Banking Awareness of 15, 16 and 17 July 2023

Topic: Indian Economy/Financial Market

1. Wholesale Price Index (WPI) inflation declined to (-) 4.12% in June 2023.

• In May 2023, Wholesale Price Index (WPI)-based inflation was (-) 3.48%.
• Inflation in food articles decreased to (-) 1.24% in June 2023 against (-) 1.59% in May 2023.
• Fuel and power basket inflation declined to (-) 12.63% in June. It was (-) 9.17% in May.
• Inflation rate in manufactured products was (-) 2.71% in June against (-) 2.97% in May.
• Inflation rate declined in June 2023 mainly because of decline in prices of mineral oils, food products, basic metals, crude petroleum & natural gas and textiles.

Topic: Indian Economy/Financial Market

2. Exports of goods from India declined 22.02% (year-on-year) to $32.97 billion in June 2023.

• Exports of goods from India declined for 5th consecutive month in June 2023.
• Imports of goods declined 17.49% to $53.09 billion in June 2023. Trade deficit during the June 2023 declined to $20.13 billion.
• Sectors like gems & jewellery, petroleum products, engineering goods and chemicals contributed to the decline in exports.
• Slowdown in major economies is also the reason for decline in exports.
• Items like petroleum products, coal & coke, chemicals and pearls, precious & semi-precious stones caused decline in imports.
• During April-June 2023, exports recorded a 15.13% decline to $102.67 billion.
• Imports declined 12.67% to $160.27 billion during April-June 2023.
• During April-June 2023, the trade deficit stood at $57.60 billion. It was 7.95% lower than the trade deficit during April-June 2022.
• In April-June 2023, India’s top five export markets were the US (1st), the UAE (2nd), the Netherlands (3rd), China (4th) and the UK (5th).
• China (1st), Russia (2nd), the US (3rd), the UAE (4th) and Saudi Arab (5th) were top five import sources of India.

Topic: Banking System

3. The incremental C/D ratio of all scheduled banks decreased to 63.7% in Q1 of FY24.

• The incremental credit-deposit (C/D) ratio was 100.32% in the year-ago quarter.  
• Banks’ credit in Q1 of FY24 grew by ₹7,16,738 crore and their deposits grew by ₹11,25,043 crore as per RBI’s latest “Scheduled Banks’ Statement of Position in India”.
• The credit to deposit (C/D) ratio reflects how much of each rupee of deposit raised by a bank is allocated to the credit markets.
• A CD ratio of 63.7% means that for every 100 fresh deposits raised by banks, they have extended 63.70 in new credit and the remaining 36.30 have gone into investments.

Topic: MoUs/Agreements

4. India and UAE signed three MoUs on 15 July 2023 in the banking and education sectors.

• The MoU in the banking sector has been signed by the Governor of the Reserve Bank of India, Shaktikanta Das, and the Governor of the Central Bank of UAE.
• It is for the use of local currencies for cross-border transactions and covers all current account transactions and permitted capital account transactions.
• Another MoU in the banking sector pertains to cooperation for interlinking payment and messaging systems.
• The central banks of the two countries agreed to cooperate on linking their Fast Payment Systems (FPSs) - Unified Payments Interface (UPI) of India with the Instant Payment Platform (IPP) of UAE.
• The MoU in the education sector has been signed between the Ministry of Education of the Government of India, the Department of Education and Knowledge of Abu Dhabi, and the Indian Institute of Technology Delhi.
• It relates to the setting up of an IIT campus in Abu Dhabi.
• These MoUs were signed during Prime Minister Modi’s visit to UAE.

Topic: Banking System

5. DICGC has asked all insured banks to display the DICGC logo on their internet banking portals and websites.

• DICGC has also asked them to display QR Code linked to its website on their internet banking portals and websites.
• These decisions have been taken to enhance awareness about Deposit Insurance.
• This will allow customers to conveniently identify banks covered by the Deposit Insurance Scheme of DICGC.
• All banks are required to comply with the circular effective from September 1, 2023.
• All commercial banks including branches of foreign banks functioning in India, local area banks and regional rural banks are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC).
• DICGC is a specialised division of RBI. It is the insurer for banks’ customer deposits.
• Deposit Insurance & Credit Guarantee Corporation (DICGC):
  • It is a fully owned subsidiary of RBI. It was established in July 1978 under the Deposit Insurance and Credit Guarantee Corporation Act, 1961.
  • It insures deposits in public and private sector banks, local area banks, small finance banks, regional rural banks, cooperative banks, Indian branches of foreign banks and payments banks.
  • Dr. M.D. Patra is the Chairman of DICGC. It is headquartered in Mumbai.

