Banking Awareness of 4, 5 and 6 July 2023

Topic: Indian Economy/Financial Market

1. Beta live coverage of ONDC has been expanded to five more cities.

• These five cities are Mumbai, Delhi NCR (including Noida, Gurgaon and Faridabad), Chennai, Hyderabad and Kolkata.
• Bengaluru and Meerut were selected for the Beta live coverage in September 2022 and December 2022, respectively.
• The ONDC is now accessible to buyers and sellers in five more cities.
• The beta live coverage is aimed at allowing consumers to experience the ONDC for the first time, collect real-time feedback and test the network before all-India launch.
• Consumers can purchase from the sellers on the ONDC through four active buyer applications.
• These applications are Paytm, Mystore, Spice Money, and Magicpin.
• Open Network for Digital Commerce (ONDC) is an initiative of the Department of Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce. It had its alpha rollout in April 2022 in five cities.

Topic: Reports and Indices

2. Services PMI declined to 58.5 in June 2023.

• It was recorded at 61.2 in May 2023. Services PMI was above the 50 threshold for the 23rd straight month in June 2023.
• Despite the decline in S&P Global Services PMI, new job creation has grown.
• India’s services sector eased to a three-month low in June.
• S&P Global India Composite PMI Output Index declined from 61.6 in May to 59.4 in June.
• It measures combined services and manufacturing output.
• The S&P Global India Services PMI is compiled from responses to questionnaires to a panel of 400 service sector companies.
• Index above 50 shows expansion, while sub 50 index shows contraction.

Topic: Reports and Indices

3. India’s middle class will increase from 432 million in 2021 to 715 million by 2031.

• India’s middle class will increase to around 1.02 billion when India turns 100 in 2047.
• These are the findings of a study by People Research on India’s Consumer Economy (PRICE), an independent think tank.
• The study is titled “The Rise of the Middle Class: A Force to Reckon With”.
• It was released recently on July 5 by Amitabh Kant, G20 Sherpa and others.
• The report defines the middle class as those having an annual average household income at 2021 prices of ₹5 lakh to ₹30 lakh and per capita per day income between ₹298 and ₹1,770.
• The study notes that the structure of India’s demographics will change from the present inverted pyramid to a diamond shape.
• In inverted pyramid, small rich class is on the top. It is followed by a bigger middle class and a huge low-income class.
• In diamond shape, large number of poor will move into the middle class bracket.
• The report notes the income demographics will be changed.
• The percentage of people grouped as destitute will come down from 14% in 2020-21 to 5% of the population by 2030-31.
• Indian middle class increased from 14% in 2004-05 to nearly 31% in 2020-21.
• It will increase to 47% in 2030-2031 and comprise 61% by 2046-47.
• Middle class has largest concentration in southern and central India.

Topic: Summits/Conferences/Meetings

4. G20 nations have agreed to adopt definition framework for start-ups.

• They have agreed to create a definition framework for start-ups and to ease market regulations for start-ups.
• The joint communique was adopted at the Startup20 Shikhar Summit on 04 July 2023.
• It urged G-20 leaders to increase combined investment in the global startup ecosystem to US$1 trillion by 2030.
• Startup20 Engagement Group under India’s G20 Presidency organised the Summit.
• Startup-20 Summit under India's G-20 Presidency was held in Gurugram, Haryana.
• Saudi Arabia has become the first country to pledge support for the $1 trillion funding milestone for startup ecosystem by 2030.
• Chintan Vaishnav, Chair of Startup20, handed over the torch for Startup20 to Brazil. Brazil has G20 presidency for the next year.

Topic: Reports and Indices

5. Annual Economic Review report for May 2023 has been released by the Finance Ministry.

• The report has been prepared by Economic Affairs Department of the Finance Ministry.
• Indian economy grew by 7.2% in FY23. The growth in January-March quarter played a major role in it.
• India's GDP growth of 7.2% in FY 23 is higher than the 7% estimated in February.
• As per the report, the post-pandemic quarterly trajectories of consumption and investment have reached beyond the pre-pandemic levels.
• The domestic demand has also recovered. The report said that external demand did not work in the second half as well of FY23.
• In the last quarter, the agriculture sector recorded a twelve-quarter record high growth rate.
• The industrial sector also rebounded in last quarter, driven by manufacturing.
• By the year-end, contact-intensive services sector fully recovered to its pre-pandemic level.
• The overall unemployment rate reduced to a five-year low of 4.1% in FY22.
• In FY23, the urban unemployment rate declined in each quarter.

Topic: Reports and Indices

6. Write-offs to gross non-performing assets ratio of private sector banks was much higher than that of public sector banks.

• According to RBI’s Financial Stability Report, the write-offs to gross non-performing assets (GNPAs) ratio of private sector banks stood at 47.9% in FY23.
• The write-offs to gross non-performing assets (GNPAs) ratio of public sector banks was 22.2%.
• The write-offs to GNPAs ratio of private sector banks in FY22 and FY21 was at 26.2% and 31%, respectively.
• The write-offs to GNPAs ratio of public sector banks in FY22 and FY21 was at 17.7% and 17.3%, respectively.
• The write-offs to GNPAs ratio is the ratio of write-off during a financial year to GNPA at the beginning of the year.
• In write-off, loans are transferred to the off-balance sheet records. Writing-off a loan does not entail forgiving the debt. The borrower still owes money to the bank.

