Banking Awareness of 4, 5 and 6 June 2024

Topic: Committees/Commissions/Taskforces

1. SEBI has formed an ad-hoc Committee for reviewing the ownership and economic structure of clearing corporations.

• The committee will also suggest measures to ensure that clearing corporations function as risk managers that are resilient, independent, and neutral.
• This ad-hoc Committee has been formed under Usha Thorat.
• In its 2018 report, the Committee on review of regulations and relevant circulars pertaining to MIIs had suggested that the ownership of Market Infrastructure Institutions (MIIs) should be widely held.
• This committee was headed by R Gandhi and referred to as Gandhi Committee.
• This committee suggested it is highly desirable that clearing corporations should be widely held.
• The Gandhi Committee had also suggested listing of clearing corporations should not be allowed.
• SEBI said that current ownership structure of a clearing corporation is dominated by the parent exchange.
• All clearing corporations are under regulatory purview of SEBI being subsidiaries of their parent exchanges.
• Under the present norm, a clearing corporation becomes dependent on the parent exchange for capital infusion and resource augmentation.

Topic: RBI

2. In FY24, the RBI fined regulated entities (REs) with ₹86.11 crore.

• The monetary penalties imposed on REs more than doubled.
• In FY23, the RBI levied financial penalties totaling ₹40.39 crore.
• Compared to 211 in FY23, RBI imposed monetary penalties on 281 REs in FY24.
• Public and private sector banks, foreign banks, payments banks, small finance banks, co-operative banks, regional rural banks, NBFCs, CICs, and HFCs are some examples of these REs.
• RBI intends to establish a scale-based framework for enforcement action.
• The financial penalties are a part of its enforcement proceedings.
• As per RBI, the scale-based framework for enforcement action will depend on various factors.
• These factors include the size, complexity, interconnection, range of operations, and degree of violations of REs.
• The draft scale-based enforcement framework is now being finalised, according to RBI.
• The purpose of the Enforcement Department's establishment was to keep the supervisory process and enforcement action apart.
• It was established to implement an organised, rule-based method for locating and handling policy violations committed by the REs.

Topic: Reports and Indices

3. PMI Manufacturing declined to 3-month low level at 57.5.

• HSBC PMI (Purchasing Managers’ Index) Manufacturing slipped to 57.5 in May as against 58.8 of April.
• As per the survey, manufacturing employment increased to one of the greatest extents seen since data collection started in March 2005.
• The PMI indicated that services sector growth fell to a five-month low in May.
• According to a survey, India's services activity growth fell to a five-month low in May as strong domestic demand weakened.
• It also showed that exports were growing at a record pace and job creation reached a 21-month high.
• The final HSBC India Services Purchasing Managers' Index (PMI) compiled by S&P Global fell to 60.2 last month from 60.8 in April.
• A reading of above 50 on the survey-based index indicates expansion in activity levels.

Topic: MoUs/Agreements

4. Punjab National Bank (PNB) and India Infrastructure Finance Company Ltd (IIFCL) have signed MoU.

• PNB and IIFCL have signed MoU to collaborate in financing of infrastructure projects.
• Under the partnership, the parties can mutually take part under consortium/multiple lending arrangement to provide financial support to the prospective borrowers.
• Kumar Goel, MD & CEO of PNB and Padmanabhan Raja Jaishankar, Managing Director of IIFCL exchanged the MoU.
• The MoU will be a milestone in finding new avenues of lending to the infrastructure projects of India.
• India Infrastructure Finance Company Ltd (IIFCL) is a state-owned company.
• It is a wholly-owned Government of India company. It was set up in 2006.
• It was set up to provide long-term financial assistance to viable infrastructure projects through the Scheme for Financing Viable Infrastructure Projects through a Special Purpose Vehicle (SIFTI).

Topic: Miscellaneous

5. A comprehensive survey for MSMEs has been launched by the Department of Telecommunications.

• This survey will identify and address the challenges faced by MSMEs in adapting to new technologies.
• It aims to lay the groundwork for a robust ecosystem that leverage the potential of the Internet of Things (IoT), the artificial intelligence (AI), the cloud computing, and the integration of 5G and 6G networks.
• The survey will be carried out over a period of 60-days.
• It will cover five sectors each in North and South India. It will reveal sector-specific needs across at least ten industries.
• The survey’s findings will shape policy interventions aimed at improving MSME’s competitive positioning and survivability.

