Banking Awareness of 6, 7 and 8 July 2024

By Priyanka Chaudhary | Last Modified: 08 Jul 2024 17:12 PM IST
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Topic: Indian Economy/Financial Market

1. Announcements of corporate investments fell to a 20-year low in Q1FY25.

  • According to Bank of Baroda's economic research department (ERD), corporate investment announcements fell to a 20-year low level of ₹44,300 core in the first quarter of FY25.
  • Elections could be the only reason for this, according to the ERD report. 
  • The previous lowest level of corporate investment announcements were seen in June 2005.
  • Investments stood at ₹2.9 lakh crore for Q1 of FY15. For Q1 of FY20, investments stood at ₹2.1 lakh crore.
  • Manufacturing accounted for the majority of all investment intentions in the first quarter of FY25.
  • With a 46.4% share, it was followed by energy (23.5%), services other than finance (22.2%), and real estate & construction (7.9%).
  • There was a ₹7.4 lakh crore decline in the value of investment announcements between June 2023 and June 2024.
  • According to the BoB study, corporate bond issuances during the first quarter of the year followed the pattern seen in corporate investment announcements.
  • From Rs 1.43 lakh crore in Q1-FY23 to ₹2.86 lakh crore in Q1-FY24, the total amount of issuances had grown.
  • In Q1-FY25, total issuances dropped sharply to ₹1.73 lakh crore.
  • In the first quarter of this year, the financial services sector accounted for 76% of bond issuances.

Topic: Banking System

2. In the first quarter of FY25, Bank of Maharashtra and UCO Bank both reported strong credit growth.

  • However, these banks' deposit growth is still trailing behind their credit growth.
  • The Bank of Maharashtra has said that in Q1FY25, gross advances increased by 19.01% year over year (yoy) and total deposits increased by 9.44% yoy.
  • ₹2,09,065 crore (₹1,75,676 crore as of June-end 2023) was the gross loans as of June-end 2024, according to the bank's provisional quarterly business update.
  • Its total deposits as of June 30, 2024, were ₹2,67,423 crore (₹2,44,365 crore).
  • The share of current account, savings account (CASA) deposits decreased from 50.96% at the end of June 2023 to 49.86% at the end of June 2024.
  • The credit-deposit ratio (C-D) increased from 71.89% at June 30, 2023, to 78.18% at that same time in 2024.
  • For the first quarter of FY25, UCO Bank recorded a 17.78% year-over-year (yoy) growth in gross advances and a 7.39% yoy growth in total deposits.
  • As per the bank's provisional quarterly business update, as of June-end 2024, its gross advances were ₹1.94 lakh crore (₹1.64 lakh crore as of June-end 2023).
  • The bank's total deposits as of June 30, 2024, were ₹2.68 lakh crore (₹2.50 lakh crore).
  • As of June 30, 2024, the share of current account, savings account (CASA) deposits increased to 38.62% from 38.10% in 2023.
  • As of June 30, 2024, the credit-deposit ratio was 72.15%, up from 65.79% at that same time in 2023.

Topic: Banking System

3. LIC raised stake in IDFC First Bank.

  • Life Insurance Corporation of India has increased its stake in IDFC First Bank from 0.20% to 2.68%.
  • LIC bought 18,60,34,900 shares at an average price of Rs 80.63 via private placement offer on 4 June 2024.
  • IDFC First Bank is a universal bank. It is an Indian private-sector bank. It was founded in 2015.
  • It is headquartered in Mumbai. V. Vaidyanathan is its MD & CEO. Its shareholding pattern is given below (as of September 2023).

Shareholders

Percentage

Promoters

40.00

Foreign Institutional Investors (FIIs)

24.48

Domestic Institutional Investors (DIIs)

9.50

Public Shareholding

26.02

Other

2.22

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Topic: Appointments

4. Bandhan Bank has appointed Ratan Kumar Kesh as interim Managing Director and Chief Executive Officer (MD & CEO).

  • The board of Bandhan Bank has approved his appointment for three months or until the new MD & CEO takes charge, whichever is earlier.
  • The appointment of Kesh as the Interim MD & CEO is with effect from July 10.
  • The appointment of Kesh is subject to the approval of the shareholders of the bank.
  • Ratan Kumar Kesh is Executive Director and Chief Operating Officer at the bank. He was earlier with Axis Bank.
  • The current MD & CEO, Chandra Shekhar Ghosh, will retire on July 9 upon completion of his current tenure.
  • Ghosh has been the bank’s Managing Director and Chief Executive Officer since July 10, 2015.
  • Bandhan Bank started operations as a universal bank on August 23, 2015.
  • It became India’s first microfinance institution to get a universal banking licence from RBI.

