Banking Awareness of 7, 8 and 9 October 2023

Topic: Appointments

1. The appointments of 12 general managers and chief general managers as Executive Directors of various public sector banks have been approved by centre.

• Sanjay Rudra has been appointed Executive Director (ED) of Union Bank of India. He was general manager (GM) of Bank of Maharashtra.
• Vijaykumar N Kamble has been appointed as ED of UCO Bank. He was also GM of Bank of Maharashtra.
• Bibhu Prasad Mahapatra has been elevated to the post of ED of the PNB from the post Chief General Manager of Punjab National Bank.
• Ravi Mehra has been appointed to become ED of Punjab & Sind Bank.
• Bhavendra Kumar has been appointed ED of the Canara Bank. He was Chief General Manager with same bank.
• Rajiv Mishra will become ED of Bank of India. Brajesh Kumar Singh will become ED of Indian Bank in March.
• Rohit Rishi will become ED of Bank of Maharashtra next month. Other appointments are listed below.
  • Lal Singh (CGM at Union Bank) as ED, Bank of Baroda,
  • Shiv Bajrang Singh (CGM Bank of India) as ED, Indian Bank,
  • Mahendra Dohare (CGM Punjab National Bank) as ED, Central Bank of India
  • Dhanaraj T (CGM Indian Bank) as ED, Indian Overseas Bank

Topic: RBI

2. RBI has raised the limit for gold loans under the Bullet Repayment Scheme.

• It has raised the limit to ₹4 lakh for Urban Co-operative Banks that have met their target and sub-targets under Priority Sector Lending as of March-end.
• Earlier limit was ₹2 lakh. In 2007, RBI allowed bullet repayment of gold loans up to ₹1 lakh.
• This was increased in 2014 to ₹2 lakh and the repayment was limited to 12 months.
• Urban Co-operative Banks (UCBs) are permitted to extend gold loans under the Bullet Repayment and Equated Monthly Instalment (EMI) Repayment routes for one year.
• Under the bullet repayment, borrower pays the principal and interest on a loan in lump sum to the lender at the end of the loan tenure.

Topic: Committees/Commissions/Taskforces

3. RBI has formed external working group on expected credit loss (ECL) based framework for banks.  

• RBI has formed this working group to get independent inputs on some of the technical aspects having a bearing on the transition.
• The present incurred loss-based provisioning regime has been replaced with the ECL approach to provisioning.
• Under the proposed ECL based Framework for Provisioning, the banks are required to classify financial assets into Stage 1, Stage 2 and Stage 3.
• R Narayanaswamy, former Professor, IIM Bangalore will chair the Working Group.
• It will have eight members, which include experts from academia and industry and representatives from select banks.
• The Group’s Terms of Reference include delineating the principles that will be required to be considered by banks at the time of designing the credit risk models to be used for assessing and measuring expected credit losses.
• Its Terms of Reference also include recommending factors that should be considered by the banks for the determination of credit risk based on the guidance provided in IFRS 9 and principles laid out by BCBS.
• IFRS stands for International Financial Reporting Standard. BCBS stands for Basel Committee on Banking Supervision.

Topic: Taxation

4. The 52nd GST Council meeting was held in New Delhi under the Chairmanship of Union Finance Minister Nirmala Sitharaman.

• GST Council recommended amendments in conditions of appointment of President and Member of the proposed GST Appellate Tribunals regarding eligibility and age.
• For this purpose, the Council has recommended amendments in section 110 of the CGST Act, 2017.
• The tenure of the President can now be up to the age of 70 from 67 earlier. Upper age limit for members has been raised from 65 to 67.
• GST Council has now recommended minimum age for appointment as President and Member (50 years). Minimum age of appointment was not specified earlier.
• An advocate for ten years with substantial experience in litigation under indirect tax laws in the Appellate Tribunal, Central Excise and Service Tax Tribunal, State VAT Tribunals, High Court or Supreme Court will be eligible for the appointment as judicial member.
• The GST Council recommended keeping Extra Neutral Alcohol (ENA) used for the manufacture of alcoholic liquor for human consumption outside the GST.
• It recommended reducing GST on molasses from 28% to 5% in relief to cane farmers for faster clearance of dues and to reduce the cost of manufacturing cattle feed.
• It recommended conditional and limited duration IGST exemption to foreign flag foreign going vessels when it converts to coastal run.
• It recommended zero rate for food preparation of millet flour in powder form and containing at least 70% millets by weight when sold in loose form, and 5% if sold in pre-packaged and labelled form.
• A separate tariff HS code has been created at the 8-digit level in the Customs Tariff Act to cover rectified spirit for industrial use.

