Banking Awareness of 7 and 8 January 2022

By PendulumEdu | Last Modified: 08 Jan 2022 17:44 PM IST
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Topic: Indian Economy/Financial Market

1. For FY22, the government has projected GDP growth to be 9.2%.

  • India's Gross Domestic Product (GDP) is expected to grow by 9.2% in FY 2021-2022, as compared to a contraction of 7.3 percent in FY 2020-21.
  • It is being expected mainly due to an improvement in the performance of the agriculture and manufacturing sectors.
  • This is below the Reserve Bank of India's (RBI) and International Monetary Fund's (IMF) projections of 9.5 percent.
  • In 2021-22, real GVA is expected to reach 135.22 lakh crore, against 124.53 lakh crore in 2020-21, showing an 8.6% increase.
  • The nominal GDP growth rate for FY22 is expected to be 17.6%.
  • The World Bank has forecasted an 8.3% growth rate, whereas the OECD has forecasted a 9.7% growth rate.
  • The Economic Survey released by the Finance Ministry in February 2021 predicted an 11 percent growth rate for 2021-22.
  • The growth projection for India is higher than the 8 percent projected for China.
  • According to NSO forecasts, GDP in actual terms in 2021-22 will surpass the pre-COVID figure of Rs 145.69 lakh crore in 2019-20.
  • According to figures provided by the National Statistical Office (NSO) on November 30, the economy grew by 8.4% in the second quarter of the current fiscal year (FY22).

Topic: Appointments

2. Arun Jaura appointed as CTO of Hero MotoCorp.

  • Arun Jaura has been appointed as Chief Technology Officer (CTO) of India’s largest two-wheeler manufacturer, Hero MotoCorp.
  • Arun Jaura will lead Research & Development (R&D) ecosystem of Hero MotoCorp.
  • Arun Jaura will report to Pawan Munjal, Chairman and Chief Executive Officer, Hero MotoCorp.
  • He has been one of the founding members of the government’s National Mission of Electric Mobility since January 2013.

Topic: Regulatory Bodies/Financial Institutions

3. CCI orders inquiry against Google for its abuse of dominant position.

  • Competition Commission of India (CCI) has ordered an inquiry against Google for its abuse of dominant position.
  • CCI said that it is of prima facie view that the provisions of Section 4 of Competition Act, 2002 have been violated by Google.
  • Section 4 of Competition Act, 2002 pertains to abuse of dominant position.
  • CCI’s order came on a complaint filed by Digital News Publishers Association against Alphabet Inc, Google LLC, Google India Private Ltd and Google Ireland Ltd. 
  • Digital News Publishers Association is a private company that promotes and secures interest of digital news publishers.
  • CCI has directed its investigation arm, the Director-General (DG) to cause an investigation into the matter and submit the investigation report within 60 days.
  • Competition Commission of India (CCI):
    • CCI was formed on 14 October 2003 under the Competition Commission Act, 2002.
    • It has a chairperson and six members. The chairperson and members are appointed by the Central government
    • It aims to eliminate practices that affect competition in Indian market and protect the interests of the consumers.
    • Current Chairperson: Ashok Kumar Gupta

Topic: Banking System

4. NPCI places limits on cash withdrawals and mini statements on AePS transactions.

  • National Payments Corporation of India (NPCI) has placed limits on cash withdrawals and mini statements on Aadhaar enabled Payments Systems (AePS) transactions.
  • Acquiring banks will be required to implement a maximum limit of 5 approved cash withdrawal transactions per customer per terminal per day.
  • Issuers will implement a limit of at least 5 approved cash withdrawal transactions per month for every customer.
  • They will also implement a limit of at least 5 mini statement transactions per customer per month.
  • In its circular, NPCI has said that these limits should be implemented by January 15 this year.
  • NPCI has also said that two factor authentication shall also be required if there is change in business correspondents (BCs), agent or merchant operating the terminal. This has to be implemented by January 31.
  • Cash withdrawal from micro ATMs of Aadhaar enabled Payments Systems (AePS) has a limit of Rs 10,000 per transaction.
  • AePS allows online transactions at PoS (MicroATM) through Business correspondent (BC) of any bank by using Aadhaar authentication.
  • MicroATM is a Point of Sale (PoS) device that Business Correspondents use for handling customer initiated transactions.

