Banking Awareness of 4, 5 and 6 January 2023

By Priyanka Chaudhary | Last Modified: 06 Jan 2023 18:24 PM IST
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Topic: RBI

1. RBI has selected six entities for the ‘Test Phase’ under the Regulatory Sandbox for theme ‘Prevention and Mitigation of Financial Frauds’.

  • These entities will begin testing of their products from February 2023.
  • The opening of the Fourth Cohort under Regulatory Sandbox for theme ‘Prevention and Mitigation of Financial Frauds’ was announced by RBI in June 2022.
  • As per RBI, Bahwan Cybertek’s solution ‘rt360 Real Time Monitoring System’ provides a comprehensive surveillance mechanism for monitoring transactions and events from loan accounts on a continuous and real time basis.
  • The product by HSBC in collaboration with enStage Software Private Limited (Wibmo) is a closed user group AI/ML based solution. It helps in card-not-present fraud detection.
  • The "regulatory sandbox" aids in gathering data on the advantages and dangers of novel financial innovations while closely observing and limiting their risks.

Sandbox Entity

Product Name

Important Point About Product

Crediwatch Information Analytics Private Limited

Crediwatch EWS

It is an Early Warning System for credit monitoring and fraud identification.

enStage Software Private Limited (Wibmo)

Trident FRM

It is a Risk Based Authentication solution.

napID Cybersec Private Limited

napID Fraud Filter Layer

It locks the login form, payment form, ATM, POS machines and enable it only for the authorised user.

Trusting Social Private Limited

Trusting Social CI & AV

It helps in address verification by running its proprietary AI algorithms on non-personally identifiable data.

Topic: Reports and Indices

2. S&P Global India Services Purchasing Managers’ Index (PMI) increased from 56.4 in November to 58.5 in December.

  • This is the strongest rate of expansion since August 2022.
  • Among various sub sector of services sector, the finance & insurance segment recorded the quickest increase in output.
  • In December, Indian service companies saw a gain in new business for the seventeenth consecutive month.   
  • PMI is prepared based on responses from purchasing managers of 400 companies separately in manufacturing and services sector.
  • The reading above 50 indicates an overall expansion in services activities and reading below 50 shows an overall decline in activities.

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Topic: Banking System

3. Annapurna Finance Pvt Ltd (AFPL) has applied to RBI for universal bank licence.

  • RBI has received application from AFPL under the Guidelines for ‘on tap’ Licensing of Universal Banks in the Private Sector.
  • Annapurna Finance Pvt Ltd (AFPL) was formerly known as Annapurna Microfinance Pvt Ltd.
  • It was the only entity to apply for a universal bank licence during the quarter ended December 31, 2022.
  • It started operations in Khurda district of Orissa. It is engaged in micro finance lending to women borrowers.

Topic: RBI

4. RBI is likely to engage external auditors to audit 9,500 non-banking finance companies (NBFCs).

  • The external auditors are likely to check whether NBFC’s registered office is at the place mentioned in their application for registration.
  • RBI had cancelled the certificate of registration (CoR) of 3,110 NBFCs between FY15 and FY22.
  • The largest number of cancellations (1,851) were done in FY19.
  • There are 9,500 NBFCs but the RBI’s supervisory staff strength is only about 1,500.
  • There are 11 types of NBFCs including Investment and Credit Company, Infrastructure Finance Company, Core Investment Company, Micro Finance Institution, Account Aggregator, Peer to Peer Lending Platform and Housing Finance Company.
Monthly Banking/ Financial Awareness Books
December Financial Awareness 2022 October Financial Awareness 2022
November Financial Awareness 2022 September Financial Awareness 2022