Topic: Banking System

6. FSIB recommends names of candidates to form the panel for appointments of Executive Directors in Public Sector Banks for FY24.

• Financial Services Institutions Bureau (FSIB) has recommended 16 candidates.
• Executive directors’ vacancies in public sector banks (PSBs) will be filled from this panel for year 2023-24.
• The names included in the panel are given in the following table.

• Financial Services Institutions Bureau (FSIB) has been formed effective from July 01, 2022 by Central Government.
• It has been formed for the purpose of recommending persons for appointment as whole-time directors and non-executive chairpersons on the Boards of financial services institutions.
• It also advises on certain other matters relating to personnel management in financial services institutions.

Topic: RBI

7. The Certificate of Registration of four NBFCs have been cancelled by RBI.

• These NBFCs are Kerala- based Nanma Chits and Financiers Ltd, Uttar Pradesh based Kailash Auto Finance Ltd and Chidrupi Financial Services Ltd and Goldline Financial Services Ltd from Telangana.
• Eleven NBFCs have surrendered their Certificate of Registration (CoR) to RBI. RBI has therefore cancelled their CoR.
• Out of these 11 NBFCs, four surrendered their registration certificates after a decision to exit from the non-banking finance business.
• Three NBFCs surrendered their CoR as they stopped to be a legal entity due to amalgamation, dissolution, merger or voluntary strike-off.
• Remaining four NBFCs surrendered their CoR due to meeting the criteria prescribed for unregistered Core Investment Company (CIC) that do not require registration.

Topic: Miscellaneous

8. 120th anniversary of the India Government Mint was celebrated in Hyderabad.

• With release of commemorative souvenir coins, the 120th anniversary of the India Government Mint has been celebrated in Hyderabad.
• These souvenir coins were crafted of silver and copper.
• The commemorative coins have been released by the Security Printing and Minting Corporation of India Ltd (SPMCIL) Chairman and Managing Director SK Sinha.
• India Government Mint in Hyderabad is producing high-quality coins and other minted products for more than 100 years.
• India Government Mint, Hyderabad (Telangana):
  • It is one of the four mints in India. Other three mints are located in Mumbai (Maharashtra), Kolkata (West Bengal) and Noida, Uttar Pradesh.
  • It was originally established in 1803 AD as the Royal Mint for the Nizam of Hyderabad.
  • It was founded by Mir Akbar Ali Khan Sikander Jah and Asaf Jah III.
  • The Government of India took over the control of mint in 1950.

Topic: Corporates/Companies

9. Numaligarh Refinery in Assam has been upgraded from ‘Schedule B’ to ‘Schedule A’ category enterprise by the government.

• The upgradation of Numaligarh Refinery has been notified by the Ministry of Petroleum and Natural Gas.
• The upgradation of Numaligarh Refinery will make it eligible for achieving the status of Navratna.
• It will allow Numaligarh Refinery to undertake more complex projects.
• Now, Numaligarh Refinery can take more speedy decisions in creating joint ventures, Strategic partnerships and special-purpose vehicles
• A Navratna company has the autonomy to invest up to Rs 1000 crore without approval from the central government.
• Numaligarh Refinery:
  • It is one of the top 20 CPSE in India both in terms of sales revenue and profitability.
  • Numaligarh Refinery is the largest refinery in northeast India and has a capacity of 3 million metric tonnes per annum.
  • It is currently implementing projects of investments of Rs 35000 crores in the region.

Topic: Reports and Indices

10. According to a UN report, global public debt reached a record of $92 trillion in 2022.

• In the last two decades, domestic and external debt has increased more than five times.
• The report has been released in the G20 finance ministers and central bank governors' meeting.
• Around 30% of the global public debt is owned by developing countries. 70% of the debt of developing countries is owned by China, India and Brazil.
• 59 developing countries have a debt-to-GDP ratio of more than 60%.
• As per the report, debt is translating into a substantial burden for developing countries due to financing, rising borrowing costs, currency devaluations and sluggish growth.
• The international financial system has made access to financing for developing countries inadequate and costly.
• Net interest debt payments exceed 10% of revenue for 50 emerging economies around the world.
• In Africa, the amount spent on interest payments is higher than spending on either education or health.
• Private creditors represent 62% of developing countries total external public debt.
• Latin America has the highest ratio of private creditors holding external government debt for any region at 74%.

Read Banking Awareness PDF - 15, 16 and 17 July 2023