Banking Awareness of 13 and 14 January 2023

By Priyanka Chaudhary | Last Modified: 14 Jan 2023 17:47 PM IST
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Topic: Indian Economy/Financial Market

1. Rural retail inflation in 23 States/UTs is higher than urban.

  • Mizoram recorded the highest rate of retail inflation at 13.94%. Tripura recorded the maximum urban inflation at 10.43%.
  • Consumer Price Index-based retail inflation for December was highest in two north-eastern States.
  • Telangana, Madhya Pradesh, Uttar Pradesh, Haryana and Punjab are the large states, which have high rural inflation.
  • Four of these five States have high dependency on the farm sector.
  • According to expert, the main reason for higher retail inflation is the larger weightage of food and beverage components in the rural CPI basket (54.18%).
  • The weightage of food and beverage components in the urban CPI basket is only 36.29%.
  • Retail inflation based on Consumer Price Index (CPI) has reduced to one-year low level of 5.72% in December.
  • Retail inflation has declined due to decline in prices of vegetables in December. The prices of cereals, spices, milk and eggs are still high.
  • Inflation in rural areas (6.05%) is still higher than urban area (5.39%).

Topic: Banking System

2. e-Bank guarantee (e-BG) facility has been launched by State Bank of India.

  • SBI has launched e-BG facility in association with National e-Governance Services Limited (NeSL).
  • SBI has taken this initiative to improve transparency and reduce turnaround time from days to minutes.
  • NeSL’s Digital Document Execution (DDE) platform will facilitate the e-Bank Guarantee process.
  • Beneficiaries can instantly get e-BG on NeSL’s platform without further verification.
  • Presently, these guarantees are issued by the bank with physical stamping and wet signatures.
  • With the introduction of e-BG, this function will be replaced with e-stamping and e-signature.
  • e-Bank guarantee refers to a substitute of paper-based guarantees.
  • National E-Governance Services Limited:
    • It is India’s first Information Utility. It is registered with the Insolvency and Bankruptcy Board of India (IBBI) under the Insolvency and Bankruptcy Code, 2016.
    • It is incorporated as a union government company.
    • Its primary role is to serve as a repository of legal evidence holding the information pertaining to any debt/claim.

Topic: Indian Economy/Financial Market

3. According to ICRA estimates, securitisation volumes for FY23 likely to reach to ₹1.70 lakh crore.

  • In FY22, securitisation volumes stood at ₹1.26 lakh crore.
  • Icra Ratings has estimated securitisation volumes jumped 58% to ₹1.17 lakh crore in the April-December 2022 period.
  • The rating agency said buoyancy in securitisation can be linked to stable macroeconomic scenario and high credit growth for non-bank lenders.
  • Mortgage-backed loans, followed by vehicle loans, have for the long time dominated securitisation volumes.
  • The agency said trend reversed in Q3 FY23. In Q3 FY23, vehicle loans at 33% of total volumes, moved ahead of mortgage loans.
  • Securitization is the process in which certain types of assets are pooled so that they can be repackaged into interest-bearing securities. The interest and principal payments from the assets are passed through to the purchasers of the securities. The process leads to the creation of financial instruments that represent ownership interest in, or are secured by a segregated income producing asset or pool of assets. These assets can be residential mortgages, commercial mortgages, auto loans, etc.

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Topic: Indian Economy/Financial Market

4. ICRA estimates the gross market borrowings of Government of India to rise about 5% year-on-year (yoy) in FY24.

  • ICRA expects the gross market borrowings of the Government of India to rise to ₹14.8 lakh crore in FY24 from ₹14.1 lakh crore in FY23.
  • ICRA estimates the gross market borrowings of General Government (representing the indebtedness of GoI and State Governments) to rise about 10% ₹24.4 lakh crore in FY24 from ₹22.1 lakh crore.
  • According to experts, this may push up the 10-year G-sec yield to 7.4-7.75% after the presentation of the Budget.
  • Given robust direct tax collections and GST inflows, ICRA expects that net tax receipts of Government of India will overshoot the budgeted amount by ₹2.1 lakh crore in FY23.
  • ICRA estimates fiscal deficit of Government of India at ₹17.5 lakh crore in FY23. This will exceed the budgeted amount of ₹16.6 lakh crore.
  • ICRA estimates gross tax revenue of Government of India at about ₹34 lakh crore in FY24.

Topic: Agriculture

5. India’s wheat output in 2022-23 crop year is expected to be almost five million tonnes more than last year’s rabi harvesting season.

  • India’s wheat output is expected to be 112 million tonnes in the 2022-23 crop year.
  • As per Director of Karnal-based ICAR-Indian Institute of Wheat and Barley Research (IIWBR), the rise in area under high-yielding varieties has contributed to this.
  • Favourable weather conditions and increase in acreage are also the reason for increase in wheat output. Fog is favourable for the crop.
  • The key growing areas for wheat crop in India include states like Punjab, Haryana, Uttar Pradesh, Madhya Pradesh, and Rajasthan.
  • The high-yielding varieties include DBW 187, DBW 303, DBW 222 and HD 3226.

