Banking Awareness of 24 and 25 October 2023

By Priyanka Chaudhary | Last Modified: 25 Oct 2023 18:31 PM IST
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Topic: RBI

1. RBI has allowed retail investors to subscribe to Floating Rate Savings Bonds (FRSBs), 2020 (Taxable).

  • The basket of products offered through the Retail Direct Portal has been expanded by RBI in consultation with the Government of India.
  • FRSBs are interest bearing, non-tradeable bonds, issued by the Government of India.
  • They are repayable on the expiration of seven years from the date of issue.
  • Presently, individual (retail) investors are able to invest in Central Government Securities, Treasury Bills, State Government Securities and Sovereign Gold Bonds through the Retail Direct Portal.
  • RBI-Retail Direct Scheme was launched on November 12, 2021.
  • As part of this scheme, individual investors are allowed to open Retail Direct Gilt account with RBI, using an online portal.
  • Through this, investments in Government Securities can be made in secondary and primary market.

Topic: Banking/Financial/Govt Schemes

2. The share of females in the PM SVANidhi Scheme has been at 43%.

  • This indicates the empowerment of entrepreneurial capabilities of urban females as per a report by SBI’s economic research department (ERD).
  • The report added the empowerment makes the PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) Scheme a gender equalizer.
  • About 75% of loan beneficiaries come from the “non-general category”.
  • Till date around 70 lakh loans have been disbursed in all three tranches. 
  • In its report, the ERD said this benefitted more than 53 lakh street vendors, with a total value exceeding ₹9,100 crore.
  • The percentage of people who take out a second loan of ₹20,000 and repay their initial debt of ₹10,000 is 68%.
  • The percentage of people who take out a third loan of ₹50,000 and repay their second loan of ₹20,000 is 75%.
  • The loan's disbursement matches census statistics. Approximately 80% of borrowers are Hindu, while the remaining 20% are non-Hindu.
  • The average debit card spending of PM SVANidhi account holders increased to about ₹80,000 in FY23. This is an increase by 50% as compared to FY21.
  • The scheme rewards digital transactions with cashback of up to ₹1,200 per year and rewards regular repayments with a 7% interest subsidy.
  • Around 5.9 lakh borrowers reside in six megacities, according to the PM SVANidhi dashboard, and 7.8 lakh borrowers are from cities with a population of more than 10 million people.
  • Varanasi is the top performer among these mega and million+ cities.
  • In Varanasi, 45% of total spenders are active spenders. It is followed by Bengaluru, Chennai, Prayagraj, etc.
  • PM SVANidhi scheme was launched on June 1, 2020. It is a micro-credit scheme for urban street vendors.
  • It aims to provide collateral-free working capital loans up to ₹50,000 in incremental tranches.

Topic: Indian Economy/Financial Market

3. S&P Global Market Intelligence has said Indian economy is expected to surpass Japan and Germany by 2030 and become 3rd largest economy.

  • India is presently ranked fifth in terms of the size of its economy at $3.7 trillion in 2023-24.
  • India’s nominal GDP measured in terms of USD is forecast to expand from $3.5 trillion in 2022 to $7.3 trillion by 2030.
  • This would result in the size of the Indian GDP exceeding Japanese GDP by 2030.
  • This would make India the second largest economy in the Asia-Pacific region.
  • As per S&P Global Market Intelligence, India will be one of the world’s fastest growing economies over the next decade.
  • It also said that 1.1 billion Indians will have internet access by 2030.
  • This is more than double from the estimated 500 million internet users in 2020.

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Topic: Infrastructure and Energy

4. According to the Coal Ministry, pan-India coal stocks has grown by over 18% Y-o-Y to 71.35 million tonnes (MT) as on October 21, 2023.  

  • This includes coal stocks at thermal power plants (TPPs), in transit and mine pit heads.
  • During this period, 13.5 MT of coal was imported as against 20.8 MT during the corresponding period of last year.
  • The Coal Ministry said that the daily supply of coal is now more than the average daily consumption.
  • The percentage of the actual stock vis-a-vis normative stock stood at 37% on October 21, 2023.
  • India’s thermal coal imports were at three-month high in September.
  • India’s thermal coal imports increased over 11% m-o-m and almost 10% y-o-y to reach 13.69 million tonnes (mt) in September 2023.
  • Government’s mandate of blending 4% imported coal has aided rise in imports.
  • Growth in steam coal imports was mainly met by increased shipments from Indonesia and South Africa.

Topic: Reports and Indices

5. According to IEA’s latest world energy outlook report, India’s solar module manufacturing capacity could exceed 70 GW per year by 2027.

