Banking Awareness of 6, 7 and 8 April 2022

Topic: Committees/Commissions/Task forces

1. Ashwini Vaishnaw will be chairperson of recently formed advisory committee for Semicon India.

• Rajeev Chandrasekhar will be the vice-chairperson of the committee.
• The advisory committee will meet at least once in three months and its term is one year. It will be reconstituted after one year.
• The committee also consists of senior government officials, academicians, industry experts and domain experts.
• Semicon India:
  • It is a ₹72,000-crore project. It was approved by the union cabinet in December 2021.
  • It aims to develop India into a global leader in semiconductor manufacturing, design and innovation.

Topic: Agriculture

2. India has achieved 99% of its marine products exports target for 2021-22.

• India’s marine products exports stood at $7.74 billion during 2021-22.
• Commerce Ministry has fixed the $7.809-billion marine products export target for 2021-22.
• US, China (2nd) and Japan (3rd) are the top three markets for India’s marine exports.
• US is top market for seafood exports for the previous 11 years.
• Arya.ag (a grain commerce platform) has joined UN Global Compact (UNGC) India.
• UN Global Compact (UNGC):
  • It is the world’s largest corporate responsibility initiative. It is a non-binding pact. It is voluntary. It was formed in 2000.  
  • It requires members to carry out business as per 10 principles and to take steps to achieve SDGs. 

Topic: Indian Economy

3. RBI kept repo rate unchanged and maintained accommodative monetary policy stance.

• The monetary policy committee (MPC) has decided to keep the repo rate and reverse repo rate unchanged.
• The repo rate remained unchanged at 4 % for the 11th time while the reverse repo rate remains unchanged at 3.35 %.
• MSF rate and Bank rate remained unchanged at 4.25 %.
• RBI has projected that retail inflation will rise to 5.7 % from 4.5 % projected earlier for FY23.
• RBI has reduced its GDP growth rate forecast from 7.8 % to 7.2 % for FY23.
• Repo rate is the interest rate at which the RBI provides short-term money to banks.
• Reverse Repo Rate is the interest rate at which the RBI absorbs liquidity from banks.

Topic: Committees/Commissions/Taskforce

4. SEBI formed a committee under the chairmanship of its former member, G Mahalingam.

• SEBI formed a committee to examine and provide recommendations for improving governance norms at stock exchanges and other market infrastructure institutions (MIIs).
• G Mahalingam, a former full-time member of SEBI, will chair the six-member committee.
• The Committee has to make recommendations on measures for strengthening the role played by the governing board and committees of MIIs.
• In addition, the panel will review the requirements for the appointment, role, and responsibility of board directors and Key Managerial Persons (KMPs).
• Securities and Exchange Board of India (SEBI):
  • SEBI was set up in 1988 and given statutory status in 1992. Its headquarters is located in Mumbai.
  • It is a regulator of the securities market in India and aims to protect the interests of investors in securities.
  • Madhabi Puri Buch is the current chairperson of SEBI.

Topic: Indian Economy

5. WMA limit for states and UTs has been lowered from Rs 51,560 crore to Rs 47,010 crore.

• Ways and Means Advances (WMA) limit was earlier increased by RBI to Rs 51,560 crore due to COVID-19 related uncertainties.
• The increased WMA limit was in effect until March 31, 2022. The reduced WMA limit has come into effect from April 1, 2022.
• RBI's decision to return to earlier WMA limits and timelines for Over Draft (OD) for state governments/Union Territories (UTs) is as per recommendations by Advisory Committee on WMA to State Governments.
• Advisory Committee on Ways and Means Advances to State Governments (Chairman: Sudhir Shrivastava) was set up by RBI in August 2019.
• Government of India’s WMA limit for the first half of financial year 2022-23 has been kept at Rs 1,50,000 crore.

Topic: RBI

6. RBI has started Standing Deposit Facility (SDF) at the interest rate of 3.75%.

• SDF has been kept at 25 basis points below the repo rate (4%) and Marginal Standing Facility (MSF) has been kept at 25 basis point above the repo rate (4%).
• As per RBI, SDF is an additional tool for absorbing liquidity without any collateral.
• RBI said SDF will take place of fixed rate reverse repo (FRRR) in the form of the floor of LAF corridor. RBI has kept FRRR at 3.35%.
• RBI has said that as of now, the scheduled commercial banks need not activate countercyclical capital buffer (CCyB).
• Banks may keep CCyB as Common Equity Tier 1 (CET 1) capital or other fully loss absorbing capital only.
• CCyB amount may be between 0 to 2.5% of the total risk weighted assets of the banks. CCyB indicators are given below.
  • Credit-to-GDP gap
  • Incremental credit-deposit ratio for 3 years
  • Industry outlook assessment index
  • Interest coverage ratio

Topic: Banking System

7. Super app "Union nxt" has been launched by Union Bank of India under its digital initiative "Sambhav".

• The bank is planning to invest Rs 1,000-crore under digital initiatives in the financial year 2022-23.
• The super app UnionNXT will reduce the need to visit branches physically.
• Union Bank of India will bring all the banking services on the Union nxt super app.
• Union Bank of India:
  • It is a government-owned bank founded in 1919.
  • Its CEO is Rajkiran Rai G. It is headquartered in Mumbai.

Topic: Regulatory Bodies/Financial Institutions

8. IRDAI may reduce Rs 100 crore initial capital limit for starting an insurance venture.

• IRDAI Chairman Debasish Panda said that it will request the government for this purpose.
• He also said that IRDAI will also focus on proposals such as Bima Mitras and lowering the compliance burden for insurance companies.
• IRDAI has also asked three loss-making public sector general insurers to provide business plans.
• The names of these insurers are National Insurance Company, Oriental Insurance Company and United Insurance Company.

Topic: Indian Economy

9. ADB has projected that India’s GDP will grow by 7.5% and 8% in FY2022 and FY2023, respectively.

• In its Asian Development Outlook (ADO) 2022, ADB has projected that the growth rate in South Asia will decline to 7% in 2022.
• ADB has also projected that the growth rate in South Asia will increase to 7.4% in 2023.
• Asian Development Bank (ADB) has estimated that Asia’s economies will grow by 5.2% in 2022 and 5.3% in 2023.
• Services PMI has increased from 51.8 in February to 53.6 in March.
• In March, finance and insurance sectors were the best performing sectors. Real estate and business services were the worst performers.
• Asian Development Outlook (ADO):
  • It is a report of ADB, which is annually published in March/April. It covers most countries in Asia.
  • An update to ADO is published in September. Brief supplements to ADO are published in July and December.
  • Global Economic Prospects by World Bank Group and World Economic Outlook by International Monetary Fund are two other important economic reports. 

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