Banking Awareness of 3, 4 and 5 September 2023

Topic: Indian Economy/Financial Market

1. Investments made by Mutual Funds in commercial papers (CPs) issued by non-bank financial companies (NBFCs) reached beyond ₹1 lakh crore.

• This has happened for the first time in July 2023, since August 2019.
• MFs’ investment in CPs of NBFCs stood at ₹1.05 lakh crore. They accounted for 5.5% of their total debt investments as of the July-end.
• In June 2023, the investments stood at ₹89,601 crore and accounted for 5.1% of total debt investments.
• MFs’ investment in CPs of other companies remained high at ₹2.20 lakh crore as of July 2023. They accounted for 11.5% of their total debt investments.
• Total investments by debt mutual funds stood at ₹19.05 lakh crore as of the July-end.
• MFs' investment in NBFC CPs has stayed above the ₹87,000 crore mark since the start of the current fiscal year.
• Commercial papers:
  • They are unsecured, short-term debt instruments. They pay a fixed rate of interest.
  • They are issued by large banks or corporations to finance short-term liabilities.

Topic: Banking System

2. UPI transactions crossed the 1,000 crore milestone in August.

• The Unified Payments Interface (UPI) network crossed the milestone of 1,000 crore transactions per month in August 2023, processed a record 1,058 crore transactions.
• In May 2023, the platform had crossed 900 crore transactions per month.
• According to National Payments Corporation of India (NPCI) data, the number of transactions was up 6.2% from the previous month and 61% compared to August 2022.
• In terms of transaction value as well, the UPI platform touched a new record high, processing transactions worth ₹15.76 lakh crore during the August 2023.
• The year-on-year growth in UPI transactions has remained above 40% for transaction value and above 50% for the volume of UPI trades.
• In FY23, the UPI platform processed a total of 8,376 crore transactions worth ₹139 lakh crore, while in FY22 there were 4,597 crore transactions worth ₹84 lakh crore.

Topic: RBI

3. Bajaj Auto Consumer Finance has received the Certificate of Registration from the RBI to start NBFC business.

• Bajaj Auto Consumer Finance, the wholly-owned subsidiary of Bajaj Auto, will not be allowed to accept public deposits.
• The certificate of Registration from RBI was issued on August 31, 2023.
• The setting up of Bajaj Auto Consumer Finance was announced by Bajaj Auto in October 2021.
• Bajaj Auto Consumer Finance will lend to two-, three- and light four-wheeler vehicles.
• Bajaj Auto Consumer Finance will be in addition to Bajaj Finance. Bajaj Finance is a non-bank lender under the Bajaj brand.

Topic: Banking System

4. PSB Alliance Pvt Ltd plans to expand coverage of its doorstep banking services from current 100 to 6,800 centres next year.

• PSB Alliance is creating its own IT platform to expand geographical coverage of doorstep banking services (DSB).
• Rajinder Mirakhur, MD & CEO, expects that own platform will bring down the charges per DSB transaction to sub-₹50 level from the current ₹75.
• Currently, PSB Alliance provides financial and non-financial services.
• It also provides DSB services like funds transfer (with a maximum of 3 fund transfer requests and cumulative fund transfer limit of ₹25,000 per day), digital life certificate and nomination services.
• Veefin Solutions Ltd has been selected for deploying and operating a unified digital platform for supply chain financing for PSBs.
• PSB Alliance Pvt Ltd is a company set up by public sector banks (PSBs). In this company, each of the 12 PSBs hold 8.33% stake each. 

Topic: Banking/Financial/Govt Schemes

5. National Pension System (NPS) assets under management (AUM) crossed ₹ 10 lakh crore mark on August 25.

• The corpus on Atal Pension Yojana (APY) is included in it.
• This represents 25% year-on-year growth over the AUM level of ₹ 8 lakh crore at August-end last fiscal.
• In March-end this year, National Pension System (NPS) assets under management (AUM) stood at ₹ 8.98 lakh crore.
• PFRDA Chairman Deepak Mohanty said that NPS AUM has doubled from ₹5 lakh crore to ₹10 lakh crore in just two years and ten months.
• He said NPS reached the milestone of ₹1 lakh crore AUM in six years and six months after its implementation.
• It then took four years and 11 months to further increase AUM to ₹ 5 lakh crore.
• Mohanty said PFRDA would implement the new feature of Systematic Withdrawal Plans in NPS in October or November.
• 1 October was observed as NPS Diwas.

