Banking Awareness of 18, 19 and 20 July 2023

Topic: RBI

1. The licence of Uttar Pradesh-based United India Co-operative Bank has been cancelled by RBI.

• United India Co-operative Bank Limited, Nagina, Bijnor, Uttar Pradesh ceased to carry on banking business with effect from the close of business on July 19, 2023.
• RBI has requested the Commissioner and Registrar of Cooperative, Uttar Pradesh to issue an order for winding up the bank and appoint a liquidator for the bank.
• On liquidation, depositors would get deposit insurance claim of his/ her deposits up to a ceiling of ₹5 lakh from the DICGC.
• 99.98% of the depositors would receive the whole amount of their deposits from Deposit Insurance and Credit Guarantee Corporation (DICGC).
• RBI cancelled the licence of the bank because it does not have adequate capital and earning prospects.
• It also failed to comply with various provisions of the Banking Regulation Act, 1949.

Topic: Banking System

2. SBI will form a new trustee company for managing the Corporate Debt Market Development Fund (CDMDF).

• SBI will set up the new trustee company as its wholly owned subsidiary.
• SBI Funds Management Ltd (SBIFML) has been selected as the investment manager-cum-sponsor of CDMDF.
• SBIFML is the asset management company (AMC) of SBI Mutual Fund. SBI has 62.53% stake in SBIFML.
• CDMDF will be classified as an Alternative Investment Fund (AIF) under the SEBI (Alternative Investment Funds) Regulations, 2012.
• It setting up is subject to receipt of all regulatory approvals.
• CDMDF will be introduced as a close ended scheme, which will have an initial tenure of 15 years from the date of its initial closing.

Topic: Banking System

3. ESAF Small Finance Bank has achieved high score of 71 in an Environmental, social, and corporate governance (ESG) assessment.

• The bank surpassed the industry average of 59.8. The assessment was carried out by CareEdge Research.
• For the environmental pillar, the bank achieved a score of 62%.
• This demonstrates the banks’ commitment to green finance and environment conscious operations.
• In terms of the social pillar, the bank has scored 68%. It demonstrated health labour management practices.
• The banks’ corporate social responsibility contribution exceeded the government-mandated requirement.
• For the governance pillar, the bank achieved a score of 76% due to its board governance and disclosure practices.

Topic: Indian Economy/Financial Market

4. India’s real GDP should grow at 7.6% per annum over the next 25 years.

• As per an article in RBI’s latest bulletin, India’s real GDP should grow at 7.6% per annum over the next 25 years for it to become a developed country by 2047-48.
• India’s per capita GDP should increase by 8.8 times from the present level of $2,500 to $22,000 for it to become a developed country by 2047.
• According to the article India @100, India also needs to focus on widening its manufacturing base to fulfil the demand of large domestic market.
• According to the authors, services sector will continue as the main driver of economic growth.
• As per the article, India may have to focus on structural reforms enabling reallocation of labour from agriculture to other sectors.

Topic: Summits/Conferences/Meetings

5. Third G20 Finance Ministers and Central Bank Governors (FMCBG) meeting was held in Gandhinagar, Gujarat.

• The meeting was held during 17-18 July 2023 and was jointly chaired by Union Minister of Finance Nirmala Sitharaman, and Governor, RBI, Shaktikanta Das.
• It was preceded by the Third G20 Finance and Central Bank Deputies (FCBD) meeting during 14-15 July 2023 in Gandhinagar, Gujarat.
• Third G20 FMCBG meeting ended with a G20 Outcome Document and Chair’s Summary comprising 26 paragraphs and 2 Annexures.
• Two paragraphs are related with Russia-Ukraine war and its impact on global economy.
• The meeting failed to build a consensus on communique mainly because of stance of China and Russia.
• The next G20 FMCBGs meeting will be in October 2023 in Marrakesh, Morocco.

Topic: Appointments

6. SEBI Executive Director (ED) Pramod Rao has been appointed as a member in the Board of IFSCA.

• Finance Ministry has appointed him as a member in the board of International Financial Services Centre Authority (IFSCA).
• He has replaced Sujit Prasad, Executive Director SEBI.
• Sujit Prasad was appointed as a Member (representing SEBI) in IFSCA in July 2020.
• Pramod Rao assumed charge as SEBI Executive Director on 15 July 2022.
• IFSCA:
  • IFSCA is a statutory body. It was set up in April 2020 under the International Financial Services Centres Authority Act, 2019.
  • It was established to regulate all financial services in International Financial Services Centres (IFSCs).
  • Presently, GIFT City, Gandhinagar in Gujarat is the India’s first and only operational International Financial Services Center.