  • The report added that it is expected India will meet its 2030 target to have half of its electricity capacity be non-fossil fuel well before the end of the decade.
  • India currently accounts for 3% of the global solar photovoltaic (PV) market.
  • Presently, solar modules manufacturing is largely concentrated in just five countries.
  • Solar module manufacturing in these five countries accounts for more than 90% of global capacity.
  • China accounts for 80% of world manufacturing capacity. Viet Nam (5% of the global market), India (3%), Malaysia (3%) and Thailand (2%) are other four nations.
  • The US, Korea, Cambodia, Türkiye and Chinese Taipei are other five leading solar manufacturers. Each of them account for about 1% of the global market.
  • In FY22, India imported solar PV modules worth $3.4 billion.
  • International Energy Agency (IEA) projected that as domestic production increases, solar PV module imports will decline.  
  • According to the IEA report, India will only be behind China and the US in terms of electricity consumption by 2050 under all scenarios due to an annual growth rate of roughly 5% in the demand for electricity.
  • The report projected air conditioner ownership in India has been steadily rising. It has tripled since 2010 and reached 24 units per 100 households.
  • As per the report, residential electricity demand from cooling increases ninefold in the Stated Policies Scenario (STEPS) by 2050.
  • Under Announced Pledges Scenario (APS), electricity demand for air conditioners is nearly 15% lower in 2050.
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Topic: RBI

6. RBI has imposed a fine of Rs 2.5 crore on L&T Finance Ltd.

  • RBI has imposed a penalty for non-compliance with certain norms concerning non-banking financial companies (NBFCs).
  • RBI said L&T Finance failed to notify the change in penal interest rate to borrowers.
  • RBI said penalty is based on the deficiencies in regulatory compliance.
  • L&T Finance is an NBFC that offers a wide range of lending products.

Topic: Banking System

7. XpressWay has been launched by HDFC Bank.

  • It is a digital platform that offers banking products and services.
  • It offers services like Xpress Personal Loan, Xpress Business Loans, Xpress Car Loan, Xpress Home Loan, Xpress Loan on cards, Xpress Credit Card, Xpress Savings Accounts, etc.
  • These services are available for both existing and new customers.
  • It empowers HDFC Bank’s customers with swift, paperless, and self-service banking.
  • It is part of HDFC Bank ‘NOW’, an umbrella brand for the Bank’s digital products and services.

Topic: Reports and Indices

8. As per SBI report, banking system’s asset/liabilities growth in last nine years (FY14-FY23) is 1.3 times higher than growth in last 63 years (FY1951-2014).

  • Total share of unsecured retail loans is only about one-tenth of ASCBs credit portfolio. This indicates contained risk at the time.
  • According to SBI’s Ecowrap report, the credit-to-nominal GDP ratio in FY24 is expected to reach 1.7 times, increasing from 1.2 times in FY23.
  • During FY14-FY23, a growth of Rs 187 lakh crore has been recorded in assets and liabilities of all scheduled commercial banks (ASCBs).
  • During the FY1951-2014, the cumulative growth of Rs 142 lakh crore was observed.
  • The report draws from CIBIL CMI data (March 2023). It revealed that personal loans of Rs 50,000 or more account for around 98% of the total personal loan book size in terms of value.
  • Personal loans of less than Rs 50,000 form roughly 2% of the personal loan book size in terms of value.
  • They form only 0.3% of the total retail loan book size at the industry level.
  • The report notes that outstanding per credit card in India has either remained static or declined.
  • In nominal terms, outstanding per credit card saw a 13% increase in August.
  • This was a notable decrease from the 24% rise observed in January.

Topic: Summits/Conferences/Meetings

9. India will host "Bharat Tex 2024”, the world's largest textiles event.

  • ‘Bharat Tex 2024’ will be organized from February 26 to February 29, 2024, in New Delhi.
  • It will be organized jointly by 11 Textile-related Export Promotion Councils (EPCs) and other industry bodies.
  • Bharat Tex 2024 will represent India’s 5F vision, comprising Farm to Fibre to Factory to Fashion to Foreign.
  • "Bharat Tex 2024" will act as a platform for global investors and buyers to explore India's potential as a global manufacturer and consumer market.
  • Bharat Tex 2024 aims to position India as a mature, competitive global sourcing destination within the textile industry.
  • More than 1,000 exhibitors and more than 30,000 visitors from 40 countries will participate in the event.
  • Sessions, seminars, conferences, CEO roundtables, B2B and G2G meetings, and strategic investment announcements will be part of this event.
  • The event will also showcase live demonstrations, cultural events, fashion presentations, designer and brand exhibitions, fashion shows, etc.

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