Banking Awareness of 15, 16 and 17 November 2022

Topic: Regulatory Bodies/Financial Institutions

1. PFRDA has empaneled Shriram Life Insurance Company as an Annuity Service Provider (ASP).

• It will help insurer manage the annuity component of the maturity proceeds under the National Pension System (NPS).
• It will help Shriram Life Insurance Company in getting more NPS subscribers under its annuity plan.
• ASP is responsible for managing the funds allocated for buying annuity.
• ASP is also responsible for payment of the pension after a subscriber attains the age of 60.
• Shriram Life Insurance Company is a private life insurer. Immediate Annuity Plus is its annuity plan.
• Pension Fund Regulatory and Development Authority (PFRDA) was established in October 2003. Its Chairman is Supratim Bandyopadhyay. Its head office is in New Delhi.

Topic: Banking System

2. Government sells shares in Axis Bank held by SUUTI.

• It received about 3,839 crore rupees from the sale of Axis Bank shares held by SUUTI.
• With this sale, government would completely exit the private sector bank.
• As of September 2022, shares held by SUUTI represented 1.55% stake in the bank.
• With this sale, government’s proceeds from the disinvestment during the current fiscal have reached ₹8,383 crore as against the estimate of ₹65,000 crore.
• On 09 November, SUUTI said it have plans to sell 4.65 crore shares, representing a 1.55% stake in Axis Bank.
• In May 2021, government sold 1.95% stake in Axis Bank held through SUUTI.
• Specified Undertaking of the Unit Trust of India (SUUTI) is a statutory authority established in 2003.
• Axis Bank:
  • It is the third-largest private sector bank in India that is headquartered in Mumbai.
  • Its MD & CEO is Amitabh Chaudhry. It was formerly known as UTI Bank. It has started operations in 1994.

Topic: MoUs/Agreements

3. €150 m loan agreement signed by State Bank of India with German development bank KfW.

• The €150 million (about ₹1,240 crore) loan agreement has been signed to facilitate new and upcoming capacity in the solar sector.
• SBI’s investment banking subsidiary, SBI Capital Markets, facilitated the arrangement of the long-term loan.
• This loan will further help in achieving India’s “Panchamrit” goals announced during COP26 in Glasgow, Scotland.
• Recently, SBI has become India’s most profitable corporate with ₹14,752 crore of consolidated net income in the Q2 of FY23.

Topic: RBI

4. Opening of nine Vostro accounts of Russian banks with banks in India has been approved by RBI.

• RBI has given this approval to allow bilateral trade to take place in rupee.
• Three accounts have already been opened. One is by Gazprom Bank with UCO Bank and two others by VTB and Sber Bank with their own branch offices in India.
• Remaining six are likely to be opened by Indusind Bank. VTB Bank and Sberbank both are facing Western sanctions.
• A Vostro account is an account which a domestic bank holds on behalf of a foreign bank.
• The RBI approved the rupee trade mechanism in July 2022. It allows bilateral trade to be carried out only in rupee.
• In the first six months of this fiscal, India’s imports from Russia increased 410% to over $21 billion.
• This is primarily caused by a substantial rise in imports of crude oil and fertiliser.

Topic: Banking System

5. ESAF Small Finance Bank has been awarded “best in class” rating for ESG practices from CareEdge Ratings.

• ESAF is the first Indian member bank of Global Alliance on Banking on Values (GAVB).
• With this recognition, ESAF has become an entity with global ESG standards.
• ESAF Small Finance Bank has joined the financial corporations in their fight against the practice of “greenwashing”.
• Greenwashing refers to faking environment, social, and governance (ESG) credentials.
• Greenwashing is a marketing ploy to mislead consumers who buy goods and services from environmentally conscious companies.
• GAVB is an independent network of independent banks using finance to deliver sustainable economic, social and environmental development.
• It is headquartered in Amsterdam, Netherlands. It was founded in 2009.
• ESAF Small Finance Bank is a Kerala based Small Finance Bank (SFB). It was founded as a small finance bank in March 2017.