Topic: Banking System

5. ABBFF will now examine all fraud cases that involve amounts of ₹3 crore and above.  

  • Advisory Board for Banking and Financial Frauds (ABBFF) will now examine all fraud cases that involve amounts of ₹3 crore and above.
  • Central Vigilance Commission (CVC) has expanded the scope of ABBFF in consultation with RBI and Department of Financial Services.
  • Till now, ABBFF was examining only banking and financial frauds of ₹50 crore and above.
  • ABBFF will examine the role of all levels of officials/whole time directors including ex-officials /ex-whole time directors in Public Sector Banks (PSBs) and Public Sector Financial Institutions (PSFIs).
  • Advisory Board for Banking and Financial Frauds (ABBFF):
    • ABBFF is headed by T M Bhasin, the former vigilance commissioner.
    • Madhusudan Prasad, D K Pathak, former director-general of BSF and David Rasquinha, former managing director of EXIM Bank are other members of ABBFF.
    • It was constituted by CVC in consultation with RBI in August 2019 for two years. Its term was extended by two years in August 2021.
    • It conducts first level examination of bank frauds before the bank makes references to investigative agencies such as Central Bureau Investigation (CBI).

Topic: Appointments

6. Re-appointment of Anup Bagchi as ED of ICICI Bank approved by RBI.

  • Re-appointment of Anup Bagchi as Executive Director (ED) of ICICI Bank has been approved by RBI.
  • RBI has approved re-appointment for a period of three years, with effect from February 1, 2022.
  • ICICI Bank (ICICI Bank Limited) is a private sector bank. Girish Chandra Chaturvedi is chairman of its board of directors. Its MD & CEO is Sandeep Bakhshi.

Topic: RBI

7. RBI increases threshold limit for banks to maintain LCR on deposits received from non-financial small business customers.

  • RBI has increased the threshold limit for banks to maintain Liquidity Coverage Ratio (LCR) on deposits received from non-financial small business customers from ₹5 crore to ₹7.5 crore.
  • All commercial banks excluding regional rural banks, local area banks and payments banks will be required to maintain LCR if they get deposits of ₹ 7.5 crore and above from non-financial small business customers.
  • LCR promotes short-term resilience of banks. It ensures that banks have sufficient high quality liquid assets (HQLAs) to survive an acute stress scenario that lasts for 30 days.
  • HQLAs include cash reserves in excess of the required cash reserve ratio and government securities (G-Secs) in excess of the minimum statutory liquidity ratio requirement.
  • Liquidity Coverage Ratio (LCR):
    • LCR requires banks to maintain HQLAs to meet 30 days net outgo under stressed conditions.
    • It has two components. These are- the value of the stock of HQLA in stressed conditions and total net cash outflows over the next 30 calendar days.

Topic: Indian Economy/Financial Market

8. Department of Expenditure releases revenue deficit grant of Rs 9,871 crore to 17 States.

  • Department of Expenditure, Ministry of Finance, has released revenue deficit grant of Rs 9,871 crore to 17 States.
  • This was the 10th installment of Post Devolution Revenue Deficit (PDRD) grant released to the States.
  • So far, the government has released Rs 98,710 crore to eligible States as PDRD grant in the current financial year.
  • About Post Devolution Revenue Deficit (PDRD) grant: Government provides PDRD grants to the States under Article 275 of the Constitution. Government releases PDRD grants to the states as per the 15th Finance Commission to meet the gap in Revenue Accounts of the States post devolution.
  • 15th Finance Commission has recommended a total PDRD grant of Rs 1,18,452  crore to 17 States in the financial year 2021-22. Out of this, Rs 98,710 crore (83.33%) has been released so far.

Topic: RBI

9. RBI releases eligibility norms for entities tapping into data from credit bureaus.

  • RBI has released eligibility norms for entities tapping into data from credit information companies (CICs) or credit bureaus.
  • According to the rules, a company must be owned and controlled by resident Indian citizens to become a specified user with a credit bureau.
  • According to the rules, it is necessary that an entity must be a company incorporated in India or a statutory corporation established in India to be eligible as a specified user under the Credit Information Companies (Amendment) Regulations, 2021.
  • The company should have a net worth of not less than 2 crore rupees as per the latest audited balance sheet.
  • Further, it should have a minimum of three years’ experience in running the business or activity of processing information.
  • The company’s promoters or directors should not have at any time in the past been convicted of any offence that involved moral turpitude or any economic offence.

Topic: Corporates/Companies

10. Reliance Industries Ltd launches its first mega bond sale.

  • Reliance Industries Ltd (RIL) has launched its first mega bond sale to raise $3-5 billion from offshore investors.
  • This is the largest-ever bond sale by an Indian company and the year’s first fundraising from India.
  • It received bids of about $11-12 billion. This is known as order book size in market parlance.
  • The bonds are of three tenors-10, 30 and 40 years.
  • In November 2021, RIL received about Rs 26,600 crore in proceeds from the final call on its rights issue.

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