Banking Awareness of 26 and 27 May 2023

Topic: Appointments

1. Srikrishnan Hari Hara Sarma has been appointed as MD & CEO of Karnataka Bank. 

• Karnataka Bank’s board of directors has appointed him as an additional director to take up the position of MD and CEO of the bank.
• He has been appointed for three years effective from the date of his assuming charge.
• The appointment is subject to shareholders’ approval at the coming Annual General Meeting or within 3 months from the date of assuming charge, whichever is earlier.
• He has previously worked with HDFC Bank and Yes Bank. He has worked at Jio Payments Bank Limited as MD and CEO.
• Karnataka Bank is a Scheduled Commercial Bank based in Mangaluru, Karnataka. It is a private sector bank. It was founded in 1924. Mahabaleshwara M S is its MD and CEO.

Topic: RBI

2. RBI has given approval for merger of Maratha Sahakari Bank with Cosmos Co-op Bank.

• The voluntary Scheme of Amalgamation of Maratha Sahakari Bank with The Cosmos Co-operative Bank has been approved by RBI.
• The scheme will become effective from May 29, 2023.
• Maratha Sahakari Bank was placed by RBI under Directions under Section 35 of the Banking Regulation Act, 1949, on August 31, 2016.
• Maratha Sahakari Bank’s branches will function as branches of The Cosmos Co-operative Bank Limited, Pune (Maharashtra) from May 29, 2023.
• The Cosmos Co-operative Bank is a multi-state urban co-operative bank.

Topic: Banking System

3. Bank of Maharashtra is ranked at first place among public sector banks (PSBs) in terms of loan and deposit growth in percentage terms during 2022-23.

• Bank of Maharashtra also recorded highest growth in profitability. Its profit has grown almost 126% to ₹2,602 crore during 2022-23.
• Bank of Maharashtra also recorded the highest growth of 24.06% in terms of Retail-Agriculture-MSME (RAM) loans.
• In terms of Retail-Agriculture-MSME (RAM) loans, Bank of Maharashtra was followed by Punjab National Bank (20.85% growth) and Punjab & Sind Bank (20.70%).
• Total business growth of Bank of Maharashtra was also the highest at 21.2%. It was followed by Bank of Baroda at 14.3%.
• Bank of Maharashtra also achieved 1st rank in terms of getting low-cost Current Account and Savings Account (CASA) deposits with 53.38%. It was followed by Central Bank of India (50.18%).
• In terms of percentage increase in gross advances, Bank of Maharashtra reported 29.4% increase in loans at ₹1,75,120 crore as of March 2023.
• Indian Overseas Bank and UCO Bank followed it with 21.2% and 20.6% growth, respectively.
• In absolute terms, aggregate loans of the SBI were nearly 16 times higher at ₹27,76,802 crore.
• Bank of Maharashtra was first in terms of deposit growth. Bank of Baroda and Punjab National Bank stood at second and third place, respectively, in terms of deposit growth.

Topic: Banking System

4. Indian Bank has been empanelled as a Clearing and Settlement Bank with the ICCL.

• It can now facilitate banking services to members of BSE (Bombay Stock Exchange) for clearing and settlement operations.
• Now, it is possible for the clearing members to open settlement accounts with the Bank for funds settlement under equity derivatives segment.
• The bank is actively considering the proposal to extend this facility to the members of NSE.
• e-TDR product for online transmission of FDR and margin with ICCL on behalf of the clearing members has also been launched by the bank.
• Indian Clearing Corporation Ltd (ICCL) was incorporated in 2007 in the form of a wholly owned subsidiary of BSE Ltd.
• It is the only clearing corporation in India to have been granted "AAA" rating by India Ratings Ltd. and Care Ratings Ltd.
• Indian Bank:
  • It was founded in 1907. Its headquarters are in Chennai. Shanti Lal Jain is its MD & CEO.
  • From 1 April 2020, Allahabad bank has been merged with Indian Bank.

Topic: RBI

5. RBI has imposed a penalty of ₹84.50 lakh on the Central Bank of India.

• The penalty has been imposed for non-compliance with some provisions of norms related to frauds classification and reporting.
• Statutory inspection for supervisory evaluation of the bank was carried out by RBI.
• Statutory inspection was carried out with reference to the bank’s financial position as on March 31, 2021.
• It was found that the bank failed to report to RBI some accounts within seven days of decision of Joint Lenders' Forum (JLF) to declare the accounts as fraud.
• Central Bank of India is an Indian public sector bank. It is based in Mumbai. Matam Venkata Rao is its MD & CEO.

