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1. FINANCE MINISTRY INSTRUCTS PSU BANKS TO DISCUSS ROADMAP FOR BANKING SECTOR: Finance Ministry has asked Public Sector banks (PSBs) to initiate a month-long consultation process with its officers starting at branch level to seek suggestions for preparing future road map of the banking sector. The move comes in the backdrop of a meeting held by the Finance Minister with PSU Bank and Private Sector Bank Chiefs recently. The Department of Financial Services has also circulated papers on 9 subjects including digital payments, corporate governance, MSME credit, Loan Recovery etc. For the first time suggestions and inputs from the branch level officials have been sought which is a positive move and these will be more practical and realistic.The suggestions and inputs from branches will be used to chalk out a strategy for future growth of the banking sector.

2. RBI ASKS BANKS NOT TO COUNT NON-CASH WITHDRAWAL TRANSACTIONS AS “FREE ATM TRANSACTIONS”: Banks provide certain number of transactions at ATMs to their customers and beyond that charges are imposed. Reserve Bank of India has asked banks not to count failed transactions at ATMs due to technical reasons and non-availability of currency in ATMs as part of “free ATM transactions”. Besides this, use of ATMs for non-cash withdrawal transactions such as balance enquiry, fund transfers, cheque book requests, payment of taxes etc also should not be the part of free transactions facility given to the customer.

3. COMMITTEE FINALISES REPORT ON TRANSFER OF RBI’S SURPLUS FUND: The Bimal Jalan Committee, constituted to assess the adequate size of capital reserves that the RBI should hold, has finalised its report. As per the report the transfer of excess RBI funds to the government would be in phased manner as is in practice. The Finance Ministry wanted the central bank to follow global best practices and transfer more surplus to the government which would help the government to meet its fiscal deficit as it will come as a windfall to the exchequer.

4. AADHAAR-ENABLED TRANSACTIONS CROSS 200 MILLION MILESTONE ON NPCI PLATFORM: The umbrella body of digital transactions, NPCI has reported that Aadhaar enabled Payment System (AePS) crossed the milestone of over 200 million transactions during July 2019. AePS is a bank led model which allows basic interoperable banking transactions at Point of Sale (PoS) through the business correspondent of any bank by using Aadhaar authentication.AePS has become instrumental in driving the financial inclusion program in India. A total number of 6.65 crore Indian citizens used banking services through AePS platform in July 2019.

5. SEBI WANTS MUTUAL FUNDS TO INVEST ONLY IN LISTED SECURITIES: Securities & Exchange Board of India (SEBI) wants all Mutual Fund houses to shift all their investments to listed or to-be-listed equity and debt securities in a phased manner and reduce their exposure to un-rated debt instruments from 25% to only 5%. This is suggested with an intension to safeguard mutual fund investors from high-risk assets. SEBI is making efforts to enhance its regulatory safety net against any such risks.

6. HOUSING FINANCE COMPANIES TO BE TREATED AS NBFCs, TO COME UNDER RBI OVERSIGHT: Housing Finance Companies (HFCs) will be treated as one of the categories of NBFCs for regulatory purposes and will come under RBI oversight. The National Housing Bank Act, 1987 has been amended and as per these amendments, certain powers for regulation of HFCs will come under the purview of RBI. The RBI direction comes after the notification issued by the Finance Ministry in this regard.

7. PSU BANKS POST PROFITS IN Q1 OF FY 2019-20 AFTER 2 YEARS GAP: Public Sector Banks (PSBs) turned in a collective profit in Q1 of financial year 2019-20, the first time in more than 2 years. Out of the 19 PSBs, 15 banks reported an aggregate profit of Rs 3,948 crore. But this was well below that of private player HDFC Bank which has reported a profit of Rs 5,568 crore for the same period. Four of the PSBs, Syndicate Bank, UCO Bank, Indian Overseas Bank and Punjab National Bank reported loss for the said period.

1. NEFT TRANSACTIONS TO BE ROUND-THE-CLOCK: Currently the NEFT (National Electronic Fund Transfer) operated by Reserve Bank of India as a retail payment system is available for customers from 8 am to 7 pm on all weekdays. NEFT system is used for fund transfers up to Rs.2.00 lakh. Now RBI has decided to allow NEFT transactions round-the-clock from December’19 onwards in order to promote digital transactions. This decision will revolutionize the retail payments system in India.

2. LENDING NORMS, EXPOSURE LIMITS EASED FOR NBFCs: The Reserve Bank of India has relaxed bank lending norms to Non-Banking Finance Companies (NBFCs) and has also eased bank’s exposure limits. This will help the NBFC sector which is already under stress due to liquidity crunch. The bank’s exposure to a single NBFC has now been raised to 20% of the Tier-I capital of the bank against the current 15%. And this can be extended up to 25% by banks’ boards under exceptional circumstances. Now the banks on-lending to priority sectors through NBFCs will also be considered as priority sector lending by these banks. Hence the bank’s on-lending through NBFCs to agriculture (up to Rs 10 lakhs), MSME (up to Rs.20 lakhs) and housing (up to Rs.20 lakhs) will be treated as priority lending by these banks.

3. RETAIL LOAN GROWTH SLUMPS TO 5-YEAR LOW IN FIRST HALF OF 2019: As per RBI’s latest data, Banks have disbursed retail loans at the slowest rate in five years in the first half of 2019. As per RBI’s monthly sectorial deployment data, the retail loans disbursement growth in the first half of 2019 was only 7.3%, which is the lowest for the past five years. Sales slowdown in Auto sector and signs of preliminary stress building up in several retail portfolios such as credit card and personal loans is the main reason for such a slow growth.This is due to the sluggish consumption demand and rising unemployment which has pegged down the country’s economic growth.

4. SEBI STRENGTHENS DISCLOSURE NORMS ON ENCUMBERED SHARES: Securities Exchange Board of India (SEBI) has already mandated disclosure on encumbrance of shares. But now the norms have been strengthened so that the promoter of every listed company shall specifically disclose the detailed reasons for encumbrance by the promoter in a prescribed format along with Persons Acting in Concert (PACs) with him, if the combined encumbrance exceeds 50% of their shareholding in the company or 20% of the total share capital. And such encumbrance should be reported within 2 working days to the company and to the stock exchanges where the shares are listed.

5. GOVERNMENT EYES Rs.3 LAKH CRORE PROCEEDS BY SALE OF PUBLIC SECTOR TRANSMISSION LINES, TELECOM TOWERS AND AIRPORTS: Government think tank, in consultation with many ministries and NITI Aayog has drawn up a list of assets that can be sold which includes electricity transmission lines of Power Grid, towers of BSNL & MTNL, pipelines of Gail India Ltd and airports in some cities. The said sale may fetch the government around Rs.3 lakh crore. The idea is to use these proceeds to fund greenfield projects.

6. NHB TO PUMP IN Rs.10,000 CRORE INTO HOUSING FINANCE FIRMS: The National Housing Bank (NHB) will infuse an additional Rs.10,000 crores into eligible Housing Finance Companies (HFCs) in this financial year which will extend up to June 2020, to shore up liquidity and improve flow of funds for affordable housing loans for individuals. The infusion will be over and above what the NHB would normally provide to these HFCs through its existing refinance schemes.

7. IN 3 YEARS, BANKS COLLECTED Rs.10,000 CRORES FINE FOR NOT MAINTAINING MINIMUM BALANCE: 22 scheduled commercial banks collected nearly Rs.10,000 crores as penalty from its customers for not maintaining minimum balance in their savings bank accounts in the last three years.

8. SEBI ISSUES TIGHTER NORMS TO ENSURE FULL DISCLOSURE ON LOAN DEFAULTS WITH RATING AGENCIES: Amid concerns over banks citing “client confidentiality” to resist sharing of information on delayed loan repayments and a possible loan default by the borrowers, Security Exchange Board of India (SEBI) is planning to issue stricter norms to make it mandatory for companies to provide data regarding delayed repayments of its loans to credit rating agencies.

1. RBI UPDATES NEW AND PROPER CRITERIA FOR APPOINTMENT OF DIRECTORS OF PSU BANK: Reserve Bank of India has come out with new criteria for appointment of Directors of Public Sector Banks. As per the new guidelines, Member of Parliament, State legislature or local bodies cannot be members of the board of Public Sector Banks (PSBs). Likewise, partners of any CA firm which are engaged as a Statutory Central Auditors of any PSBs cannot join the board of any PSB. Candidates for post of board member in PSBs should not be a board member of any other bank or financial institution/insurance company. No person can be elected or re-elected on the board of any PSB if he or she has served as a director in the past on the board of any bank, financial institution or insurance company for six years whether continuously or intermittently.

2. RBI ALLOWS BANK OF CHINA TO OFFER BANKING SERVICES IN INDFIA: The Reserve Bank of India has allowed Bank of China to offer regular banking services in India. The Bank of China Ltd has been added in the Second Schedule of the Reserve Bank of India Act, 1934. All commercial banks are in second schedule. Latest addition to Second schedule is Jana Small Finance Bank Ltd. Banks falling under second schedule have to adhere to the norms set by Reserve Bank of India.

