Banking Awareness of 26 and 27 April 2024

Topic: RBI

1. RBI released roadmap for voluntary transition of SFBs to universal banks.

• This roadmap for voluntary transition of small finance banks (SFBs) to universal banks provided criteria, including net worth and NPA ratios.
• As part of roadmap, RBI has prescribed criteria like minimum net worth of ₹1,000 crore and net profit in the last two financial years.
• Other criteria include low non-performing asset (NPA) ratio and diversified loan portfolio.
• Based on the six specified eligibility requirements, the majority of the ten applicants might not be prepared to switch to a universal bank until the following year.
• This is due to their inability to fulfil the gross non-performing assets (NPA) and net non-performing assets (NPPA) thresholds of less than or equal to 3% and 1%, respectively, for the previous two fiscal years.
• In 2015, these applicants received "in-principle" approval to establish SFBs.
• According to RBI guidelines, SFBs wishing to become universal banks must be listed on an established stock exchange (North East Small Finance Bank is the only one of the 10 SFBs that is not listed).
• Its minimum net worth as of the end of the previous quarter (audited) should be ₹1,000 crore.
• It should satisfy the mandated 15% capital to risk-weighted assets ratio (CRAR) threshold for SFBs.
• It must be in a scheduled status and have demonstrated a minimum of five years of satisfactory performance.
• A specified promoter is not required to be present for an eligible SFB to qualify.
• The current SFB promoters, if any, must nevertheless continue in their role as Universal Bank's promoters.
• During the transfer to Universal Bank, an eligible SFB will not be able to add new promoters or replace existing promoters.
• There won't be a new minimum shareholding lock-in requirement for current promoters in the reorganised universal bank.
• As of now, there are 11 SFBs. Their names are AU (Fincare SFB merged with AU on April 1, 2024), Capital, Equitas, Suryoday, Ujjivan , Utkarsh , ESAF Jana , North East , Shivalik and Unity.

Topic: Banking System

2. National Bank for Agriculture and Rural Development (NABARD) has partnered with RBI’s RBI Innovation Hub (RBIH).

• NABARD has partnered with RBIH to introduce a system which will enable faster processing of agricultural loans.
• NABARD will integrate its e-Kisan Credit Card (KCC) loan origination system portal with the Public Tech Platform for Frictionless Credit (PTPFC) of RBIH.
• The loan origination system portal was developed by NABARD to facilitate digital KCC loan processing for cooperative banks and Regional Rural Banks (RRBs).
• The digitization of agricultural lending will make sure instant doorstep delivery of credit to farmers.
• NABARD chairman Shaji K V and Rajesh Bansal, CEO, RBIH signed the partnership agreement.
• About 351 district and state cooperative banks, along with 43 RRBs, will be able to access digitised state land records, satellite data, KYC, and credit history through the integration with PTPFC.
• For the 120 million farmers in India, the partnership will cut the loan turnaround time from three to four weeks to only five minutes.
• More than ten states have complied with the PTPFC's request to make digital land records available, allowing lenders to easily obtain reliable information.
• A few RRBs will be involved in the partnership's pilot phase of implementation.
• The objective is to expand the digital lending platform to include about 5 crore KCC loans from all RRBs and cooperative banks in the country.

Topic: Reports and Indices

3. India is once again on the US's "priority watch list" of nations with issues with intellectual property enforcement and protection.

• India has joined China, Russia, Venezuela, and three other countries included by the US.
• According to the 2024 Special 301 Report of the US Trade Representative, which was made public on April 25, 2024, there has been advancement in resolving certain issues within the US-India Trade Policy Forum.
• Pre-grant opposition procedures and trademark infringement investigations are these issues.
• But the report also raises a number of ongoing issues. These include a long backlog of trademark oppositions, a lack of effective IP enforcement, and a lack of suitable legal tools to safeguard trade secrets.
• India still needs to fully implement the WIPO Internet Treaties, according to the report.
• Every year, the USTR publishes the Special 301 Report.
• It illustrates how IP protection and enforcement policies are doing in the different nations with whom US conducts business.
• The USTR office states that the existence of a "priority watch" list signifies issues in nations with intellectual property protection, enforcement, or market access for Americans who depend on IP.
• Among the seven nations on the "priority watch list" are Argentina, Chile, and Indonesia.

Topic: Banking/Financial/Govt Schemes

4. During FY22–23, savings from Direct Benefit Transfer (DBT) exceeded ₹63,000 crore, compared to ₹50,000 crore in FY22.

• Since the beginning, the cumulative savings have surpassed ₹3.48 lakh crore.
• For FY25, the government has allocated ₹86,000 crore for the Rural Employment scheme.
• Duplicate or false beneficiaries have been removed, and leaks have been plugged, due to DBT and other governance reforms.
• As of right now, 53 Central Ministries and Departments are using DBT in 314 programs.
• The Public Distribution System saved more over ₹50000 crore in FY23. This was highest among all schemes.
• Over ₹1.85 lakh crore has been saved in total thus far. The removal of over five crore bogus, duplicate ration cards made this possible.
• Under PM KISAN, savings of more than ₹10000 crore were achieved.
• Over ₹500 crore was saved in FY23 due to the efficient management of the LPG subsidy. With this, the total amount saved surpassed ₹73,000 crore.
• DBT was started on January 1, 2013. Its first phase was started in 43 districts. Later, 78 more districts were added in 27 schemes.
• The countrywide implementation of DBT was extended on December 12, 2014. DBT is made possible via JAM.
• About 139 crore Aadhaar, 115 crore mobile connections, and 52 crore Jan Dhan Accounts as of right now integrate DBT in all social programs across the nation, including States and Union Territories.

