Banking Awareness of 29 and 30 September 2023

Topic: Banking System

1. Non-food credit growth of Scheduled commercial banks’ (SCBs) decreased to 15% year-on-year (y-o-y) in August 2023.

• Non-food credit recorded a growth of 16% y-o-y in August 2022.
• Banks’ non-food credit growth declined in August 2023 due to decline in credit demand from industry and personal loans.
• As per RBI’s data on sectoral deployment of bank credit, credit to industry recorded growth of 6.1% y-o-y in August 2023 as compared with 11.4% in August 2022.
• RBI said among major industries, credit growth (y-o-y) to ‘basic metal & metal products’ accelerated in August 2023.
• It also said among major industries, credit growth (y-o-y) to ‘textiles’ accelerated in August 2023.
• RBI said credit growth to ‘chemicals and chemical products’, ‘food processing’ and ‘infrastructure’ decelerated.
• Personal loans growth declined to 18.3% y-o-y in August 2023 from 19.4% a year ago.
• Credit growth to agriculture and allied activities increased from 13.4% a year ago to 16.6% y-o-y in August 2023.
• Credit growth to services sector increased from 17.4% a year ago to 20.7% y-o-y in August 2023.
• Crisil Ratings, in a report, observed that bank credit growth may moderate to 13-13.5% this fiscal.
• As per Crisil, the growth in wholesale credit is likely to slow to 11-11.5% this fiscal from a decadal high of 15%. Wholesale credit forms about 60% of overall credit.
• As per Crisil, retail credit is likely to grow at the rate 19-20%. Retail credit is about 28% of overall credit.

Topic: RBI

2. RBI has imposed penalty on three cooperative banks.

• The names of banks are Saraswat Co-operative Bank, Bassein Catholic Co-operative Bank and Rajkot Nagarik Sahakari Bank. 
• The monetary penalties have been imposed on these banks as the have shown deficiencies in regulatory compliances.
• A penalty of ₹23 lakh has been imposed on Saraswat Co-operative Bank Limited, Mumbai.
• It failed to follow RBI’s directions on ‘Loans and advances to directors, their relatives, and firms/concerns in which they are interested’.
• A penalty of ₹25 lakh has been imposed on the Bassein Catholic Co-operative Bank Ltd, Vasai, Maharashtra.
• It had granted multiple unsecured loans to one of its director/his proprietorship firm.
• A penalty of ₹13 lakh has been imposed on Rajkot Nagarik Sahakari Bank.
• It did not comply with the directions issued by RBI on ‘Interest Rate on Deposits’.
• It did not pay eligible interest at the time repayment on the term deposits which matured on the Sunday/ holiday or non-business working day.

Topic: RBI

3. RBI has granted permission to Poonawalla Fincorp Ltd. to issue co-branded credit cards with IndusInd Bank.

• It plans to introduce these credit cards within three months.
• This partnership will enable Poonawalla Fincorp to usher in a new age of flexible and versatile retail credit.
• Poonawalla Fincorp Ltd. is a Cyrus Poonawalla group-promoted non-banking finance company.
• Abhay Bhutada is Managing Director of Poonawalla Fincorp.
• IndusInd Bank is a Pune-based bank. It was started in 1994.
• Sumant Kathpalia is its CEO. Its tagline is we make you feel richer.

Topic: Corporates/Companies

4. Government has upgraded the Indian Renewable Energy Development Agency (IREDA) to Schedule A CPSE.

• IREDA has been upgraded from the Schedule B category to Schedule A Central Public Sector Enterprise (CPSE).
• The change makes it possible for IREDA to switch from a Mini Ratna to a Navratna company.
• IREDA’s upgradation to a Navratna company can offer it increased financial autonomy.
• Companies holding the status of "Navratna" must be Miniratna Category-I firms with Schedule A status to qualify.
• Earlier this month, IREDA filed its draft red herring prospectus (DRHP) with SEBI to raise funds through its initial public offering (IPO).
• As of August 21, 2023, the company has financed 3,137 renewable energy projects.
• Indian Renewable Energy Development Agency (IREDA):
  • It is a Mini Ratna (Category – I) Government of India Enterprise under the administrative control of Ministry of New and Renewable Energy (MNRE).
  • It is a Public Limited Government Company established as a Non-Banking Financial Institution in 1987. It is headquartered in New Delhi.

Topic: Appointments

5. Banmali Agarwal has been appointed Chairman of Tata Advanced Systems.

• He has taken over the role of chairman of Tata Advanced Systems.
• He has replaced Vijay Singh, who has retired from his position at Tata Advanced Systems.
• Tata Advanced Systems today is the largest private sector mobility player in the Defence space in India.
• It is an Indian aerospace manufacturing, military engineering and defense technology company. It is a fully owned subsidiary of Tata Sons.

Topic: Reports and Indices

6. Tata Consultancy Services (TCS) has retained its top rank in the Kantar BrandZ Top 75 Most Valuable Indian Brands Report for 2023.

• Its brand value is $43 billion. India’s Top 75 brands have a combined brand value of $379 billion. This is a decline of 4% from 2022.
• HDFC Bank, Infosys and Airtel also maintained their place in the top four spots.
• State Bank of India entered into the list of top five.
• There are four new additions to the 2023 Indian brand ranking. They are PhonePe (21st spot), Cred, ShareChat and Star.
• The automotive category gave the two fastest growing companies TVS and Mahindra in this ranking.
• The year 2023 is the 10th ranking of India’s most valuable brands.
• These rankings are based on the opinions of over 127,634 respondents.

Topic: Miscellaneous

7. Major amendments have been made to the Cable Television Networks Rules 1994 by the Ministry of Information and Broadcasting.

• On September 27, a notification amending the rules and introducing a procedure for the renewal of multi-system operator (MSO) registrations was issued by the Ministry.
• A provision has been made in the rules for sharing infrastructure by cable operators wherein broadband service providers will promote last mile internet access.
• Multi-system operators will apply for renewal of registration online on the Broadband Services Portal of the Ministry of Information and Broadcasting.
• Registration of multiple system operators will be renewed for a period of 10 years.
• The application for renewal of registration must be made two to seven months before the expiry of the validity of the registration.
• The renewal process is in line with the government's commitment towards ease of doing business.
• This will provide certainty to cable operators to continue their services without any interruption and thus make the sector attractive for foreign investment.
• Earlier, only new MSO registrations were granted under the Cable Television Networks Rules, 1994.
• The rules did not specify the period of validity for MSO registration, nor did it mandate mandatory filing of online applications.
• The inclusion of provisions relating to the sharing of infrastructure by cable operators with broadband service providers will have the dual benefit of increasing Internet penetration and efficient utilization of resources.
• This will also reduce the need for additional infrastructure for broadband services.

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