Banking Awareness of 7, 8 and 9 December 2021

Topic: Indian Economy/Financial Market

1. Fitch Ratings lowers India’s GDP forecast for FY22 to 8.4%.

• Fitch Ratings has lowered India’s GDP forecast for FY22 by 30 basis points to 8.4%.
• However, it has increased growth rate projection by 20 basis points for FY 2022-23.
• Monetary Policy Committee (MPC) has kept its GDP projection for the current fiscal at 9.5%.
• MPC said that increasing vaccination coverage and decline in fresh Covid-19 cases are causing domestic recovery.
• After the meeting of the MPC, RBI said there are risks like volatile commodity prices, global supply disruptions, new mutations of the virus and financial market volatility.
• Fitch Ratings has said that India’s economy has shown a strong rebound in the third quarter of FY21 (July-September).

Topic: Appointments

2. Ittira Davis appointed as MD and CEO of Ujjivan Small Finance Bank.

• Ittira Davis has been appointed as managing director (MD) and chief executive officer (CEO) of Ujjivan Small Finance Bank for a period of three years.
• The appointment is subject to the approval of the members of the Bank and Reserve Bank of India.
• Martin P S is currently looking at the bank's day-to-day operations as an officer on special duty (OSD).
• Before Martin, Carol Furtado was the OSD. Furtado assumed charge as interim CEO from October, after the resignation of the bank's MD & CEO Nitin Chugh in August.
• Ujjivan Small Finance Bank was founded in 2017 by Samit Ghosh. It is headquartered in Bengaluru.

Topic: RBI

3. RBI keeps key policy rates unchanged.

• RBI has kept key policy rates unchanged and left the policy repo rate unchanged at 4%.
• Monetary Policy Committee (MPC) members have voted to keep accommodative policy stance.
• MPC left the reverse repo rate unchanged at 3.35%. RBI has revised retail inflation forecast for the third quarter to 5.1% from 4.5% earlier.
• RBI has lowered the fourth quarter retail inflation projection to 5.7% from 5.8% earlier.
• Overall, FY22 retail inflation projection has been kept by RBI at 5.3%.
• In continuation of its liquidity rebalancing exercise, RBI will enhance the 14-day variable rate reverse repo (VRRR) auction amounts on a fortnightly basis.
• RBI will enhance VRRR auction amounts to ₹6.5-lakh crore on December 17, and further to ₹7.5-lakh crore on December 31.
• UPI-based payment products for feature phone users will be launched.
• Transaction limit for payments via UPI for Retail Direct Scheme for investment in G-Secs and IPO will be increased to ₹5 lakh from ₹2 lakh.
• RBI has maintained the status quo in policy rates for ninth consecutive time. RBI had last revised the policy rates on May 22, 2020. 

Topic: RBI

4. RBI to revise all-in-cost ceiling for new Foreign Currency (FCY) External Commercial Borrowings (ECB)/Trade Credit (TC).

• RBI will revise all-in-cost ceiling for new Foreign Currency (FCY) External Commercial Borrowings (ECB)/Trade Credit (TC).
• All-in-cost ceiling for new Foreign Currency (FCY) External Commercial Borrowings (ECB)/Trade Credit (TC) will be revised from 450 basis points (bps) to 500 bps and from 250 bps to 300 bps, respectively.
• RBI said any widely accepted interbank rate or ARR applicable to the currency of borrowing may be used as a benchmark after discontinuation of LIBOR (London Interbank Offered Rate).
• Currently, the benchmark rate for FCY ECB/TC is 6-months LIBOR rate or any other 6-month interbank interest rate that is applicable to the currency of borrowing.
• ECBs are commercial loans. They are in form of bank loans, buyers’ credit, suppliers’ credit, securitised instruments (for example floating rate notes and fixed rate bonds) that are availed from the non-resident lenders with a minimum average maturity of 3 years.
• Trade credits (TCs) means credits extended for imports directly by the overseas supplier, bank and financial institution for maturity of fewer than three years.
• Trade credits include suppliers’ credit or buyers’ credit depending on the source of finance.

Topic: Appointments

5. Sanjiv Mehta to be appointed as FICCI’s president.

• Sanjiv Mehta will be appointed as President of Federation of Indian Chambers of Commerce and Industry (FICCI).
• He will take over the position at FICCI’s Annual General Meeting on December 18.
• He is President of Unilever South Asia and is a member of the ‘Unilever Leadership Executive’ which is Unilever’s Global Executive Board.
• He is also a Director on the Board of the Indian School of Business. He will succeed current President Uday Shankar.   

Topic: Banking System

6. City Union Bank launches RuPay On-the-Go contactless wearable keychain for its debit card customers.

• City Union Bank has launched RuPay On-the-Go contactless wearable keychain for its debit card customers.
• The card has been launched by the bank in partnership with National Payments Corporation of India (NPCI) and its manufacturing partner Seshaasai.
• City Union Bank has introduced this keychain payment mode to enable customers to make payments on-the-go.
• The keychain can be requested through net banking, mobile banking, and City Union Bank’s branches.
• It allows the bank’s customers to carry payment cards on their keychains and make payments up to ₹5,000 at all Rupay-enabled point of sale devices (PoS) without entering a PIN.
• For payments above ₹5,000, customers need to tap, followed by entering their PIN.
• Customers would be required to hold the keychain in front of the PoS devices during payment.
• City Union Bank is an Indian bank headquartered in Kumbakonam, Tamil Nadu.

Topic: MoUs/Agreements

7. SBI to sign Memorandum of Understanding (MoU) with Kendriya Sainik Board.

• SBI will sign a Memorandum of Understanding (MoU) with Kendriya Sainik Board to support and educate the children of war veterans, ex-servicemen, and war widows.
• SBI will provide a grant of ₹1,000 per month to 8,333 war veterans’ children.
• SBI has contributed ₹10 crore to the Armed Forces Flag Day Fund, which is celebrated on December 7.

Topic: RBI

8. RBI places Nagar Urban Co-operative Bank, Ahmednagar under its directions.

• RBI has placed Nagar Urban Co-operative Bank, Ahmednagar, Maharashtra, under its directions.
• With effect from the close of business on December 6, deposit withdrawal will be limited to ₹10,000 per depositor during the six months that the Bank will be under Directions.
• Under the directions, NUCB cannot grant or renew any loans and advances.
• It cannot make any investment, incur liability including borrow funds and accept fresh deposits.

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