3. RBI BANS NBFCs FROM CHARGING LOAN FORECLOSURE PENALTIES: The Reserve Bank of India has now barred Non-Banking Finance Companies (NBFCs) from charging pre-payment penalties (foreclosure charges) from individual borrowers. As per the latest notification from RBI, NBFCs shall not charge pre-payment charges from individuals on any floating rate term loans sanctioned for purposes other than business. Foreclosure charges are part of the fee-based income for any lender which adds to its bottomline. The direction includes both deposit-taking and non-deposit-taking NBFCs. The notification comes at a time when NBFCs are struggling with host of serious issues.

4. LIQUIDATION PROCESS NOW TO BE COMPLETED WITHIN AN YEAR: The liquidation process of any Corporate Debtor under Insolvency & Bankruptcy will have to be completed within one year of its commencement. This is in accordance with the amendment to the Insolvency & Bankruptcy Board of India (IBBI) Regulations. It provides for a model timeline for each task in the liquidation process.

5. SBI ROLLS OUT POLICY ON WILFUL DEFAULTERS: State Bank of India (SBI) has put in place a comprehensive policy on willful defaulters. It envisages setting up of three willful default identification committees (WDICs). Each of these committees will be headed by a Deputy Managing Director (DMD). There will be quarterly reviews by branches for identification, declaration of willful defaulters and taking action against them. The proposals for classification of borrowers as willful defaulters have to be placed before any of the three WIDCs based on the area of operation.

6. NBFC TOP EXECUTIVES MOVE OUT TO JOIN BANKS/FINTECH: Many of the Non-Banking Finance Companies (NBFCs) are struggling with multiple problems including liquidity crisis. Now many of the top executives and senior professionals of these NBFCs are quitting and are looking out for openings elsewhere. A few years back theses executives had moved out of banking and insurance sector to join these NBFCs. But now the trend seems to have reversed.

7. BANKS PLAN FOR UNIFORM LENDING POLICY IN JEWELLERY SECTOR: Banks led by State Bank of India are working on a common policy framework for lending to the gems and Jewellery sector. The uniform policy will define terms of entry, such as credit rating, the systems exposure to the borrower, in terms of collaterals and experience of the borrowe. These will enable a uniform approach in proposals to this sector.

8. RBI TO TABLE REPORT ON DEVELOPMENT OF SECONDARY MARKET SOON: Next Month Reserve Bank of India is expected to come out with a report on facilitating development of secondary market for corporate lending. RBI had set up a task force to suggest policy and regulatory interventions required for development of secondary market in corporate loans, including loan transaction platform for stressed loans.

1. NBFCs MAY FACE BANK-LIKE RESTRICTIONS: After forcing banks to recognize stressed loans and Non-Performing Assets (NPAs) last year, RBI is talking tough to large Non-Banking Finance Companies (NBFCs) on asset quality. RBI may place lending restrictions on some big Finance Companies under Prompt Corrective Action (PCA). This is similar to the PCA framework laid down on banks, where they are not allowed to increase their large risk exposure unless they improve financial ratios in respect of capital adequacy and NPAs. RBI has asked Large NBFCs to make provisions for loans acquired by them from other small lenders and on such portion of loans where there is a moratorium period on repayment. RBI’s supervision department is already looking at the top 50 NBFCs.

2. IBBI TIGHTENS NORMS FOR INSOLVENCY RESOLUTION PROFESSIONALS:The Insolvency & Bankruptcy Board of India (IBBI) has tightened norms governing Resolution Professionals. Insolvency Resolution Professionals would be barred from having employment when they are in possession of authorization to take up work under the insolvency law. Besides this, an insolvency Professional and his/her relative cannot accept any employment from successful resolution applicant concerned for one year.

3. CONSOLIDATION OF REGIONAL RURAL BANKS ON GOVERNMENT AGENDA:The government is eyeing a mega revamp of its Regional Rural Banks (RRBs). The plan includes consolidation of these RRBs for better operational efficiencies in line with the government’s focus on rural improvements. The plan also includes adoption of differentiated banking strategies such as targeting specific sector for a strong regional connect. Some RRBs will be merged with their sponsoring banks. There are 56 operational RRBs and the aim is to bring them down to less than 38. At present Central government holds 50% stake in RRBs. Sponsor banks own 35% and the rest 15% is by respective state governments.

4. BANKS TAKE GOVERNMENT TO COURT OVER Rs 18,000 GST CHARGE: Last year the government had levied Rs. 18,000 crores as service tax and GST on banks on services offered by these banks to customers who maintain large balances and deposits for getting free facilities such as wealth management or locker facility. The government has accused banks of bypassing the taxation process and avoiding service tax GST. (To sight an example, the instance of a locker, where instead of an annual rent of say about Rs 3,600/-, the locker is offered free of cost for a huge deposit. The rent would have fetched a GST of Rs. 648/- to the government but a deposit will not earn any GST). In the same way many a serviceis offered free of cost for which the government is demanding service tax/GST. After refusing to respond to the tax notice for over a year, banks have now dragged the government to court.

5. GOVERNMENT TIGHTENS ANTI-MONEY LAUNDERING LAWS: The government has tightened the Anti-Money Laundering laws by expanding the ambit of the “Proceeds of Crime” which now includes properties and assets created through any criminal activity even if it is not under the Prevention of Money Laundering Act (PMLA). These crimes will now be considered as “relatable Offence”. The new amendment has been brought in with the Finance Bill passed in Lok Sabha recently.

6. RBI BLAMES BANKS ON MUDRA LOAN DEFAULTS: The Reserve Bank of India has held banks poor credit appraisal responsible for their high bad loans arising out of Mudra (Micro Units Development & Refinance Agency) Loans. Non-Performing assets (NPAs) in Mudra loans have spiked and as at the end of FY 2018-19 it is at 9.3% of Mudra advances. Loans under Mudra were Rs 3.22 trillion as at FY 2018-19. RBI Governor Mr. Shaktikanta Das spoke at length with all banks chiefs on this issue and addressed his concerns.

7. SBI HIRES 83 OVERSIGHT AGENCIES TO MONITER END USE OF FUNDS: State Bank of India Chairman Mr. Rajnish Kumar has stressed that diversion of funds is a big concern for banks and is the route cause for the loans going bad. The bank now has empaneled 83 oversight agencies to constantly monitor the end use of bank loans. He also said that the methods of lending will also have to undergo change. The consortium discipline or the multiple banking discipline has to be improved and here the regulator (RBI) also has to play a major role.

8. RBI GOVERNOR ASKS BANKS TO DIGITALLY ENABLE ONE DISTRICT EACH: RBI Governor has asked all banks to setup enabling infrastructure for digital payments in one district per state over the next one year. The banks have agreed to identify one district in each state to make it 100% digitally enabled within a time frame of one year in close coordination with all the stakeholders. Such districts may be covered with the “Transformation of Aspirational Districts” programme of the Government.

1. STANDARD CHARTERED BANK IS THE FIRST FOREIGN BANK TO START OPERATIONS IN “GIFT CITY”: Gujarat International Finance Tech-City (GIFT City) is a business district promoted by Gujarat Government through a joint venture company. GIFT City is India’s first operational smart city with International Financial Service Centre (IFSC) in Ahmedabad. Government has envisaged GIFT IFSC as a hub to bring Offshore financial transactions. And Standard Chartered Bank Ltd is the first foreign bank to start its operations in GIFT City. The banking business at GIFT IFSC has seen a 167% jump in just two years with the cumulative banking transactions touching $ 22 billion this year as compared to $ 6 billion in 2016.

2. RBI WANTS AUDIT FIRM PARTNERS UNDER LENSE TO STAY AWAY FROM BANKS: Reserve Bank of India over the last two years has placed significant responsibility on statutory auditors of commercial banks. It has directed Audit firm partners who are in the midst of any disciplinary proceedings not to sign balance sheet of any bank or even engage in the audit process. Amid the ongoing poor quality of asset in the banks resulting in high provisioning, the RBI has put in place a system to exchange notes with auditors every quarter where in observations on provisioning and other issues are shared and if any changes are necessary, the same can be incorporated by the auditor in the next quarter.

3. DIGITAL PAYMENT COMPANIES SEEK COMPENSATION FROM THE GOVERNEMENT: The government has mandated the digital payment companies to waive the Merchant Discount Rate (MDR), a charge borne by merchants on digital payments. Now the Payment Council of India, an industry body representing Non-Banking Payments Service Providers, is seeking compensation from the government for losses incurred while processing online payments due to the “zero” MDR charges. At “zero” MDR these digital payments companies will find it very difficult to survive, hence they have sought at least a minimum charge to maintain business viability.

4. SEBI PROVIDES NEW FORMAT FOR COMPLIANCE REPORT ON CORPORATE GOVERNANCE, SBI DIFFERS ON THE SAME: Securities Exchange Board of India (SEBI) has come out with a new format for compliance report on corporate governance to be submitted by listed companies to stock exchanges. As per the new format these companies have to make disclosures on quarterly basis, annual basis and within six months from end of financial year along with second quarterly report. This will come in to effect from 30thSeptember 2019. But State Bank of India is differing on the new corporate governance rules set by SEBI. While SEBI says since SBI is a listed entity, it has to comply with new corporate governance rules but SBI says its governance structures are derived from the SBI Act, 1955 which supersedes SEBI rules.

