Banking Awareness of 3, 4 and 5 March 2024

Topic: RBI

1. According to RBI's quarterly data, the percentage of TDs in SCBs’ total deposits rose from 57.2% in March 2023 to 60.3% in December 2023.

• The RBI stated that the compositional shift in scheduled commercial banks (SCBs) deposits is being driven by rising return on term deposits.
• As of December 2023, interest rates for term deposits (TDs) with terms longer than a year varied from 6.25% to 7.25%.
• According to the RBI's recent monthly bulletin, throughout the period of May 2022 to December 2023, the WADTDR on fresh and outstanding deposits increased by 246 basis points (bps) and 180 bps, respectively.
• WADTDR stands for weighted average domestic term deposit rate.
• RBI’s quarterly Basic Statistical Return (BSR) data for December, 2023 shows that between April and December of 2023, TDs constituted approximately 97.6% of all deposits on an incremental basis.
• In December 2023, the percentage of term deposits with interest rates higher than 7% increased from 54.7% to 61.4% of all term deposits.
• About ₹201 lakh crore was the total amount of deposits held by SCBs as of December 29, 2023.
• Of this, 88% came from TDs, with the remaining 4% coming from CASA deposits.
• Between April and December of 2023, the combined share of rural and semi-urban branches' incremental CASA deposits was 67.2%.
• Between October and December of 2023, their aggregate percentage of all term deposits was a significantly smaller 21.7%.
• Between October and December 2023, about two thirds of the incremental term deposits were between ₹1 lakh and less than ₹1 crore in size.
• The increase of deposits was significantly influenced by women customers.

Topic: Indian Economy/Financial Market

2. India has succeeded in bringing the rate of extreme poverty below 3% of its population, according to data from the World Poverty Clock.

• The percentage of the population living in extreme poverty has decreased from 3.3% in 2022 to 2.4% in 2024.
• Compared to 4.69 crore in 2022, around 3.44 crore people live in extreme population in 2024.
• The clock has taken $2.15 a day income to present the finding.
• The World Poverty Clock provides real-time poverty estimates for nearly all countries in the world.
• It tracks progress with respect to ending extreme poverty, which is the UN’s first SDG.
• The German Federal Ministry for Economic Cooperation and Development and the International Fund for Agricultural Development (IFAD) provide funding for World Poverty Clock.
• The number of people living in extreme poverty globally is shown by the World Poverty Clock.
• The global rate of poverty elimination as of right now is indicated by the escape rate.
• The term "extreme poverty line" is frequently used to describe the $2.15 per day poverty limit.
• In some of the world's poorest nations, it represents the value of national poverty lines.
• The World Bank also monitors poverty, with $3.65 per day being the average for lower-middle-income nations and $6.85 per day being the average for upper-middle-income nations.

Topic: Reports and Indices

3. According to S&P Global, services PMI declined to 60.6 in February.

• Services Purchasing Managers’ Index (PMI) stood at 61.8 in January.
• Services sector contributes over 53 per cent in Gross Value Added (GVA).
• The inflation of input costs decreased, and service prices increased at the slowest rate in 24 months.
• The service industry as a whole saw an increase in commercial activity, according to the survey.
• The subsectors with the fastest growth rates were real estate and business services.
• The fastest growing subsectors were banking and insurance.
• For the twelfth consecutive month, new business from outside India was placed with Indian service providers.
• The second-weakest cost pressures in the industry since August 2020 were also shown in the survey.
• The PMI is derived from the opinions of 400 organizations' purchasing managers.
• A figure over 50 indicates growth, but one below 50 indicates decline.

Topic: Miscellaneous

4. Finance Minister Nirmala Sitharaman virtually launched seven infrastructure projects worth over ₹1,000 crore.

• The inaugurated projects include unveiling the plaque for the construction of residential quarters of Income Tax Department officers at Faridabad and Gurugram.
• She inaugurated State Bank of India’s new local head office building and Life Insurance Corporation of India’s International Business Centre building.
• She also inaugurated Canara Bank’s IFSC Banking Unit at GIFT City, Gandhinagar, Gujarat.
• She inaugurated the new head office building of United India Insurance Company Limited at Chennai.
• FM Sitharaman also inaugurated conference of GST enforcement chiefs in New Delhi on 04 March 2024 to tackle tax evasion and fake invoicing.
• The one-day national conference was organised to strengthen the enforcement mechanism in GST.
• The conference was aimed at examining current challenges and delving into successful methodologies used by both state and central enforcement authorities.

Topic: RBI

5. IIFL Finance has been instructed by RBI to immediately stop making loans against gold.

• However, the RBI has given IIFL Finance permission to use the usual procedures for collection and recovery to service its current portfolio of gold loans.
• According to the RBI, an examination of IIFL Finance's financial standing as of March of last year was conducted.
• There were some significant supervision issues found in its gold loan portfolio. RBI found loan-to-value ratio violations.
• RBI has imposed business restrictions on the company with immediate effect.
• When a special audit that the RBI will conduct is finished, the restrictions will be reconsidered.
• IIFL Finance is one of the largest NBFCs. It offers gold loans to MSME, self-employed, and salaried customers.