Topic: Reports and Indices

7. India has been ranked 80th in the Henley Passport Index 2023, released on July 18, 2023.

• India’s rank has gone up from 87 to 80 in the Henley Passport Index 2023.
• Indians can travel to 57 destinations without a visa. India was ranked 87th on the Passport Index in the 2022 ranking.
• Singapore has overtaken Japan to claim the most powerful passport in the world.
• Singapore allows passport holders visa-free entry to 192 out of 227 destinations in the world.
• The second spot is shared by Germany, Italy, and Spain, and the third spot is shared by Austria and Finland.
• Afghanistan's passport is ranked 103rd with a visa-free score of 27, the worst passport in the world.
• Iraq ranked 102nd with a visa-free score of 29, second-worst passport in the world.
• The global passport rankings for 2023 were conducted on the basis of data provided by the International Air Transport Authority (IATA).
• IATA ranks the world's passports by the number of destinations their holders can access without prior visas.
• Henley Passport Index:
  • It was launched in 2006. The index covers 199 passports and 227 travel destinations.
  • Each passport is ranked on the total number of destinations the holder can access visa-free.

Topic: Reports and Indices

8. NITI Aayog launched National Multidimensional Poverty Index (MPI).

• NITI Aayog released a report titled ‘National Multidimensional Poverty Index: A Progress Review 2023’.
• It has been released by Suman Bery, Vice-Chairman, NITI Aayog.
• As per this report, 13.5 crore people moved out of multidimensional poverty between 2015-16 and 2019-21.
• This second edition of the National Multidimensional Poverty Index (MPI) shows India's progress in reducing multidimensional poverty between both the surveys, NFHS-4 (2015-16) and NFHS-5 (2019-21).
• This report is based on the baseline report of India's MPI launched in November 2021.
• The National MPI tracks deprivations across dimensions of health, education, and standard of living based on 12 SDG-aligned indicators.
• Nutrition, child and adolescent mortality, maternal health, years of schooling, school attendance, cooking fuel, sanitation, drinking water, electricity, housing, assets, and bank accounts are the 12 indicators of India’s national MPI.
• As per the report, India’s multidimensionally poor percentage has declined from 24.85% in 2015-16 to 14.96% in 2019-2021.
• Poverty decline in rural areas was faster as compared to urban areas. Poverty in rural areas declined from 32.59% to 19.28%.
• Uttar Pradesh registered the largest decline in number of poor. Around 3.43 crore people came out of multidimensional poverty.
• This report estimates poverty for 36 States and Union Territories and 707 Administrative Districts.
• The fastest reduction in the proportion of multidimensional poor has been registered in Uttar Pradesh, Bihar, Madhya Pradesh, Odisha, and Rajasthan.
• The MPI value has nearly halved from 0.117 to 0.066 between 2015-16 and 2019-21. The intensity of poverty has reduced from 47% to 44%.
• All 12 parameters of the MPI have shown improvement.

Topic: Reports and Indices

9. Third edition of the Export Preparedness Index 2022 report released by NITI Aayog for States/UTs of India.

• On 17 July, the report was released by Vice Chairman, NITI Aayog, Shri Suman Bery in New Delhi.
• The Export Preparedness Index, by NITI Aayog in association with the Institute of Competitiveness, goes deeper beyond states and examines exports at the district level.
• According to this, the coastal states have performed best on all the indicators.
• Tamil Nadu has topped NITI Aayog's Export Preparedness Index 2022. Maharashtra and Karnataka are on the second and third positions respectively.
• Gujarat and Haryana are on the fourth and fifth positions.
• The report states that the higher average of the coastal states reflects their better preparedness and contribution to national exports.
• EPI 2022 report evaluates the performance of states on four pillars- Policy, Business Ecosystem, Export Ecosystem, and Export Performance.
• These pillars are further based on ten sub-pillars– Export Promotion Policy, Institutional Framework, Business Environment, Infrastructure, Transport Connectivity, Export Infrastructure, Trade Support, R&D Infrastructure, Export Diversification, and Growth Orientation.
• 73% of the districts in the country have prepared export action plans and more than 99% of the districts are covered under the One District One Product scheme.
• One hundred districts of the country export about 87% of the total exports.
• Noting the lack of adequate transport connectivity, the report said that the lack of air connectivity hinders the movement of goods in landlocked states.

Topic: Committees/Commissions/Taskforces

10. Government formed a panel to review all surveys being conducted under NSO.

• The government has established a new oversight mechanism to review data of NSO.
• Standing Committee on Economic Statistics (SCES) set up in 2019 will be replaced by a Standing Committee on Statistics (SCoS).
• Pronab Sen, India’s first chief statistician, has been named as the chairman of the new committee.
• SCES was responsible for reviewing economic indicators related to the industrial sector, the services sector, and the labour force statistics.
• The SCoS will have a broader mandate to review the framework and results of all surveys being conducted under the National Statistical Office (NSO).
• SCoS jurisdiction will be beyond economic data and advise the Ministry on technical aspects for all surveys.
• This new panel will have 10 members and four non-official members who are eminent academics.
• The Ministry of Statistics and Programme Implementation (MOSPI) issued notification regarding this on 13 July.
• SCoS work includes the identification of data gaps that need to be filled by official statistics.

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