5. REAL ESTATE DEVELOPERS FACE THE HEAT AS CREDIT MARKET DRIES UP NEW FUNDING: Real Estate Developers are facing lot of stress as the credit market dries up fresh funding for their projects and getting credit has become a herculean task for these builders. With the worsening crisis of Non-Banking Financial Companies, the funding for new projects has nearly dried up. Borrowing rates for most developers have surged to the highest. But even at this high cost capital availability is limited as most of the banks have literally stopped project funding.

6. NEED DATA SHARING TO CURB CONSUMER BANKING FRAUDS: Experts from banking and payments industry want a common registry to tackle the menace of consumer banking frauds. Transparency in reporting the Turn-Around Time (TAT) of the resolution of debit card and OTP related frauds can go a long way in increasing the use of digital payments platform. There are broadly 2 types of debit card related frauds, one is related to cloning of cards and the other is related to OTP frauds. In both the cases the money is transferred immediately to a bank account which is linked to KYC. A common registry can help blacklist these accounts and track the perpetrators of these frauds. The National Payments Corporation of India (NPCI), a body responsible for governance of payments system, is considering such a common registry but the key challenge lies in the regulatory whip and cooperation from all stakeholders to share fraud information that is deemed sensitive by banks.

7. NPA CRISIS—LOAN WRITE-OFFS BY BANKS CROSS Rs.2 LAKH CRORE MARK: Write-Offs made by 27 banks in FY 2019 crossed the Rs.2 lakh crore mark, with 16 public sector banks alone accounting for Rs.1.77 lakh crore worth write-off loans. In FY 2018, banks had written off Rs.1.28 lakh crore bad loans. The amount of Written-off amount for FY 2019 could be even more as the numbers for Dena Bank and Vijaya Bank, which are now merged with Bank of Baroda are not available. This as per the data compiled by Financial Express.

1. NCLAT ASKS IL&FS, GOVERNMENT ABOUT STEPS TAKEN FOR 55 LOSS MAKING FIRMS: The National Company Law Appellate Tribunal (NCLAT) has sought information from the government and IL&FS about the steps being initiated and taken for the 55-loss making red entities of the debt-ridden group. The two member NCLAT bench has asked IL&FS and Ministry of Corporate Affairs to file an affidavit within two weeks stating the time it would take to decide on the action. Besides this the appellate tribunal has also asked about the steps taken for releasing the funds from pension and provident fund accounts in the loss-making companies.

2. POST MERGER BANK OF BARODA TO FOCUS ON TECH INTEGRATION: After the merger of Bank of Baroda with Vijaya Bank and Dena Bank, Bank of Baroda is focusing on integrating the technology systems of all the three banks for providing a smooth customer experience. The merged entity now has more than 9,500 branches and the IT heads of all the three banks have begun chalking out an integration strategy. This integration is necessary so as to allow a customer of any three banks to go to any branch and request basic banking services.

3. NON-BANK FINANCE COMPANIES FREEZE HIRING: Non-Banking Financial Companies (NBFCs) which act as country’s shadow banking sector have been reeling under a lot of stress and liquidity crunch. Due to this, these NBFCs have put brakes on hiring or we can say that the hiring of new staff has come to a complete standstill. And despite government giving some lifeline to NBFC sector in the recent budget, it is unlikely that the position of these NBFCs is going to improve soon.

4. DEPOSITS IN JAN-DHAN ACCOUNTS CROSS Rs.1 LAKH CRORE: Deposits in bank accounts opened under Jan Dhan scheme, launched five years ago by the Modi government have crossed the Rs 1 lakh crore mark. At present there are around 36.06 crore Jan-Dhan savings accounts and as per the latest data by the Finance Ministry these accounts hold a balance of Rs 1,00,495 crore as on July 3, 2019. And as per the latest data available, out of these 36.06 crore bank accounts, about 5.07 crore (about 14.37%) are zero balance accounts.

5. GOVERNMENT TO TAX BUYBACKS BY LISTED COMPANIES: The Central Government has decided to introduce a 20% tax on buybacks by listed companies. Until now only the unlisted companies were taxed for the buybacks. The measure has been introduced by the government to curb the misuse of the buyback route by listed companies to avoid taxes. Until now listed companies have been using buyback to return money to shareholders instead of dividends since dividends attract distribution tax. With introduction of tax on buyback this trend will end, but markets are reacting negatively on this.

6. NOW RBI TO TAKE CONTROL OF HOUSING FINANCE COMPANIES: All these years National Housing Bank (NHB) was controlling the supervisory and regulatory powers of all Housing Finance Companies. National Housing Bank was also acting as a lender and was refinancing these Housing Finance Companies. From now onwards all the powers to supervise and regulate these Housing finance Companies will be with the Reserve Bank of India. This move will make implementation of regulations simpler and easier.

7. INCOME TAX DEPARTMENT EYES NRIS’ RESIDENTIAL STATUS: A resident Indian can attain NRI (Non-Resident Indian) status by staying away from India for 182 days in a calendar year. And when you are an NRI,tax rules are different from an Indian Resident. The NRI income tax will depend on his/her residential status. If you are an NRI you don’t have to pay tax on global income earned but if you are a resident, tax must be paid on global income also. Hence many Indians carefully divide their time between India and abroad. Income Tax department is scrutinizing the residential status of Non-Resident Indians and are sending notices to several of them to reopen tax assessments of the last 5 years. They have also been told to share photocopies of their passports.

1. GOVERNMENT TO PROVIDE CREDIT GUARANTEE TO PSBs TO BUY NBFC ASSETS: Non-Banking Finance Companies (NBFCs) play an important role in sustaining consumption demand and capital formation there-by inducing economic growth. Off late the NBFC sector is undergoing a liquidity hurdle with a spate of defaults by companies such as IL&FS and DHFL since September 2018. Even as NBFCs are governed by RBI, it has limited control and authority over the sector and therefore appropriate proposals are mooted out by the Finance Ministry to address the issues faced by these NBFCs. As a first step towards these measures, the government will provide one time six months’ partial credit guarantee to public sector banks on purchase of high-rated pooled assets of Rs 1 lakh crore or more from financially sound NBFCs during the current financial year.

2. Paytm TRANSACTIONS WILL BE COSTLIER IN FUTURE: From 6th July 2019 onwards Paytm transactions will get a little costlier. It will start passing on the Merchant Discount Rate (MDR) that banks and card companies charge for digital transactions to consumers. The charge amounts to 1% on payments through credit cards, 0.9% for debit cards and up to Rs 12-15 for transactions on net banking and UPI payments. All these days Paytm was absorbing these charges and was not charging anything extra to its customers. But henceforth these charges will be passed on to the customers by Paytm.

3. BANKS STARE AT SLIPPAGES OF Rs 15,000 CRORE OF MSME LOANS: A big chunk up to Rs 15,000 crore loans given to Micro, Small & Medium Enterprises (MSMEs) could slip over to NPA category over the next 10 months. In fact these loans could have been slipped to NPA category long time back if RBI had not given banks a breather. On June 6, 2018 a RBI notification had allowed banks and NBFCs to temporarily classify their exposure to all MSME loans up to Rs 25 crore as standard asset if they were standard assets as on 31/08/2017. Now most of these loans may go bad.

4. VERY SOON TAX DEPARTMENT WILL START “FACELESS TAX ASSESSMENT”: Finance Ministry has proposed to introduce “Faceless Assessment”. This means that there will be no human intervention while scrutinizing the tax return. The main aim is to cut down the interaction between tax payer and income tax officer. Faceless Assessment means the assessing officer will not know the identity of the tax payer and would use technology to scrutinise details of the tax payer.

5. BANKS AND INSURANCE COMPANIES HOLD OVER Rs 32,000 CRORE AS UNCLAIMED DEPOSITS: Indian Banks and Insurance companies hold a huge sum of Rs 32,000 crore as unclaimed deposits with them. Any account which is not operated for 10 years or more is termed as unclaimed account and the amount deposited in such accounts is termed as unclaimed deposit. The amount of unclaimed deposit with all banks put together as on March 2018 was Rs 14.58 crore, the unclaimed deposit with life insurance companies was Rs.8,928 crore and Rs 989.62 crore with non-life insurance companies.

6. DEBT MUTUAL FUNDS REDUCE THEIR EXPOSURE IN NBFC SECTOR: Debt Mutual Funds exposure to Non-Banking Financial Companies ( NBFCs) has come down by Rs 58,000 crore since liquidity crunch of NBFCs started in July last year.A report by CARE Ratings on mutual funds reports that the percentage share of funds deployed by mutual funds in NBFCs has dropped from 19.04% in July 2018 to 14.81% in April this year. Since July 2018 Mutual Funds have withdrawn almost 36%of their investments from CPs of NBFCs.

