Banking Awareness of 17, 18 and 19 January 2024

By Priyanka Chaudhary | Last Modified: 19 Jan 2024 18:02 PM IST
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Topic: RBI

1. RBI’s working group has proposed framework for State guarantees.

  • The RBI's working group on guarantees for state governments has suggested that any instrument that establishes an obligation—contingent or not—on the part of the state government should be considered a "guarantee."
  • The RBI panel stated that there should be a clear definition of the reason behind the issuance of government guarantees.
  • According to the panel, state governments can think about capping the amount of incremental guarantees given out in a given year at either 5% of revenue receipts or 0.5% of GSDP (gross state domestic product), whichever is lower.
  • According to the panel, state governments should think about assessing a minimum guarantee cost for extended guarantees.
  • The panel states that depending on the underlying loan's tenor and risk category, an additional risk premium may be assessed.
  • The panel said, the data related to guarantees may be published/disclosed by state governments, as per the Indian Government Accounting Standard (IGAS).
  • The terms of reference of the Working Group included following:
    • Prescribing a uniform guarantee ceiling for the states
    • Prescribing a uniform reporting framework for the guarantees given by the State Governments
    • Assessing the adequacy of states’ contribution to the Guarantee Redemption Fund (GRF)
  • As of March-end 2021, outstanding guarantees issued by the States were at ₹7.40-lakh crore, or 3.7% of their combined SGDP.
  • RBI managed GRF corpus stood at ₹10,839 crore as on March 31, 2023.

Topic: Awards and Prizes

2. The ICAI Award was presented to REC for Excellence in Financial Reporting for FY 2022-23.

  • REC Limited has been awarded the 'Plaque' under the 'Financial Services Sector (other than Banking and Insurance)' category at the ICAI Awards for Excellence in Financial Reporting for the financial year 2022-23.
  • This is the only award given by ICAI under this category.
  • The selection has been made based on the company's accounting practices, disclosure policies, and presentation of financial statements, with Indian Accounting Standards, statutory guidelines, and regulations.
  • REC Director (Finance) Shri Ajoy Chaudhary and others received the award from the Chief Minister of Chhattisgarh Shri Vishnu Dev Sai at a function held in Raipur.
  • Recently, REC was awarded the 'Golden Peacock Award' by the Institute of Directors (IoD) for its exceptional performance in risk management.
  • Apart from this, the REC was awarded the 'Best Central PSU' award in the Financial Services category at the Dun & Bradstreet PSU Awards 2023.
  • Since the year 1958, the Institute of Chartered Accountants of India through its Research Committee has been conducting the ICAI Awards for Excellence in Financial Reporting.
  • The award is given to recognize and encourage excellence in the preparation and presentation of financial and non-financial information in annual reports by entities in various sectors.
  • REC Limited:
    • Established in 1969, REC Limited is a Maharatna Public Sector Unit and a leading NBFC under the Ministry of Power.
    • It provides financial assistance to State Electricity Boards, State Governments, Central and State power utilities, independent power producers, rural power cooperatives, and private sector utilities.  

Topic: Indian Economy/Financial Market

3. RBI’s economic activity index has forecasted GDP growth for Q3 (October-December) FY24 at 7%.

  • This is according to an article in RBI’s most recently monthly bulletin.
  • This is more than the real GDP growth projection of 6.5% for Q3FY24 as per RBI Governor’s monetary policy statement of December 2023.
  • Economic activity in India remained strong due to the support of robust domestic demand.
  • As per the article “State of the Economy”, “supply chain pressures in India in December remained below historical average levels.
  • Headline inflation recorded a slight increase from 5.6% in November to 5.7% in December.
  • It was driven by increased food inflation because of unfavourable base effects.
  • As per authors, private consumption languished on the back of slow revival of rural economy. Private consumption accounts for 57% of GDP.

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Topic: Banking System

4. State Bank of India raised ₹5,000 crore.

  • SBI raised this amount through its second Basel III-compliant Additional Tier (AT) 1 bond issuance for the current financial year.
  • The bond were issued at a coupon rate of 8.34%.
  • The coupon rate on this issuance was 24 basis points higher than the last issuance.
  • SBI had raised ₹3,101 crore via AT-1 bonds in July 2023 at 8.10%.
  • The tenor of AT-1 bonds is perpetual. They are with a call option after 10 years.
  • The issue was oversubscribed by nearly 2.65 times as compared to the base issue size of ₹2,000 crore.
  • Overall, investors put in bids aggregating ₹5,294 crore. Crisil and ICRA rated the bonds as AA+ with a stable outlook.

