Banking Awareness of 6, 7 and 8 August 2023

Topic: Indian Economy/Financial Market

1. India has become net importer of steel in July 2023.

• India has become net importer of steel for the fourth time in over a year.
• In July 2022, India had become net steel importer for the first time in four years.
• India’s imports for July 2023 stood at 5,87,000 tonnes. Exports for July 2023 stood at 5,13,000 tonnes.
• For July 2023, imports exceeded exports by 74,000 tonnes. Imports and exports both increased over 30% YoY.
• Steel imports in July 2022 were 4,44,000 tonnes. Steel exports in
  July 2022 stood at 3,80,000 tonnes.
• For April to July period, India was a net exporter of steel. Exports stood at 25,63,000 tonnes and imports stood at 19,89,000 tonnes.
• For July, India’s main import item was non-alloyed steel. It made up 70% of steel imports.
• Import of non-alloyed steel increased 63% YoY at 411,000 tonnes. Non-alloyed steel imports in 2022 stood at 2,52,000 tonnes.
• Imports of alloyed and stainless steel declined 8% from 1,92,000 tonnes to 1,76,000 tonnes. 
• Exports of non-alloyed steel shipments increased 190% from 156,000 tonnes to 454,000 tonnes.  
• Exports of stainless and alloyed steel have fallen 74% to 58,000 tonnes from 223,000 tonnes.

Topic: Taxation

2. E-way bill generation increased to 8.79 crore in July 2023 from 8.61 crore in June 2023.

• This will possibly have a positive impact on GST collection.
• E-way bill generation crossed an all-time high of 9 crore in March. This led to GST collection in April at ₹1.87 lakh crore.
• In April, the e-way bill generation came down to 8.44 crore. GST collection in May was ₹1.57 lakh crore.
• In May, e-way bill generation increased to 8.82 crore. GST collection in June was over ₹1.61 lakh crore.
• There is no direct correlation between e-way bill generation and GST collection.
• There is evidence showing higher generation of e-way bills would lead to higher collection.
• E-way bill is an electronic document. It is generated on a portal.
• It shows the movement of goods. It shows whether tax has been paid.
• According to the Rule 138 of the CGST Rules, 2017, every registered person who causes the movement of goods of consignment value of over ₹50,000 is required to generate an e-way bill.
• This applies to both, the movement within a State as well as the movement between states.

Topic: Banking System

3. ₹14-lakh crore worth NPAs were written off by Scheduled commercial banks (SCBs) between FY15 and FY23.

• Out of these, nearly half (₹7,40,968 crore/ ₹7.40 lakh crore) were related to large industries and services.
• In the written-off loans, total recovery was just over ₹2 lakh crore.
• As of date, the list of SCBs include 12 public sector banks (PSBs), 22 private banks, 12 small finance banks, four payment banks (which act as agents in loan business), 43 regional rural banks, and 45 foreign banks.
• Write-off does not lead to a waiver of the borrower’s liability to repay. Write-off does not benefit the borrower.
• SCBs have recovered an aggregate amount of ₹2,04,668 crore in written-off loans, including corporate loans, since April 2014 and up to March 2023.
• Gross NPAs of PSBs declined to ₹4.28-lakh crore as of March 31, 2023, from ₹8.96 lakh crore as of March 31, 2018.

Topic: Corporates/Companies

4. Top fifteen insurance companies will adopt IND-AS from April 2024.

• IRDAI has asked top 15 insurance companies to adopt the new IND-AS accounting framework from 01 April 2024 (FY25).
• State-run insurance companies, including LIC have been excluded from the adoption of the new accounting rules for now.
• The move is aimed at bringing Indian accounting practices closer to global standards.
• IRDAI has identified 15 companies that have foreign equity partners and strategic collaborations for the purpose.
• Some of these companies are ICICI Prudential Life, ICICI Lombard General, TATA AIG General, Niva Bupa Health, HDFC Life, and HDFC Ergo General.
• Over 140 countries have adopted IFRS 17, effective January 2023. IND-AS 117 is designed in coordination with IFRS-17.
• The new accounting standard will replace Ind AS 104, Insurance Contracts.

Topic: MoUs/Agreements

5. Bureau of Indian Standards (BIS) has signed a Memorandum of Understanding (MoU) with 35 institutions.

• The MoU is for fostering collaboration in standardisation and conformity assessment.
• BIS will explore the establishment of Centre of Excellence for Standardisation in collaboration with these institutions.
• The institutions include Prominent NITs, government, and private engineering colleges from across the country.
• Bureau of Indian Standards (BIS) is a statutory body. It is functioning under the aegis of Ministry of Consumer Affairs, Food and Public Distribution, Government of India.
• Pramod Kumar Tiwari is the Director General of BIS. Its headquarters is in New Delhi.

