes 'The Global 2000'- List last year.
• Reliance Industries has remained at the top among Indian corporates in the 2023 edition of the list.
• Reliance Industries is placed at 45 in the overall ranking of 2000 global companies. Its ranking improved from 53 in 2022 to 45 in 2023.
• In the ranking, State Bank of India at 77, HDFC Bank at 128 and ICICI Bank at 163 are included. 
• Life Insurance Corporation (LIC) has made a first-time entry to the Forbes list this year. It is ranked 363.
• Total 55 Indian firms have featured on the list. US’s bank, JP Morgan has topped the Forbes Global 2000 List this year.  
• Saudi Arabia’s Oil company Aramco has been ranked second.
• 'The Global 2000' List recognizes the world's largest companies.
• They are recognized based on four key metrics- sales, profits, assets and market value.
• National Thermal Power Corporation Limited (NTPC) is India’s largest power generation company.
• NTPC Limited is a central Public Sector Undertaking. It is under the ownership of Ministry of Power. It was founded in 1975. Gurdeep Singh is its Chairman and MD.

(Source: News on AIR)

Topic: Indian Economy/Financial Market

10. Central government released Rs 1.18 trillion as tax devolution to state governments.

• Central government released the third tranche amounting Rs 1.18 trillion of tax devolution to state governments to speed up capital spending.
• It is significantly higher than the normal monthly devolution of Rs 59,140 crore.
• This transfer of money is a part of transferring federal taxes to states. It will help states in meeting their development and welfare-related expenditures.
• Uttar Pradesh received the highest share of Rs 21,218 crore and Goa the least at Rs 457 crore.
• Assam, Bihar, Chhattisgarh, and Gujarat were allocated ₹3,700 crore, ₹11,897 crore, ₹4,030 crore, and ₹4,114 crore, respectively.
• Andhra Pradesh received ₹4,787 crore, while Arunachal Pradesh received ₹2,078 crore.
• The funds have been given to states based on a predefined formula that is based on various factors such as population, area, and fiscal capacity.
• At present, 41 per cent of taxes collected by the Centre is devolved in 14 instalments to states during a fiscal year.

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