7. NBFC CRISIS MAY HAMPER ECONOMIC GROWTH: The Economic Survey for 2018—19 has highlighted the contagion risks posed by stress in Non-Banking Financial Companies (NBFCs) as it has hurt the consumption growth in the automobile sector which in turn has affected manufacturing sector as well. The survey has warned that if the stress is spilled over this year then it will badly hamper economic growth due to lower credit off take by NBFCs.

1. NBFC CREDIT DISBURSALS FALL BY 31%: Non-Banking Finance Companies (NBFCs) credit disbursals dropped by 31% to 1.96 lakh crore as on March 31, 2019 from 2.83 lakh crore at the end of March 2018. According to a data compiled by credit bureau body CRIF and Industry body Finance Industry Development Council (FIDC), NBFCs contribute almost 20% of the total credit in India and due to this slump in NBFC credit flow almost all sectors—Automobiles, MSME, agriculture and real estate have been badly affected. This is also one of the main reasons for the collapse in automobile sales. According to a CEO of a troubled NBFC, the government and the regulators have to take note of it and act fast, otherwise there will be an eventual economic recession.

2. GOVERNMENT PAYS BACK SOME IL&FS LENDERS: The government has paid up Rs 25 crore to Asian Development Bank and German Development Bank on sovereign government guarantees issued on behalf of the distressed Infrastructure Leasing & Financial Services (IL&FS) after IL&FS defaulted on loan repayments. Considering the default status of IL&FS, the government had no other option but to pay from its contingency fund to avoid a default on a loan guaranteed by it. The government is further staring at another Rs 250 crore payments towards guaranteed IL&FS loans in near future.

3. MICRO ATMs A BIG HIT IN RURAL INDIA: The Aadhaar-Enabled Payments System (AEPS) which is a biometric-abled payment channel which falls under the broader category of Micro-ATMs, has emerged as one of the fastest growing payment systems in rural India next to Unified payment Interface (UPI) in terms of annual volume growth. While UPI addresses just top 80 million customers, AEPS caters to 800 million customers who are neglected by banks. AEPS developed by NPCI in 2015 works as cash points for rural bank customers where they can withdraw cash from their Aadhaar linked bank accounts simply by scanning their fingerprints at biometric compatible Point of Sale (PoS) devices which are located in most of the local kirana stores in rural India.

4. INCOME TAX DEPARTMENT TO SHARE DATA ON DEFAULTERS’ ASSETS WITH PSU BANKS: The Central Board of Direct Taxes (CBDT) has directed zonal heads of the income tax department to share information related to assets and liabilities of defaulters with banks on the request of respective banks. This will go a long way in boosting loan recovery efforts of Public Sector Banks. An official of the commissioner rank and above can share this information with the applicant bank if he is satisfied that it is in the public interest.

5. GOVERNMENT ASKS BANKS TO APPOINT GM-LEVEL OFFICIAL TO ADDRESS MSME SECTOR WOES: The Micro Small & Medium Enterprises (MSMEs) has been the focus of the present government as it plays a critical role in promoting economic growth. Taking forward the agenda of the government, Finance Minister Ms Nirmala Sitaraman has asked to focus on inclusive growth of MSMEs with an objective of achieving the growth target of $5 trillion economy by 2024. In view of this, the government has asked banks to appoint a General Manager–level official to resolve the problems being faced by MSME sector, particularly with regard to availability of credit.

6. RBI LAUNCHES “CMS” FOR FILING ONLINE COMPLAINTS AGAINST BANKS, NBFCs: The Reserve Bank of India has launched an application on its website for lodging complaints against banks and NBFCs with a view to improve customer experience in timely redressal of grievances. The Complaint Management System (CMS) is a software application installed by RBI in its website to facilitate RBI’s grievance redressal process. Customers can lodge complaints against any regulated entity such as banks and NBFCs and the complaint would be directed to the appropriate office of the Ombudsman/Regional Office of RBI.

7. RBI CONCERNED OVER HIGH LEVEL OF PROMOTER PLEDGING: The practice of pledging of shares by promoters suggests that they are unable to access other funding means and increasing frequency of share pledging is a reflection of poor financial health of the company. RBI in its Financial Stability Report (FSR) has said that high level of share pledging by promoters is seen as a warning signal which indicates poor financial health of the company and also a probable situation where the company is unable to raise funds from other means and this activity is risky for any company as debt repayment will be a difficult task.

1. INDIABULLS FINANCE & LAKSHMI VILAS BANK MERGER GETS CCI APPROVAL: In April 2019 Lakshmi Vilas Bank Ltd had announced its merger with Indiabulls Housing Finance in a share-swap up deal. The Competition Commission of India (CCI) has considered the proposed merger and has approved the same. The combined entity, with employee strength of 14,302 will have a loan book of Rs 1.23 lakh crore. The merged entity will now have a larger capital base and wider geographical reach. However, the said merger is yet to get the approval from Reserve Bank of India.

2. TAX ASSESSMENT CASES OLDER THAN 4 YEARS WILL NOT BE RE-OPENED: The government is contemplating to create such a rule under which income tax officials will not be able to re-open the tax assessment case older than four years of any tax payer. At present the officials can examine the records of tax payers for up to 6 years. After the introduction of new rule, the tax payers will get a lot of relief as well as reduce the work burden of the tax department. However, for those who commit tax frauds the time limits remains as 6 years only.

3. FINANCE MINISTRY ASKS PUBLIC SECTOR BANKS TO PROVIDE DETAILS OF EXPECTED RECOVERIES AND PROVISIONS IN STRESSED ACCOUNTS: The Finance Ministry has sought detailed information from Public Sector Banks (PSBs) on their expectation of recoveries and provisions held in respect of stressed accounts admitted in National Company Law Tribunals (NCLTs). This is being sought as the Ministry is expected to take a call on setting aside funds for recapitalisation of PSBs for FY 2020 based on the information provided by these banks. The information could also help to gauge the functioning of NCLTs and a further possibility of setting up of a dedicated tribunal to fast-track the hearings in corporate insolvency resolution cases.

4. MORE INDEPENDENT DIRECTORS TAKE EXIT ROUTE FEARING LEGAL SCRUTINY: Former executives, ex-bureaucrats and others who are working as Independent Directors on several company boards are taking the exit routes sighting personal problems as independent directors are increasingly being held accountable for the actions of promoters and management. This shows a growing trust deficit in corporate world. In FY 2019, Nifty 500 companies saw 316 exits by independent directors which is 31.7% more than last year.

5. HARD TIMES AHEAD FOR NBFCs AS RECORD DEBT REPAYMENT BECOMES DUE IN NEAR FUTURE: The Non-Banking Finance Companies (NBFCs) which are already in great stress due to liquidity crunch are likely to face more heat and increased strain as they have a record 1.1 trillion (approximately Rs. 1.11 lakh crore) of local currency bonds due next quarter, according to data compiled by Bloomberg. With re-financing these NBFCs is becoming a bigger risk, the only options for these NBFCs is selling of loan portfolios and securitization as there is zero-to-no growth in new loan disbursements in many of the NBFCs. This financing crunch of NBFC’s may hurt India’s economic growth in a big way.

6. GOVERNMENT MAY SELL STAKE IN SOME WEAK PSU BANKS: A proposal is being considered by the government to sell a majority stake in some weak Public Sector Banks (PSBs). The government wants to use these proceeds to fund the rural housing program. The proposal is in the early stages and the details are still being worked out and if approved, it could be included in the budget to be unveiled on July 5TH. If the plan is finalised, the government will need to amend a law to enable it to sell majority stake in state-run banks.

7. SEBI TIGHTENS RULES FOR USAGE OF CLIENT FUNDS BY BROKERAGES: Securities & Exchange Board of India (SEBI) has tightened the rules for usage of client funds by brokerages. As per the new rule brokers have been asked to transfer the securities to their client accounts within one day of receiving payment. In case the client defaults on the payments, brokers have been instructed to hold on the securities up to 5 days after which they can liquidate the securities in the market and recover the dues.

1. RBI ASKS BANKS TO GROUT ATMs TO WALL, PILLER OR FLOOR TO ENHANCE SECURITY: The Reserve Bank of India has instructed all banks to ensure their ATMs are grouted to a wall, pillar or floor by September 2019 to enhance security of cash vending machines. This rule excludes those ATMs that are installed in high security areas such as airports. In 2016 RBI had set up a Committee on Currency Movement (CCM) to review the entire gamut of security of cash in transit and the ATMs and based on the recommendations of the said committee these instructions have been given.

2. BANKS ASKED TO ISSUE KCC TO ELEIGIBLE FARMERS WITHIN 2 WEEKS OF SUBMITTING APPLICATIONS: The Reserve Bank of India has directed all the concerned banks to issue Kisan Credit Cards (KCC) to eligible farmers within two weeks after they submit the application for the same.Presently there are 6.95 crore active KCCs under which crop loans are given to farmers at a subsidized interest rate. Now KCC has also been extended to farmers involved in animal husbandry and fisheries activities. Despite these measures there are still many farmers who are still out of the ambit of institutional credit.

