Banking Awareness of 8, 9 and 10 April 2023

By Priyanka Chaudhary | Last Modified: 15 Apr 2023 17:02 PM IST
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Topic: Reports and Indices

1. Customers selected UPI as their 2nd most preferred method of repaying digital loans as per financial services platform CASHe.

  • 27% of borrowers chose United Payments Interface (UPI).
  • E-NACH (Electronic National Automated Clearing House) was the preferred method for 36% of the borrowers.
  • As per the Financial Mood of the Millennials Report by CASHe for FY23, 84% customers choose taking a credit line over personal loans (14%) and Buy Now Pay Later (BNPL, 2%).
  • The customer behavior of 540,000 millennials on its Sqrrl investment platform forms basis of the report.
  • 49% of millennials prefer loans of less than ₹10,000. Bengaluru led among cities for credit demand.
  • As per the report, the top two reasons for availing of short term digital credit are unforeseen medical and monthly expenses.
  • The most popular option for online investors is SIP (systematic investment plans).
  • It accounts for 35% of investing activities. Digital gold accounts for 18% and tax-saving products account for 15% activities.
  • The report said 33% millennials believe in saving 20% of their annual income for retirement.
  • CASHe is an AI-based, credit-led financial wellness platform. It is based in Mumbai.

Topic: Banking/Financial Schemes

2. Total balance in bank accounts under PMJDY has reached to a record level of ₹50,000 crore in the financial year ended March 31, 2023.

  • Total balance stood at ₹1.99 lakh crore at the end of FY23 against ₹1.49-lakh crore at the end of FY22.
  • Addition of 5 crore new accounts has been recorded under the scheme.
  • The number of beneficiaries recorded at 48.65 crore by the end of the last fiscal. The women beneficiaries were over 27 crore.
  • The key drivers for the scheme are the public sector banks. They have ₹1.55-lakh crore with them as deposits.
  • Public sector banks are followed by Regional Rural Banks (RRBs) with ₹38,832 crore. Private sector banks got the remaining deposits.

Year on year increase in total balance of PMJDY

March 2019

0.96 lakh crore rupees

March 2020

1.19 lakh crore rupees

March 2021

1.45 lakh crore rupees

March 2022

1.49 lakh crore rupees

March 2023

1.99 lakh crore rupees

 

  • The issuing of RuPay cards has declined. Only 33 crore cards have been issued out of about 49 crore account holders.
  • According to RBI data, nearly 8% of Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts have zero balance. The average balance is around ₹2,400.

Topic: Banking/Financial Schemes

3. The gap between sanctioned and disbursed under Pradhan Mantri MUDRA Yojana (PMMY) has declined to an all-time low level of 1.35% at end of FY23.

  • Earlier, the gap between sanctioned and disbursed under PMMY stood at 2.2% and 3.3%.
  • As on 31 March 2022, NPA (Non-Performing Assets) in MUDRA stood at 3.17%.
  • The NPA were more than 270 bps lower than overall Gross NPA.
  • During FY23, sanctions were made amounting to ₹4.48-lakh crore.
  • Out of this, ₹4.42-lakh crore were disbursed. This is 98.65% of the total sanctions.
  • As per Finance Ministry, about 41 crore loans amounting to ₹23.2-lakh-crore were sanctioned under PMMY in the last eight years.
  • Under the scheme, no collateral is required. Loans are extended to eligible micro units under the scheme.
  • On April 8, the scheme completed eight years since its launch. It was launched on April 08, 2015.
  • According to Finance Minister, Nearly 68% of the accounts under the scheme belong to women entrepreneurs.
  • The aim of the scheme is to facilitate easy collateral-free micro credit of up to ₹10 lakh to non-corporate, non-farm small and micro entrepreneurs.
  • It aims to fulfil one of the three pillars of the financial inclusion — ‘Funding the Unfunded’.
  • ‘Banking the Unbanked’ and ‘Securing the Unsecured’ are other two pillars.
  • Loans under PMMY are provided to diverse industries to meet both term loan and working capital components.

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Topic: RBI

4. RBI has imposed a fine of ₹6.77 crore on Mahindra & Mahindra Financial Services Limited.

  • The fine has been imposed for non-compliance with the “Non-Banking Financial Company-Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016”.
  • RBI has also imposed ₹55 lakh penalty on Indian Bank for contravention of certain Know Your Customer (KYC) norms.
  • RBI conducted scrutiny of the Indian Bank in July 2020 based on a high-value fraud reported by the bank.
  • A penalty of Rs 10.50 lakh has been imposed on Muthoot Money Limited, Ernakulam.
  • Penalty of Rs 10.50 lakh has been imposed for non-compliance with provisions of the ‘Monitoring of Frauds in NBFCs (Reserve Bank) Directions, 2016’.