Topic: Banking System

5. HDFC Bank has partnered with Microsoft for digital transformation.

  • HDFC Bank aims to unlock business value by modernising the data landscape, transforming the application portfolio, and securing the enterprise with Microsoft Cloud.
  • The bank will leverage Microsoft Azure to consolidate and modernise its enterprise data landscape.
  • The bank will also leverage Microsoft Power Platform’s low code, no code capabilities to establish an App Innovation and Automation Factory.
  • It will also leverage Microsoft 365 to adopt a modern, integrated, and secure digital workplace.
  • HDFC Bank:
    • It is headquartered in Mumbai. Its CEO is Sashidhar Jagdishan.
    • It is India's largest private sector bank by assets. It is world's 10th largest bank by market capitalisation as of April 2021.
    • It is the third largest company by market capitalisation on the Indian stock exchanges.
Monthly Banking/ Financial Awareness Books
December Financial Awareness 2022 October Financial Awareness 2022
November Financial Awareness 2022 September Financial Awareness 2022

Topic: Banking System

6. YES Bank has partnered with Microsoft to develop new banking app.

  • YES Bank will leverage Microsoft’s Azure platform to create the app.
  • The app will offer services like online shopping, payments, rewards, offers, besides traditional banking functions.
  • It will run on Microsoft’s enterprise-grade cloud platform. It will enable the bank to cater to diverse financial needs of customers.
  • YES Bank was founded in 2004. It is headquartered in Mumbai. Prashant Kumar is its MD and CEO.    

Topic: Indian Economy/Financial Market

7. DPIIT is working on a new industrial policy to increase financing sources for industries.

  • The new industrial policy will promote Made in India brand.
  • The proposed policy aims to address issues and challenges of the industry through certain policy measures.
  • It will foster and create an innovative and competitive industrial ecosystem in the country.
  • The new industrial policy has identified six objectives to achieve the goals. The objectives are given below:
    • Competitiveness and capability
    • Economic integration and moving up the global value chain
    • Promoting India as an attractive investment destination
    • Nurturing innovation and entrepreneurship
    • Achieving global scale and standards
  • It has a proposal for the implementation of an integrated investment promotion strategy by involving district, state, national and international markets.
  • It also proposed incentivising public procurement by developing a robust data protection regime, setting up a technology fund, etc.
  • The policy will also strengthen export finance systems to promote export competitiveness.
  • It will be the third industrial policy after 1956 and 1991. The new industrial policy will replace the industrial policy of 1991.

Topic: Taxation

8. Government raised windfall profit tax on domestically produced crude oil as well as on the export of diesel and ATF.

  • The government has raised the tax on the export of diesel from Rs 5 to ₹6.5 per litre.
  • The tax has been raised on overseas shipments of ATF from ₹1.5 a litre to ₹4.5 a litre.
  • The windfall profit tax has been increased on domestically produced crude oil from Rs 1,700 per tonne to Rs 2,100 per tonne.
  • The new tax rates are effective from 3 January. The tax rates are reviewed based on average oil prices in the previous two weeks.
  • The government levies tax on windfall profits made by oil producers on any price above a certain threshold of $75 per barrel.
  • Reliance Industries Ltd and Nayara Energy are the main exporters of fuel in India.
  • The tax on the export of fuel is based on the margins that refiners get on overseas shipments. The margins are difference between the international oil price realised and the cost.
  • India is a major consumer and importer of oil.
  • India imposed windfall profit tax for the first time on 1 July 2022 to control inflation and to ensure availability of the transport fuels in the local market.
  • A windfall profit tax is imposed by governments on businesses or economic sectors when economic conditions result in large and unexpected profits.

Topic: MoUs/Agreements

9. India and Asian Development Bank (ADB) have signed $1.22 billion loan agreements for infrastructure projects in several states.

  • The agreements would cover projects for improving the power sector and highways in the northeastern states of Tripura and Assam, respectively.
  • The agreements include a $350 million loan to expand the metro rail network in Chennai. It would support the development of three new metro lines—3, 4, and 5.
  • A $350 million loan agreement has been signed to improve the connectivity of key economic areas in the state of Maharashtra.
  • A $300 million loan agreement has been signed to upgrade over 300 kilometres of state highways and major district roads (MDRs) in Assam.
  • A $220 million loan agreement has been signed to strengthen the power sector in Tripura.
  • It will provide funds for the replacement of the Rokhia power plant with a highly efficient combined cycle gas turbine. 

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