Banking Awareness of 29 and 30 April 2022

Topic: Appointments

1. Rajnish Kumar appointed as advisor of Indifi Technologies and Krishnan Ramanujam appointed as Chairperson of NASSCOM.

• Rajnish Kumar is former chairman of SBI. In March 2022, Rajnish Kumar was appointed International Strategic Advisory Board of Dun & Bradstreet, a data and analytics firm.
• Krishnan Ramanujam, a senior executive at Tata Consultancy Services, has been appointed as Chairperson of NASSCOM for 2022-23.
• Ramanujam has succeeded Rekha M. Menon. Krishnan was currently the Vice-Chairperson of NASSCOM.
• Anant Maheshwari, President of Microsoft India, has been appointed as the Vice-Chairperson of NASSCOM for 2022-23.
• Indifi Technologies is an online lending platform. It provides online business loans to small businesses.
• National Association of Software and Services Companies (NASSCOM):
  • It was established in 1988 as an association of the software industry.
  • It is the premier trade body and chamber of commerce of the Tech industry in India.
  • Debjani Ghosh is the current President of NASSCOM.

Topic: Banking/Financial Schemes

2. MSME Sustainable (ZED) Certification Scheme has been launched to facilitate MSMEs adopt ZED practices.

• The scheme is a drive to motivate and incentivize MSMEs for Zero Defect Zero Effect (ZED) Certification.
• Phase 1 of the scheme has been launched. It will focus largely on inclusion of manufacturing MSMEs.
• Phase 2 of the scheme will focus on inclusion of services sector MSMEs.
• The scheme includes three certification levels (bronze, silver and gold). MSMEs will be required to take a ZED pledge upon registration.
• Each MSME that takes the pledge of ZED will be offered Rs 10,000 as a reward for participating in the scheme.
• The scheme has a provision of up to Rs 5 lakh (per MSME) for handholding and consultancy support for MSMEs under ZED Certification.
• Under the scheme, subsidies will be provided to MSMEs on the cost of ZED certification as given below.
  • Micro Enterprises (80%), Small Enterprises (60%), Medium Enterprises (50%)
  • Additional subsidy of 10% for the MSMEs owned by Women/SC/ST Entrepreneurs
  • Additional subsidy of 10% for MSMEs in NER/Himalayan/LWE/Island territories/aspirational districts.
  • Additional subsidy of 5% for MSMEs which are also a part of the SFURTI.
  • Additional subsidy of 5% for MSMEs which are a part of the Micro & Small Enterprises - Cluster Development Programme (MSE-CDP).

Topic: Indian Economy/Financial Market

3. Core sector output growth declines to 4.3% in March 2022.

• This decline in growth of output of eight core industries is due to high base effect of 12.6% recorded in March 2021.
• As per the official data released on 29th April 2022, overall growth in 2021-22 stood at 10.4%.
• Commerce and Industry Ministry has changed the growth rate of core industries in December 2021 from 3.8% to 4.1%.
• For March 2022, six out of eight core industries recorded growth.
• Only crude oil and coal recorded contraction at 3.4% and 0.1% respectively. The weightage of eight core industries is 40.27% in IIP.
• Industries that have shown positive growth rate in March 2022 are natural gas (7.6%), refinery products (6.2%), fertilisers (15.3%), steel (3.7%), cement (8.8%) and electricity (4.9%).

Topic: Agriculture

4. ₹17.09 lakh crore has been disbursed by banks and cooperatives as agriculture credit during 2021-22.

• The agriculture credit disbursal has exceeded the target of ₹16.5 lakh crore.
• The total agriculture credit includes crop loans of ₹10.21 lakh crore and ₹6.88 lakh crore for agricultural infrastructure and long-term projects.
• The share of crop loan is less than 60% in overall agri credit. The cooperative banks’ share in crop loan is only 19.76%.

Topic: RBI

5. Guidelines for compensation policy of senior management and key managerial personnel in NBFCs has been released by RBI.

