Banking Awareness of 26, 27 and 28 September 2023

Topic: RBI

1. RBI has imposed a fine of ₹1.3 crore on State Bank of India (SBI).

• RBI has also imposed a penalty of ₹1.6 crore on Indian Bank.
• RBI has imposed penalty for non-compliance with guidelines on ‘Loans and Advances – Statutory and Other Restrictions’.
• In the statutory Inspection of the banks for FY21, it was found that they had sanctioned a term loan to a corporation without undertaking due diligence on the viability and bankability of the projects.
• SBI also violated norms on ‘Management of Intra-Group Transactions and Exposures’.
• Indian Bank violated guidelines under ‘Know Your Customer (KYC) Directions, 2016’ and ‘Interest Rate on Deposits Directions, 2016’.
• RBI has also imposed a penalty of ₹1 crore on Punjab & Sind Bank for breach of norms on ‘The Depositor Education and Awareness Fund Scheme’.
• Punjab & Sind Bank failed to credit eligible amount to Depositor Education and Awareness Fund (DEAF) within the period provided under Section 26A of the Banking Regulation Act.
• Monetary penalty of Rs 8.8 lakh has also been imposed on Fedbank Financial Services.
• Fedbank Financial Services is the NBFC arm of Federal Bank.

Topic: Regulatory Bodies/Financial Institutions

2. Nabard has raised ₹1,040 crore via social bonds.

• Nabard has issued India’s first ‘AAA’ rated Indian Rupee denominated Social Bonds.
• It has issued the Social Bonds aggregating ₹1,040.50 crore at a coupon rate of 7.63%.
• The bonds were redeemable, taxable, non-convertible, non-priority sector, unsecured, social securities of face value ₹1 lakh each.
• They were of five-year tenure. They were issued privately to eligible institutional investors on September 26.
• These bonds are to be listed on the Bombay Stock Exchange (BSE) on September 29, 2023.
• The base issue size of the social bonds was ₹1,000 crore, with an option to retain oversubscription up to ₹2,000 crore.
• National Bank for Agriculture and Rural Development (NABARD) was founded in July 1982. It is headquartered in Mumbai. It is under the jurisdiction of the Ministry of Finance. Shaji K V is its chairman.

Topic: MoUs/Agreements

3. REC and Punjab National Bank (PNB) have signed a memorandum of understanding (MoU).

• The MoU is for co-financing loans worth ₹55,000 crore for projects in the power, infrastructure and logistics sectors in the next three years.
• REC essentially lends to the power sector. Power Ministry has authorized it to also lend to the infrastructure sector.
• It is a Maharatna company. It has now diversified into the non-Power infrastructure sector and commercial infrastructure.
• REC is a 'Maharatna' company under the administrative control of the Ministry of Power, Government of India.
• It is registered with RBI as non-banking finance company (NBFC), Public Financial Institution (PFI) and Infrastructure Financing Company (IFC).
• REC was incorporated in 1969. Vivek Kumar Dewagan is its CMD.

Topic: RBI

4. The merger of Sahebrao Deshmukh Co-op Bank with Cosmos Co-op Bank has been approved by RBI.

• The merger has become effective from 26 September, 2023.
• The branches of Sahebrao Deshmukh Co-operative Bank are now functioning as branches of Cosmos Co-operative Bank.
• Sahebrao Deshmukh Co-operative Bank is a Mumbai-based bank. Cosmos Co-operative Bank is Pune-based.
• RBI has approved scheme of amalgamation of two in exercise of the powers conferred under the Banking Regulation Act, 1949.

Topic: Banking/Financial/Govt Schemes

5. Government has extended RoDTEP scheme for exporters by nine months till June 30 2024.

• Remission of Duty and Taxes on Exported Products (RoDTEP) was notified for certain sectors till September 30 2023.
• Commerce & Industry Ministry has extended the scheme at the same rates to the existing export items.
• It is a popular export benefit scheme. The scheme is WTO compatible.
• It was announced in January 2021 to replace the WTO-incompatible MEIS scheme.
• Under the scheme, 8731 items from most export sectors were covered with the exception of organic and inorganic chemicals, pharmaceuticals and iron & steel.
• It refunds embedded duties/taxes, mandi tax and duty on electricity used during manufacturing, that are not rebated under other schemes.
• Later, government extended the benefits of RoDTEP to the three excluded sectors, but just for 9 months till September 30 2023.

Topic: Appointments

6. M. Rajeshwar Rao has been reappointed by centre as Deputy Governor of RBI for one year.

• This term of one year will begin from 9th of next month, or until further orders, whichever is earlier.
• M. Rajeshwar Rao handles the departments of Regulation, Communication, Enforcement, Legal and Risk Monitoring.
• Mr. Rao joined the central bank in 1984. He worked as the Banking Ombudsman in New Delhi.
• His three-year term as Deputy Governor started on 09 October, 2020.

Topic: Taxation

7. The Income Tax Department of India has demanded around $150 million from Dream11 for underpaying taxes during 2017-2019.

• Dream11 has filed a case in the High Court in Mumbai.
• It has challenged the notices which demand it to explain why it should not be forced to pay the shortfall.
• While Indian tax authorities are demanding a greater 28% tax on the overall gaming money Dream11 receives from players, Dream11 contends that it should pay a tax on the fees it charges users.
• The company was given 30 days by the tax authorities to provide justification as to why it shouldn't be required to pay a shortfall of 2.1 billion rupees ($26.07 million) for 2017–18 and 10 billion rupees ($120.85 million) for 2018–19.
• Tax officials are also looking into Dream11's four additional years of tax payments, up until March 2023.
• Dream11 is an Indian fantasy sports platform. In April 2019, it became the first Indian fantasy sport company to become a unicorn.
• It was set up in 2008. U.S. investment fund Tiger Global is a major investor in it.

Topic: RBI

8. License of Mumbai-based 'The Kapol Co-Operative Bank' cancelled by RBI.

• On September 25, the license of Mumbai-based Kapol Co-operative Bank Ltd. was cancelled as the lender did not have adequate capital and earnings prospects.
• As a result of the cancellation of the license, the Co-operative Bank is prohibited from conducting 'banking' business.
• This includes accepting deposits and repayment of deposits with immediate effect.
• RBI has also requested the Additional Secretary of the Ministry of Cooperation and the Central Registrar of Cooperative Societies to issue an order to close the bank and appoint a liquidator for the bank.
• Every depositor will be entitled to receive the deposit insurance claim amount of his deposits up to a monetary limit of ₹ 5 lakhs from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
• About 96.09% of depositors are entitled to receive the full amount of their deposits from DICGC.
• As of July 24, 2023, DICGC has already paid ₹ 230.16 crore of total insured deposits based on the willingness received from the respective depositors of the bank.

Topic: Appointments

9. Amit Khare has been given an extension as advisor to PM Modi.

• Amit Khare was appointed as an advisor for two years in October 2021.
• Amit Khare is a 1985-batch (retired) Indian Administrative Service (IAS) officer of the Jharkhand cadre.
• He had superannuated on 30 September 2021. He last served as the higher education secretary.
• Appointments Committee of the Cabinet (ACC) approved the extension in Khare's tenure beyond October 12, 2023, for a period "co-terminus with the term of Prime Minister”.
• The extension in tenure of Rajesh S Gokhale as secretary of, the Department of Biotechnology, has also been approved by the ACC.
• This extension is for a period of two years with effect from November 1, 2023.

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