Banking Awareness of 4 and 5 December 2022

By PendulumEdu | Last Modified: 05 Dec 2022 20:25 PM IST
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Topic: Banking System

1. Payments Council of India (PCI) has launched Project Pratima to standardize payments icons across platforms.

  • Project Pratima has been launched to equalize payment icons across apps and platforms for the purpose of easy identification of digital payments.
  • The website of Project Pratima aims to improve trust, security and popularity of digital payment icons in an attempt to prevent fraud or mistake at the time of initiating payment transactions.
  • FamPay, Setu, Jupiter, Amazon Pay, Safexpay, and Paytm are some companies that are part of core group implementing Project Pratima.
  • Members from HDFC Bank, National Payments Corporation of India (NPCI), State Bank of India (SBI), Visa, Whatsapp Pay, PayU, Eko, Mobikwik, and Paytm are included in the working group for Project Pratima.
  • Pratima is a Sanskrit word. It means ‘icons’. Standardizing icons is only the first phase of the initiative.
  • In Phase 2, PCI will work to make payments easier for the visually impaired.
  • Payments Council of India (PCI):
    • It is a body representing over 85% of the non-Bank companies in the Payments ecosystem.
    • Vishwas Patel is its chairman. It was formed in 2013 under aegis of IAMAI (Internet and Mobile Association of India).  

Topic: RBI

2. RBI announced a 4-tired regulatory framework for UCBs.

  • On 1 December 2022, RBI issued a circular regarding four-tired regulatory framework to categorize Urban Co-operative Banks (UCBs).
  • The existing framework categorizes UCBs into two tiers- Tier I and Tier II.
  • The new framework have come into force immediately. The categorization of UCBs is as follows:

Tiers

Criteria

Tier 1

All unit UCBs and salary earners' UCBs (irrespective of deposit size), and all other UCBs having deposits up to ₹100 crore

Tier 2

UCBs with deposit more than ₹100 crore and up to ₹1,000 crore

Tier 3

UCBs with deposit more than ₹1,000 crore and up to ₹10,000 crore

Tier 4

UCBs with deposit more than ₹10,000 crore

  • RBI has also announced norms related to the net worth and capital adequacy of UCBs.
  • Tier 1 UCBs operating in a single district should have a minimum worth of ₹2 crore and for other UCBs, the minimum worth should be ₹5 crore.
  • UCBs which currently do not meet above minimum net worth (MNW) requirement shall meet at least 50% of the applicable MNW on or before March 31, 2026 and the entire MNW on or before March 31, 2028.
  • Tier 1 UCBs have to maintain a minimum capital to risk weighted assets ratio (CRAR) of 9% of Risk Weighted Assets (RWAs) while other UCBs (Tier 2 to 4) have to maintain a minimum CRAR of 12% of RWAs.
  • UCBs in Tier 2 to 4, which do not currently meet the revised CRAR of 12 percent of RWAs shall achieve at least 10% by March 31, 2024, 11% by March 31, 2025, and 12% by March 31, 2026.
  • RBI has also revised criteria to classify UCBs as financially sound and well managed (FSWM).
  • One criteria is that, throughout the previous two fiscal years, UCBs should not have been subject to any financial penalties for violating regulatory directives or guidelines.
  • If a UCB meets criteria relating to CRAR of at least 1 percentage point above the minimum CRAR and net non-performing assets (NPAs) of less than 3% will be classified as FSWM.
  • Other criteria are given below.
    • Net profit for minimum 3 out of the past 4 years and not having incurred a net loss in the immediate preceding year.
    • No default in the maintenance of cash reserve ratio (CRR)/ statutory liquidity ratio (SLR) during the preceding financial year.
    • Sound internal control system with minimum 2 professional directors on the Board.

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Topic: MoUs/Agreements

3. A memorandum of understanding (MoU) has been signed between CAG of India and Comptroller General of the Republic of Chile.

  • The aim of MoU is to learn from each other’s best practices and strengthen institutional and professional capacities.
  • The MoU was signed at Santiago (capital of Chile) on 29 November.
  • The agreement was signed by Girish Chandra Murmu, Comptroller and Auditor General of India and Comptroller General of the Republic of Chile.

Topic: Indian Economy/Financial Market

4. Steel exports from Russia to India registered over 333% increase for the April–October of FY23.

  • Steel exports from Russia to India for the April–October of FY23 increased to 0.15 million tonnes (mt).
  • Imports from Russia in the corresponding period last fiscal year were 0.034 mt.
  • Russia is amongst the top four exporters of finished steel to India. It accounts for just 5% of the imports by India.
  • Steel imports to India for April-October increased 14.5% to 3.1 mt.
  • India became net importer of steel for October for the second time this fiscal after July.
  • The largest exporter to India in volume terms was Korea. It accounted for 41% of the import share.
  • Other major exporters are China (24% share), Japan (12% share) and Indonesia (4% share).
  • Exports from China and Indonesia increased by 53% and 17% Y-o-Y, respectively. Exports from Japan dropped by 10%.
Monthly Banking/ Financial Awareness Books
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Topic: Appointments

