Banking Awareness of 9 and 10 August 2024

Topic: Reports and Indices

1. The bimonthly consumer confidence survey published by RBI showed a drop in consumer confidence for the second consecutive survey round.

• After a prolonged upward trend in the post-Covid era, consumer confidence fell.
• The current situation index (CSI) fell to 93.9 in July 2024 from 97.1 two months earlier.
• The future expectations index (FEI) dropped by 4.1 points, ending in July 2024 at 120.7.
• For the second consecutive survey round, sentiments on personal income and present employment status declined.
• The study gathers household expectations for the upcoming year as well as present perceptions in comparison to a year ago.
• These are gathered about the overall state of the economy, employment, general price situation, personal income, and spending patterns in 19 main cities.
• 6,062 people participated in the most recent survey round, which was held from July 2 to July 11, 2024.
• Of the sample, 54.4 percent of the responders were female.
• In the most recent bi-monthly inflation expectations survey of households, the median household assessment of current inflation increased by 20 basis points to 8.2%.

Topic: Banking System

2. Banking Laws (Amendment) Bill, 2024, was introduced by the Finance Minister Nirmala Sitharaman on 09 August 2024 in Lok Sabha.

• The bill provides customers an option to increase the number of nominees per bank account from existing one to four.
• The bill proposes change related to redefining ‘substantial interest’ for directorships.
• This could increase from the current limit of ₹5 lakh to ₹2 crore.
• The bill also gives more freedom to banks in deciding the how much remuneration is to be paid to statutory auditors.
• Additionally, it changes the dates on which banks must report for regulatory compliance.
• It changes the dates from the second and fourth Fridays to the 15th and final day of each month.
• The Bill proposes to amend the following acts.
  • Reserve Bank of India Act, 1934
  • Banking Regulation Act, 1949
  • State Bank of India Act, 1955
  • Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 
  • Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980
• The Finance Minister made announcement about the amendments to the Banking Regulation Act during her 2023–24 Budget speech.

Topic: RBI

3. A measure on the Continuous Clearing of Cheques under the Cheque Truncation System (CTS) has been announced by the RBI.

• Once implemented, checks would be approved within hours after being submitted, as opposed to the present two-day processing time.
• Currently, CTS executes checks with a maximum two-working-day clearance period.
• In an effort to decrease settlement risk for participants and increase the effectiveness of cheque clearing, the RBI has announced measure on the Continuous Clearing of Cheques under the Cheque Truncation System (CTS).
• According to the governor of the RBI, a proposal has been made to switch from the present batch processing method for CTS to continuous clearing with "on-realization-settlement."
• During business hours, checks will be continuously scanned, presented, and passed in a matter of hours.
• The clearing cycle will shorten to a few hours from the current T+1 days.

Topic: Reports and Indices

4. Roshni Nadar Malhotra is India's most influential woman leading a family-owned business.

• She has found top place in the 2024 Barclays Private Clients Hurun India Most Valuable Family Businesses report.
• Roshni Nadar Malhotra is chairperson of HCL Technologies.
• Second well-known woman is Nisaba Godrej, who comes from the Godrej family.
• Sushila Devi Singhania of JK Cement, Manju D. Gupta of Lupin, Meher Pudumjee of Thermax, Amita Birla of Birlasoft, Leena Gandhi Tewari of USV, Mahima Datla of Biological E, Bina Modi of Godfrey Phillips India, and Jyothy Ramachandran of Jyothy Laboratories are a few other well-known female leaders.
• With a valuation of Rs 25.75 trillion, the Ambani family has topped the inaugural Barclays-Hurun India most valuable family businesses list.
• The rankings are determined based on the company valuations as of March 20, 2024.
• The Ambani family is followed by Bajaj family in second position. Birla family ranks third.
• The Nadar family comes in at number five on the list, after the Sajjan Jindal-led family in fourth position.
• Roshni Nadar Malhotra of the Nadar family is the sole female member in the top 10 family businesses.
• First-generation families are not included in the 2024 Barclays Private Clients Hurun India Most Valuable Family Businesses list.
• However, the Adani family, founded by current chairman Gautam Adani, has emerged the most valuable first-generation family businesss.

