Banking Awareness of 6, 7 and 8 August 2024

Topic: RBI

1. RBI has kept repo rate unchanged at 6.50% for the 9th time continuously.

• As a result, the standing deposit facility (SDF) rate stands unchanged at 6.25 percent and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 per cent.
• The benchmark interest rate was last changed by the MPC in February 2023.
• The Monetary Policy Committee (MPC) also decided to stay focused on withdrawal of accommodation.
• The MPC took this decision by a majority of 4 out of 6 members. The MPC met on 6th, 7th and 8th August, 2024.
• FY25 real GDP growth projection has been kept unchanged at 7.2%.
• Retail inflation projection has been retained at 4.5% for FY25.
• Forex reserves have increased to historic high of $675 billion.
• RBI will create public repository of digital lending apps to check unauthorised players.
• RBI will introduce ‘Delegated Payments’ through UPI. It proposed steps to speed up cheque clearance.
• The next meeting of MPC will take place from October 7 to 9, 2024.

Topic: RBI

2. The transaction limits for tax payments through UPI will be increased from ₹1 lakh to ₹5 lakh, as per RBI.

• Delegated payments through the Unified Payments Interface (UPI) will be introduced.
• Presently, the transaction limit for Unified Payments Interface (UPI) is kept at ₹1 lakh.
• RBI Governor Shaktikanta Das said the decision to increase limit has been taken as direct and indirect tax payments are common, regular and are of high value.
• He said that UPI has become the most-preferred mode of payments.
• He noted that the UPI has a large user base of 424 million individuals.
• Delegated payments would allow an individual (the primary user) to fix a UPI transaction limit for another individual (secondary user) on the bank account of primary user.

Topic: Indian Economy/Financial Market

3. India’s electronics exports has secured third place among India’s top 10 exports by the end of the Q1 of FY25.

• India’s electronics exports has surpassed gems and jewellery exports by the end of the April-June quarter of 2024-25.
• Electronics exports ranked fourth in the same quarter of the previous fiscal year (FY24).
• The Department of Commerce's data shows that engineering items are the main export commodity, followed by petroleum, while electronics exports are currently ranked third.
• Department of Commerce data shows that at the end of Q1 FY25, electronics exports reached $8.44 billion, up 22% from the previous year.
• There was an increase of USD 1.5 billion from $6.94 billion in Q1 FY24.
• The growth in Apple iPhone exports from India is the main reason driving this development in electronics exports.

Topic: Appointments

4. Challa Sreenivasulu Setty has been appointed Chairman of State Bank of India (SBI).

• Proposal to appoint Challa Sreenivasulu Setty as Chairman of SBI has been approved by the Appointments Committee of the Cabinet (ACC).
• His appointment will be effective for a three year period from the date of his assumption of charge of the office, on or after August 28, or until further orders, whichever is earlier.
• He was serving as the SBI Managing Director heading Global Markets & Technology.
• His name for being appointed SBI Chairman was recommended by the Financial Services Institutions Bureau (FSIB) in June this year.
• Incumbent SBI Chairman Dinesh Kumar Khara will be superannuating on August 28.
• On August 28, he turns 63, the upper age limit for SBI chairman.
• Rana Ashutosh Kumar Singh’s appointment as Managing Director of SBI has also been approved by the ACC.

Topic: Banking System

5. Karnataka Bank has started accepting GST payments through UPI mode.

• All the GST-registered users can make GST payment under this facility. This includes Karnataka Bank customers.
• Maximum limit permitted under UPI mode is ₹1 lakh.
• This is another step towards digitizing the bank’s services.
• Karnataka Bank is already accepting GST payments through its branches on behalf of CBIC.
• It is also GST payments on Internet banking facility on behalf of CBIC.
• Karnataka Bank is a Scheduled Commercial Bank based in Mangaluru, Karnataka.
• It is a private sector bank. It was founded in 1924. Srikrishnan H is its MD and CEO.