Topic: Banking System

5. Banks have kept savings deposit rates unchanged in the current tightening period as per RBI’s Monetary Policy report for April.

  • However, banks have increased term deposit rates during this period.
  • As per the report, increase in term deposit rates in the current tightening cycle has been more than increase in lending rate.
  • The report said that this has helped in improving the lenders’ net interest margins (NIM).
  • The net interest margin is the difference between the interest earned by a bank and the interest paid by it.
  • The net interest margin improved from 3.44% as of December 2021 to 3.73% as of December 2022.
  • In March 2023, term deposits formed 58.5% of aggregate deposits of scheduled commercial banks (SCBs).
  • Savings account and current account deposits were 32.6% and 8.9%, respectively.
  • RBI deregulated the interest rates on saving bank deposits from October 2011.
  • As per MPC of RBI, the transmission of the repo rate increase to retail deposit rates gathered pace in the 2nd half of fiscal 2022-23. It remained subdued in April-September 2022.
  • The weighted average domestic term deposit rate (WADTDR) on fresh deposits was raised by 222 bps during May 2022 to February 2023.
  • As per the report, external benchmark-based lending rates (EBLRs) was raised by the banks by 250 bps during May 2022- March 2023.
  • The report said that the marginal cost of funds-based lending rate (MCLR) increased by 140 bps over the same period.

 

Monthly Banking/ Financial Awareness Books
March Financial Awareness 2023 February Financial Awareness 2023
January Financial Awareness 2023 December Financial Awareness 2022

 

Topic: Infrastructure and Energy

6. Four infrastructure projects have been approved by the Network Planning Group (NPG) under the PM Gati Shakti initiative.

  • The infrastructure projects are related to railways. At its 46th session, NPG under PM Gati Shakti recommended four infrastructure projects.
  • The four projects include construction of broad-gauge double line between Sawai Madhopur and Jaipur in Rajasthan.
  • They also include broad-gauge line between Junagarh to Nabarangpur station in Odisha.
  • Broad-gauge line between Anand Nagar Ghughuli via Maharajganj on Northeastern Railway in Uttar Pradesh is also included in these projects.
  • The projects also include provision of automatic block signalling on freight dense high utilization network on Western Railway. 
  • PM Gati Shakti – National Master Plan was launched in October 2021.
  • It was launched to develop an integrated and planned infrastructure to cut logistics costs.
  • All logistics and connectivity infrastructure projects with an investment of over Rs 500 crore are routed through NPG.

Topic: Awards and Prizes

7. Tripura became the best-performing state among North Eastern States in implementing e-Procurement.

  • Tripura received this award at a National Workshop on e-Procurement.
  • A National Workshop on e-Procurement was organized by the Ministry of Finance and the Ministry of Electronic and Information Technology.
  • The Tripura government has been recognized for their work in various departments in the last 5 years.
  • The Tripura government has received this award for completing the work within a specified time under the Power Department’s Saubhagya Yojana.
  • Tripura also gets the title of the best performer in agriculture, and panchayat self-employment.
  • The Finance Minister of Tripura said that the state government has emphasized on transparency in administration.
  • The Tripura government made e-procurement mandatory for the procurement of goods and services above Rs 25,000.

Topic: World Economy

8. Global trade growth is expected to slow down to 1.7% in 2023.

  • World Trade Organization (WTO) said that global merchandise trade volume is expected to grow by 1.7% in 2023, compared to an earlier estimate of 1% in October.
  • But it is lower from growth of 2.7% in 2022. The trade is expected to be 'subpar' due to a number of factors, including the Russia-Ukraine conflict, extremely high inflation, tighter monetary policy and financial uncertainty.
  • The trade growth is below than 12-year average of 2.6%. In 2024, Trade growth is expected to touch 3.2%.
  • However, the estimate is uncertain as much will depend on how the conflict between Russia and Ukraine ends.
  • As far as India is concerned, its share in global merchandise trade is 1.8 per cent, which ranks 18th.
  • In the financial year 2022-23, India is expected to witness nearly 6% YoY growth in merchandise trade to $447 billion.
  • In terms of imports, the share of India is 2.8% with the ninth rank.
  • Among the world's leading exporters and importers of commercial services like transportation, travel, commercial services, computer services, among others, India's share was 4.4 per cent in exports and 4 per cent in imports.
  • India ranked seventh in terms of exports and eighth in terms of imports of commercial services.
  • Over recent years, China ranked as the largest tourism outbound market and spender.

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