Topic: Indian Economy/Financial Market

6. Moody's raised India's 2024 GDP forecast to 6.8%.

• Moody's Investor Service raised India's economy GDP forecast to 6.8% from 6.1 %.
• Moody predicted that inflation will remain above the RBI’s target of 4 per cent.
• Moody's noted that the 8.4 per cent growth during the third quarter is more than the economists' projections of 6.6 per cent.
• As per Moody's Global Macroeconomic Outlook, the growth will be 6.4 per cent in 2025.
• India's economy has performed well and stronger-than-expected data in 2023.
• India is likely to remain the fastest-growing among G-20 economies.
• Moody’s expects that after the general election policy will continue and the focus will remain on infrastructure development.
• The private industrial capital spending is slowly picking up and it is expected to pick up with ongoing supply chain diversification benefits.

Topic: Indian Economy/Financial Market

7. Government has allowed derivative trading in 11 more commodities.

• Government has permitted trading in these 11 more commodities based on recommendations from SEBI.
• Finance Ministry has added these commodities under the Securities Contracts (Regulation) Act, 1956.
• With this permission, the total number of commodities in which derivatives trading is allowed has increased to 104.
• The 11 commodities include skimmed milk powder, cement, apple, bamboo and timber.
• Weather, freight, white butter, cashew, metal alloys and manganese are also among these commodities.
• Commodity and Derivatives Advisory Committee (CDAC) of the SEBI recommended adding these commodities.

Topic: Banking/Financial/Govt Schemes

8. Under Ayushman Bharat PMJAY, UP has become the first state in the country to issue five crore Ayushman cards.

• The Uttar Pradesh government has issued 50,017,920 Ayushman cards and benefited 74,382,304 individuals.
• Under this scheme, a total of 3,716 hospitals in the state are listed.
• A total of 3,481,252 health claims have been filed under the Ayushman Bharat scheme, out of which 3,275,737 claims have been settled, representing a settlement rate of 92.48% in the state.
• This achievement is significant and is the result of the continuous support of the National Health Authority and the dedication of the grassroots workers, Panchayat assistants, ANMs, medical officers, ASHAs, and other workers.
• With this achievement, there has also been a significant increase in the number of patients receiving free treatment every day under this scheme.
• Earlier, the average admission of patients per day under this scheme was 2,000, which has now increased to about 8,000 per day.

Topic: Banking System

9. FIU-IND has imposed a penalty of ₹5.49 cr on Paytm Payments Bank.

• The Financial Intelligence Unit-India (FIU-IND) has imposed this penalty for money laundering violations under the Prevention of Money Laundering Act.
• Following the receiving of information from law enforcement agencies regarding a few entities and their network of enterprises involved in various unlawful acts, FIU-IND began an investigation into Paytm Payments Bank Ltd.
• These unlawful acts included organising and facilitating online gambling.
• The funds obtained from these unlawful activities were directed and passed through bank accounts these organizations kept with Paytm Payments Bank Ltd.
• Paytm Payments Bank was instructed by the RBI on January 31 to cease taking deposits or top-ups in any customer accounts, wallets, FASTags, and other devices after February 29.
• The deadline was later extended to March 15. The allegations involved violations of different norms including KYC.
• Financial Intelligence Unit – India (FIU-IND):
  • It was set up in November 2004. It is an independent body.
  • It reports directly to the Economic Intelligence Council, which is headed by the Finance Minister.
  • It is responsible for receiving, processing, analyzing and disseminating information relating to suspect financial transactions.

Topic: Banking System

10. NUCFDC Limited inaugurated by Union Home Minister Amit Shah.

• On 2nd March, Union Home and Cooperation Minister Amit Shah launched the National Urban Co-operative Finance and Development Corporation Limited.
• The setting of this umbrella organization will help in achieving the goal of ‘Sahakar se Samriddhi’.
• The main aim of the initiative is to modernize and strengthen the urban Cooperative banking sector.
• NUCFDC has received a Certificate of Registration from the Reserve Bank of India to operate as a non-banking finance company.
• It will act as the apex organization for the urban cooperative banking sector.
• NUCFDC will provide specialized functions and services to cooperative banks. It will facilitate communication between banks and regulators.
• Vishwanathan Committee had recommended an umbrella body for UCBs.
• There are over 1,500 Urban Cooperative Banks with 11,000 branches.
• Union Home and Cooperation Minister Amit Shah said NUCFDC should achieve its target paid-up capital within a year.
• National Cooperative Development Corporation (NCDC) has decided to contribute ₹200 crore to it.

Read Banking Awareness PDF - 3, 4 and 5 March 2024