3. PNB ADMITS STAGGERING LOAN DEFAULTS OF Rs 25,000 CRORE: Punjab National Bank has admitted to 1,142 big and small defaulters all over the country who have defaulted a stupendous amount of Rs 25,090 crore. Out of 1,142 cases PNB has so far initiated recovery proceedings by filling suits against 1,108 defaulters covering an amount of Rs 23,869 crore. No suits have been filed in remaining cases who owe the bank Rs 1,210 crore. Mysteriously some of the defaulting companies are shown as registered abroad while some companies registered in India have taken loan from PNB’s overseas branches.

4. BANK OF BARODA EXPERIMENTS WITH VERTICAL STRUCTURE FOR OPERATIONAL SYNERGIES: In a sudden move towards organizational restructuring, Bank of Baroda has closed all its regional offices under its Mumbai zone and created vertical structures to achieve operational synergies. The bank after its mega merger has decided to have exclusive teams for business generation and outbound sales while another set of teams will look after administration, service and support function. This vertical is only tried now in Mumbai zone for time being.

5. RESERVE BANK RELAXES NORMS FOR NO-FRILLS ACCOUNTS: Reserve Bank of India has now relaxed norms for No-frill accounts. Banks now will provide cheque books and other facilities as is available for other normal bank accounts. However, the bank can ask the account holders to maintain minimum balance in lieu of such facilities being extended to them.

6. MORE ITEMS LIKELY TO GO OFF THE HIGHEST GST SLAB: The GST structure will be pruned further as several items in highest slab of 28% is being pruned down. The GST council may meet on June 20thahead of budget to discuss certain issues. The Finance Ministry has also unveiled a road map for implementation of the new GST return mechanism. It has also put in place a transition mechanism.

7. RBI GOVERNOR CALLS FOR SYSTEM TO EVALUATE PERFORMANCE OF BANK CHIEFS: RBI Governor Mr.Shaktikanta Das has said that the performance of bank chiefs of public and private sector banks should be closely monitored by the Board of Directors either through a sub-committee or an external peer group review. An effective evaluation system should also be put in place for banks to improve their financial and operating parameters.

1. FITCH DOWNGRADES CREDIT RATINGS OF ICICI BANK & AXIS BANK: At a time when the Indian banking industry is struggling with poor asset quality and bad loans scenario, the rating agency Fitch has downgraded the credit ratings of two private sector banks—ICICI Bank and AxisBank to Junk. Fitch has downgraded the long-term Issuer Default Rating (IDR) to BB+ from BBB- for both the banks. The rating agency expects the performance of India’s banking sector to be below average over the next one or two years. Fitch in its report has said that banks in India can take advantage of faster growth and improved business prospects only if their damaged balance sheets recover substantially with infusion of fresh equity that will help them to support credit growth.

2. NBFC LIQUIDITY PROBLEM TURNING IN TO SOLVENCY ISSUE: It is 9 months since IL&FS crisis started and since then the NBFC sector is facing liquidity problems due to which many NBFCs have sold their loan portfolios to many banks to raise money. The latest crisis of NBFC is the default by DHFL. The NBFC problem is something that may have started as liquidity but it is quickly morphing into a solvency issue for some NBFCs. The government needs to address this issue and resolve it sooner rather than waiting for the worse to happen.

3. RBI ISSUES REVISED CIRCULAR FOR RESOLUTION OF STRESSED ASSET: The Reserve Bank of India has issued a revised circular for resolution of stressed assets which replaces its earlier circular dated 12Th February 2018which the Supreme Court had declared as ultra vires. The new norms replace all the earlier resolution plans. Now the lenders can start resolution process for a stressed asset within 30 days of default. During the review period of 30 days, lenders may decide on the resolution strategy, including the nature of resolution plan and the approach for implementation of the resolution plan. The RBI circular also mentions that in case the defaulted loan amount is more than 2,000 crore the resolution plan should be implemented within 180 days from the end of review period.

4. “ON TAP” LICENSING FOR SMALL FINANCE BANKS UNDER STUDY: The Reserve Bank of India has said that it is considering “On-Tap” licensing facility for small finance banks. The draft guidelines for the same will be issued by August 2019. “On-Tap” facility allows the RBI to accept applications and grant license for banks throughout the year subject to fulfilment of set conditions. So far RBI has issued licenses to 10 small finance banks. Of this, 8 have been included in the second schedule of the RBI Act, 1934 and are now scheduled banks.

5. MICROFINANCE INDUSTRY POSTS 38% GROWTH IN 2018-19: The microfinance industry’s Gross Loan Portfolio (GLP) stood at 1,87,386 crore as on 31.03.2019, up by 38% as compared to last year’s figures. The total number of microfinance accounts was 9.33 crore as on 31.03.2019 showing a growth of 21.9%. These figures are as per the report of Microfinance Institutions Network (MFIN).

6. 6,800 CASES OF BANK FRAUDS REPORTED IN 2018-19: Over 6,800 cases of bank fraud involving an unprecedented amount of Rs 71,500 crore have been reported in the financial year 2018-19. The previous year showed a figure of 5916 cases involving Rs 41,167 crore which shows a clear increase of over 73% in fraud amount. This was as per a RBI reply to RTI query.

7. PUBLIC SECTOR BANKS ASKED TO PREPARE PLAN FOR THIRD ROUND OF CONSOLIDATION: Chiefs of all Public Sector Banks have been asked to be ready with their consolidation plan so that it could be placed before Alternative Mechanism (AM) of the new government. Third round of bank consolidation is planned for October-December quarter of this fiscal year. The AM is a group of ministers under Finance Ministerwhich was created in 2017 to fast track consolidation and help create strong and competitive banks with improved risk profile.

8. NPA CRISIS-- PSU BANKS STARING AT YET ANOTHER SPIKE IN BAD LOANS: With operating losses of over Rs 50,000 crore in March’19 quarter and the likelihood of a few more large corporate accounts going bad in near future, the woes of Public Sector Banks (PSBs) as far as bad loans are concerned are not yet over. There are concerns that credit exposures could turn toxic in sectors like agriculture, real estate and NBFCs, which could badly affect the balance sheets of PSBs.

1. RUPEE CO-OP BANK GETS EXTENSION FOR ITS BANKING LICENCE TILL 31st AUGUST: Rupee Co-op Bank Ltd which is on the brink of closure since last three years has already applied for its merger with Maharashtra State Co-op Bank Ltd and the said proposal is under consideration and the Board of Administration (BoA) of Rupee Co-op bank Ltd is hopeful for a positive reply from Maharashtra State Co-op Bank. Meanwhile the financial condition of Rupee Co-op Bank has improved and the statutory audit of the bank for FY 2018-19 is completed without any adverse remarks. Hence the BoA has requested RBI to carry out Annual inspection of the Bank. The Bank has paid Rs 332 crore to 83,777 needy depositors under hardship scheme of RBI. Considering all these factors, RBI has granted extension of its banking license till August 31st, 2019.

2. BANK CAN USE AADHAAR FOR KYC WITH CUSTOMER’S CONSENT: Reserve Bank of India specifies Know Your Customer (KYC) norms to be followed by banks and other entities regulated by it for various customer services. Accordingly now banks have been allowed to carry out Aadhaar authentication/off-line verification of an individual who voluntarily uses his Aadhaar number for identification purpose with customer’s consent.

3. RBI FORMS TWO PANELS TO STRENGTHEN SALE OF STRESSED CORPORATE ASSETS AND HOUSING LOAN PORTFOLIOS: Reserve bank of India has appointed two separate panels to create a more vibrant and transparent framework for the sale of bad corporate assets and securitisation of housing loans in abid to make these processes more open and structural. These panels have been asked to review the existing market conditions and come out with recommendations in line with global best practices. The current market lacks any formalised mechanism and is largely restricted to sale of bad debts by banks to Asset Restructuring Companies (RACs). There is a need for creating a more vibrant secondary market for debt which will go a long way in increasing the efficiency of the debt market.

4. RBI EXTENDS LAST CUT-OFF TIMING FOR RTGS TRANSACTIONS FROM 4.30 PM TO 6 PM:Reserve Bank of India has extended the last cut-off time for customer transactions through Real Time GrossSettlement Systems (RTGS) from 4.30 pm to 6 pm from June 1ST 2019. Effectively the transactions will now take place under three windows: 8 am to 11 am, 11 am to 1 pm and 1 pm to 6 pm.

5. NPA CYCLE APPEARS RELENTLESS: A couple of years ago the bad loan scenario was mainly confined to the corporate sector. But off late the Non-Performing Assets (NPAs) menace is spreading to Micro Small & Medium Enterprises (MSMEs) and retail segments as well. Earlier only banks were affected by these NPAs but now even the Non-bank segments– NBFCs are badly affected by this bad loan scenario. A pattern in March quarter results of FY 2019 indicates fresh slippages in new segments. 22 out of 33 banks declaring results show a substantial increase in NPAs, with 58% increase in overall provisioning in one quarter. This includes some large borrowers being added to the existing list and also potential slippages from stressed NBFCs that are apprehended. In our opinion a fresh cycle of toxic bad loans could further affect the financial sector badly in coming financial year.

