Banking Awareness of 4, 5 and 6 March 2023

Topic: Taxation

1. CBDT has given five-year tax exemption to IBBI starting from the current financial year.

• Certain specified incomes of Insolvency and Bankruptcy Board of India (IBBI) have been granted tax exemption by Central Board of Direct Taxes (CBDT).
• These incomes include grants-in-aid received from Central Government, fees received under the IBC, fines collected under the IBC and any interest income on these receipts.
• The tax exemption will be available for the financial years 2022-2023, 2023-2024, 2024-2025, 2025-2026 and 2026-2027.
• In September 2022, IBBI had imposed a regulatory fee of 0.25% on corporate insolvency resolution process (CIRP).
• It had also imposed a 1% regulatory fee on third-party service providers and professionals appointed by Insolvency Professionals (IPs).
• Insolvency and Bankruptcy Board of India (IBBI):
  • It was established on 1 October 2016 under the Insolvency and Bankruptcy Code, 2016.
  • It is responsible for the implementation of the IBC code.
  • It is a unique regulator that regulates a profession as well as process.
  • Chairperson of IBBI: Ravi Mittal

Topic: Miscellaneous

2. Proposals for empanelment of partners to execute training programmes has been invited by the Textiles Ministry.

• This has been done to increase the speed of enrolment in skilling programmes in the textile sector under the scheme Samarth.
• Approximately 1.5 lakh persons have been trained under the Samarth scheme so far. Out of these, 86% are women.
• The textile ministry is aiming to skill around 2 lakh workers.
• Samarth is the government’s flagship skilling scheme. It was launched in 2020.
• It is a placement-oriented and demand-driven umbrella skilling programme of the Ministry of Textiles.
• Its implementation period is up to March 2024. It aims to supplement and incentivise the efforts of the industry in creating jobs in the organised textile and related sectors.
• It also caters to the re-skilling requirement of traditional textile sector like handloom, handicraft, silk and jute.

Topic: Banking System

3. Punjab National Bank has made Positive Pay System mandatory for cheque payments of Rs 5 lakh and above.

• PNB has taken this step to safeguard customers from fraudulent payment of cheques.
• This new rule will become effective from April 5, 2023.
• Earlier, submission of cheque details in Positive Pay System (PPS) was mandatory for cheques of ₹10 lakh and above.
• PNB had brought in PPS for cheque truncation system (CTS) of ₹50,000 and above from January 1, 2021. RBI had given recommendation that availing of this facility is at the account holder’s discretion.
• It had recommended that banks may consider making it mandatory for cheques of ₹5 lakh and above.
• National Payments Corporation of India (NPCI) has developed Positive Pay System (PPS).
• PPS is an electronic authentication system that allows customers to share the cheque details with your bank before the bank processes it.
• RBI had introduced PPS with effect from January 1st, 2021.
• As per RBI, Truncation is the process of stopping the flow of the physical cheque issued by a drawer at some point by the presenting bank en-route to the paying bank branch. In its place an electronic image of the cheque is transmitted to the paying branch through the clearing house, along with relevant information like data on the MICR band, date of presentation, presenting bank, etc.

Topic: RBI

4. RBI has placed restriction on Tamil Nadu-based Musiri Urban Co-operative Bank.

• RBI has imposed Rs 5,000 cap on withdrawals by individual customers from this bank under the restrictions.
• RBI has placed the restrictions on the bank due to its deteriorating financial condition.
• RBI said the restrictions will continue for six months from the close of business on March 3.
• Restrictions are subject to review. Without RBI’s approval, the cooperative bank cannot make any investment, grant loans, and disburse any payment.
• RBI said its restrictions should not be taken as cancellation of the banking licence.
• The bank will continue to carry out banking business with restrictions till improvement in its financial position.

Topic: RBI

5. Non-food bank credit increased 16.7% in January 2023 as per data released by RBI.

• The growth in non-food bank credit in January 2023 was much higher than 8.3% in the year-ago-period (January 2022).
• As per data on Sectoral Deployment of Bank Credit, credit growth to agriculture and allied activities increased to 14.4% in January 2023 from 10.4% a year ago.
• Credit growth to the industry increased at 8.7% in January 2023 compared with 5.9% a year ago.
• Credit to the services sector increased by 21.5% in January 2023 compared with 5.7% a year ago.
• The growth in credit to services sector was mainly due to the improved credit offtake to non-banking financial companies.
• Growth in personal loans increased to 20.4% from 12.8% a year ago. This was largely driven by housing and vehicle loans.

• Credit increased to sectors like basic metal and metal products, beverage and tobacco, cement and cement products, chemicals and chemical products, food processing, glass and glassware etc.
• Credit decreased to sectors such as engineering, construction, gems and jewellery, infrastructure, leather and leather products etc.

Topic: Indian Economy/Financial Market

6. A list of 15 designated Qualified Stock Brokers (QSBs) issued by the National Stock Exchange (NSE).

• The list includes Zerodha Broking, 5paisa Capital, HDFC Securities, ICICI Securities, Anand Rathi Share and Stock Brokers, Angel One, IIFL Securities, Kotak Securities, and Motilal Oswal Financial Services.
• QSBs are stock brokers that cater to the needs of large number of investors.
• They are entities which can impact investors and the securities market, governance and service standards because of their size and scale of operations.
• They occupy important position in Indian securities market because of their size, trading volumes and amount of clients’ funds handled by them.
• Stock brokers are designated as QSBs based on four parameters. These four parameters are given below.
  • Number of active clients
  • Total available assets of clients
  • Trading volumes
  • End-of-day margin obligations
• Stock brokers with overall score greater than or equal to five on these four parameters are designated as QSBs.
• The scores are to be determined annually during the financial year, and the stock exchanges will jointly issue the updated list of QSBs after consulting with SEBI.
• Stock brokers which are designated as QSBs are required to meet enhanced obligations.

Topic: RBI

7. RBI has imposed Rs 3.06 crore penalty on Amazon Pay (India).

• A penalty of three crore six lakh sixty-six thousand rupees has been imposed on Amazon Pay (India) Private Limited.
• RBI has imposed penalty for non-compliance with certain directions related to Prepaid Payment Instruments and Know Your Customer.
• RBI said its action is based on deficiencies in regulatory compliance.
• RBI said its action is not intended to pronounce upon the validity of any agreement entered into by the entity with its customers.
• RBI has imposed penalty in exercise of powers vested in it under the Payment and Settlement Systems Act, 2007.
• Amazon Pay is the digital payment arm of Amazon. It is an online payment processing service owned by Amazon. It was launched in 2007.

Topic: Appointments

8. Jishnu Barua appointed as new chairperson of Central Electricity Regulatory Commission (CERC).

• Union Power Minister RK Singh administered the oath of office and secrecy to Jishnu Baruah.
• On February 27, 2023, Barua has been appointed chairperson of the CERC.
• Baruah was the Chief Secretary of Assam from October 2020 to August 2022.
• Earlier, he was the Additional Chief Secretary of Assam looking after various departments of the state from August 2017 to October 2020.
• Central Electricity Regulatory Commission (CERC):
  • The Government of India has established CERC under the provisions of the Electricity Regulatory Commission Act, 1998.
  • CERC is the Central Commission for the purposes of the Electricity Act, 2003, which has repealed the ERC Act, 1998.
  • The commission consists of a chairperson and four other members, including Chairperson of Central Electricity Authority, who is the ex-officio member of the commission.
  • The main function of the CERC under the Act is to regulate the tariff of generating companies owned or controlled by the Central Government.

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