Banking Awareness of 19, 20 and 21 July 2022

Topic: RBI

1. RBI prohibited three cooperative banks from carrying out banking activity due to poor liquidity positions.

• These banks are Nashik Zilla Girna Sahakari Bank and the Raigad Sahakari Bank, both from Maharashtra, and Sri Mallikarjuna Pattana Sahakari Bank from Karnataka.
• The depositors of Nashik Zilla Girna Sahakari Bank and Sri Mallikarjuna Pattana Sahakari Bank are prohibited from withdrawing any money from their savings, current, and other accounts.
• However, they are allowed to offset loans against deposits.
• However, RBI has permitted Raigad Sahakari Bank depositors to withdraw a maximum of 15,000 rupees from the balance of all savings, current, and other accounts combined.
• According to RBI, these instructions have become effective starting on July 19, 2022, for a period of six months.
• Further, RBI has made it clear that these instructions do not mean that the licenses of banks have been cancelled.

Topic: RBI

2. RBI has issued a revised regulatory framework for UCBs.

• RBI has issued this framework as per the recommendations of the expert committee set up under the Chairmanship of RBI’s former Deputy Governor Mr N S Vishwanathan.
• RBI has adopted the four-tiered regulatory framework for Urban Cooperative Banks (UCBs).
• The regulatory framework is based on the size of deposits of the banks and their area of operations.
• It stipulates a minimum net worth of two crore rupees for Tier 1 UCBs operating in a single district and five crore rupees for all other UCBs.
• RBI has introduced an automatic route for branch expansion for UCBs.
• It has allowed UCBs to open new branches as per the revised Financially Sound and Well Managed criteria.
• In the case of housing loans, RBI has decided to assign the risk weights solely on the basis of the Loan to Value Ratio. This would result in capital savings.
• RBI said that the minimum CRAR requirement for Tier 1 banks is retained at the present level of 9%.
• For Tier 2, Tier 3, and Tier 4 UCBs, it has been decided to increase the minimum Capital to Risk (Weighted) Assets Ratio (CRAR) to 12%.

Topic: Committees/ Commissions/Taskforces

3. Government formed a Committee on MSP under the chairmanship of former agriculture secretary Sanjay Agrawal.

• The government has made a provision to include three members from Sanyukta Kisan Morcha (SKM) in the committee.
• The committee will also suggest ways to promote natural farming, crop diversification and micro-irrigation scheme.
• It will also suggest strategies for making Krishi Vigyan Kendras and other Research and Development institutions as knowledge centres.
• The committee will also recommend ways to make the system more effective and transparent for providing MSP to farmers.
• It will also suggest measures to give more autonomy to Commission for Agricultural Costs and Prices (CACP) and to make it more scientific.
• The panel will also suggest measures to strengthen the Agricultural Marketing System.
• IFFCO Chairman Dilip Sanghani and CNRI General Secretary Binod Anand are also part of the committee.
• NITI Aayog member Ramesh Chand, Agricultural Economists CSC Shekhar from Indian Institute of Economic Development and Sukhpal Singh from IIM- Ahmedabad are members of this committee.

Topic: Infrastructure and Energy

4. Jawaharlal Nehru Port has become India’s first 100 % Landlord Major Port having all berths being operated on the PPP model.

• Ports, Shipping and Waterways Minister Sarbananda Sonowal said that the total handling of JNPT will increase to 1.8 million Twenty-foot Equivalent Units (TEUs) from 1.5 million TEUs in 2020-21.
• Jawaharlal Nehru Port is ranked 26th place among the top 100 global ports according to Lloyds List Top 100 Ports 2021 Report.
• A landlord port is a port where terminals are leased to private companies while the port authority only retains ownership of the land.
• In February 2021, Parliament passed Major Port Authorities Act 2021. It is aimed at reorienting the governance model in central ports to the landlord port model.
• Jawaharlal Nehru Port (also called Nhava Sheva Port) is the second largest container port in India after Mundra Port. It is located in Navi Mumbai. It was developed to decongest Mumbai Port.

Topic: RBI

5. RBI has signed its renewed Statement of Commitment to the FX Global Code.

• FX Global Code is a compilation of best market practices, applicable to the wholesale foreign exchange market participants.
• It is voluntary in nature. Central banks and market participants have formulated and developed it under the auspices of Bank for International Settlements (BIS), Basel.
• It does not impose any legal or regulatory obligation. It was initially launched on May 25, 2017.
• It was later reviewed and Global FX Committee published an updated Code on July 15, 2021.
• Global FX Committee (GFXC) is currently implementing it in co-ordination with the Local FX Committee (LFXC) in each jurisdiction.

