Banking Awareness of 9, 10 and 11 April 2022

Topic: RBI

1. Guidelines for the establishment of digital banking units (DBU) have been released by RBI.

• Guidelines would be applicable to all domestic scheduled commercial banks.
• Guidelines would not apply to Regional Rural Banks, Payment Banks and Local Area Banks.
• The guidelines have been released by RBI as part government’s announcement in Union Budget 2022-23.
• In Union Budget 2022-23, the government announced that 75 digital banking units will be set up in 75 districts to mark 75 years of independence of India.
• In guidelines, RBI has permitted all scheduled commercial banks having digital banking experience to open DBUs in Tier 1 to Tier 6 centres.
• These banks do not need to take permission from RBI. The DBUs will be treated as Banking Outlets (BOs).
• The facilities at DBUs can be insourced or outsourced. Banks can adopt an in-sourced or out-sourced model for the operation of DBUs.
• Banks should include the setting up of DBUs in their digital banking strategy.
• Through the DBU, banks can offer any product or service that can be delivered digitally via internet banking or mobile banking.
• Banks should have digital business facilitator/business correspondents to expand coverage of DBUs.
• Performance update about DBUs also needs to be submitted to the Department of Supervision, RBI on monthly basis and in the annual report.

Topic: MoUs/Agreements

2. Bilateral MoU between SEBI and FRC of Mongolia has been approved by Cabinet.

• The MoU would help in setting up a technical assistance programme. It will also strengthen the information-sharing framework.
• SEBI has signed 27 bilateral MoUs with capital market regulators of other countries.
• Both Financial Regulatory Commission (FRC) and SEBI are co-signatory to IOSCO MMoU.
• International Organization of Securities Commissions’ Multilateral MoU (IOSCO MMoU) does not cover technical assistance.
• International Organization of Securities Commissions is an association of the world’s securities market regulating organizations.
• It is headquartered in Madrid, Spain. It was formed in 1983.
• Securities and Exchange Board of India (SEBI):
  • SEBI was set up in 1988 and given statutory status in 1992. Its headquarters is located in Mumbai.
  • It is a regulator of the securities market in India and aims to protect the interests of investors in securities.
  • Ms. Madhabi Puri Buch is the current chairperson of SEBI.

Topic: Committees/ Commissions/Taskforces

3. Government has formed AVGC promotion Task Force headed by the Secretary, the Ministry of Information and Broadcasting.

• State Governments of Karnataka, Maharashtra, Telangana, heads of education bodies, and representatives of industry bodies will be members of this Task Force.
• This Task Force will frame a national AVGC policy and it will also create a national curriculum framework for Graduation, Post-Graduation, and Doctoral courses in AVGC.
• The first action plan will be submitted by Task Force within 90 days.
• India has the potential to become a leader in the Animation, Visual Effects, Gaming and Comics (AVGC) sector.

Topic: RBI

4. RBI has imposed monetary penalty of Rs 93 lakh on Axis Bank and Rs 90 lakh on IDBI bank.

• RBI has imposed monetary penalty on Axis Bank as it violated provisions on loans and advances and Know Your Customer (KYC) guidelines.
• The bank also violated provisions on levy of penal charges on non-maintenance of minimum balances in saving bank accounts.
• IDBI Bank did not comply with directions on frauds - classification and reporting by commercial banks. It also violated norms on cyber security framework.
• Axis Bank is a private sector bank in India. It is headquartered in Mumbai. Its MD & CEO is Amitabh Chaudhary.
• IDBI Bank was set up in 1964. It is headquartered in Mumbai. Rakesh Sharma is its CEO.

Topic: RBI

5. RBI has proposed to make the card-less cash withdrawal facility available across all banks and ATM networks using the UPI.

• The card-less cash withdrawal facility will allow individuals to withdraw cash without using any debit card at Automated teller machines (ATMs).
• An individual can withdraw a maximum of ₹10,000 per day or ₹25,000 per month by using this facility.
• At present, banks like SBI, ICICI, and HDFC are giving this facility to customers.
• Customers will be identified using the Unified Payments Interface (UPI) while settlement of transactions will be done through the ATM network.
• This initiative by RBI will help in preventing frauds like card skimming, and card cloning.
• Unified Payments Interface (UPI):
  • It is an instant real-time payment system for transferring money in bank accounts.
  • It was launched in 2016.
  • It was developed by the National Payments Corporation of India (NPCI).