Topic: Reports and Indices

6. Funds for India’s corporate debt issuers could almost triple relative to nominal GDP by 2030, according to a report from S&P global.

• This would be possible if India is included in the key global government bond debt indexes and this increases foreign participation in India’s government bond market from 0.9% to 10%, as per the report.
• The report is titled “Look Forward: India’s moment”.
• According to the market estimates, inclusion in key bond indexes could initially cause inflow of $20 billion-$40 billion.
• This could increase to over $180 billion over in next decade.
• As of end 2022, foreign investors collectively held less than 1% of outstanding Indian government bonds.
• According to the same report, the share of global venture capital flow into Indian start-ups may double by 2030.
• S&P global sees considerable momentum for start-up investments in newer verticals like electric vehicles (EV), space technology, artificial intelligence, and drones in next two years.
• As per the report, venture capitalists will likely contribute to significant share of the expected investments of $ 266 billion in the EV industry in this decade.   
• India emerged as the fourth most popular destination for start-ups in the world in 2022 according to S&P Global Market Intelligence.
• India had more than 92,000 start-ups recognised by the Department for Promotion of Industry and Industrial Trade (DPIIT) as of February 28, 2023.
• According to the report, young Indian start-ups may face fewer challenges raising money amid the global VC slowdown.

Topic: Banking System

7. Star Health Insurance has signed bancassurance partnership with Standard Chartered Bank (SCB).

• As part of partnership, health insurance solutions will be provided across SCB’s 100 branches in 42 cities.
• SCB will provide Star Health’s insurance products through its extensive branch network across India.  
• SCB will serve as one-stop destination for its customers seeking comprehensive health insurance coverage.
• Bancassurance is an insurance distribution model in which insurance companies partner with banks to sell policies.
• Both the bank and the insurance company benefit from bancassurance.
• The bank gets commission from the insurance company, the insurer benefits from the distribution network of the bank.

Topic: Miscellaneous

8. Sashidhar Jagdishan of HDFC Bank was the highest paid bank chief executive in financial year 2022-23.

• Jagdishan of HDFC Bank received over Rs 10.55 crore in overall pay.
• Axis Bank’s Amitabh Chaudhary was the second highest paid bank CEO. He received Rs 9.75 crore payout.
• Amitabh Chaudhary was closely followed by Sandeep Bakhshi of ICICI Bank.
• Sandeep Bakhshi drew Rs 9.60 crore for the same year.

Topic: Banking System

9. SBI has reported highest ever quarterly profit in the April-June quarter of 2023-24.

• It has reported quarterly profit at ₹ 16,884 crore. This is a nearly three-fold jump over ₹ 6,068 crore in the year-ago period.
• The record increase in quarterly profit is caused by a steep decline in bad loans and higher interest income.
• On a consolidated basis, the bank’s net income increased over two-fold to ₹ 18,537 crore in the April-June quarter from ₹ 7,325 crore a year ago.
• Total income was ₹ 1,32,333 crore in the April-June quarter of 2023-24. It was ₹ 94,524 crore in the April-June quarter of 2022-23.
• On a sequential basis, margins and net interest income showed marginal deterioration while loan loss provisions more than doubled.
• The bank has shown improvement in the the asset quality with a major improvement in the slippage ratio. The gross non-performing assets (NPA) fell to 2.76% from 3.91%.
• Net NPAs also declined to 0.71% from 1% a year ago. The capital adequacy ratio improved by 113 bps to 14.56.

Topic: Miscellaneous

10. Government set a deadline for the pharma industry to adopt good manufacturing practices.

• Ministry of Health announced that all pharma industries with an annual turnover of over Rs 250 crore will have to mandatorily adopt good manufacturing practices (GMP) within six months.
• Pharma companies with less than Rs 250 crore in revenue would have to adopt good manufacturing practices within a year.
• The timeline for adopting Schedule M of the Drugs and Cosmetics Act will start from 1 August. It has not been implemented by most of the drugmakers.
• Schedule M of the Drugs and Cosmetics Act of 1940 deals with Good Manufacturing Practices (GMP) for pharmaceutical manufacturing units.
• GMP includes specific requirements pertaining to premises, plant and equipment. GMP are mandatory standards to bring quality in products by controlling materials, methods, machines, processes, environment, etc.
• GMP was first incorporated in Schedule M in 1988. The norms of GMP were last amended in 2018.
• In India, there are around 10,500 pharma manufacturing units. Out of the total, 8500 are MSMEs.
• Around 2000 manufacturing units in India have WHO GMP certification.

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