6. RBI SEEKS TO TIGHTEN ALM NORMS FOR NBFCs: Amid persisting liquidity crunch faced by NBFCs, the Reserve Bank of India has put a draft circular tightening the norms for their Asset Liability management (ALM). It proposes to introduce Liquidity Coverage Ratio (LCR) for all deposit seeking NBFCs and also non-deposit seeking NBFCs with an asset value of 5,000 crore and above.LCR refers to the ratio of proportion of highly liquid assets to be held by financial institutions to ensure their on-going ability to meet short-term obligations.

7. GOVERNMENT MAY TAX CASH TRANSACTIONS AT BANKS: The new government is planning to put in place further measures by re-introducing Banking Cash Transaction Tax (BCTT) to discourage cash transactions and curb black money. The tax authorities are also considering levying estate tax on inherited property in line with global practices. All this is being examined to see the feasibility and effectiveness of the tax before implementing the same.

1. BANK OF BARODA LOOKS TO RATIONALISE 800-900 BRANCHES: Following its merger with Vijaya Bank and Dena Bank, Bank of Baroda is considering the option of rationalising 800 to 900 branches across the country to improve its operational efficiency. There are cases where branches of all the three banks are at one location, on the same road or in the same building making it non-viable. After comprehensive study and review, Bank of Baroda has identified around 800 to 900 of such branches which need to be rationalised as the lender could opt for re-location or closure of these branches. Besides this there is also the need to close Regional and Zonal offices of merged entities. After the merger, Bank of Baroda has become the second largest Public Sector Bank with over 9,500 branches, 13,400 ATMs and 85,000 employees with 12 crore customer base.

2. COMPREHENSIVE PUBLIC SECTOR BANK REFORMS ON THE CARDS: A host of measures are on the cards for transformation of Public Sector Banks (PSBs). Consolidation of these PSBs is the top most agenda. A list of directions is being separately worked out for these PSBs to focus on risk management, enhanced early warning signals in cases of stressed assets and bringing in new Fintech players. Basically these measures will be rolled out for prudential and clean lending.

3. SOME BANKS MAKE RECORD PROVISIONS AGAINST BAD LOANS: Since the past one year most of the banks are looking to clean their books and strengthen balance sheets by improving their Provision Coverage Ratio (PCR). PCR is the ratio of provisioning to gross Non-Performing Assets and indicates the extent of funds a bank has kept aside to cover loan losses. PCR is at a record level in some banks, which is a positive factor as it makes bank figures more reliable. SBI’s PCR increased to 78.73% in March 2019 from 74.63% in March 2018 and ICICI Bank’s PCR for March’19 was 80.60% as compared to 60.40% in March 2018.

4. RBI NOT IN FAVOUR OF SPECIAL CREDIT WINDOW FOR NBFCs:Government and NITI Aayog think that a special credit window for Non-Banking Financial Companies (NBFCs) is required to be made available as they are facing liquidity crunch. However, Reserve Bank of India is not in favour of providing special credit window to NBFC sector to tide over the liquidity crunch as it feels that the liquidity crunch scenario is not sector-specific, but limited to a few large NBFCs which have over-leveraged due to aggressive lending.

5. UPI SEES EIGHT-FOLD GROWTH: Unified Payments Interface (UPI) transactions has seen an eight-fold jump in financial year 2018-19 to 8.76 lakh crore from 1.09 lakh crore in financial year 2017-18. But it has a long way to go before it overtakes the number of card transactions (both debit and credit card) which is 3.2 times that of UPI transactions on an average.

6. PRIVATE BANKS’ PROVISIONS RISE IN FY’19: The provision for bad loans made by private banks in anticipation of larger slippages has increased substantially by nearly 13% during the financial year 2018-19. The value of provisions made by 16 private sector banks that have so far reported their March’19 quarter results stood at Rs. 54,447 crore, up from Rs. 48,298 crore for Financial Year 2018. But the value of gross Non-Performing Assets (NPAs) has remained nearly flat at the end of March 2019.

7. MINISTRY PLANS TO TIGHTEN AUDIT REPORTING STATNDARDS: The Ministry of Corporate Affairs plans to propose changes to Companies (Auditor’s Report) Order (CARO). CARO applies to most large companies in India other than financial and charitable institutions. The move comes at a time when questions have been raised on the role of auditors in several of the recent financial scams, particularly the loan repayment defaults of IL&FS which is being investigated by Serious Fraud Investigation Office of the Ministry of Corporate Affairs. The Ministry plans to review the auditing standards to tighten the rules for auditors.The Ministry is also looking to operationalize the recently formed National Financial Reporting Authority (NFRA).

1. OPTIONS AVAILABLE FOR FILING DELAYED INCOME TAX RETURNS: The deadline for filing Income Tax Returns is July 31ST for every assessment year. If you miss the deadline, you can file the delayed returns by up to 31ST March of the following year. If one has missed the deadline for filing returns for the year 2016-17 and 2017-18, he/she cannot file delayed returns now. They can file a delayed return only on the direction of income tax officer, that is if they get notice for not filing the return. In the same manner one can file a condonation of the delay to the Assessing Officer and if he is satisfied with the reason for the delay, he can allow to file the delayed returns.

2. HOME BUYERS CANNOT CHOOSE BETWEEN OLD AND NEW GST RATES: The GST council has allowed the real estate developers to shift to 5% GST rates for residential units and 1% for affordable housing without the benefit of input tax credit(ITC) from April 1ST 2019. For the on-going projects, the builders have been given the option to either continue in the 12% GST with ITC or opt for the new rate without ITC. But homebuyers will not have the option of choosing between old and new rates. It also says that the project started before April 1ST but had not received any bookings would be classified as New Project and will be subjected to revised GST rates.

3. RBI ALLOWS BANKS TO TREAT IL&FS EXPOSURE AS NPA: The Reserve Bank of India (RBI) has allowed banks to treat exposure of IL&FS and its group companies as Non-Performing Assets (NPAs) following the National Company Law Appellate Tribunal’s (NCLAT) order. Earlier RBI had asked banks not to treattheir exposure as NPAs without the prior permission of Appellate Tribunal. But an order by NCALT on May 2nd has allowed the banks to declare the accounts of IL&FS and its group companies as NPAs.

4. RBI PLANS INCENTIVES FOR BANKS TO MOVE IBC: RBI is understood to be planning “Incentive” to those banks which take the errant borrowers to bankruptcy court. RBI is considering a proposal to assign a “lower risk weight” on such loans to companies against which action has been initiated under the Insolvency & Bankruptcy Code (IBC) of 2016. A lower risk weight would act as an incentive to banks as it would help them in conserving capital. Lower risk weights on loans would make it easier for banks to achieve and maintain Capital Adequacy Ratio.

5. IBA SEEKS APPLICATIONS TO MAKE FORENSIC AUDITORS’ LIST: The Indian Banks’ Association (IBA) has invited applications for the empanelment of firms to conduct forensic audit of frauds in the banking industry. IBA plans to rope in firms for two separate categories of frauds—up to Rs 50 crore and above Rs 50 crore. At present there are 72 firms on IBA’s panel and their term is ending in August 2019. These firms will have to re-apply to be empaneled again. As on March 2018, the number of frauds in banks involving amounts of Rs 1 lakh and above stood at 5,917 which is 17% up from March 2017 figures.

6. SBI TO SEEK CONSULTATNT’S HELP TO DRAW UP LONG TERM GROWTH PLAN: State Bank of India (SBI) is seeking to engage the services of a consultant to suggest strategies to improve its Return on Assets (RoA) and Pre-Provisions Operating Profit (PPOP) by increasing income from different sources, reducing cost and optimising the balance sheet. The consultant is expected to draw a road map by planning portfolio strategy and long term growth opportunities. He will strategize for current account acquisition and increasing its balances and optimising Asset Liability Management (ALM).

7. RBI MAY OFFER MORE TIME FOR BANK-LED RESOLUTION OF NPAs:RBI is planning a liberal approach towards resolution of stressed assets when it issues a revised circular, replacing its controversial February 12 circular. As per the new circular the banks will be given 30 days from the first default to identify and qualify the account as a bad debt (Special Mention account-SMA) and initiate resolution action. The RBI as per the suggestion given by IBA, may allow individual banks to grant additional 60 days’ time for approval and implementation for a resolution plan. So, instead of having 180 days’ time (as earlier) for a bank-led resolution, now the banks could get up to 270 days to resolve an asset without taking it to NCLT.

1. RBI OUTLINES ITS VISION DOCUMENT ON PAYMENTS & SETTLEMENT SYSTEMS FOR 2019-21: The Reserve bank of Indiahas outlined a three year vision for payments & settlements system which will offer huge business opportunities for technology-enabled Fintech players. It will enable merchant acquisitions of non-banks, participation of private entities in retail payments which will open fresh business avenues. This vision document is a pursuit towards less cash society accompanied by a less-card India.The endeavour is to serve segments of society which is untouched by the payments system as RBI is trying to smoothen the digital payments in rural areas by pushing its feature - phone-based digital payments where the transaction can take place without internet connection. It is also a customer-centric approach to ensure prevention of frauds through digital channels.