5. SEBI has approved the name of Sundararaman R as the new MD and CEO of the BSE.

  • Sundararaman Ramamurthy will replace Ashish Chauhan.
  • He has earlier worked with National Stock Exchange (NSE) for nearly 20 years.
  • He was instrumental in launching Bank Nifty, which is the most widely traded index on the NSE after the benchmark Nifty index.
  • From 2014, he was working with Bank of America Merill Lynch.
  • BSE (Bombay Stock Exchange):
    • BSE is India’s premier exchange. It is the world’s fastest Stock Exchange with a speed of 6 microseconds.
    • It is the first stock exchange to get approval from SEBI. It launched its SME platform on 13th March 2012.
    • It was established in 1875. It is also the oldest stock exchange in Asia. It is located in Mumbai.
    • BSE Chairman: S S Mundra

Topic: Reports and Indices

6. Tamil Nadu remained India’s top state in terms of number of factories according to 7th edition of RBI’s annual report Handbook of Statistics on Indian States 2021-22.

  • According to the report, Tamil Nadu has maximum number of factories including micro, small and mid-sized units.
  • Tamil Nadu is followed by Gujarat, Maharashtra, Andhra Pradesh, and Uttar Pradesh in the top-five on a list of 36 states and union territories across India.
  • RBI has released the report on 19 November. It covers sub-national statistics on socio-demographics, state domestic product, and agriculture over various time periods ranging from 1951 to 2021-22.
  • It also covers price and wages, industry, infrastructure, banking and fiscal indicators across Indian states over various time periods ranging from 1951 to 2021-22.
  • The report contains latest (2019-20) data from the Ministry of Statistics and Programme Implementation’s Annual Survey of Industries.
  • As per this data, Tamil Nadu had 38,837 factories. The number of factories in Tamil Nadu increased by 45% from 26,790 factories as of 2009-10 and 1.85% from 38,131 factories as of 2018-19. 
  • Gujarat had 28,479 factory count. The number of factories in Gujarat had grown at a faster rate of 82% from 15,576 as of 2009-10.
  • As of 2019-20, total number of factories in India was 2,46,504. Out of this, Tamil Nadu had a share of 15.7%.
  • Regions with the least presence of factory units were Ladakh with only three factories, Andaman & Nicobar Islands (with 15 units), Sikkim, Arunachal Pradesh and Meghalaya.

Topic: Indian Economy/Financial Market

7. Manufacturing PMI improved to 55.7 in November against 55.3 in October.

  • Manufacturing PMI in November reached to three-month high level.
  • New orders and production rose at quicker rates in the consumer and intermediate goods categories.
  • Capital goods makers registered slowdown. Like Manufacturing, Services sector has also shown good performance.
  • Services PMI increased to 56.4 in November as against 55.1 in October. This is the quickest expansion in 3 months.
  • Job creation was the important element of November’s performance. It the quickest in over three years.
  • Both manufacturing and services have done better during the 1st two months of the Q3 (October-December).

Topic: Reports and Indices

8. As per RBI report, Karnataka is the state with highest installed grid-interactive renewable power capacity in India.

  • According to the report, total installed capacity of the state is 15,463 megawatts (MW).
  • Tamil Nadu was ranked at the second place with 15,225 MW. Gujarat was ranked at third place with 13,153 MW.
  • Maharashtra was ranked at fourth according to Handbook of Statistics on Indian States 2021-22, which was the seventh edition of RBI’s statistical publication.
  • The states' figures of installed capacity were till the end of March 2021.
  • As per India Energy Exchange, Karnataka discoms (distribution companies) had become the top seller of renewable energy under the Green Term Ahead Market (GTAM).

Topic: Reports and Indices

9. Kirit Parikh Committee on gas pricing submitted its report.

  • The committee on gas pricing headed by Kirit Parikh has submitted its report to the Petroleum Ministry.
  • The recommendations of the committee are as follows:
    • A minimum floor price of $ 4 per million British thermal unit and a cap price of $ 6.5 per million British thermal unit on gas from old or legacy fields and complete pricing freedom from 1 January 2026.
    • Linking of domestic gas price with international prices.
    • Removal of price cap in the next 3 years.
    • Gas under Administered Pricing Mechanism (APM) to be treated differently.
  • Under the current system, price is reviewed twice in a year- 1 April and 1 October- depending on prices in gas surplus countries like Canada, US and Russia in a year with a lag of one quarter.
  • At present, the price is $8.57/mBtu till March 2023.
  • APM gas produced by ONGC and OIL in their allocated field is fixed by the government. 

Topic: Awards and Prizes

10. CJ George has won ‘TiE Kerala Lifetime Achievement Award’.

  • CJ George has received the award from Palanivel Thiagarajan, Minister for Finance and Human Resources Management, Tamil Nadu, at a function held in Kochi, Kerala.
  • CJ George has over 35 years of professional experience in the securities market.
  • He is Founder and Managing Director of Geojit Financial Services.
  • The company is known for the launch of India’s first internet and mobile trading platforms in 2000 and 2010 respectively.

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