Banking Awareness of 4, 5 and 6 February 2025

Topic: Reports and Indices

1. India's services sector activity grew at its slowest pace in more than two years in January.

• Seasonally adjusted HSBC India Services PMI Business Activity Index declined from 59.3 in December to 56.5 in January.
• This is its lowest level since November.
• Score above 50 means expansion. The overall expansion rate reached a five-month high level.
• HSBC India Composite Output Index declined from 59.2 in December to a 14-month low level of 57.7.
• Composite PMI indices are averages of manufacturing and services PMI indices.
• S&P Global compiles HSBC India Services PMI from responses by a panel of about 400 service sector companies.

Topic: Regulatory Bodies/Financial Institutions

2. A regulatory framework to make sure retail investors’ safe participation in algorithmic trading through brokers has been released by SEBI.

• Application Programming Interface (API) for algo trading and responsibilities of stock brokers and exchanges are part of the framework.
• In algo trading through APIs, brokers will act as principal. Algo provider or fintech/vendor will be its agent.
• In Algo trading, orders are generated using automated execution logic. Its advantages are timed and programmed order execution.
• Tech-savvy retail investors developing algos will be required to register with stock exchange after crossing the specified order per second threshold.
• Broker’s Industry Standards Forum will evolve specified threshold for categorisation as an algo.
• The tagging of all algo orders will be required with a unique identifier provided by the exchange.

Topic: Banking System

3. Ujjivan SFB has filed application for a universal banking licence.

• Earlier, AU SFB has applied for a universal banking licence under the voluntary transition route.
• Ujjivan SFB is the second such SFB after AU SFB.
• Ujjivan SFB began operations in February 2017.
• Eligibility norms for conversion into a universal bank are given below.
  • Minimum net worth of Rs 1,000 crore
  • Scheduled status
  • Satisfactory track record of minimum five years.
  • Gross non-performing asset (NPA) ratio of 3 per cent or less
  • Net NPA ratio of 1 per cent or less over the past two financial years
  • Only listed small finance banks are eligible
  • Net profit in the past two financial years

Topic: Banking System

4. YES Bank and Fintech firm Finvasia have collaborated to launch Jumpp.

• Jumpp is an AI-driven financial super app to simplify personal finance.
• It combines banking, saving, payments, investing, and borrowing into one platform.
• It aims to onboard 1 million users by January 2026. It targets online shoppers in Tier 2 and Tier 3 cities.
• Its features include multilingual conversational AI. This allows users to access services in English and Hindi.
• With this app, users can open savings accounts with YES Bank in minutes.
• Jumpp’s aim is to improve financial inclusion in India.

Topic: Indian Economy/Financial Market

5. FDI limit in the Insurance sector has been raised from 74 per cent to 100 per cent.

• In the budget FY25, Finance Minister Nirmala Sitharaman raised FDI limits in the insurance sector from 74 per cent to 100 per cent.
• This enhanced limit will be for those companies who will invest the entire premium in India.
• It will attract foreign investment, enhance competition, improve insurance penetration, and align with global practices.
• At present, there are 26 life insurers and 27 general insurers including 2 specialized insurers.
• The insurance sector has registered approximately 10% CAGR in the last five years.
• The FDI limit in insurance was introduced in 2000 with a cap of 26%. It was gradually raised to 49% in 2015 and 74% in 2021.
• In 2019, the Insurance intermediaries, such as brokers, were allowed 100% FDI.
• The Government aims to use the full potential of the Indian insurance sector, which is projected to grow at 7.1% annually over the next five years.
• Countries like Canada, Brazil, Australia, and China have allowed 100% FDI in their insurance sectors.

Topic: Awards and Prizes

6. Karnataka Bank has won six awards for excellence in banking technology by Indian Banks’ Association.

• The bank won these awards at the 20th Annual Banking Technology Conference, Expo & Citations, 2024.
• The bank was declared as runner-up in several other categories. These categories include ‘Best Tech Talent and Organization,’ ‘Best IT Risk Management,’ and ‘Best Technology Bank,’.
• The awards won by bank are ‘Best Tech Talent and Organization’, ‘Best IT Risk Management’, ‘Best Technology Bank’, and ‘Best Fintech and DPI Adoption’ (all runner-ups); and ‘Best Digital Sales, Payments and Engagement’ and ‘Best AI and ML Adoption’ (special mention).

Topic: MoUs/Agreements

7.  An MoU has been signed between Investor Education and Protection Fund Authority (IEPFA) and Association of Chartered Certified Accountants.

• An MoU has been signed between IEPFA and Strategic Educational Professionals Pvt Ltd.
• Strategic Educational Professionals Pvt Ltd is a subsidiary of Association of Chartered Certified Accountants (ACCA).
• The MoU has been signed for developing a digital programme.
• The digital programme focusses on experiential learning targeting financial literacy for school children.
• This content will be provided to select schools, which will include rural schools, through a pilot project.

Topic: Reports and Indices

8. India’s manufacturing PMI reached a six-month high in January.

• India’s manufacturing sector witnessed a strong start in January.
• The employment PMI indicate that job has been created in the manufacturing sector.
• Input cost inflation declined for the second consecutive month by reducing the need for manufacturers to increase final output prices.
• The Purchasing Managers’ Index (PMI) rose from December’s 56.4 to 57.7 in January.
• PMI values range between 0 and 100 and reading above 50 indicate expansion and below 50 indicate contraction.
• International demand for Indian goods also strengthened in January. The growth rate in new export orders was the highest recorded in nearly 14 years.
• Cost pressures eased to their lowest level in 11 months and selling prices continued to rise due to buoyant demand and strengthened business confidence.

Topic: Miscellaneous

9. German ex-president and IMF chief, Horst Koehler, passed away at the age of 81.

• Germany's former president Horst Koehler and former IMF chief Horst Koehler passed away at the age of 81.
• Horst Koehler was the president of Germany from 2004 to 2010.
• He was the head of the IMF from 2000 to 2004. He also held several other roles in the civil service and banking.
• He played a key role in Germany's monetary unification in 1990.
• He also helped in the introduction of the euro. He was born in 1943 in German-occupied Poland.

Topic: Indian Economy/Financial Market

10. India has become the world’s second-largest mobile manufacturer.

• India has moved from production of 2 units in 2014 to over 300 operational units nationwide.
• About 99.2 per cent of mobile phones sold in India are now made locally.
• The manufacturing value of mobiles have reached to Rs 4.22 lakh crore with exports crossing Rs 1.29 lakh crore in 2024.
• More than 325 to 330 million mobile phones are manufactured annually in India.
• The mobile manufacturing sector has generated approximately 12 lakh direct and indirect jobs over the decade.
• The ‘Make in India’ initiative has enabled the domestic production of critical components and sub-assemblies such as chargers, battery packs, mechanics of all types, etc.
• The India Semiconductor Mission and five major projects have been also launched.