2. INSOLVENCY PROFESSIONAL MAY REQUIRE A CERTIFICATE OF PRACTICE TO BE ABLE TO WORK: Insolvency Professionals (IPs) may soon require to obtain a Certificate of practice (CoP) to be able to work as resolution professionals or liquidators. Insolvency regulator IBBI proposes to amend the existing IP regulations so as to introduce the concept of CoP for Insolvency Professionals. This CoP needs to be renewed every year for the IPs to remain in practice.

3. BANKS SET ASIDE Rs. 50,000 CRORE PROVISIONS DUE TO JET AIRWAYS AND IL&FS COLLAPSE: Stung by the collapse of Jet airways and IL&FS as many as 13 banks have made a provision of Rs 50,000 crore in the fourth quarter of FY 2019. How much of this would be written off and how much would be recovered is very difficult to predict for the banks. Loan loss provisions across 13 Public Sector Banks stood at Rs 52,739 crore for the fourth quarter of FY 2019 which is sharply higher that the figure (29,626 crore) in the corresponding period of previous year. Most of the banks have reported huge losses for March’19 quarter.

4. NBFCs TIEUP WITH BANKS UNDER RBI’S LOAN CO-ORIGINATION SCHEME: An increasing number of Non-Banking Finance Companies (NBFCs) are partnering with banks under the RBI’s loan co-origination scheme. Due to liquidity crunch prevailing in the market, the NBFCs are forced to look for cheaper routes to raise funds. It is envisaged that loans worth between Rs. 5,000 to Rs. 10,000 crore may have been sanctioned under the scheme since its inception in August last year.

5. RBI TELLS BIGGER NBFCs TO APPOINT CHIEF RISK OFFICER:The Reserve Bank of India has instructed Non-Banking Finance Companies (NBFCs) with an asset size of over Rs. 5,000 crore to appoint a Chief Risk Officer to improve standards of their risk management. RBI said that with increasing role of NBFCs in credit intermediation, there is a need for these NBFCs to augment risk management practices. RBI directive comes ata time when most of these NBFCs are facing liquidity crisis as some of the firms are burdened with over-leveraging and mismatch between assets and liabilities. And if theNBFC is listed then it has to report the appointment and incumbency of any Credit Risk Officer to the stock exchanges.

6. ICICI BANK MOVES TO ROLE-BASED DESIGNATIONS OF ITS TOP EXECUTIVES: In a major HR shift, ICICI Bank has shocked its top management by getting rid of all grades of Deputy General Manager(DGM) and above. These top management executives will be now known by their role and there will be no grade-based benefits. The bank has also got rid of hierarchy as no longer can anyone guess an executive’s seniority based on the size of his car or access to executive dining room. So much so that earlier even the internet bandwidth was depending on the seniority. This move will affect 400 executives. ICICI Bank has moved from grade-based designations to role-based designations.

7. PUNJAB NATIONAL BANK TERMINATES AGREEMENT TO SELL ITS STAKE IN HOUSING FINANCE ARM: Punjab National Bank has terminated the agreement to sell its stake in PNB Housing Finance with General Atlantic Group and Varde Partners. The bank said it strongly believes in the growth story of housing finance and hence it will continue to support the housing finance arm in its growth plans.

1. LENDERS TAKE 57% HAIRCUT IN 94 CASES WORTH Rs 1.75 LAKH CRORE: Banks have taken a huge 57% haircut in 94 large accounts worth Rs 1.5 lakh crore which were resolved in Financial Year 2019, recovering just Rs 75,000 crore, which amounts to 43% of total value of the admitted claims, as per a report. The average resolution time for these 94 cases resolved was 324 days as against the stipulated timeline of 270 days. As of March 2019 there were 1,143 cases pending at various bankruptcy tribunals, and 32% of them are pending beyond 270 days. The report further says that had these 94 cases were liquidated, the recovery would have been just 22%.

2. ROUND 2 OF PSB MERGERS, BIG BANKS MAY GET A CALL: The government is soon likely to invite select big banks for discussion on a second round of merger in Public Sector Banks, according to a Finance Ministry Official. The lenders to be called for discussion may include Punjab National Bank and Union Bank of India. The merger activity may start anytime during the second or third quarter of the current fiscal year. But in our opinion the time is not ripe for further mergers as most of the banks are in a recovery mode and first they need to strengthen and consolidate their balance sheets. Moreover the government should see how the earlier merger of Dena Bank and Vijaya Bank with Bank of Baroda shapes up.

3. RBI MOVES TO TIGHTEN CURRENT ACCOUNT OPERTAING NORMS TO CHECKFUND DIVERSION:In a move to tackle fund diversion, Reserve bank of India has proposed sterner rules on opening and running of current accounts of corporate borrowers. As per the proposed rule, current accounts can only be opened with the lead bank in a lending consortium while other banks having collection accounts will have to transfer funds at the end of the day to the current account with the consortium leader. RBI has said the rule would apply to corporate accounts which have borrowed and availed a credit limit of Rs 50 crore or more from the banking system.

4. LENDERS TO ANIL AMBANI’S RCom FACE STEEP HAIRCUT: Lenders to Anil Ambani’s Reliance Communication (RCom), Reliance Telecom and Reliance Infratel are finalising plans to recover their loans of Rs 45,000 crore. Banks have decided to shortlist a Resolution Professional from a field of 15 players. But the bankers feel it will be a tough task given that the value has been significantly eroded with the impaired assets, leaving little on the table for the potential buyer. So even if the lenders find a buyer, they will have to take huge haircut.

5. NBFCs AIM TO TAP OVERSEAS LOAN MARKET TO RAISE FUNDS: Non-Banking Finance Companies which includes some prominent players like Piramal Capital Housing, Bajaj Finance, Hero Fincorp, L&T Finance, Tata Financial Services are now going beyond bonds to seek loans from overseas banks in the form of External Commercial Borrowing (ECB). While they are willing to be exposed to currency risks, they want to diversify their funding pattern. Each company aims to raise about $ 200-400 million in the next few weeks. Maturities of such loans are likely to be in the range of 3 to 5 years.

6. RBI GETS SUPREME COURT ULTIMATUM ON RTI ACT DISCLOSURES: The Supreme Court has ordered the Reserve Bank of India to disclose its annual inspection reports of banks along with the list of defaulters and information related to them under the Right to Information Act. The Supreme Court further said that the RBI is duty bound under the law to disclose information sought under RTI Act.

7. CBDT AND GSTN SIGN A PACT TO NAB TAX EVADERS TO REDUCE BLACK MONEY GENERATION: The Central Board of Direct Taxes (CBDT) and Goods & Services Tax Network (GSTN) have signed an agreement to facilitate exchange of data between the two. The I-T Department will share key financial information including the status of I-T Return filings, turnover of business, gross total income and turnover ratio with GSTN. This is done to nab the evaders and thus reduce generation of black money.

1. DEUTSCHE BANK LOOKS TO GROW ITS RETAIL BUSINESS IN INDIA: Deutche Bank is looking to grow its retail business in India. It is planning to roll out a new digital platform for processing loans. The first part of the digital platform will be completed in June this year while the process will be completed by the end of this year.

2. DEPOSITS IN JAN-DHAN ACCOUNTS INCHING TOWARDS Rs 1 LAKH CRORE MARK: As on March 2019, the number of accounts in Jan-Dhan Yojana crossed 35.39 crore. The Jan-Dhan accounts scheme which was launched five years ago is set to cross Rs 1 lakh crore mark soon. The total deposit in the said accounts touched to Rs 96,107 crore as on March 2019. As per the latest data available, the figure has touched an all-time high of Rs 97,665 crore as on April 3 rd 2019.

3. IRREGULARITEIS OF MORE THAN Rs 1 LAKH CRORE FOUND IN COMPANIES UNDER INSOLVENCY & BANKRUPTCY CODE: Forensic audit of over 200 companies facing corporate insolvency resolution action under the Insolvency & Bankruptcy Code (IBC) has revealed irregularities of more than Rs 1 lakh crore. This also includes diversion of funds. The Ministry of Corporate Affairs, which is responsible for implementation of IBC is expected to initiate action against promoters, directors and even the auditors involved in such cases.

4. BANKS IN SEARCH OF INFORMATION TECHNOLOGY TALENT: All banks are going more and more digital nowadays and due to this lenders (Private Banks, NBFCs and Fintech Companies) are trying to attract best of the Information Technology (IT) talent with fat pay packets with ESOPs (Employee Stock Options). A top class techie with a flair for analytics is in lot of demand. Many smaller Fintech companies are offering a partnership in the business with an equity stake if the candidate is top class.

5. 28 to 30% CONSUMER COMPLAINTS TO RBI ARE ABOUT DIGITAL OR CARD PAYMENTS: About 28% to 30% of the complaints filed by consumers with RBI are in the space of digital transactions and card payments. As per the annual report by RBI on Banking Ombudsman Scheme 2017-18, 22% of the complaints pertained to banks not adhering to the “Fair Practice Code”, while ATM and debit card related issues made up the second largest category of complaints with more than 15%. Together with the credit-card related complaints and online banking issues, the total share of complaints on digital channels almost touched 30%.