Topic: RBI

6. RBI has granted in principle approval to ‘Open’ for a Payment Aggregator licence.

• Open offers an all-in-one finance platform for SMEs and small businesses to automate their finances.
• RBI released the payment aggregator framework in March 2020.
• As per the framework, all payment gateways are required to obtain a license to acquire merchants.
• In May 2022, Open became the 100^th unicorn from India.
• Open is a neo-banking fintech. It was founded in 2017. It has earlier this year received RBI’s permission for its cross-border payments product.

Topic: Regulatory Bodies/Financial Institutions

7. Utilisation of issue proceeds raised through QIP and Preferential Issues (PI) will be monitored.

• This monitoring of utilisation of funds raised through Qualified Institutions Placement (QIP) and PI will happen in case of issues of over ₹100 crore.
• The monitoring will be done by credit rating agencies.
• Presently, monitoring of utilisation of issue proceeds is required for all public and rights issues above ₹ 100 crore.
• The SEBI Board had in end September made the decision to align the monitoring requirements for the use of issue proceeds for PI and QIP with the public and rights issues.

Topic: RBI

8. Central government has nominated Department of Financial Services Secretary Vivek Joshi as a director on the Central Board of RBI.

• His nomination as a director on the Central Board of RBI is effective from November 15, 2022 and until further orders.
• He took office as the secretary at the Department of Financial Services on November 1.
• RBI has imposed monetary penalties on 9 cooperative banks.
• RBI has imposed penalties on account of various contraventions or non-compliances of laid down guidelines.
• The monetary penalties slapped on these banks range from ₹25,000 to 3.1 lakh rupees. The names of banks are given below.

Topic: Indian Economy/Financial Market

9. Wholesale Price-based inflation in October eased to 8.39% from 10.70% in September.

• Wholesale Price-based inflation for October eased to its lowest level since March 2021.
• It has declined below the double-digit mark for the first time since March 2021.
• WPI inflation stood at 19-month low level due to decline in the food articles segment.
• The food articles segment slipped to 8.33% in October.
• Vegetable prices segment decreased from 39.66% in September to 17.61% in October.
• In October, the fuel and power segment decreased from 32.61% to 23.17%.
• Additionally, the manufactured products segment saw a decrease from 6.34% one month earlier to 4.42% in October.

Topic: Indian Economy/Financial Market

10. India’s merchandise export declined by 17% to $29.78 bn in October.

• The merchandise trade deficit has widened to $26.91 billion from $25.71 billion in October.
• From April to October this year, exports witnessed a growth of 12.55% to $263.35 billion.
• During this period, $ 436.81 billion was imported, which is 33.12 percent more than the same period of 2021-22.
• Gems and jewellery, engineering, petroleum products, and ready-made garments textiles sectors have recorded negative growth during October.
• As per the government data, India’s exports to major destinations such as the US, UAE, China, Bangladesh, UK and Saudi Arabia recorded negative growth in October.
• Global inflation, the Russia-Ukraine war, the simmering China-Taiwan crisis, and supply disruptions are the main causes of slow economic growth worldwide.
• The decline in exports and increase in imports has widened the trade deficit. It has put pressure on the value of the domestic currency.
• According to the World Trade Organization (WTO), global trade is expected to grow by 3.5 percent this year, while in 2023 its growth rate will come down to just one percent.

Topic: Corporates/Companies

11. Amazon.com Inc. has become the world’s first public company to lose a trillion dollars in market value.

• Its shares fell 4.3% on 09 November 2022. Its market value reduced to about $879 billion from a record of $1.88 trillion in July 2021.
• Rising inflation and tightening monetary policies triggered a historic selloff in the stock this year.
• Disappointing earnings updates also triggered a historic selloff this year.
• Microsoft Corp. has lost $889 billion from a November 2021 peak.
• This year, the market value of the top five US technology corporations by revenue has decreased by around $4 trillion.
• Along with Alphabet, Apple, Microsoft, and Meta, Amazon is one of the Big Five American information technology firms.
• Amazon:
  • It is an American multinational technology company.
  • Jeff Bezos is its founder and executive chairman. Andy Jassy is its president and CEO.
  • It is headquartered in Seattle, Washington and Arlington, Virginia, U.S.

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