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
2. HDFC Bank announces names of winners of fourth edition of its SmartUp Grants 2021.
- 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
3. PhonePe continued to lead the UPI payments business in March.
- 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
4. U GRO Capital enters into partnership with SBM Bank India to launch GRO Smart Business credit card.
- 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
5. RBI will publish Financial Inclusion Index in July.
- 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.
- 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.
6. Interim WMAs limit of ₹51,560 crore to State governments extended by RBI until September.
- 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
7. Net Direct tax collections for financial year 2020-21 increase by almost 5% year-on-year.
- 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%.