Topic: Indian Economy/Financial Market

5. Issues of Commercial Paper (CP) by NBFCs reached a four-year peak.

• CP issuances are driven by the RBI's higher risk weights on bank loans to NBFCs.
• From January to March of 2024, NBFCs CP issuances reached a four-and-a-half-year high of ₹1.2 lakh crore.
• Still, this is less than the ₹3.1-lakh crore recorded between July and September of 2018.
• An increase in investor confidence also supports CP issuances. This is a result of NBFCs' robust balance sheets, steady asset quality, and robust liquidity.
• NBFCs are currently issuing CPs with longer tenures than they did in the past.
• From July to September 2019, thirty-three percent of CP issuances had maturities of less than two months.
• This percentage dropped to just ten percent from January to March 2024.
• Commercial Paper (CP): It is an unsecured money market instrument issued. It is issued in the form of a promissory note. In India, it was introduced in 1990.

Topic: Awards and Prizes

6. Hindustan Aeronautics Limited (HAL) has been conferred the Outstanding Public Sector Undertaking (PSU) of the Year award.

• At the All India Management Association (AIMA) Managing India Awards ceremony, Hindustan Aeronautics Limited (HAL) received the Outstanding Public Sector Undertaking (PSU) of the Year award.
• The award was presented by Vice-President Jagdeep Dhankhar in Delhi on April 23.
• In the last financial year, HAL collected the highest-ever revenue of more than ₹29,810 crore from operations.
• It registered a double-digit growth of around 11% as against 9% in the previous financial year.
• It has maintained growth momentum and has achieved an all-round improved performance in diverse areas.
• All India Management Association (AIMA) was established in 1957. It is the apex body of the management profession in India.
• Hindustan Aeronautics Limited (HAL):
  • HAL is one of the oldest and largest aerospace and defence manufacturers in the world.
  • It was established in Bangalore on 23 December 1940 by Walchand Hirachand in association with the then Kingdom of Mysore.
  • It is a government-owned corporation. Its headquarters is located in Bangalore.

Topic: RBI

7. RBI has banned Kotak Mahindra Bank from some banking activity.

• Kotak Mahindra Bank has been ordered by the Reserve Bank of India (RBI) to stop adding new customers and issuing new credit cards through its online and mobile banking channels.
• However, RBI said in its order that the bank can provide services to its existing customers including its credit card customers.
• This action has become necessary based on the significant concerns arising from the Reserve Bank's IT audit of the Bank for the years 2022 and 2023 and the Bank's continued failure to address these concerns in a comprehensive and timely manner.
• RBI said serious deficiencies and non-compliance were observed in the areas of IT inventory management, patch, and change management, and user access management at Kotak Mahindra Bank.
• It also includes vendor risk management, data security and data leakage prevention strategies, business continuity and disaster recovery hardening and drills, etc.

Topic: Corporates/Companies

8. Reliance Jio became the world's largest mobile operator in data traffic.

• Reliance Jio has become the world's largest mobile operator in terms of data traffic by surpassing China Mobile.
• The total traffic on the Jio network has reached 40.9 exabytes, with a 35.2% year-on-year increase.
• Jio has a very strong and wide subscriber base of 481.8 million. It is transforming India with 108 million True 5G customers.
• The monthly per capita data usage has increased from 13.3 GB three years ago to 28.7 GB.
• Jio has also become the first Indian company to cross ₹100,000-crore in pre-tax profits.

Topic: RBI

9. FEMA regulations for direct listing on international exchanges have been released by RBI.

• Reserve Bank has notified amendments to the FEMA regulations for listing an Indian company on international stock exchanges.
• These new regulations will help companies to utilise foreign exchange more effectively.
• The first set of regulations is related to the mode of payment and reporting of non-debt instruments.
• The second set of regulations is related to foreign currency accounts by a person resident in India.
• In January, the government has permitted the direct listing of securities by Indian companies on international exchanges of GIFT IFSC.
• The Ministry of Corporate Affairs (MCA) has issued Companies (Listing of Equity Shares in Permissible Jurisdictions) Rules, 2024.

Topic: Summits/Conferences/Meetings

10. The Retail Summit (TRS) 2024 held in Dubai, with its agenda built around eight key themes.

• It is a leading global event focused on the future of retail.
• The aim of these themes is to address the key challenges and opportunities facing retailers around the world.
• TRS 2024 focused on areas including Artificial Intelligence, Brick and Mortar Stores, Data, Digital Transformation, Macroeconomics, Supply Chain Management, Sustainability & Ethics, and Talent Acquisition.
• The Federation of Indian Chambers of Commerce and Industry (FICCI) is an industry partner of the Retail Summit 2024.
• The Retail Summit is the world's only event, with over 900 participants from over 30 countries that discusses the convergence of retail with technology, experience, and hospitality.
• Some of the world's leading brands participated, including Indian giants like Reliance Group and Myntra.
• This partnership focuses on giving Indian brands in the retail and e-commerce sector a platform for B2B engagement with international brands to showcase their products and services.
• The two-day event concluded on April 24, which was organized in partnership with Dubai Chambers.

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