Topic: Banking System

6. Gupshup introduces UPI payments on feature phones.  

• It is leveraging UPI 123 Pay to enable payments for feature phone users.
• GSPay, an app developed by Gupshup.io, uses SMS messaging for payments without the data plan or internet connectivity.
• The app will provide the option to make payments either via mobile number or UPI ID.
• The users will enter the mobile number or UPI ID of the payee, the amount and UPI PIN. After the confirmation, the payment will be completed.
• GSPay app is presently available in 12 Indian languages.
• Gupshup is a homegrown conversational engagement platform.
• UPI 123 Pay is an instant payment system launched by RBI and NPCI in March 2022.

Topic: Banking System

7. Axis Bank has launched Sarathi platform.

• It is a platform for easy Point of Sale (PoS) onboarding of merchants.
• It is a first-of-its kind digital onboarding platform for merchants to adopt Electronic Data Capture (EDC) or Point of Sale (PoS).
• It enables merchants to finish the onboarding process in 4 simple steps.
• The requirement for merchants to fill out documents has been eliminated by the paperless onboarding procedure.
• The paperless onboarding procedure also eliminates merchants wait to have their PoS terminals installed.
• The features of Sarathi include immediate status updates and the ability to transact on the same day their application is processed.
• With the help of this solution, speedy installation within 45 minutes of processing the application.
• Axis Bank is the third-largest private sector bank in India that is headquartered in Mumbai. Its MD & CEO is Amitabh Chaudhry.

Topic: Appointments

8. R Dinesh has assumed office as the new President of Confederation of Indian Industry.

• R Dinesh, the Executive Vice Chairman of TVS Supply Chain Solutions, has assumed office as the new President of the Confederation of Indian Industry for 2023-24.
• He took place of Sanjiv Bajaj, the Chairman and Managing Director of Bajaj Finserv Limited.
• ITC Managing Director Sanjiv Puri has been named the President-Designate of CII for the year 2023-24.
• Rajiv Memani has been named as the Vice President of CII for the year 2023-24.
• Confederation of Indian Industry (CII):
  • It was established in 1895 as a non-governmental trade association.
  • It is a membership-based organization.
  • It is a body registered under the Societies Registration Act, 1860 of India.
  • CII National Council is the highest governing body of CII.

Topic: Taxation

9. Draft valuation rules for overseas investments into startups under the ‘angel tax’ regime has been announced.

• The rules have been issued by the Central Board of Direct Taxes (CBDT).
• Five new valuation methods for calculating Angel Tax under a new mechanism for non-resident investors in startups have been proposed under the rules.
• The new mechanism will be effective from April 1, 2024.
• Regulated investor entities from 21 countries and recognised startups will be immune from the new mechanism. New valuation methods are given below.
  • Comparable Company Multiple Method
  • Probability Weighted Expected Return Method
  • Option Pricing Method
  • Milestone Analysis Method
  • Replacement Cost Method
• These five new valuation methods will be separate from two methods already in use- Discounted Cash Flow (DCF) and Net Asset Value (NAV).
• 10% variation has been allowed over the value determined under these rules.
• As per the rule, the valuation report by the Merchant Banker would be acceptable if it is of a date not more than 90 days prior to the date of issue of shares subject to valuation.
• Investment from angel investors belonging to Singapore, Ireland, the Netherlands and Mauritius will not be exempted under new angel tax mechanism.
• Entities from 21 specified countries will get exemption. DPIIT (Department for Promotion of Investment and Internal Trade)-recognised start-ups will get exemption from the new angel tax provision.
• The rules are expected to help by bringing greater flexibility in determining the fair market value of unquoted shares. They will also reduce valuation disputes in angel tax levy.
• Angel tax (income tax at the rate of 30.6%) is levied when shares are issued by an unlisted company to an investor at a price that is more than fair market value.
• It was previously imposed only on investments made by a resident investor.
• In Budget 2023-24, it was proposed to extend angel tax to non-resident investors also.

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