Banking, Financial and Economic Awareness of 8, 9 and 10 April 2021

By PendulumEdu | Last Modified: 10 Apr 2021 20:37 PM IST

Main Headlines:

Topic: Banking System

1. Yes Bank carries out its first Secured Overnight Financing Rate (SOFR) linked transaction.

Yes Bank has carried out its first Secured Overnight Financing Rate (SOFR) linked transaction.
This is part of the benchmark transition management plan of Yes Bank. This is also the first step to a smooth transition to news Alternative Reference Rates.
SOFR will replace USD LIBOR (London Inter-Bank Offered Rate). LIBOR will be phased out (stopped gradually in stages) by the end of 2021.
ICICI Bank and SBI have also done SOFR linked transactions earlier.
LIBOR serves as a reference rate at which financial instruments can contract upon to establish the terms of agreement and also as a benchmark rate that reflects a relative performance measure for investment returns.
SOFR is a secured interbank overnight interest rate and reference rate established as an alternative to LIBOR.
Yes Bank:
- Yes Bank Limited is an Indian private sector bank. It is headquartered in Mumbai.
- It was founded in 2004 by Rana Kapoor and Ashok Kapoor. Prashant Kumar is its current CEO since Mar 2020.

Topic: Banking System

HDFC Bank has announced the names of winners of the fourth edition of its SmartUp Grants 2021.
As part of the fourth edition of its SmartUp Grants 2021, 21 startups from the social sector were chosen from 300 applications received from all over India.
HDFC Bank said that SmartUp Grants had been offered under the Parivartan programme. It started SmartUp grants in 2017.

Topic: Banking System

As per the NPCI data, PhonePe continued to lead the UPI payments business in March 2021.
PhonePe and Google Pay are the top apps for Unified Payment Interface (UPI) in March 2021.
They continue to be top apps and their market share in terms of the value of transactions is 87%. In terms of volume of transactions, their market share is 79%.
In March, transactions processed by PhonePe stood at 43.91% of the market share in terms of volume.
Paytm Payments Bank had 14.7% of the market share in terms of volume.
In November 2020, NPCI released the standard operating procedure to limit market share cap of third-party application providers. NPCI has placed a 30% limit on volume for all Third-Party App Providers.

Topic: Banking/Financial Schemes

U GRO Capital has entered into a partnership with SBM Bank India to launch the GRO Smart Business credit card.
U GRO Capital said that credit cards are powered by RuPay, along with EnKash. The credit cards are specially designed for under-banked micro, small and medium enterprises.
U GRO Capital borrowers can get these against a fixed deposit (FD) with SBM Bank India.
U GRO Capital Limited is a small business-lending platform. In December 2018, SBM became the first foreign Bank in India to operate as a new Indian bank.

Topic: Reports and Indices

The Reserve Bank of India has announced that it will release the Financial Inclusion Index.
It will be published annually in July for the previous financial year.
It will be used to measure the reach of financial inclusion in the country. It will be based on various parameters.
However, RBI has not released the parameters and other details about the Index.
Earlier, RBI had also released the National Strategy for Financial Inclusion for India 2019-2024.
Financial Inclusion: It is a method of offering banking and financial services to individuals. It aims to provide basic financial service to everyone.
RBI:
- It was established on April 1, 1935, under the provisions of the Reserve Bank of India Act, 1934.
- It was set up on the recommendations of the Hilton Young Commission.
- It is the central bank of India and regulates the banking system in India
- Shaktikanta Das is the current RBI governor.

Topic: RBI

Interim ways and means advances (WMAs) limit of ₹51,560 crore to State governments has been extended by RBI until September.
RBI has announced an extension to help states during financial stress created by the second wave of COVID-19.
Furthermore, the aggregate WMA limit of States and UTs has been enhanced by RBI to ₹47,010 crore per year. Currently, the aggregate WMA limit of States and UTs is ₹32,225 crore.
₹32,225 crore was fixed in February 2016. As per RBI, the basis of normal WMA limits is a three-year average of a State’s actual revenue and capital expenditure.
Withdrawals beyond the limit are taken as an overdraft. States are required to pay interest linked to the repo rate on WMA withdrawals.
WMAs are temporary loans given by RBI to the states. They help states during any gaps in receipts and payments.
WMAs are of two types – normal and special. Special WMAs are secured advances. They are provided against the pledge of Government of India dated securities.

Topic: Taxation System

Net Direct tax collections for the financial year 2020-21 increased by almost 5% year-on-year to ₹9.45 lakh crore.
Net Direct tax collections exceeded revised estimates of ₹9.05 lakh crore in the Union Budget.
As per experts, Vivad Se Vishwas Scheme helped increase collections. Net Corporation tax collections for the year stood at ₹4.57 lakh crore.
As per provisional data released by the Finance Ministry, collection from personal income tax, including the Securities Transaction Tax, was ₹4.88 lakh crore. Direct tax refunds increased more than 42% in FY21.
Advance Tax collections for 2020-21 stand at ₹4.95 lakh crore and this shows the growth of 6.7% over preceding financial year.
As per experts, India’s fiscal position may be better than 9.5% of the fiscal deficit projected in revised estimates as indirect tax collections are also rising.
Highest indirect tax collection during the financial year (FY21) was seen in March. Indirect tax during the financial year (FY21) collection exceeded actual collection last year (FY20) by 13%. It also exceeded Revised Budget Estimates by about 9%.

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