Topic: Banking System

6. SBI General Insurance and HSBC India entered into bancassurance partnership.

• Through this partnership, SBI General Insurance aims to provide its insurance solutions to HSBC India’s customers.
• As part of partnership, HSBC India will offer the entire suite of SBI General Insurance’s non-life insurance products to its customers.
• Capital Small Finance Bank and Edelweiss Life Insurance entered into bancassurance partnership.
• All products of Edelweiss Life will be available to bank’s customers.
• Bancassurance:
  • It is an insurance distribution model. In this, insurance companies enter into partnership with banks to sell policies.
  • This partnership benefits both the bank and the insurance company.
  • The bank gets commission from insurance company. The insurance company benefits from the bank’s distribution network.

Topic: Taxation

7. The DGGI served Binance, a cryptocurrency asset exchange, a show-cause notice for more than ₹700 crore.

• The notice was issued to Binance by the Directorate General of GST Investigation for collecting fees from users who transacted in virtual digital assets on their platform.
• This notice is applicable for the period starting from the 2017–18 fiscal year.
• Binance, a significant participant in the global cryptocurrency market, was not registered under the Indian GST system.
• The FIU fined it a total of more than ₹18.82 crore earlier in June.
• In India, the phrase "crypto currency" is not used. NFT and cryptocurrencies are referred to as "Virtual Digital Assets (VDA)" by the Indian Tax Administration.
• Any revenue from the transfer of VDAs is subject to 30% taxation (plus surcharge and cess) effective from April 1, 2022.
• Additionally, from July 1, 2022, the government implemented Tax Deducted at Source (TDS) on VDA.
• Whenever a person or HUF purchases a VDA, a one percent fee will be subtracted.

Topic: Corporates/Companies

8. Reliance Industries moved up to number 86 from number 88 on Fortune's Global 500 list for 2024.

• Reliance Industries continues to be the highest ranked Indian company.
• From 155 in 2021, the company has risen 69 spots in the last three years.
• Nine Indian companies are included in this year's Fortune Global 500 list.
• Five of them are from the public sector (IOCL, LIC, ONGC, BPCL and SBI) and four are from the private sector.
• Companies are ranked by total revenues for their respective fiscal years that ended on or before March 31, 2024, in the Fortune Global 500 list.
• In 2023, the Fortune Global 500 achieved a record-breaking $41 trillion in total revenue. This amounts to over one-third of the world's GDP.
• Walmart had $648 billion in revenue, making it the largest firm for the eleventh consecutive year.  

Topic: Summits/Conferences/Meetings

9. The first BIMSTEC Business Summit hosted by India from 6-8 August in New Delhi.

• The Ministry of External Affairs organised this three-day event in partnership with the Confederation of Indian Industry (CII).
• External Affairs Minister S. Jaishankar inaugurated the summit.
• The event was attended by ministers from BIMSTEC member countries responsible for trade, commerce, industry, and energy, high-ranking government officials, policymakers, entrepreneurs, and industry associations.
• The aim of the first edition of the Business Summit is to promote greater regional cooperation through stronger trade and investment ties among the member countries of BIMSTEC.
• The Ministry of External Affairs emphasised India's commitment to BIMSTEC, which links five South Asian countries (Bangladesh, Bhutan, Nepal, India and Sri Lanka) with two South East Asian countries (Myanmar and Thailand).

Topic: RBI

10. RBI revised NPAs provision norms for co-operative banks to ensure uniformity.

• The Reserve Bank of India issued norms for uniformity in the treatment of Bad and Doubtful Debt Reserve (BDDR) for prudential purposes.
• These revised norms will be for Urban cooperative Banks, State Cooperative Banks and Central cooperative Banks.
• It will come into force with immediate effect.
• RBI has also prescribed specific steps to facilitate rectification and easy transition to an accounting standard compliant approach.
• RBI directed that appropriation should be made directly from the P&L Account or General Reserves to make provisions for NPAs by March 31, 2025.

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