Topic: Indian Economy/Financial Market

6. Netherlands emerged as India's 3rd largest export destination in 2023-24.

• During 2023–24, the Netherlands has emerged as India's third largest export destination after the US and UAE.
• India mainly exported petroleum products ($14.29 billion), electrical goods, chemicals, and pharmaceuticals to the Netherlands.
• In the last fiscal year, India’s trade surplus with the Netherlands increased to $17.4 billion from $13 billion.
• The Netherlands has overtaken major export destinations for India like the UK, Hong Kong, Bangladesh and Germany.
• In 2023–24, India’s exports to the Netherlands increased by about 3.5 percent to $22.36 billion from $21.61 billion in 2022–23.
• In 2021–22, the Netherlands was the fifth-largest destination for Indian exports.

Topic: Agriculture

7. Total food grain production as per third advance estimate is 3288.52 lakh metric tons.

• The third advance estimate of production of major agricultural crops for the year 2023-24 has been released by the Ministry of Agriculture and Farmers Welfare.
• From the last agricultural year, Zaid season has been separated from Rabi season and included in the 3rd Advance Estimates.
• Hence, this 3rd Advance Estimates of area, production and yield include Kharif, Rabi and Zaid seasons.
• This estimate is prepared mainly based on information received from State Agricultural Statistics Authorities (SASA).
• The data obtained has been validated and triangulated with remote sensing, weekly Crop Weather Watch Group (CWWG) reports and information received from other agencies.
• Climatic conditions, past trends, price fluctuations, mandi arrivals etc. have also been considered while preparing the estimates.
• Total food grain production is estimated at 3288.52 lakh metric tonnes, which is slightly less than the food grain production of the year 2022-23.
• It is 211.00 lakh metric tonnes more than the average food grain production of 3077.52 lakh metric tonnes of the last 5 years (2018-19 to 2022-23).

Topic: Banking System

8. SBI’s market capitalization crossed Rs 8 lakh crore mark.

• SBI’s shares increased by 9% and reached an all-time high of Rs 912.
• In past six months, SBI’s shares have increased by over 50%.
• India’s banking sector had recently recorded its highest-ever net profit, exceeding Rs 3 lakh crore.
• Finance Minister Nirmala Sitharaman said banks recovered over Rs 10 lakh crores from bad loans between 2014 and 2023.
• On 3 June 2024, Nifty Bank index also increased to a record high and crossed the 50,000 mark for the first time.
• SBI reported a standalone net profit of Rs 20,698.35 crore.
• This reflects a 24% year-on-year (Y-o-Y) growth.
• This growth is driven by increased interest income and minimal provisions.
• State Bank of India (SBI) reported a 15.24% year-over-year (YoY) credit growth at March 2024 end.

Topic: Regulatory Bodies/Financial Institutions

9. A directive issued by FSSAI to all FBOs mandates the removal of any claim of 100% fruit juice from the label.

• A directive issued by the Food Safety and Standards Authority of India (FSSAI) mandates all food business operators (FBOs) to remove any claim of 100% fruit juices from the labels and advertisements of reconstituted fruit juices with immediate effect.
• All FBOs have also been directed by FSSAI to phase out all existing pre-printed packaging material before September 1, 2024.
• Recently, the Ministry of Health and Family Welfare said in a statement that several FBOs are falsely marketing various reconstituted fruit juices with the false claim of being 100% pure.
• According to the Food Safety and Standards (Advertising and Claims) Regulations, there is no provision for making 100% claims.
• The FBO must comply with the fruit juice standards under the Food Safety and Standards Regulations.

Topic: Infrastructure and Energy

10. Adani Ports signed a 30-year pact to operate the Dar es Salaam Port terminal in Tanzania.

• Adani Ports and Special Economic Zone (APSEZ) wholly owned subsidiary Adani International Ports Holdings Pte Ltd (AIPH) signed a 30-year concession agreement with the Tanzania Ports Authority.
• The pact will enable AIPH to operate and manage Container Terminal 2 at the Dar es Salaam Port in Tanzania.
• The Dar es Salaam Port is a gateway port with a well-connected network of roadways and railways.
• APSEZ will be the controlling shareholder and will consolidate EAGL on its books.
• East Africa Gateway Ltd (EAGL) has been incorporated as a joint venture of AIPH, AD Ports Group, and East Harbour Terminals Ltd (EHTL).
• Container Terminal 2 has an annual cargo handling capacity of 1 million twenty-foot equivalent units (TEUs).

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