Topic: Infrastructure and Energy

6. Oil Minister Hardeep Singh Puri said that India is likely to see an investment of USD 58 billion in exploration and production (E&P) of oil and gas by 2023.

  • He added multinational corporations like TotalEnergies, Chevron Corp, and ExxonMobil have interest in investing in Indian E&P sector.
  • While speaking at the Voice of Global South Summit, he said the government is targeting to increase the geographical area under E&P to 0.5 million square kilometres by 2025 from the current 0.25 million sq km.
  • India is third biggest oil-consuming and importing nation of world. It imports 85% of its crude oil.
  • India hosted the Voice of Global South Summit virtually on 12th &13th January. The theme of the Summit was “Unity of Voice, Unity of Purpose”.
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November Financial Awareness 2022 September Financial Awareness 2022

Topic: Corporates/Companies

7. Indian auto manufacturer Mahindra has become the fastest-growing brand in South Africa for the year 2022.

  • According to a report by the National Association of Automobile Manufacturers of South Africa (NAAMSA), Mahindra’s local subsidiary set several records in the last year.
  • As per the report, Mahindra SA increased its sales volume by 78% compared to 2021.
  • This is also the second year since 2019 that Mahindra has been named fastest-growing brand of South Africa.
  • This is also the fourth year in the past five that the brand has been among the fastest-growing brands of South Africa.
  • The XUV300 was the fastest-growing compact SUV in its addressable segment.
  • The XUV300 is also the safest car in Africa as tested by the Global New Car Assessment Programme (GNCAP).
  • Mahindra South Africa is a fully owned subsidiary of Mahindra & Mahindra India.
  • Global New Car Assessment Programme (GNCAP):
    • It is a project of the Towards Zero Foundation, a UK-registered charity.
    • It provides a platform for cooperation among new car assessment programmes worldwide.
    • It promotes universal adoption of UN’s motor vehicle safety standards globally.

Topic: Indian Economy/Financial Market

8. The Index of Industrial Production (IIP) increased 7.1% for November 2022.

  • This is the highest in five months. According to the Ministry of Statistics and Programme Implementation data, IIP recorded positive growth after contracting by 4% in the preceding month.
  • IIP grew by 1% in the same period in 2021. In November, the manufacturing sector recorded a growth of 6.1%.
  • The mining sector recorded a 9.7% growth. The electricity sector recorded 12.7% growth.
  • Overall industrial production so far (from April to November) this fiscal has been 5.5%.
  • Growth of 17.6% was seen in the corresponding period of the previous year.

Index of Industrial Production (IIP)

(Source: News on AIR)

Topic: Reports and Indices

9. World Economic Forum released the 18th edition of the Global Risk Report.

  • The 18th edition of the Global Risk Report is based on the Global Risk Perception Survey of 2022-2023.
  • The survey indicates that the cost of living crisis, food supply crisis, energy supply crisis, rising inflation and cyberattacks on critical infrastructure are the top risks for 2023.
  • Apart from these risks, the report mentions that the weakening of human rights, Net Zero targets, failure of non-food supply chains and debt crisis are other major risks.
  • As per the report, 2025 will be dominated by social and environmental risks.
  • WEF’s this year report ranked the ‘cost of living crisis’ at the first place among all global risks on the basis of severity.
  • “Biodiversity loss and ecosystem collapse” is one of the fastest deteriorating global risks over the decades.
  • Six environmental risks will be in the top 10 risks over the next decades.
  • In the GRPS results, “Natural disasters and extreme weather events” has been considered the second-most severe risk over the next two years.
  • “Geoeconomic confrontation” is the third most severe risk for the next two years.
  • “Geoeconomic confrontation” and “Erosion of social cohesion and societal polarisation” risks are the two new entries in the top 10.
  • The report has also mentioned that protests have broken out in 92 countries due to an increase in fuel prices.
  • The disruption has occurred in the energy supply due to the Russia-Ukraine crisis which has increased inflation in many countries.

Topic: Appointments

10. Ravi Kumar has been appointed as CEO of Cognizant.

  • He has replaced Brian Humphries as CEO of Cognizant.
  • Humphries will remain with Cognizant as a special advisor until March 15, 2023.
  • Ravi Kumar will join Cognizant after a 20-year career at Infosys.
  • Cognizant also said that Stephen J. Rohleder has been elected Chair of the Board.
  • Stephen J. Rohleder is a member of Cognizant's Board since March 2022.
  • Former Chair Michael Patsalos-Fox will be on the Board as an independent director.
  • Cognizant is an American multinational information technology services company. It is headquartered in Teaneck, New Jersey, United States.

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