Topic: Corporates/Companies

5. FinAGG raised $11 million in funding from Tata Capital and BlueOrchard.

  • FinAGG has raised $11 million in its Series A funding round.
  • The funding round was co-led by global impact investment manager BlueOrchard and Tata Capital Limited.
  • Small Industries Development Bank of India (SIDBI) and existing investor Prime Venture Partners participated in the funding round.
  • FinAGG also secured capital from Gray Matter Capital through non-convertible debentures (NCDs).
  • Earlier, it raised $3 million in its pre-Series A round. This round was led by BLinC Invest in September 2022.
  • FinAGG Technologies is a Fintech start-up offering cash-flow-based supply chain finance.
Monthly Banking/ Financial Awareness Books
December Financial Awareness 2023 November Financial Awareness 2023
October Financial Awareness 2023 September Financial Awareness 2023

Banking Awareness Vol-1 Jan 2023 to June 2023

Topic: Corporates/Companies

6. LIC has become the most valued PSU.

  • Its share price touched ₹900 for the first time since its listing in May 2022. It has moved ahead of the State Bank of India.
  • It has reached its 52-week high on the stock market on 17 January 2024.
  • The market capitalisation (mcap) of LIC has now exceeded that of the State Bank of India.
  • LIC's market capitalisation crossed ₹5.66 lakh crore. The mcap of SBI currently stands at ₹5.63 lakh crore.
  • On 17 May 2022, LIC shares were listed on the stock market at ₹875.25 apiece. Its issue price ahead of listing was ₹949.
  • The stock is currently only 6.21% away from its ₹949 IPO price.
  • The government holds a 96.5% stake in the Life Insurance Corporation (LIC).

Topic: Reports and Indices

7. Gujarat, Kerala, and Karnataka emerged as the best-performing states in developing the startup ecosystem.

  • According to the ranking of states and Union Territories (UTs) by the Department for Promotion of Industry and Internal Trade (DPIIT), Gujarat, Kerala, and Karnataka have emerged as the best-performing states for budding entrepreneurs.
  • On January 16, Commerce and Industry Minister Piyush Goyal released the “Startup Rankings of States for 2022” in New Delhi.
  • This was the fourth edition of the awards and saw participation from 33 states and union territories.
  • They were ranked under five categories: best performers, top performers, leaders, aspiring leaders, and an emerging startup ecosystem.
  • The ranking is based on the initiatives taken to develop the startup ecosystem to promote budding entrepreneurs.
  • Participants were assessed across 7 broad Reform areas comprising 25 action points.
  • This includes Institutional Support, Fostering Innovation and Entrepreneurship, Access to the Market, Incubation and Mentorship support, Funding Support, Capacity building of enablers & Roadmap to a sustainable future.
  • 15% of the total score was awarded based on 10,000+ survey responses collected in 9 languages.
  • States Startup Ranking Framework 2022 Results:

Performance

Category A States (Population more than 1 crore)

Category B States (Population less than 1 crore)

Best performer

Gujarat, Karnataka, Kerala, and Tamil Nadu

Himachal Pradesh

Top Performer

Maharashtra, Odisha, Punjab, Rajasthan, and Telangana

Arunachal Pradesh and Meghalaya

 

Leader

Andhra Pradesh, Assam, Madhya Pradesh, Uttar Pradesh, and Uttarakhand

Goa, Manipur and Tripura

Aspiring leader

Bihar and Haryana

Andaman and Nicobar Islands and Nagaland

Emerging Ecosystems

Chhattisgarh, Delhi, and Jammu and Kashmir

Chandigarh, Dadra and Nagar Haveli and Daman and Diu, Ladakh, Mizoram, Puducherry, and Sikkim

Topic: Miscellaneous

8. National Start-up Day 2024: 16 January

  • Every year on 16 January, National Start-up Day is celebrated to promote start-up culture at the grass-root level.
  • In 2022, Prime Minister Narendra Modi had announced celebrating January 16 as National Start-up Day.
  • Several organizations organize this event with the aim to foster the spirit of entrepreneurship and innovation by engaging the start-up community.
  • The first National Start-up Day was celebrated in 2022.
  • Launched in 2016, the Startup India initiative has seen tremendous growth, with the number of startups increasing from around 340 in the year of its launch to over 1,15,000 in 2023.
  • 2024 is the eighth anniversary of the Startup India program.

Topic: Reports and Indices

9. US ranked most powerful, and India at 4th position in the 2024 military strength rankings.

  • According to the Global Firepower Rankings, India has retained its position as the fourth-strongest military globally.
  • In the ranking, the United States is named as the most powerful military, followed by Russia and China.
  • As per GFP's assessment, India's Power Index (PwrIndx) score is 0.1023 (a score of 0.0000 is considered 'perfect').
  • The power index score of the US is 0.0699, that of Russia is 0.0702, and that of China is 0.0706.
  • A total of 145 countries were evaluated based on their global military power for Global Firepower's 2024 military power rankings.
  • The ranking of the index is decided after examining the countries on several parameters, including military resources, natural resources, industry and geographical features, and available manpower.
  • Of the 145 countries included in the list, Bhutan has the least powerful military, with a PwrIdx of 6.3704, followed by Moldova (4.2311) and Suriname (3.9038).

Ranking

Top 10 countries with the most powerful militaries in the world

10 countries with the least powerful militaries in the world

1

United States

Bhutan

2

Russia

Moldova

3

China

Suriname

4

India

Somalia

5

South Korea

Benin

6

United Kingdom

Liberia

7

Japan

Belize

8

Turkey

Sierra Leone

9

Pakistan

Central African Republic

10

Italy

Iceland

 

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