Banking Awareness of 6, 7 and 8 July 2022

Topic: Banking System

1. The Ministry of Defence has approved HDFC Bank Ltd., ICICI Bank and Axis Bank to provide financial services in overseas procurement.

• Till now, only authorized public sector banks were used to provide financial services in overseas procurement to the Ministry of Defence.
• Now for the first time, three private sector banks have also been allowed by the Defense Ministry to provide financial services for overseas procurement.
• In this regard, the Principal Controller of Defence Accounts (PCDA) on behalf of the Ministry of Defense recently signed a Memorandum of Understanding (MoU) with these three banks (HDFC Bank Ltd., ICICI Bank and Axis Bank).
• Selected banks may be permitted to issue letters of credit worth Rs 2000 crore on the capital and revenue side for a period of one year on a concurrent basis.

Topic: Indian Economy/Financial Market

2. The share of Chinese imports in India’s total imports has declined from 16.5% in 2020-21 to 15.4% in 2021-22.

• India’s exports to China grew marginally to $21.25 billion in 2021-22 from $21.18 billion in 2020-21.
• In 2021-22, India's exports to China stood at $21.2 billion. They were third highest after US and UAE.
• As per the sources, imports of mobile phones from China declined by 55% from $1.4 billion in 2020-21 to $626 million in 2021-22.
• Chinese imports into India are used for meeting demands of telecom and power sectors.
• Imports of Active Pharmaceutical Ingredients (APIs) and drug formulations from China meet demands of Indian pharma industry. 

Topic: Indian Economy/Financial Market

3. Unemployment rate in India in June 2022 increased due to increase in rural joblessness.

• It increased from 7.12% in May 2022 to 7.8% in June 2022 as per data by Centre for Monitoring Indian Economy (CMIE).
• Rural unemployment rate increased from 6.62% in May 2022 to 8.03% in June 2022.
• Urban unemployment rate declined from 8.21% in May 2022 to 7.30% in June 2022.
• Highest unemployment rate in June 2022 was recorded in Haryana at 30.6%. It was followed by Rajasthan at 29.8%.
• Low unemployment rates were recorded in Madhya Pradesh at 0.5%, Chhattisgarh and Odisha at 1.2% each and Tamil Nadu at 2.1%.

Topic: Reports and Indices

4. Union Consumer Affairs, Food and Public Distribution Minister Piyush Goyal released 1st edition of the State Ranking Index for NFSA has been released.

• Odisha (1^st rank), Uttar Pradesh (2^nd rank) and Andhra Pradesh (3^rd rank) have achieved the top three ranks amongst the General Category States in the ‘State Ranking Index for National Food Security Act (NFSA)’.
• Tripura (1^st rank), Himachal Pradesh (2^nd rank) and Sikkim (3^rd rank) are ranked in the top three positions in the Special Category States/UTs. 
• Dadra and Nagar Haveli & Daman and Diu is the top ranked UT among the 3 UTs where Direct Benefit Transfer (DBT) - Cash is operational.
• The index was released during the conference on ‘Food Nutrition and Security in India’.

• The National Food Security Act (NFSA) was enacted on July 5, 2013 and in order to celebrate the day, the conference on ‘Food Nutrition and Security in India’ was organized.
• About First edition of “State ranking Index for NFSA”:
  • It is largely focused on NFSA Distribution and will include procurement and PMGKAY Distribution in the future.
  • It is built on three key pillars. These pillars are NFSA— Coverage, targeting and provisions of the Act, Delivery platform and Nutrition initiatives.

Topic: RBI

5. RBI eased FPI and NRI deposit norms to boost inflows of foreign exchange.

• The RBI has taken several steps to prevent the rupee falling against the US dollar.
• It has increased the External Commercial Borrowing (ECB) limit under the automatic route from $750 million per financial year to $1.5 billion.
• From July 30, 2022, incremental FCNR (B) and NRE deposits with the base date of 1 July 2022 will be exempted from maintaining the cash reserve ratio and statutory liquidity ratio (SLR). This relaxation will be available only till 4 November 2022.
• It has allowed Category one banks to utilize overseas foreign currency borrowing (OFCBs) for lending in foreign currency to entities.
• RBI has temporarily permitted banks to raise fresh Foreign Currency Non-Resident (Bank)/FCNR (B) and Non-Resident (External)/NRE deposits without reference to the extant regulations on interest rates. This relaxation will be available till October 31, 2022.
• RBI has allowed FPIs to invest in all-new issuances of government securities (G-Secs) of 7-year and 14-year tenors. Currently, they can invest in G-Secs with 5-year, 10-year and 30-year tenors.
• In the current fiscal year till July 5, the rupee has depreciated 4.1 percent to 79.30 against the US dollar.
• India’s foreign exchange reserves stood at $593.3 billion as on June 24, 2022.

Topic: Banking System

6. South Indian Bank and Kerala’s Forest and Wildlife Department have signed an agreement.

• The agreement will enable digital collection of payments at Vanasree shops, eco-tourism centres and mobile Vanasree units across the State.
• With this partnership, South Indian Bank’s digital collection system will be found at all 124 tourist spots under the Forest Department.
• The partnership will begin with establishment of 124 Point of Sale (POS) machines at Vanasree shops, eco-tourism centres and mobile Vanasree units.
• South Indian Bank is a private sector bank. It is headquartered in Thrissur, Kerala.

Topic: Appointments

7. R Dinesh has been elected as President Designate of the Confederation of Indian Industry (CII) for 2022-23.

• He is executive Vice-Chairman of TVS Supply Chain Solutions.
• He was elected President Designate of CII for 2022-23 at its recent National Council meeting.
• At the meeting, Sanjiv Puri, Chairman and Managing Director of ITC, was elected as Vice-President of CII.
• Sanjiv Bajaj, Chairman and Managing Director, Bajaj Finserv Ltd, continues to be the President of CII for the year 2022-23.
• Confederation of Indian Industry (CII):
  • It was established in 1895 as a non-governmental trade association.
  • It is headquartered in New Delhi. Its Director General is Chandrajit Banerjee.

Topic: RBI

8. RBI has selected Mumbai-based Hansa Research Group to carry out July 2022 round of CCS and IESH.

• On behalf of RBI, Hansa Research Group will conduct field work for July 2022 round of the consumer confidence survey (CCS) and inflation expectation survey of households (IESH).
• IESH aims to capture subjective assessments of households on inflation, based on their individual consumption baskets, across 19 cities.
• CCS seeks qualitative responses from households, regarding their sentiments on general economic situation, price level, employment scenario, households’ income and spending. It is conducted regularly in 19 cities.
• The results of IESH and CCS provide useful inputs for monetary policy.

Topic: Miscellaneous

9. Gita Gopinath has become the first woman to feature on IMF’s ‘wall of former chief economists’.

• She has become the 2^nd Indian to feature on IMF’s ‘wall of former chief economists’.
• Raghuram Rajan was the first Indian to achieve this honour.
• Gita Gopinath became IMF Chief Economist in October 2018. She served as the first female chief economist of IMF for three years.
• She was appointed International Monetary Fund’s First Deputy Managing Director in December 2021.
• Gita Gopinath is an Indian-American economist. She has earlier worked as an honorary economic adviser to the Chief Minister of Kerala.

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