Topic: Indian Economy/Financial Market

5. Unique registered investor base of NSE has surpassed the 10-crore mark for the first time.

• The growth rate has risen significantly since March 2021. It took more than 25 years to reach the 4-crore milestone in March 2021.
• Every additional crore has been added on average every six to seven months.
• Over the past five years, the investment base has increased by over three times.
• Strong market performance, greater investor knowledge, faster digitization, and improved financial inclusion have all contributed to this.
• The median age of the 10-crore registered investors is roughly 32 years old, down from 38 years old five years ago.
• More over 20% of investors are women, and 40% of investors are under 30.
• Geographically, North India has the highest percentage of registrations (42%), followed by West India (25%), South India (18%), and East India (14%).
• With over 25% of all new investor registrations, Uttar Pradesh and Maharashtra continue to be the top states.

Topic: RBI

6. RBI reduced the frequency of bank reports to credit information companies.

• Now, the Reserve Bank of India (RBI) has reduced the frequency of reporting by banks to Credit Information Companies (CICs) from one month to a fortnight.
• It will be beneficial for both borrowers and lenders (CIs).
• Borrowers will get the benefit of faster updation of information, especially when they have repaid the loans.
• Lenders will be able to make better risk assessments of borrowers and also reduce the risk of over-leveraging by borrowers.
• It is a progressive step that will bring more transparency and promote a healthy credit culture.

Topic: MoUs/Agreements

7. Customs Cooperation Arrangement has been signed by India and New Zealand to facilitate trade between the two countries.

• On 6 August 2024, a formal customs arrangement signed, and will further strengthen the relationship between New Zealand and India to facilitate trade and enhance enforcement cooperation.
• The agreement was ratified during the three-day visit of Indian President Draupadi Murmu.
• The CCA has become effective from the date of signature i.e. 6th August 2024.
• On 8 August, President Draupadi Murmu held bilateral talks with Prime Minister Christopher Luxon and Deputy Prime Minister and Foreign Minister Winston Peters at Government House in Wellington.
• New Zealand also ratified the International Solar Alliance (ISA), paving the way for increased opportunities for joint research and development in this sector.
• The two countries also agreed to exchange best practices in the field of traditional medicine through the Global Centre for Traditional Medicine in Jamnagar.

Topic: Appointments

8. SEBI approved Praveena Rai as the new MD & CEO of MCX.

• SEBI has approved the name of Praveena Rai as Managing Director and Chief Executive Officer of Multi Commodity Exchange of India Limited (MCX).
• She was the COO of the National Payment Corporation of India (NPCI).
• She was responsible for formulating and deploying the marketing, business development, product management, and operations strategy.
• She has 20 years of extensive experience in various fields including payments, cards, retail, transaction, wholesale and commercial banking.
• Multi Commodity Exchange of India Limited (MCX):
  • It is India's largest commodity derivatives exchange.
  • It was established in 2003 by the Government of India.
  • It is currently based in Mumbai.

Topic: Taxation

9. An amendment to the Finance Bill, 2024 has been moved by the central government.

• With this amendment, individuals who acquired property before July 23, 2024, will be able to choose between a 12.5% long-term capital gains tax rate without indexation and a 20% rate with indexation.
• Taxpayers can use this decision to determine which course of action is best for them when selling any land or buildings they acquired before July 23, 2024.
• The new scheme allows the taxpayer to compute taxes at a rate of 12.5% without indexation, while the old scheme allowed for a rate of 20% with indexation.
• Indexation lowers taxable gains by adjusting asset acquisition prices in response to inflation.
• The elimination of this benefit, though, might make sellers' tax obligations higher.
• In Union budget 2024 speech, the LTCG tax rate was lowered from 20% to 12.5%, without indexation benefit.

Read Banking Awareness PDF -9 and 10 August 2024