Banking, Financial and Economic Awareness of 14 and 15 July 2021

Topic: MoUs/Agreements

1. India to sign MoU with Bangladesh to export 10 lakh bales of cotton every year.

• India will sign a Memorandum of Understanding (MoU) with Bangladesh to export 10 lakh bales of cotton every year.
• Pradeep Kumar Agarwal, Chairman-cum-Managing Director, Cotton Corporation of India Limited (CCI) said that MoU will be signed soon.
• He said that CCI will handle the exports to Bangladesh. Bangladesh is one of the largest buyers of Indian cotton.
• Cotton Corporation of India Limited is a government agency engaged in activities related to trade, procurement and export of cotton.

Topic: RBI

2. RBI imposes restrictions on Mastercard Asia / Pacific Pte. Ltd. (Mastercard).

• RBI has imposed restrictions on Mastercard Asia / Pacific Pte. Ltd. (Mastercard) from on-boarding new domestic customers (debit, credit or prepaid) onto its card network.
• Mastercard will not be able to add new customers to its card network from 22 July 2021.
• RBI said that Mastercard has been found non-compliant with the directions on Storage of Payment System Data.
• RBI said that Mastercard is required to advise all card issuing banks and non-banks to conform to directions on Storage of Payment System Data.
• All payment system providers were required to ensure that within a period of six months the entire data relating to payment systems operated by them is stored in a system only in India.
• They were also required to report compliance with directions on Storage of Payment System Data to RBI.
• Earlier, RBI had imposed similar restrictions on American Express Banking Corp and Diners Club International Ltd from on-boarding new domestic customers onto their card networks from May 1.
• Mastercard is an American multinational financial services corporation.

Topic: Appointments

3. Kamal Batra appointed by Bandhan Bank as its Head (Assets).

• Kamal Batra has been appointed by Bandhan Bank as its Head (Assets).
• Batra will be given responsibility for growing bank’s commercial banking business and retail assets portfolios.
• Batra was earlier Executive Vice President and Head, Business Banking and Secured Assets at IndusInd Bank.
• Bandhan Bank is a Kolkata based private sector bank. Dr. Anup Kumar Sinha is its current chairman. Chandra Shekhar Ghosh is its MD & CEO.

Topic: RBI

4. RBI releases draft guidelines for issue and regulation of share capital and securities by UCBs.

• RBI has released draft guidelines for the issue and regulation of share capital and securities by UCBs.
• As per draft guidelines, RBI will allow Urban Co-operative Banks (UCBs) to refund the share capital to their members, or nominees/ heirs of deceased members, on-demand, subject to conditions.
• UCBs can refund only if their capital to risk-weighted assets ratio (CRAR) is 9% or above. In other words, the refund should not result in the CRAR of the bank falling below 9%.
• Share-linking to borrowing norms shall be discretionary for UCBs, which meet the minimum regulatory CRAR criteria of 9 % and a Tier 1 CRAR of 5.5 %.
• Such UCBs shall have a board-approved policy on share-linking to borrowing norms. Currently, borrowings from UCBs are linked to shareholdings of the borrowing members.

Topic: Banking System

5. Bhutan will become first country to adopt Unified Payment Interface (UPI) standards.

• Bhutan will become the first country to adopt Unified Payment Interface (UPI) standards for its QR deployment.
• Bhutan will also become the first country to issue and accept RuPay cards. It will benefit more than 2 lakh tourists from India.
• National Payment Corporation of India has inked a pact with the Royal Monetary Authority (RMA) of Bhutan for implementing BHIM UPI QR-based payments.
• The Royal Monetary Authority of Bhutan (RMA), will ensure the participating NPCI mobile application through UPI QR transactions.
• In 2020, NPCI International Payments was launched to expand the footprint of the UPI platform to other countries.

Topic: Indian Economy

6. Producers’ inflation-based Wholesale Price Index (WPI) declines to 12.07% in June.

• Producers’ inflation-based Wholesale Price Index (WPI) declined to 12.07% in June from 12.94% in May.
• The trend is similar to CPI-based retail inflation, which declined to 6.26% in June from 6.30% in May. As per the experts, both inflation rates are high.
• As per Commerce & Industry Ministry, high rate of inflation in June 2021 is mainly because of low base effect and increase in prices of mineral oils viz. petrol, diesel (HSD), naphtha, ATF, furnace oil, etc,
• Inflation for primary food articles declined to 3.1% in June from 4.3% in May.

Topic: RBI

7. RBI Retail Direct facility introduced by RBI.

• RBI Retail Direct facility has been introduced by RBI to facilitate investment in Government Securities by individual investors.
• RBI Retail Direct facility is a one-stop solution to facilitate investment in Government Securities (G-Secs) by individual investors.
• Under the facility, retail investors (individuals) will have the facility to open and maintain Retail Direct Gilt (RDG) Account with RBI.
• RBI Retail Direct facility was announced in February 2021 as part of continuing efforts to increase retail participation in government securities.
• Retail Direct Gilt (RDG) Account can be opened through an ‘Online portal’ provided for ‘RBI Retail Direct’ scheme.
• Retail Investors having Rupee savings bank account in India, Permanent Account Number (PAN), Valid KYC documents, email ID and Registered Mobile number are eligible to open RDG account.
• Non-Resident retail investors eligible to invest in Government Securities under Foreign Exchange Management Act, 1999 are eligible to open RDG account under ‘RBI Retail Direct’ scheme.

Topic: Miscellaneous

8. NICL decides to insure yaks for the first time.

• National Insurance Company Ltd (NICL) has decided to insure yaks for the first time.
• Yaks are highly valuable Himalayan cattle. Yak farmers in the remote Himalayas incur regular losses due to the deaths of the yaks.
• India has around 58,000 yaks. They are found on the heights of Arunachal Pradesh, Sikkim, Himachal Pradesh, and Ladakh.
• They are susceptible to weather conditions due to climate change, diseases, attacks by wild animals, etc.
• Arunachal Pradesh based National Research Centre on Yak (NRCY) has played a key role in securing insurance policy. NRCY’s Director Dr. Mihir Sarkar played a big role in it.
• Dr. Sarkar said that policy will protect them against a number of risks posed by weather calamities, diseases, in-transit mishaps, surgical operation, strike or riots and permanent total disability for breeding or stud yaks,
• As per Dr. Sarkar, the benefit of subsidy under the policy is limited to five animals per beneficiary per household.
• However, it is possible to ensure more than 5 animals by paying the full premium without availing the benefit of the subsidy.

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