Topic: Taxation

6. Government’s tax collection during Fiscal Year 2021-22 (FY22) has increased to ₹27 lakh crore.

• The tax collection of ₹27 lakh crore is nearly 34% higher than that in the Fiscal Year 2020-21.
• It is ₹5 lakh crore more than ₹22 lakh crore estimated in the Budget.
• Tax-to GDP ratio increased to 11.7%, which is the highest since 1999. It was 10.3% in the fiscal year 2020-21.
• Overall tax buoyancy has reached to 1.91. It is 2.8% for direct tax and 1.13% for indirect tax.
• It compares the growth rate of tax collection with a nominal growth rate of GDP.
• Direct tax collection is higher than indirect tax collection in 2021-22.
• Direct tax collection stood at ₹14.10 lakh crore. This is a growth of 49% over the last fiscal.
• Indirect tax collection increased 20% to ₹12.90 lakh crore.

Topic: Taxation

7. Finance Act 2022 allows government to retrospectively levy interest on Input Tax Credit (ITC) wrongly availed and utilized.    

• The related provision in Finance Bill 2022 will be implemented with effect from July 1, 2017.
• As per the Finance Act 2022, the government is allowed to retrospectively levy interest on Input Tax Credit (ITC) wrongly availed and utilized with effect from July 1, 2017.
• Central Board of Indirect Taxes & Customs (CBIC) is required to issue a notification in this regard.
• Finance Act 2022 also amends section 50 retrospectively from July 1, 2017.

Topic: Indian Economy/Financial Market

8. Government has spent Rs 90.9 lakh crore as development expenditure from 2014-2022.

• This expenditure includes Rs 24.85-lakh crore spent on food, fuel and fertiliser subsidies. This also includes Rs 26.3-lakh crore on capital creation.
• During 2004-2014, only Rs 49.2 lakh crore was spent as development expenditure.
• Government has spent Rs 93,685.68 crore during 2014 to 2022 on repaying oil bonds.
• Government will pay additional Rs 1.48 lakh crore by 2026.   
• NOTE:
  • Developmental expenditure comprises expenditure incurred on education, medical care, public health and family planning, labour and employment, agriculture, cooperation, irrigation, transport and communication and other miscellaneous services. Expenditure incurred on these items both on Revenue and Capital accounts is also treated as development expenditure.
  • Non-Developmental expenditure comprises expenditure incurred on items like defence, collection of taxes and duties, administrative services, interest on debt and other services, stationery and printing and other expenditure on general services.

Topic: National News

9. Cabinet has approved distribution of fortified rice through different schemes in all States and Union Territories by 2024.

• This initiative will be implemented in three phases. The Centre will bear the total cost of rice fortification.
• The cost of fortification is estimated at ₹2,700 crore per year.
• The fortified rice will be distributed through Targeted Public Distribution System, Integrated Child Development Services, Pradhan Mantri Poshan Shakti Nirman-PM POSHAN and Other Welfare Schemes.
• The fortified rice scheme will also cover 81 crore beneficiaries under National Food Security Act (NFSA).
• A Pilot Scheme on "Fortification of Rice and its Distribution under Public Distribution System" was implemented in 2019-20.
• Prime Minister Narendra Modi had made an announcement on the Fortification of Rice on the 75^th Independence Day.
• Fortification is the addition of key vitamins and minerals such as iron, iodine, zinc, and Vitamin A & D to staple foods.

Topic: Corporates/Companies

10. Aerospace engineering and digital innovation centre has been jointly launched by Infosys & Rolls-Royce in Bengaluru.

• This centre will provide R&D services integrated with advanced digital capabilities to Rolls-Royce’s engineering and group business services from India.
• Both companies will also explore opportunities for digital and engineering innovation and associated cost optimization strategies.
• Rolls Royce and Infosys had signed a strategic partnership for aerospace engineering in December 2020.
• Rolls-Royce is a British automobile company. Infosys Limited is an Indian multinational information technology company. Salil Parekh is the current CEO.

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