Banking Awareness of 18, 19 and 20 October 2022

By PendulumEdu | Last Modified: 20 Oct 2022 18:42 PM IST
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Topic: Banking System

1. Total borrowings of the household sector from institutional sources have increased by 28.3% between March 2019 and September 2021.

  • According to an article in the RBI’s latest monthly bulletin, household sector’s total borrowings have increased from ₹62 lakh crore in March 2019 to ₹79 lakh crore in September 2021.
  • Scheduled commercial banks (SCBs), non-banking financial companies (NBFCs), housing finance companies (HFCs) and co-operative banks are included in institutional sources.
  • According to the article ‘Financial Liabilities of Household Sector in India – An Assessment’ the share of household credit from SCBs in GDP increased from 23% in March 2015 to 30.1% in March 2021.
  • The share of Household borrowings from all the institutions (SCBs, NBFCs, HFCs and co-operative banks) increased from 32.9% in March 2019 to 35.4% of GDP in March 2020.
  • The share of personal loans in total credit to HHs has risen steadily in recent years.
  • The share of credit for agricultural activities declined to 22.4% in March 2021.
  • The share of HH savings in gross domestic savings (GDS) increased to 78.5% in 2020-21.
  • The credit to deposit (CD) ratio has been continually increasing in recent years. It reached 59.1% in 2020-21.
  • HH sector remains net lender to the banking sector despite the continuous increase in its CD ratio.

Topic: Banking System

2. Five Digital Banking Units (DBUs) have been inaugurated by Canara Bank.

  • The DBUs has been set up in compliance with the latest announcement by PM Modi to dedicate 75 DBUs to the nation.
  • The five DBUs were opened in Bengaluru Rural (Devanahalli) in Karnataka, Ernakulum in Kerala, Raichur in Karnataka, Virudhunagar in Tamilnadu, and Lakshadweep.
  • A DBU is a brick-and-mortar area in the identified district hosted by the anchor bank.
  • In DBU, banking services are provided through digital modes/channels in a paperless environment.

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Topic: Appointments

3. Yubi, formerly CredAvenue, has appointed Atanu Chakraborty as the Independent Chairman of its Board.

  • Atanu Chakraborty is the current Chairman of the Board of HDFC Bank.
  • He has been Joint Secretary of the Ministry of Finance and part of the Central Board of Directors of RBI. Yubi is a Chennai-based debt marketplace.
  • In September 2022, Yubi has partnered with State Bank of India (SBI) to enable higher credit access to priority sector.
  • President Droupadi Murmu has appointed Justice D.Y. Chandrachud as the 50th Chief Justice of India (CJI).
  • He will take oath as the 50th Chief Justice of India on November 9, 2022, a day after incumbent CJI Justice Uday Umesh Lalit demits office on attaining the age of 65.

Topic: Regulatory Bodies/Financial Institutions

4. CCI has imposed penalties totaling more than 392 crore rupees MakeMyTrip, Goibibo and OYO for adopting unfair business practices.

  • Competition Commission of India (CCI) has imposed monetary sanctions on MMT-Go (MakeMyTrip and GoIbibo) for abusing its dominant position.
  • CCI has also imposed monetary sanctions on MMT-Go for having anti-competitive arrangement with OYO (Oravel Stays Limited).
  • Monetary penalty is also imposed on OYO for its anti-competitive arrangement with MMT-Go.
  • Under anti-competitive arrangement, MMT-Go delisted the competitors of OYO from its online portals in 2018.
  • Monetary penalties have been imposed on MMT-Go and OYO at the rate of 5% of their relevant turnovers, amounting to Rs 223.48 crore and Rs 168.88 crore, respectively.
  • They have been given 60 days to deposit the monetary penalty.
  • CCI also examined the parity obligation which MMT-Go was imposing wide price parity as well as room availability parity obligations on its hotel partners.
  • It found that deep discounts and parity conditions create an ecosystem that reinforces MMT-Go’s dominant position.
  • CCI directed MMT-Go to remove/ abandon its agreements around ‘price parity’ and ‘room parity’.
  • In October 2019, CCI had ordered an investigation against MMT-GO and OYO and directed the Office of the Director General to investigate the matter.
  • Three main issues were price parity, room parity agreements and preferential treatment by MMT to OYO.

Topic: Banking/Financial Schemes

5. ‘KBL Centenary Deposit Scheme’ has been launched by Karnataka Bank with effect from October 17.

  • Karnataka Bank has launched this scheme as a precursor to its centenary year in 2023-24.
  • It is a term deposit scheme. The deposit will be for a period of 555 days with interest rate of 7.20%.
  • Interest rate will be 7.60% for senior citizens.
  • Karnataka Bank is a Scheduled Commercial Bank based in Mangaluru, Karnataka. It is a private sector bank.
  • Mahabaleshwara M. S is its MD and CEO. P. Pradeep Kumar is its Part-Time Non-Executive Chairman.

