Banking Awareness of 29, 30 and 31 July 2023

Topic: Reports and Indices

1. RBI’s Digital Payments Index (DPI) increases from 377.46 in September 2022 to 395.57 in March 2023.

• RBI-DPI stood at 349.30 in March 2022. RBI-DPI for September 2022 was announced on January 31, 2023.
• RBI has been publishing RBI-DPI since January 1, 2021 with March 2018 as base.
• RBI-DPI captures the extent of digitization of payments across the country.
• RBI-DPI consists of five parameters. Of these parameters, payment enablers account for 25% of DPI.
• Payment infrastructure – demand-side factors account for 10%, payment infrastructure – supply-side factors account for 15%.
• Payment performance accounts for 45%, whereas consumer centricity holds 5% weightage.
• According to the Economic Survey 2022-23, fintech adoption rate in India is highest at 87%. Global average of fintech adoption rate is 64%.
• India has achieved 3rd place in digital payments, after US and China.

Topic: Banking System

2. Fino Payments Bank’s board has approved its transition to a Small Finance Bank.

• However, the transition is subject to necessary approvals.
• The Payments Bank has also got a letter from its holding company Fino PayTech regarding a group corporate restructuring proposal.
• After this, the board has formed a committee to explore the possibility of group corporate restructuring.
• Fino Payments Bank is a wholly-owned subsidiary of Fino Paytech Limited (FPL). It was launched in 2017.
• The difference between the payments banks and small finance banks is that payment banks are allowed to accept demand deposits only and hold up to Rs. 2 lakh per person, on the other hand, small finance banks are allowed to accept all types of deposits.
• According to RBI, there are six payment banks and 12 small finance banks as of now.

Topic: Corporates/Companies

3. Razorpay has launched the MoneySaver Export Account.

• It is an account for Indian exporters. With this, Indian exporters can now open a smart account in any country of their choice.
• They can receive payments locally via bank transfers on the Razorpay platform.
• With this initiative, exporters are allowed to get international bank transfers from 160 countries.
• According to Razorpay, this will be India’s first smart account to offer 50% savings on international bank transfers for exporters.
• The account comes with a single-click electronic Foreign Inward Remittance Statement (FIRS).
• This is accessible directly from the Razorpay dashboard.
• Razorpay is payment and Banking Company. It is India's first full-stack financial solutions company.

Topic: Reports and Indices

4. HDFC Bank has been ranked on the top in the list of 2023 CRISIL’s Greenwich market share Leaders in Large Corporate Banking.

• It has surpassed State Bank of India (SBI). For middle market corporates, it again topped the list of 2023 Leaders among local banks.
• HDFC Bank joined ICICI Bank as the year’s joint Greenwich Quality Leaders.
• From 2021 to 2022, the share of Indian corporates who are working with one of the largest Indian private sector banks for overall corporate banking services increased from 33% to 38%.
• The share of corporates working with minimum one large foreign bank increased from 18% to 21% from 2021 to 2022.
• However, the share of Indian corporates working with minimum one of the country’s smaller private sector banks declined from 21% to 18% during 2021 to 2022.
• Industry revenue pools across banking increased by 16% overall year on year.

Topic: RBI

5. As on July 23, RBI has permitted 20 banks functioning in India to open 92 Special Rupee Vostro Accounts of partner banks from 22 countries.

• This has been done in an attempt to promote bilateral trade in local currencies.
• RBI and the Central Bank of UAE have signed a MoU to permit exporters and importers to pay in their respective domestic currencies.
• The 22 countries include the countries given in the following table.

• UCO Bank has opened four special rupee vostro accounts. It has got RBI approval for opening 8 more accounts.
• India's exports increased by 36.6% during the last five years from USD 330.07 billion in 2018-19 to USD 450.95 billion in 2022-23.
• India's imports increased by 38.8% during the last five years from USD 514.07 billion in 2018-19 to USD 714.04 billion in 2022-23.
• A Vostro account is an account which a domestic bank holds on behalf of a foreign bank.

Topic: Indian Economy/Financial Market

6. China’s steel exports to India during first quarter of FY24 were highest since FY20.

• Significant increase in Chinese steel imports in Q1 of FY24 is believed to be caused by Indian traders’ buying of discounted Chinese offerings.
• China is largest exporter of steel to India in value terms. It has overtaken Korea.
• Hot rolled coils/sheets are the most imported steel item in volume terms during Q1 of FY24.
• Cold rolled coils are the second most imported steel item in volume terms during Q1 of FY24. They were highest in value terms during Q1 of FY24.
• Stainless steel and alloyed steel imports recorded a more or less upward trajectory during FY20 to FY24.
• The import of non-alloyed steel reported a sharp upward trajectory during FY20 to FY24.
• In volume terms, Korean supplies to India declined 4% to 0.5 mt in Q1FY24.
• India’s steel imports in first quarter of FY24 increased 20% YoY to 1.4 mt.
• India’s Q1 FY24 steel exports were lowest since FY21 at 2 million tonnes (mt).
• This was due to weaker offers from key markets (Belgium, UAE, and Vietnam), a slowdown in buying across newly tapped markets like Turkey, and increased price competition with Chinese players.
• Italy has emerged as the top buyer for Indian hot rolled coils in recent years.

Topic: Taxation

7. The number of assesses who will be mandatorily issuing e-invoice will increase by over 4 lakh from 1 August 2023.

• This is because new threshold of aggregate annual turnover of ₹5 crore will be effective from 1 August 2023.
• At present, the threshold is ₹10 crore. It was ₹500 crore at the time of implementation of mandatory generation of e-invoice from October 1, 2020.
• Presently, approximately 6 lakh assesses are required to comply with this mandatory norm.
• This number will increase to nearly 10 lakh after lowering the threshold.
• Exempted categories like banks, Non-Banking Financial Companies or insurance companies are excluded from this number.
• According to Rule 48(4) of CGST Rules, registered persons are required to prepare an invoice by uploading particulars of the invoice on Invoice Registration Portal (IRP).
• ‘e-invoicing’ facilitates the exchange of the structured invoice data between a supplier and a buyer in an integrated electronic format.

Topic: Miscellaneous

8. As per the Finance Ministry, over 65% growth have been seen in 2022 from 2021 in the frauds reported for ATMs and others.

• The amount involved in the frauds has nearly doubled.
• According to National Payment Corporation of India (NPCI), 2000 customers are, on an average, impacted every month due to cyber fraud.
• Parliamentary committee’s report on ‘Cyber security and rising incidence of cyber/white collar crimes’ was recently tabled in Parliament by its Chairman Jayant Sinha.  
• The committee recommended setting up of centralized regulatory authority focused on cyber security on the lines of Directorate General of Civil Aviation.
• In 2021, the number of total frauds reported for ATMs and other frauds were about 10.80 lakh and the value was ₹1,119 crore.
• For every 67,000 transactions, one fraud was committed in 2021.
• In 2022, the number of total frauds reported for ATMs and other frauds were about 17.80 lakh and the value was ₹2,113 crore.
• For every 64,000 transactions, one fraud was committed in 2022.
• The committee also recommended the setting up of a Central Negative Registry for improving prevention and detection of fraud in the banking sector.
• The committee recommended that RBI should devise an automatic compensation system.

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