Topic: RBI

5. RBI cancelled licence of Shimsha Sahakara Bank Niyamitha.

  • RBI said the bank ceases to conduct banking business with effect from the close of business on July 05, 2024.
  • RBI has cancelled the licence of Karnataka based bank because of its worsening financial position.
  • The Registrar of Cooperative Societies, Karnataka has also been requested to issue an order for winding up the bank.
  • Every depositor would be entitled to get deposit insurance claim of deposits up to Rs 5 lakh from Deposit Insurance and Credit Guarantee Corporation (DICGC).
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Topic: RBI

6. Punjab National Bank was fined a total of Rs 1.32 crore by RBI.

  • Penalty have been imposed for breaking Know Your Customer (KYC) as well as loans and advances related norms.
  • Two corporations owned by the state government were granted working capital demand loans by PNB.
  • These loans were granted against amounts receivable from the government by way of subsidies, refunds, or reimbursements.
  • PNB failed to keep the records related to the identification of customers and their addresses.
  • These records were obtained during the course of the business relationship in certain accounts.

Topic: Miscellaneous

7. An 80% concession in licensing fees for women entrepreneurs was announced by Union Minister Piyush Goyal.

  • On 3 July, the Stakeholder Consultation was organized by the Department for Promotion of Industry and Internal Trade (DPIIT).
  • The objective of the program was to enhance efficiency within the Petroleum and Explosives Safety Organisation (PESO) and improve communication with industry stakeholders.
  • During the event, Goyal announced a concession of 80% in license fee for women entrepreneurs and 50% for MSMEs for licenses granted by PESO.
  • He directed PESO to prepare guidelines to outline safety measures in consultation with the Central Pollution Control Board (CPCB) and the Ministry of Petroleum and Natural Gas (MoPNG).
  • This will allow retail outlets for petrol pumps to function in cases where there is habitation within 30–50 metres.

Topic: Miscellaneous

8. India’s defence manufacturing sector registered a 16.7% increase in the fiscal year 2023–24.

  • It is the highest-ever growth in the country’s defence production value.
  • The total value of defence production has reached a record high of Rs 126887, up from the previous year’s figure of Rs 1,08,684 crore.
  • The defence PSUs and other PSUs accounted for approximately 79.2 percent of the total production value in FY 2023–24.
  • The private sector contributed 20 percent to the total production value.
  • The central government has set a target of achieving indigenous defence manufacturing worth Rs 1,75,000 crore by the fiscal year 2024–25.
  • India’s defence exports have increased by 32.5% from Rs 15,920 crore to Rs 21,083 crore in FY 2023–24.

Topic: Miscellaneous

9. Women Entrepreneurship Platform (WEP) and TransUnion CIBIL have launched the Society for Empowerment of Human Resources (SEHER) ​​programme.

  • It will empower women entrepreneurs in India with financial literacy content and business skills.
  • The Women Entrepreneurship Platform's (WEP) is a public-private partnership platform incubated at Niti Aayog.
  • SEHER program is part of WEP’s Financing Women Collaborative (FWC).
  • FWC is a first-of-its-kind initiative aimed at accelerating access to finance for women entrepreneurs.
  • India has 63 million micro, small, and medium enterprises, of which 20.5% are women-owned.
  • Rural areas have a slightly higher share of women-owned enterprises (22.24%) compared to urban areas (18.42%).
  • TransUnion CIBIL Limited is a credit information company operating in India.

Topic: Corporates/Companies

10. LIC started the "Jeevan Samarth" project to address the changing needs of its clients.

  • In order to carry out the transformation project, LIC has teamed up with A T Kearney.
  • For carrying out this project, LIC will review its current agency architecture from beginning to end.
  • LIC hopes to change its agency ecosystem through this project so that it may better serve the continually changing demands of millions of Indian families.
  • In addition, LIC wants to offer them pension plans, ULIPs, health insurance, protection, and appropriate long-term savings.

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