Banking, Financial and Economic Awareness of 29, 30 and 31 August 2021

Topic: Regulatory Bodies/Financial Institutions

1. Kotak Mahindra Asset Management Company banned from launching any Fixed Maturity Plan (FMP) for six months.

• Kotak Mahindra Asset Management Company has been banned from launching any Fixed Maturity Plan (FMP) for six months.
• The ban has been placed by SEBI on Kotak Mahindra Asset Management Company for arbitrarily entering into a ‘standstill’ agreement with the promoters of Essel Group.
• The agreement extended maturity of these debt papers and delayed payment of full proceeds to investors of six Fixed Maturity Plan (FMP) schemes run by the AMC.
• Kotak has invested in Non-Convertible Debentures of financially handicapped entities of Essel Group, including Konti Infrapower & Multiventures Pvt. Ltd and Edison Utility Works Pvt. Ltd.
• SEBI has also fined the AMC with ₹50 lakh. In 2019, Kotak Mutual Fund entered into a first-of-its-kind standstill agreement with Essel Group.
• This was done after Essel Group expressed inability to repay the investments made by the six FMPs of the fund house.
• FMPs are fixed-income funds. They invest in debt with maturities similar to the fund’s duration.  

Topic: RBI

2. RBI increases ceiling per transaction under Indo-Nepal Remittance Facility Scheme by four-fold to ₹2 lakh.

• RBI has increased ceiling per transaction under Indo-Nepal Remittance Facility Scheme by four-fold to ₹2 lakh.
• RBI has removed the limit of 12 remittances in a year per remitter. The changes will come into effect from October 1, 2021.
• As per RBI, the changes has been made to boost trade payments between the two countries, as also to facilitate person-to-person remittances electronically to Nepal.
• RBI said that the ceiling of ₹50,000 per remittance with a maximum of 12 remittances in a year shall continue to apply for remittances accepted by banks by way of cash from walk-in customers or non-customers.

Topic: Appointments

3. The tenure of Bank of India executive director PR Rajagopal extended by two years.

• The tenure of Bank of India executive director PR Rajagopal has been extended by two years.
• His current term was to expire on February 28, 2022. Last week, government has extended term of executive directors of various public sector banks.
• Bank of India is a government of India owned bank. Its headquartered in Mumbai. Atanu Kumar Das is the MD & CEO of Bank of India.
• It was founded in 1906. It is a founder member of SWIFT (Society for Worldwide Inter Bank Financial Telecommunications).

Topic: Banking System

4. Axis Bank starts issuing debt securities under ₹35,000 crore-debt raise plan announced earlier this year.

• Axis Bank has begun issuing debt securities under ₹35,000 crore-debt raise plan announced earlier this year.
• In April, Bank’s Board had approved capital raise proposal up to ₹35,000 crore by issuing various debt instruments in Indian or foreign currency in domestic/overseas markets.
• The bank has started process of issuing of the debt instruments, in the form of the additional tier 1 notes (notes) in foreign currency.
• This was part of the existing global medium term notes (GMTN) programme of the bank.
• Axis Bank is the third-largest private bank in India. It is headquartered in Mumbai. Its MD & CEO is Amitabh Chaudhry.

Topic: Banking System

5. Tally Solutions and Cosmea Financial Holdings apply to RBI for ‘on tap’ license to operate as small finance banks.

• Bengaluru-based Tally Solutions and Mumbai-based Cosmea Financial Holdings have applied to RBI for ‘on tap’ license to operate as small finance banks.
• After the applications of Tally Solutions and Cosmea Financial Holdings, the number of applicants wanting to set up small finance banks (SFB) has increased up to six.
• In April 2021, RBI said that four applicants had applied to set up an SFB under the December 2019 Guidelines for ‘on tap’ licensing.
• The names of four applicants are VSoft Technologies, Calicut City Service Co-operative Bank, Akhil Kumar Gupta and Dvara Kshetriya Gramin Financial Services.
• The minimum paid-up voting equity capital/net worth requirement is ₹200 crore according to the guidelines for ‘on tap’ licensing of SFBs.
• Minimum net worth requirement for urban co-operative banks wanting to change into SFBs is ₹100 crore. This should be increased to ₹200 crore within five years from the date of commencement of business.

Topic: Banking System

6. Northern Arc Capital successfully concludes $50 million external commercial borrowing (ECB) transaction with JICA.

• Debt financing platform, Northern Arc Capital has successfully concluded $50 million external commercial borrowing (ECB) transaction with Japanese International Cooperation Agency (JICA).
• Chennai-based NBFC said that the fund will be used to meet credit needs of women borrowers or towards products that benefit women.
• Kshama Fernandes, MD & CEO of Northern Arc Capital. JICA is Japan’s governmental agency. It works towards promoting economic and social growth in developing countries.
• External commercial borrowing (ECB): It is a financial instrument to borrow money from a foreign source for solely commercial purposes.

Topic: Corporates/Companies

7. Classical-music streaming service Primephonic acquired by Apple Inc.

• Classical-music streaming service Primephonic has been acquired by Apple Inc.
• Primephonic’s playlists and audio content will be integrated into Apple Music.
• Apple Inc also plans to launch an app dedicated to genre (classical music) next year.
• Primephonic’s existing service will close on September 7, but its subscribers will get six months of Apple Music for free.
• Apple has launched Apple Music in 2015. It has acquired music-recognition app Shazam in 2018.
• Apple Inc is an American multinational technology company. It is world's largest technology company by revenue and world's most valuable company. Tim Cook is its CEO.

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