Topic: Indian Economy/Financial Market

6. The US dollar has gained by over 25% against the Indian rupee in the last eight years since 2014.

• The exchange rate of the Indian rupee against the US dollar stood at 63.33 on December 31, 2014. It was at 79.41 on July 11, 2022.
• Finance Ministry said the depreciation of the rupee would boost export competitiveness, though imports would get costlier.
• During the current calendar year till date (18 July 2022), US dollar has strengthened by about 7 percent.
• As per Finance Minister, Russia-Ukraine conflict, soaring crude oil prices and tightening of global financial conditions are the major reasons for the weakening of the Indian rupee against the US dollar.
• British pound, the Japanese yen and the euro have weakened more than the Indian rupee against the US dollar.
• Outflow of FPI (Foreign Portfolio Investment) is also the reason for the weakening of the rupee. In the current fiscal, FPIs have withdrawn around $14 billion.
• Finance Minister Nirmala Sitharaman listed steps taken by RBI to check the weakening of Rupee.

Topic: Agriculture

7. US Department of Agriculture-Animal and Plant Health Inspection Service (USDA-APHIS) has approved Gujarat Agro Radiation Processing Facility (GARPF).

• GARPF was set up by Gujarat Agro Industries Corporation Ltd (GAIC) at Bavla in Ahmedabad.
• GARPF is first in Gujarat and fourth in India to get USDA-APHIS approval for the export of mangoes and pomegranates.
• The facility is implemented under the guidance and technical support of Bhabha Atomic Research Centre (BARC), and the Board of Radiation and Isotope Technology (BRIT).

Topic: Miscellaneous

8. Uttar Pradesh government has appointed Deloitte India as a consultant to suggest plans for making state's economy a $1 trillion economy.

• UP government is preparing a sector-wise plan to achieve the goal of bringing the economy of Uttar Pradesh to 1 trillion US dollars.
• The decision to appoint Deloitte India as a consultant was taken on the recommendation of a high-power committee at a cabinet meeting chaired by Chief Minister.
• The role of Uttar Pradesh is very important to fulfil the Prime Minister's resolve to make India a $5 trillion economy.

Topic: Appointments

9. Jayanti Prasad has been appointed as a Wholetime Member of the IBBI.

• Prasad has been appointed for a period of five years from the date of assumption of charge (July 5, 2022) or up to the age of 65 years, whichever is the earliest.
• Prasad is a 1986 batch Indian Audit & Accounts Service Officer.
• Insolvency and Bankruptcy Board of India (IBBI) was established on 1 October 2016 under the Insolvency and Bankruptcy Code, 2016.
• It is responsible for the implementation of the IBC code.
• It is a unique regulator that regulates a profession as well as process. Its chairperson is Ravi Mittal.

Topic: Banking System

10. Federal Bank has entered into partnership with Central Board of Direct Taxes (CBDT) to launch online tax payment services.

• The bank has entered into a partnership to assist taxpayers to pay through the e-pay tax facility in the e-filing portal.
• Anyone can now pay taxes through modes like Debit/Credit Card, UPI, Net banking, cash, NEFT/RTGS, etc.
• The Bank received approval from the Centre for direct tax collection last financial year.
• Federal Bank is an Indian private sector bank with headquarters in Kerala. Its CEO is Shyam Srinivasan. Its tagline is your perfect banking partner.

Topic: Banking System

11. Customs duty collection arrangement facility has been launched by South Indian Bank.

• Corporate and retail customers of the bank can now pay customs duty through its internet banking platform ‘SIBerNet’.
• The bank will collect customs duty on behalf of the Central Board of Indirect Taxes & Customs (CBIC) under authorization from the RBI.
• South Indian Bank is a private sector bank. It is headquartered in Thrissur, Kerala.

Topic: Taxation

12. New GST rates have become effective from 18 July 2022.

• GST Council decided on new GST rates in its 47^th meeting held in Chandigarh last month.
• Banks will charge 18% GST as a fee for issuing cheques. Hotel accommodation costing up to 1,000 rupees per day will be taxed at a rate of 12%.
• GST on solar water heaters has been increased from earlier 5% to 12% now. GST on e-waste has increased from earlier 5% to 18% now.
• The tax on transport of goods and passengers by ropeways will be lowered from 12% to 5%.
• The GST exemption on air travel to and from the northeastern states and Bagdogra will be limited to economy class only. Electric vehicles are eligible for the 5% GST rebate.
• No GST will be levied on single packages of unbranded pre-packed and labelled food items like cereals, pulses, and flour weighing in excess of 25 kilograms.
• Several packages for retail sale to ultimate consumers, like 10 packages of 10 kilograms each, are sold in a larger pack, then GST would be applied.   
• A rice package containing 50 kilograms in one package would not be considered a pre-packaged and labelled commodity for the GST.

Read Banking Awareness PDF - 19, 20 and 21 July 2022