Topic: Banking System

7. HSBC has introduced its global private banking business in India.

• HSBC has launched it to serve high-net-worth (HNW) and ultra-high-net-worth (UHNW) individuals and their families.
• HSBC has launched the new business, which is aimed at clients with investable assets of over $2 million.
• The introduction of the global private banking business will complement retail and corporate banking offerings of HSBC.
• It is expected that India will become the third largest economy by FY28 and the number of UHNW individuals in India (having over $30 million to invest) is projected to increase 58% by 2027.
• HSBC is a British bank and financial services group. It is headquartered in London, England.
• Indian Bank launched new services under its digital transformation initiative — Project WAVE.
• Indian Bank in collaboration with National E-Governance Services Ltd introduced an electronic bank guarantee (e-BG) service to ease traditional paper-based processes.

Topic: Reports and Indices

8. India’s share in global commercial services exports has doubled: World Bank and WTO report.

• According to a World Bank and WTO report, India’s share in global commercial services exports has increased from 2% in 2005 to 4.4% in 2022.
• China and India have doubled their share of global commercial services exports from 2005 to 2022.
• The report titled ‘Trade in services for development’ states that India has become a popular destination for medical travel.
• Around 3.5 million foreign patients came to India from 2009 to 2019.
• Foreign patients from United Kingdom, the United States, Bangladesh, Nepal and Sri Lanka visited India in search of cost-effective and high quality treatment.
• As per the report, in India, South Africa and Türkiye, jobs directly linked to cross-border services exports are more than 10% of total services sector jobs.
• The trade-in service has expanded mainly due to China, Hong Kong, Singapore, and India.
• According to the report, India and the Philippines will need to skill their workforce and invest primarily in research and development to grow their domestic service sectors.
• In 2018, Services value-added accounted for over 51% of India's total exports.
• Global commercial services exports have almost tripled between 2005 and 2022.

Topic: Appointments

9. Krishan Mishra has been appointed as Chief Executive Officer by the FPSB India.

• His appointment will be effective from 1 August 2023.
• As CEO, he will lead the strategy and operations of FPSB India.
• Financial Planning Standards Board of India (FPSB India) is the Indian subsidiary of FPSB.
• FPSB is the global standards-setting body for the financial planning profession.
• The government has appointed Lt Gen M U Nair as the new National Cybersecurity Coordinator (NCSC).
• Tushar Mehta has been reappointed as the Solicitor General of India. He was appointed as Solicitor General for the first time in October 2018.

Topic: Banking System

10. The IDFC First Bank’s board of directors approved the programme of amalgamation of its parent IDFC Ltd with IDFC First Bank.

• According to the approved scheme of amalgamation, the share exchange ratio will be 155 equity shares of face value of Rs 10 of IDFC First Bank for every 100 equity shares of face value of Rs 10 of IDFC Ltd.
• IDFC Ltd’s shares have a market capitalisation of Rs 17,455 crore.
• IDFC First Bank has a market capitalization of Rs 54,311 crore.
• After the merger, the bank’s standalone book value per share would increase by 4.9%, as calculated on audited financials as of March 31, 2023.
• IDFC First Bank is an Indian private-sector bank. It was founded in 2015. It is headquartered in Mumbai. V. Vaidyanathan is its MD & CEO.
• Infrastructure Development Finance Company Limited (IDFC):
  • It is a finance company under the Department of Financial Services, Government of India.
  • It was founded in 1997. It is headquartered in Chennai, Tamil Nadu.

Topic: Indian Economy/Financial Market

11. Tamil Nadu has regained first place in electronic exports in India.

• Exports from Tamil Nadu increased at 1.6% in FY2020-21 and at 1.8% in FY2021-22.
• The exports jumped 5.3% in FY2022-23. The exports from Tamil Nadu have surpassed the exports from the states like Uttar Pradesh, Karnataka and Maharashtra.
• Exports from Tamil Nadu are valued at USD 5.37 billion in FY2022-23.
• Important factors behind the rise in exports are setting up of manufacturing facilities by Tata Electronics, Apple contract manufacturer Pegatron under China plus one strategy and the centre’s production-linked incentives for electronic manufacturing.
• Tamil Nadu has regained first place nearly after a decade. It has jumped from 4th place in FY22 to first place in FY23.

Topic: Summits/Conferences/Meetings

12. India virtually hosted the 23rd Summit of the Shanghai Cooperation Organization on 4 July.

• Prime Minister Narendra Modi chaired the 23rd Summit of the SCO Council of Heads of State.
• All SCO member states China, Russia, Kazakhstan, Kyrgyzstan, Pakistan, Tajikistan, and Uzbekistan were invited to participate in the summit.
• Iran, Belarus and Mongolia were invited as observers. As per SCO tradition, Turkmenistan was also invited as the guest chair.
• The theme of India’s Chairmanship of SCO-SECURE is derived from the acronym given by the Prime Minister at the 2018 SCO Qingadao Summit.
• ‘Secure’ means Security, Economic development, Connectivity, Unity, Respect for sovereignty and territorial integrity, and Environmental protection.
• Shanghai Cooperation Organisation (SCO) Heads of State adopted New Delhi Declaration.
• A virtual meeting of the Council of Heads of State of SCO was held on 04 July 2023.
• Member states agreed to declare 2024 as the SCO Year of Environment.
• The presidency of the SCO is handed over to Kazakhstan.
• The next meeting of the SCO Council of Heads of State will be held in 2024 in Kazakhstan.
• One important achievement of the Summit is that Iran has become a member state of SCO. Now, the SCO has 9 member states.
• Nine SCO member states are China, India, Iran, Kazakhstan, Kyrgyzstan, Pakistan, Russia, Tajikistan and Uzbekistan.

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