Banking Awareness of 26 and 27 March 2025

Topic: Reserve Bank of India

1. RBI released updated PSL guidelines for banks.

• The updated priority sector lending (PSL) guidelines will take effect from April 1, 2025. 
• PSL target for urban cooperative banks has been lowered by RBI.
• PSL target for urban cooperative banks is now fixed at 60%, down from earlier 75%. 
• RBI has increased loan limit for housing loans for individuals purchasing or building homes. 
• In cities with populations of 50 lakh or more, housing loan limit has been fixed at ₹50 lakh. 
• For cities having populations between 10 lakh and 50 lakh, limit has been fixed at ₹45 lakh. 
• In areas having populations below 10 lakh, the housing loan limit is fixed at ₹35 lakh. 
• Educational loans of up to ₹25 lakh will now be eligible for PSL classification. 
• This has been increased from earlier ₹20 lakh limit. 
• The range of purposes eligible for loans under Renewable Energy has been expanded by RBI. 
• UCBs will need to meet a PSL target of 60% of their loans starting from FY2024-25. 
• As per current guidelines, UCBs are required to achieve PSL target of 65% of their loans by FY25 and 75% from FY26 onwards.

Topic: Banking System

2. National Payments Corporation of India (NPCI) has introduced BHIM 3.0.

• BHIM 3.0 is a revamped digital payment platform. Vivek Deep, Executive Director of the Reserve Bank of India launched it in Mumbai. 
• BHIM 3.0 is having new features for both individual users and merchants. 
• BHIM 3.0 app now supports more than 15 Indian languages. 
• BHIM 3.0 app will work effectively in areas with low internet connectivity. 
• Users can now split expenses. They can track family finances through a shared mode.
• They can view spending analytics that categorize expenses automatically. 
• Merchants can benefit from BHIM Vega.
• BHIM Vega is an integrated payment solution that enables instant transactions within the app. 
• The platform aims to simplify digital payments for different user groups. 
• BHIM 3.0 addresses the needs of today’s digital payment users. 
• BHIM 3.0 will be rolled out in phases. It is expected to be fully available by April 2025. 
• BHIM 3.0 is third major update since its first launch in 2016. 

Topic: Reports and Indices

3. The rank of Gujarat International Finance Tec-City (Gift City) changed to 46th place from 52nd in Global Financial Centres Index (GFCI).

• In the 'reputational advantage' category, Gift City achieved first rank.  
• In the FinTech rankings, its rank improved rising from 45th to 40th.
• Tapan Ray, MD and Group CEO of Gift City, highlighted India's growing influence in global finance.
• Global Financial Centres Index (GFCI) evaluates financial centers worldwide using 140 factors.
• Organizations like the World Bank and OECD provide these factors.
• The GFCI measures business climate, infrastructure, workforce, financial sector growth, and competitiveness.

Topic: Reserve Bank of India

4. From May 1, withdrawing cash from ATMs in India will be more expensive.

• This will be due to an increase in interchange fees set by RBI. 
• Extra charges will be paid by customers after exceeding their free transaction limit at ATMs. 
• The interchange fee is the amount one bank pays another for ATM services. 
• The bank passes this fee often to customers. 
• From May 1, an additional Rs 2 will have to be paid for each financial transaction beyond the free limit. 
• For non-financial transactions, such as checking balances, the fee will increase by Rs 1. 
• The cost of ATM withdrawals will now be Rs 19 per transaction, up from earlier Rs 17. 
• Balance inquiries will now be priced at Rs 7 per transaction. 
• Digital payments in India increased from Rs 952 lakh crore in FY14 to Rs 3,658 lakh crore in FY23. 

Topic: Appointments

5. Rajiv Gauba has been appointed NITI Aayog’s full-time member.

• He is former cabinet secretary and a 1982-batch IAS officer of the Jharkhand cadre.
• He served as the Cabinet Secretary for five years from 30 August 2019 till 30 August 2024.
• He has also served as Union home secretary. He has also served as secretary in the Ministry of Urban Development and chief secretary of Jharkhand.
• PM has approved his appointment. He will serve as NITI Aayog’s full-time member under the same terms as other full-time members of the NITI Aayog.

Topic: Banking/Financial/Govt Schemes

6. A social protection data pooling initiative for better coverage launched by the Labour Ministry and ILO.

• A social security data pooling exercise has been initiated in the country by the Ministry of Labor and Employment in collaboration with states and the International Labor Organization (ILO).
• The aim of this exercise is to get a holistic picture of social protection coverage in India.
• In the first phase, the ministry has identified 10 states, including Uttar Pradesh, Rajasthan, Maharashtra, Madhya Pradesh, Tamil Nadu, and Odisha, for data consolidation at the central level.
• Over 200 crore records were processed to identify unique beneficiaries using encrypted Aadhaar as a unique identifier across 34 major central schemes such as MGNREGA, EPFO, ESIC, APY, and PM-POSHAN.
• About 65% of India's population receives at least one social security benefit, both in cash and in kind, of which 48.8% receive cash benefits.
• The objective of this data pooling exercise is to facilitate the Central Government, States and Union Territories to optimise welfare expenditure and move closer to sustainable financing of social security.
• It also aims to assist states in identifying specific beneficiaries under state-specific social security schemes.
• According to the International Labour Organisation (ILO), India's social security coverage has doubled from 24.4% in 2021 to 48.8% in 2024.
• The unemployment rate has declined from 6% in 2017-18 to 3.2% in 2023-24, while female workforce participation has seen a significant increase from 22% to 40.3%.
• International Labour Organization (ILO):
  • It is a specialized agency of the United Nations consisting of 187 countries.
  • It was formed in 1919 with its headquarters in Geneva, Switzerland.
  • It develops international labour standards and advances social justice.
  • Current Director General of ILO: Gilbert F. Houngbo (11th DG of ILO)

Topic: Banking/Financial/Govt Schemes

7. BAANKNET and e-BKray launched by the government to enhance PSU Bank e-auctions for asset sales.

• A revamped e-auction portal named 'BAANKNET' has been launched by the Finance Ministry to further streamline the listing and auctioning of banks' assets.
• “BAANKNET” was launched on January 03, 2025.
• On 28th February, 2019, the platform “e-BKray” was launched.
• The BAANKNET portal is specially designed to enhance transparency and expedite the process of resolution of non-performing asset (NPA) cases.
• By leveraging cutting-edge technology and integrating automated KYC tools, secure payment gateways, and bank-verified property titles, the platform ensures a high level of transparency in the property auction process.
• It provides a quick and efficient way to apply for a loan and get approval based on digital evaluation of the applicant's data.
• All 12 public sector banks and the Insolvency and Bankruptcy Board of India (IBBI) are using the platform to list and auction properties across the country.

Topic: Miscellaneous

8. Indonesia will join the BRICS New Development Bank.

• Indonesian President Prabowo Subianto said on March 25 that Indonesia will join the New Development Bank, a multilateral bank developed by BRICS member countries.
• Prabowo said joining the NDB as a member would help Indonesia accelerate its economic transformation.
• He said the bank is interested in collaborating in areas such as renewable energy and biodiesel as well as technological development.
• BRICS is an inter-governmental organisation comprising ten countries – Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Indonesia, Iran and the United Arab Emirates.
• In 2014, NDB began operating and is headquartered in Shanghai, China, with a regional office in South Africa.
• Its objective is to provide financial assistance to sustainable development projects, especially in developing countries.

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