Topic: Indian Economy/Financial Market

6. Global rating agency Fitch has assigned BBB- sovereign rating with stable outlook to India.

  • It said India’s external buffers appear sufficient to cushion risks associated with monetary policy tightening in the US and rising global commodity prices.
  • India’s forex reserves were recorded at $533 billion.
  • Current account deficit widened to $23.90 billion in the first quarter of fiscal year 2022-23. This is the highest since the December quarter of 2012.
  • As a percentage of GDP, current account deficit was at 2.8%. This is the highest in nearly four years.
  • Fitch said reserve cover is strong at about 8.9 months of imports in September. This is higher than that in 2013, when it was at about 6.5 months.
  • Fitch noted that gross external debt stood at 18.6% of GDP in second quarter of 2022. This is low compared to median of 72 percent for BBB rated sovereigns in 2021.
  • Fitch estimated that India’s current account deficit in the fiscal year ending March 2023 (FY23) will reach 3.4% of GDP, from 1.2% in FY22.

Topic: Regulatory Bodies/ Financial Institutions

7. Food Safety and Standards Authority of India (FSSAI) is tightening labelling norms for breads.

  • From May 2023, a product labelled as whole wheat bread must be made of at least 75% whole wheat flour.
  • Brown bread must comprise of at least 50% whole wheat flour.
  • In case of multigrain bread, the minimum amount of specialty Ingredient (grains other than wheat) shall be minimum 10% in the first year of enforcement. It shall later be 20%.
  • For the first time, the food safety authority has also notified standards for specialty breads.
  • These standards are part of the Food Safety and Standards (Labelling and Display) Second Amendment Regulations, 2022.

Topic: Miscellaneous

8. India exported indigenously manufactured defence equipment worth ₹8,000 crore in the first six months of this fiscal.

  • Defence Minister, Rajnath Singh said this at the Defence Expo 2022 (DefExpo 2022) in Gandhinagar.
  • India has now been listed in the world’s top 25 defence exporting countries.
  • India's defence exports have increased eight times in the last five years and a target of $5 billion has been set for exports.
  • PM Modi said this after inaugurating the DefExpo at Gandhinagar.
  • PM Modi unveiled HTT-40 - the indigenous trainer aircraft designed by Hindustan Aeronautics Limited.
  • In 2021-22, defence exports from India reached $1.59 billion (about ₹13,000 crore).
  • The 12th edition of the biennial DefExpo is being held from 18th October to 22nd October in Gandhinagar, Gujarat. The theme of the 12th DefExpo is ‘Path to Pride’.

Topic: Reports and Indices

9. The Global Multidimensional Poverty Index 2022 has been recently released.

  • It covered 111 developing countries. 41.5 crore Indians were lifted from multidimensional poverty in the last 15 years.
  • As per the Global Multidimensional Poverty Index 2022, 22.8 crores in India are still multi-dimensionally poor. Out of the 22.8 crores, 9.7 crores are children.
  • During 2005-06 and 2019-21, 41.5 crore people in India climbed out of poverty and the MPI value and incidence of poverty got halved.
  • The MPI value has fallen from 0.283 in 2005-2006 to 0.122 in 2015-2016 to 0.069 in 2019-2021.
  • As per the report, the poverty rate has fallen from 55.1% in 2005/06 to 16.4% in 2019/21 in India. All 10 MPI indicators have shown a significant reduction in their value.
  • Globally, 610 crore people across 111 developing countries are living in multidimensional poverty. About half of them are living in severe poverty.
  • Bihar, Jharkhand, Meghalaya, Madhya Pradesh, Uttar Pradesh, Assam, Odisha, Chhattisgarh, and Rajasthan are the poorest states in India.
  • The poverty rate of Bihar has fallen from 77.4% in 2005/2006 to 52.4% in 2015/2016 to 34.7% in 2019/202.
  • India has the largest number of poor people around the world, followed by Nigeria.
  • The poverty rate has fallen from 36.6 per cent in 2015-2016 to 21.2 per cent in 2019-2021 in rural areas and from 9.0 per cent to 5.5 per cent in urban areas.
  • About 19.7 per cent of people living in female-headed households are living in poverty.
  • The Global Multidimensional Poverty Index (MPI) 2022 report has been prepared jointly by the UNDP’s Human Development Report Office and the Oxford Poverty and Human Development Initiative (OPHI).
  • The MPI measures poverty across 10 indicators in three dimensions- health, education, and standard of living. The MPI value ranges from 0 to 1, and higher values imply higher poverty.

Topic: Appointments

10. Bharati Das assumed charge as the new Controller General of Accounts.

  • She is a 1988-batch Indian Civil Accounts Service Officer.
  • She is the 27th Controller General of Accounts, Ministry of Finance.
  • She has served as Principal Chief Controller of Accounts (Pr. CCA) Central Board of Direct Taxes, Pr. CCA Ministry of External Affairs and Pr. CCA Ministry of Home Affairs.
  • Former Indian cricketer Roger Binny has been appointed as the new (36th) President of the Board of Control for Cricket in India (BCCI).
  • He replaced Sourav Ganguly. Binny was part of the 1983 Cricket World Cup winning squad of India. Jay Shah has been re-inducted as the secretary of the board.
  • Controller General of Accounts:
    • It is responsible for maintaining the account of the government.
    • It prepares monthly and annual analysis of expenditure, revenues, borrowings, and various fiscal indicators for the Union Government.
    • Controller General of Accounts (CGA), in the Department of Expenditure, is the Principal Accounting Adviser of Government of India.

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