Banking Awareness of 27, 28, 29 and 30 July 2025

Topic: Regulatory Bodies/Financial Institutions

1. IRDAI has directed insurers to extend insurance services to 75,000 Gram Panchayats over the next two years.

• This move is aimed at increasing insurance penetration in rural areas.
• In the 2025-26 financial year, insurers must cover 25,000 Gram Panchayats.
• In 2026-27, the target increases to 50,000 Gram Panchayats.
• The rule applies to all life, general, and standalone health insurance companies.
• In FY26, insurers must cover at least 15% of people, vehicles, or assets in each assigned Panchayat.
• In FY27, they must cover 25% in Panchayats assigned in FY26.
• They also need to cover 10% in newly assigned Panchayats during FY27.
• The Life and General Insurance Councils will assign Panchayats to insurers.
• This allocation will be based on factors like market share or other relevant parameters.
• Insurers will identify target Panchayats using data from the Ministry of Panchayati Raj.
• This data comes from the Local Government Directory, which maps villages by district, pincode, and Panchayat.
• The original rural and social sector norms were introduced in 2024.
• These earlier guidelines were valid only until the end of FY25.
• New rules with specific targets and coverage requirements apply for FY26 and FY27.
• India has approximately 2.68 lakh Gram Panchayats, according to government figures.

Topic: RBI

2. The Reserve Bank of India has relaxed investment rules for lenders in Alternative Investment Fund (AIF) schemes.

• A single lender can now invest up to 10% of an AIF scheme’s total capital.
• All lenders together can invest up to 20% of the fund’s corpus.
• If a lender invests over 5% in an AIF that indirectly funds its own borrower (excluding equity), full provisioning is required for that specific exposure.
• The new rules raise the investment cap from 15% in the draft guidelines to 20% in the final version.
• Provisioning for overlapping exposure between an AIF and a borrower is now proportionate to the lender’s stake in the fund.
• Earlier, full provisioning was required for such common exposures.
• These changes are expected to boost bank participation in AIF schemes.
• Lenders must now improve their internal systems for risk evaluation and ongoing investment monitoring.
• Alternative Investment Funds (AIFs) are privately pooled. They are invested in alternative asset classes such as venture capital, hedge funds, etc.

Topic: RBI

3. Anuradha Thakur, the Economic Affairs Secretary, has been appointed to the Reserve Bank of India’s central board.

• The government made the appointment. She replaces Ajay Seth, who retired on June 30.

• Seth served on the board for four years.
• Thakur is an IAS officer from the 1994 batch. She belongs to the Himachal Pradesh cadre.
• She started as Secretary of the Department of Economic Affairs on July 1.
• The RBI announced her appointment in an official statement. Her term on the board started on July 24, 2025.
• It will continue until further notice.
• M Nagaraju, the Financial Services Secretary, is another government nominee on the RBI board.

Topic: Regulatory Bodies/Financial Institutions

4. IRDAI has fined Star Health and Allied Insurance with ₹3.39 crore.

• The penalty was for violations of information and cybersecurity rules.
• The company also received an official warning.
• There are increasing concerns about insurers breaking regulations. Mis-selling is one of the major issues.
• To tackle this, IRDAI formed special committees.
• These committees include full-time members.
• They focus on enforcing the Insurance Act and related regulations.
• The committees oversee insurers and insurance intermediaries.

Topic: Banking System

5. India recorded over 65,000 crore digital transactions between 2020 and 2025.

• The total value of these transactions exceeded ₹12,000 lakh crore.
• Minister of State for Finance Pankaj Chaudhary shared this data in a written reply in the Lok Sabha.
• The government has partnered with various stakeholders to boost digital payment adoption.
• These include the RBI, NPCI, banks, fintech companies, and state governments.
• Efforts have been concentrated on increasing usage in Tier-2 and Tier-3 cities.
• To support this push, the RBI launched the Payments Infrastructure Development Fund (PIDF) in 2021.
• The PIDF scheme encourages the expansion of digital payment infrastructure.
• It targets Tier-3 to Tier-6 cities, the northeastern region, and Jammu & Kashmir.
• As of May 31, 2025, about 4.77 crore digital payment touchpoints had been installed under this initiative.
• Digital platforms like UPI have helped small merchants and rural users adopt cashless payments.
• This has reduced dependence on physical cash transactions.
• It has also helped more people enter the formal financial system.
• Digital financial activity has improved access to formal credit.
• To track digital payment trends, the RBI developed the Digital Payments Index (RBI-DPI).
• The index measures the extent of digital adoption across the country.
• As of September 2024, the RBI-DPI stood at 465.33.
• This indicates steady growth in digital infrastructure and usage.

Topic: Indian Economy/Financial Market

6. India's industrial output growth, measured by the IIP, slowed to 1.5% in June 2025.

• This was down from a revised 1.9% growth in May.

• In comparison, industrial production had increased by 4.9% in June 2024.
• The manufacturing sector performed better, rising by 3.9% in June.
• This was an improvement from 2.6% growth in the previous month.
• Mining output declined sharply, contracting by 8.7% during June.
• Electricity generation also fell, recording a 2.6% drop.
• Infrastructure and Construction Goods output rose by 7.2% compared to June last year.
• Intermediate goods saw a year-on-year growth of 5.5%.
• Capital goods production increased by 3.5% over the same period.
• Consumer durables output went up by 2.9% year-on-year.
• Primary goods output declined by 3% in June.
• Consumer non-durables saw a minor contraction of 0.4% year-on-year.

Topic: Banking/Financial/Govt Schemes

7. Atal Pension Yojana crossed 8 crore enrollments in its 10th year.

• The Atal Pension Yojana has crossed 8 crore gross enrollments since its launch in 2015.
• Atal Pension Yojana (APY) is a flagship social security scheme of the Government of India administered by the Pension Fund Regulatory and Development Authority (PFRDA).
• In FY 2025-26 alone, 39 lakh new subscribers have been added to the scheme.
• APY was launched to provide a universal social security system, especially for the unorganized sector.
• APY is designed to provide 'Sampurna Suraksha Kavach' by guaranteeing a monthly pension of ₹1,000 to ₹5,000 after 60 years of age.
• The same pension is given to the spouse after the subscriber's death, and the accumulated corpus is returned to the nominee after both pass away.
• The scheme is open to Indian citizens aged 18-40, except those who are or have been income tax payers.

Topic: Indian Economy/Financial Market

8. India’s growth forecast for 2025 and 2026 raised to 6.4% by the IMF.

• The International Monetary Fund (IMF) has revised India’s GDP growth forecast for 2025 and 2026 to 6.4%, up from earlier estimates of 6.2% and 6.3%.

• India continues to be recognized as the fastest-growing major economy in the world.
• The revision reflects a more favorable global environment than expected in IMF’s April 2025 projections.
• According to financial year data, India’s GDP growth is expected to reach 6.7% in 2025 and 6.4% in 2026.
• Global growth forecasts have also been revised upwards slightly to 3.0% in 2025 and 3.1% in 2026.
• China's growth rate is estimated to be 4.8% in 2025 and 4.2% in 2026, while the US growth rate is estimated to be 1.9% in 2025 and 2.0% in 2026.
• Factors influencing the improved projections include easing tariff impacts, a weaker dollar, and better financial conditions.