Banking Awareness of 8, 9 and 10 April 2023

Topic: Reports and Indices

1. Customers selected UPI as their 2^nd 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.

• 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.

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.

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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