Topic: Appointments

5. The tenure of State Bank of India (SBI) Managing Director (MD) Ashwini Tewari has been extended by centre.

• His tenure has been extended by two years. Tenure extension would be applicable beyond January 27, 2024.
• He was appointed as SBI MD in January 2021. Before his appointment as SBI MD, he was MD and CEO of SBI Card.
• His tenure extension coincides with Centre extending the tenure of SBI Chairman Dinesh Kumar Khara. 

Topic: Banking System

6. The number of UPI transactions remained steady in September 2023 and crossed 1,000 crore mark.

• According to National Payments Corporation of India (NPCI), the number of UPI transactions stood at 1,056 crore in September.
• Transactions on the UPI (Unified Payments Interface) network crossed the milestone of 1,000 crore transactions per month in August.
• The transactions in September were 0.2% down on month-on-month basis but higher by 56% on year-on-year basis.
• In terms of value of transactions, the UPI platform set a new record of transactions worth ₹15.80 lakh crore being processed during September.
• Growth in UPI transactions has remained over 40% for the value of transactions and above 50% for volume of UPI trades.
• In FY23, the UPI platform processed a total of 8,376 crore transactions aggregating ₹139 lakh crore.
• In FY22, the UPI platform processed a total of 4,597 crore transactions worth ₹84 lakh crore.
• The share of person-to-merchant (P2M) trades in overall UPI transactions increased from 40.3% in January 2022 to 57.5% in June 2023.
• This is expected to keep growing, according to Worldline India’s Digital Payments Report for H1 2023.
• As per a report by PwC India, UPI transactions are expected to breach 100 crore transactions per day by FY27.

Topic: Taxation

7. GST collection increased to ₹1.63 lakh cr in September year-on-year.

• This is the second highest collection in the fiscal year. The pace of growth has slowed down.
• GST collection in September relate to goods consumed and services availed in August.
• The revenues for September 2023 are 10% higher than the GST revenues in September 2022.
• During the September 2023, the revenues from domestic transactions (including import of services) are 14% higher than the revenues from these sources during September 2022.
• The gross GST collections have for the fourth time crossed the ₹1.60 lakh crore mark in the current fiscal.

Topic: Indian Economy/Financial Market

8. The government has kept the interest rate on General Provident Fund (GPF) savings at 7.1% for the October-December quarter.

• For the 15th consecutive quarter, the government has maintained the status quo for payout rates on retirement savings of government employees.
• On October 4, the Finance Ministry notified the rate, which is also applicable for other provident funds for government employees, including the Railways and those serving in the armed forces.
• In the first quarter of 2020–21, the GPF rate was last changed when it was reduced from 7.9% to 7.1%.
• While rates on select small savings schemes have been increased for five consecutive quarters.
• Returns on the popular Public Provident Fund (PPF) have remained unchanged at 7.1% since the first quarter of 2020-21.
• Last week, the government had kept the interest rates offered on 11 out of 12 small savings schemes for this quarter at the same level as the previous quarter.
• Returns on five-year recurring deposits alone have increased to 6.7% for this quarter, from 6.5% in the July-September period.

Topic: Indian Economy/Financial Market

9. India’s unemployment rate reached to lowest level in the last 1-year.

• In September 2023, India's unemployment rate dropped to a one-year low.
• The overall joblessness rate declined to 7.09% in September from 8.10% in August.
• The unemployment rate reached to lowest level since September last year.
• The fall in the unemployment rate by 1.87% is the result of an increase in labour participation in the rural and urban areas.
• Rural unemployment dropped to 6.20%, from 7.11% in August.
• The urban unemployment rate fell to 8.94% from 10.09% in the same period.
• In the last five years, India recorded the weakest monsoon rains but it did not impact much the agricultural activity in the country.
• The unemployment rate has remained high above 7% since February this year.
• The lowest unemployment rate was recorded in Chhattisgarh at 0.1% in September. It was followed by Assam with 0.4%. 

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