• The guidelines will come into effect from April 1, 2023. They will be applicable to all NBFCs under SBR framework.
• The guidelines will not be applicable to NBFCs categorised under ‘base layer’ and government-owned NBFCs.
• As per the guidelines, the board of NBFCs will form Nomination and Remuneration Committee (NRC).
• The mandate of NRC include overseeing framing, review and implementation of compensation policy of NBFC.  
• In October 2021, RBI has already established Scale Based Regulatory (SBR) framework for NBFCs. 
• Report on Currency and Finance (RCF) for the year 2021-2022 has also been released by RBI. Its theme is “Revive and Reconstruct”.
• As per the report, 6.5 – 8.5% is feasible range for medium-term steady state GDP growth in India.
• The report says that it is important to lower down general government debt to less than 66% of GDP over the next 5 years to secure India’s medium-term growth prospects.

Topic: Regulatory Bodies/Financial Institutions

6. Exposure limit for insurers in Banking, financial services and insurance (BFSI) sector has been increased.

• Insurance Regulatory and Development Authority of India (IRDAI) has increased the rate to 30%.
• IRDAI has allowed the insurers to carry exposure to financial and insurance activities up to 30% of their investment assets.
• Centre will sell its 3.5% stake in LIC through IPO. Up to 50% of net offer will be allocated to Qualified Institutional Buyers.
• Up to 15% will be available for allocation to non-institutional bidders.
• Not less than 35% of the net offer will be allocated to retail individual bidders.

Topic: Banking System

7. Bank credit has grown by 9.7% in March 2022.

• As per RBI’s statement on Sectoral Deployment of Bank Credit, credit to industry grew up to 7.1% in March 2022.
• Credit to medium industries has shown growth of 71.4% in March 2022. 
• Credit to micro and small industries increased to 21.5% from 3.9%.
• Credit to large industries has shown marginal growth of 0.9%.
• Credit to services sector increased to 8.9% in March 2022. Credit to agriculture and allied activities registered growth of 9.9% in March 2022.
• As per analysis by Crisil Ratings, bank credit growth may increase by 200 to 300 basis points to 11-12% this fiscal.

Topic: Banking System

8. ICICI Bank has launched digital ecosystem for Micro, Small and Medium Enterprises (MSMEs) in India.

• The digital ecosystem is also for customers of other banks. Customers can avail facilities through the ICICI Bank’s InstaBIZ app.
• Customers can get the services by logging in as a Guest in latest version of InstaBIZ app.
• bob World Gold has been launched by Bank of Baroda. It is specially designed for senior citizens and elderly people.
• It is a new feature on Bank of Baroda’s bob World mobile banking platform.
• The features of bob World Gold are simple and easy user interface, customization and preferential research-based service.

Topic: Indian Economy/Financial Market

9. Cabinet Committee on Economic Affairs (CCEA) approved the sale of 51 per cent equity in Pawan Hans Limited.

• CCEA has approved the selling of 51% stake in helicopter services provider Pawan Hans Ltd to Star9 Mobility for Rs 211.24 cr.
• The government had received three bids for the sale of Pawan Hans.
• The government had fixed the Reserve Price of Rs 199.92 crore for the sale of 51%.
• ONGC had already said that it would give its entire stake to the successful bidder in the strategic disinvestment deal at the same price and terms.
• Pawan Hans Ltd (PHL):
  • It is a joint venture of the government of India and ONGC for providing helicopter and aero mobility services.
  • It is incurring losses for the last three financial years.
  • The government holds 51% of the shares in the company and ONGC holds the balance 49% shareholding.

Topic: Banking System

10. Airtel Payments Bank has entered into partnership with IndusInd Bank.   

• Airtel Payments Bank has entered into this partnership to offer fixed deposit (FD) facilities to its customers.
• Customers can now do fixed deposits (FDs) from Rs 500 up to Rs 190,000 through Airtel Thanks app.
• Saving account customers of Airtel Payments Bank will get an interest rate of up to 6.5% per annum. Senior citizens will get extra 0.5% interest.
• Customers can dissolve FD even before the maturity date without any penalty or processing fee.

Read Banking Awareness PDF - 29 and 30 April 2022