Topic: RBI

6. RBI Governor Shaktikanta Das has been rated the A+ category in the Global Finance Central Bank Report Card 2023.

• The Global Finance has placed Mr. Das at the number one position in the list of three central bank governors of the world.
• There are two other governors–Thomas J. Jordan of Switzerland and Nguyen Thi Hong of Vietnam.
• The Central Banker Report Card is an annual publication by Global Finance since 1994.
• It assesses and grades the performance of central bank governors in 101 significant countries and regions, encompassing entities such as the European Union, the Eastern Caribbean Central Bank, and the Bank of Central African States.
• In October, the full Central Banker Report Card 2023 report and grade list will be released.
• PM Modi has congratulated Shaktikanta Das on being given A+ rating in the Global Finance Central Bank's Report Card 2023.
• Success in inflation control, economic growth goals, currency stability, and interest rate management are graded on a scale of A to F.
• An “A” grade shows an excellent performance, “F” represents outright failure.
• The Bank Governors who earned an “A+" and "A" grade:

Topic: RBI

7. RBI has authorised banks to operate pre-approved credit lines through UPI.

• With previous client approval, Scheduled Commercial Banks (SCBs) can now enable payments through a pre-approved credit line for individuals for transactions using the UPI (unified payments interface).
• The scope of UPI has been broadened by the addition of credit lines as a funding account.
• This was stated by the RBI in a circular to SCBs (excluding Payment Banks, Small Finance Banks, and Regional Rural Banks).
• In its statement on development and regulatory policies (April 06, 2023), RBI said it will expand the scope of UPI by allowing transfer to/ from pre-sanctioned credit lines at banks.
• The terms and conditions of use of such credit lines may be stipulated by the banks according to their Board-approved policy.
• The terms may include credit limit, period of credit, and rate of interest.
• At present, savings account, overdraft account, prepaid wallets and credit cards can be linked to UPI.

Topic: Indian Economy/Financial Market

8. DGFT has clarified e-commerce exports qualify for pre-shipment and post-shipment credit.

• DGFT has clarified e-commerce exports also qualify for packing credit loan in foreign currency (PCFC) as per RBI guidelines.
• Directorate General of Foreign Trade (DGFT) said banking and financial institutions are encouraged to provide pre-shipment and post-shipment export credit and PCFC to e-commerce exports.
• The commerce ministry has recommended anti-dumping duty of up to $ 243 per tonne on import of Chinese glass used in home appliances.
• The anti-dumping duty has been recommended with a view to guard domestic industries from cheap inbound shipments from the neighboring country.
• The final decision on imposing the anti-dumping duty will be taken by the finance ministry.
• Directorate General of Trade Remedies (DGTR) has investigated the dumping of 'toughened glass for home appliances having thickness between 1.8 MM to 8 MM and area of 0.4 SqM or less' originating in or exported from China.
• The application to initiate the anti-dumping investigation had been filed by the Federation of Safety Glass.
• DGTR has found that the product was exported to India at a price below the normal level.
• DGTR has found this has led to dumping which has impacted domestic makers.

Topic: Corporates/Companies

9. Paytm has released card soundbox to transform merchant payments.

• The Paytm Card Soundbox is equipped with a built-in ‘tap and pay’ functionality.
• It allows the merchants to accept card payments of up to ₹5,000.
• Paytm Card Soundbox is India’s first Soundbox that will also accept contactless card payments.
• Paytm Card Soundbox addresses the two challenges faced by merchants- the acceptance of card payments and receiving instant audio alerts for all transactions.
• It provides both audio and visual payment confirmations via a LCD display. It harnesses 4G network connectivity for payment alerts. It offers alerts in 11 languages.

Topic: Reports and Indices

10. Services PMI declined from 13-year high level of 62.3 in July to 60.1 in August.

• New export orders grew at the fastest pace in almost nine years.
• S&P Global India Services Purchasing Managers’ Index (PMI) shows India’s services sector output.
• Taking manufacturing and Services activity together, S&P Global said mild slowdown in private sector activity growth was recorded across India during August.
• S&P Global Composite PMI Output Index eased from 61.9 in July to 60.9 in August.
• Services has an over 53% share of India’s GVA.
• S&P Global Market Intelligence prepares PMI Services based on responses from purchasing managers of 400 companies.

Read Banking Awareness PDF - 3, 4 and 5 September 2023