6. STATE BANK OF INDIA APPOINTS 8 NEW DEPUTY MANAGING DIRECTORS: The country’s largest bank, SBI with more than 25% share of country’s loan market, has elevated eight of its executives to the post of Deputy Managing Directors (DMD) in one of the biggest HR revamps. SBI is also in the process of identifying about 15 executives who would fill the positions as Chief General Managers.

7. MICROFINANCE SECTOR TO GROW AT 22% IN FINANCIAL YEAR 2020: As per a report by rating agency Icra, the Microfinance industry is likely to grow at 20-22% in the current fiscal. The industry will require external capital of almost Rs 3,500 to 4,700 crore over the next 3 years to sustain the growth potential. There is a need for the Microfinance Industry to do a more thorough credit analysis/assessment of actual debt repayment capacity of the borrower.

1. BANKS BOARD BUREAU IDENTIFIES 75 SENIOR OFFICERS FOR LEADERSHIP ROLES IN PSBs: The Banks Board Bureau (BBB), the apex body for selection of whole-time Directors of Public Sector banks has identified 75 senior officers from the Senior Management Level to take over leadership role in the future. The current list of 75 officers have been selected from a pool of 450 such eligible officers to take on the current and emerging challenges as well as help create a leadership pipeline. Shortly a globally ranked Indian Institution will be identified where every year the identified personnel would undergo intensive leadership development training.

2. ICICI BANK LAUCNHES INSTANT LOAN SCHEME: ICICI bank has launched an Instant Loan for its salaried customers wanting to buy cars and two wheelers. Pre-approved ICICI Bank customers can get a sanction letter for a car or two wheeler loan instantly which can be used to get a vehicle loan for the full on road price within 15 days. ICICI Bank is already offering instant personal loans, home loans and credit cards and now it has added vehicle loans in this list.

3. IDBI BANK BRINGS PAPERLESS ACCOUNT FACILITY FOR NRIs: IDBI Bank has launched “NRI-Insta- Online” account opening for Non Resident Indians (NRIs). This online account opening process is available to NRIs residing in Financial Action Task Force (FATF) member countries. Hence NRIs living in nearly 40 countries will now be able to open account in IDBI Bank without submitting paper documents as they will not be required to furnish any physical documents such as KYC proofs. This user friendly initiative will help NRIs to open the account without any need to visit the branch or submit any physical documents and they can choose the branch in which the account needs to be opened.

4. EASIER FINANCING FOR LOW-COST HOMES LIKELY: The government is planning to ease funding and construction norms for its “Housing for All” programme to speed up construction of affordable house. Some of the changes under consideration are allowing greater access to institutional finance to the poor, relaxation in eligibility criteria for bank loans and switching to a life cycle cost approach to construction of such houses to bring down costs and ensure quality of construction. Besides this, fiscal support is being considered for companies that use recycled products made from waste.

5. CHANGES IN INCOME TAX RETURN FORM FOR AY-19-20: The Central Board of Direct Taxes (CBDT) has introduced new Income Tax Return (ITR) forms for the assessment year 2019-20. The new ITR form comes with a set of changes. The tax payer will be required to feed more detailed disclosure. The idea is to check evasion and eliminate many loopholes. With the last date for filing the returns being 31 ST July, the tax payer needs to start the process in advance to fill in the required details.

6. CBDT AMENDS FORM-16 AND FORM-24Q FOR DETAILED REPORTING ON TDS: The Central Board for Direct Taxes (CBDT) has affected amendments in Form-16 (Certificate for Tax Deducted at Source- TDS) and Form-24Q, a quarterly TDS statement for salaries. As per the new form it is required to provide more details related to bifurcation of exemptions under Section 10 of the Income Tax Act, disclosure of standard deduction amount and other income.

7. BRITAIN ORDERS FOR SEPERATION OF AUDIT AND CONSULTANCY BUSINESS FOR THE “BIG FOUR” AUDIT FIRMS: Britain’s “Big-Four” accounting firms have to now separate their consultancy business and audit business as per the country’s competition watchdog. This means the auditors should focus exclusively on producing the most challenging and objective audits rather than being influenced by their much larger consultancy businesses.

8. BUILDERS FACING TOUGH CHOICE IN GST RATES FOR ONGOING PROJECTS: Builders and home buyers are finding it difficult to understand the best deal for them under the new GST rates for on- going projects. Real Estate Developers have time till May 10 th to decide on whether to stick to the old rate with input tax credit or to opt for new GST rate (5%) with no input tax credit.

1. SBI CARD PLANNING FOR A CARD-LESS BUSINESS MODULE : SBI Card, the credit card arm of State Bank of India (SBI), is changing its business model. It is planning and is preparing for a card-less world. In the last 18 months it has set up its own infrastructure and brought back its core platform to India without losing sight of growth. Now they are using Chatbot, Artificial Intelligence and robots to do their respective jobs. The card company is backed by private equity fund Carlyle and is also diversifying its funding from banks beyond SBI to tap local bond market as it seeks diversification after the exit of GE Capital a year ago.

2. BANKS CLOSE THE FY19 WITH ROBUST CREDIT GROWTH: According to RBI data released this week, bank credit rose by 13.24% while deposit grew by 10.03% in Financial Year 2018-19. This is the second consecutive double-digits credit growth after the same had declined to 4.5% in Financial Year 2016-17. On a Year-on-Year basis, non-food credit increased by 13.2%, Loans to Services sector by 23.7%, Credit to Industry by 5.6%, credit to Personal loan segment by 16.7% and advances to Agriculture & Allied Activities increased by 7.5%.

3. BANK BOARD BUREAU TALKS OF AUTONOMY TO PSU BANKS TO DECIDE ORGANISATIONAL STRUCTURE : The Banks Board Bureau (BBB), the apex body for selection of whole-time Directors of State-owned Banks, has made a case for giving a complete autonomy to banks to decide organisational structure for better efficiency. The board has suggested revamping credit governance architecture in these banks to reinforce efforts to minimise credit costs and enhance efficiency of credit allocation. It has also recommended incentivisation scheme linked to performance.

4. I-T DEPARTMENT TO GO AFTER 65,000 NON-FILERS FOR 2016-17 : The Income Tax Department will initiate recovery of tax along with penalty from approximately 65,000 assessees who had deposited Rs 10 lakh and more in their bank account during demonetisation period but did not file returns for the assessment year 2017-18.

5. RESERVE BANK OF INDIA ISSUES NEW NORMS FOR BANKS TO SET UP CURRENCY CHESTS: The Reserve Bank of India (RBI) has come out with new set of guidelines for setting up of new Currency Chests by banks. As per the new guideline the strong room/vault size must be of minimum 1,500 sq ft. For those situated in hilly area the area should be 600 sq ft. Besides this, the new currency chests should have the capacity to process 6.6 lakh pieces of bank notes per day.

6. LIC GETS 12 YEARS TO CUT ITS STAKE IN IDBI BANK: The Reserve Bank of India has given Life Insurance Corporation of India (LIC) 12 years to reduce its stake by 10% in IDBI Bank. Presently LIC has 51% controlling stake in IDBI bank making it the bank’s majority shareholder. This has to be brought down to 40% in the next 12 years.

7. CERTAIN NBFCs TO GET LICENCE FOR FOREX DEALERSHIP: Reserve Bank of India has announced that certain Non-Banking Financial Companies (NBFCs) will be able to get licence as authorised foreign exchange dealer. This move will make it easy to purchase foreign exchange for overseas travel. Accordingly Non-deposit taking systematically important NBFCs (NBFCs-NDSI) will be made eligible to apply for grant of Authorised Dealer Category-II licence.

8. BANK OF INDIA TO SELL 25.05% STAKE OF ITS INSURANCE JV : Bank of India has announced that it will sell 25.05% stake in its insurance Joint Venture (JV) Star-Union Dai-ichi Life Insurance Co. The proposed sale of over 6.48 crore equity shares will fetch the bank at least Rs 1,106 crore. The floor price for the stake sale has been fixed at Rs 170.50 per share.

1. RBI TO ISSUE NEW DIRECTIVE AFTER SC VERDICT ON FEBRUARY 2018 CIRCULAR: In February 2018 RBI had issued a circular which had stipulated that banks had 180 days to arrive at debt resolution plan for loan accounts above 2,000 crore and more, failing which the company would have to be sent to bankruptcy Court under Insolvency & Bankruptcy Code (IBC). Now the Supreme Court has quashed this circular. RBI will soon issue a revised directive on stressed asset resolution that will comply with Supreme Court order. RBI Governor Mr. Shaktikanta Das said RBI stands committed to maintain and enhance the momentum of resolution of stressed assets and adherence to credit discipline.

2. NEW CUSTOMER-PROTECTION MEASURES ON CARDS FOR ELECTRONIC PEYMENTS: The Reserve Bank of India would soon come up with new set of customer-protection measures aimed at improving user confidence in electronic payment channels. The main objective is to reduce the use of cash in business transactions. The proposed regulations will include a common timeframe for all authorised electronic payment systems to respond to customer complaints and setting up a compensation framework for failed transactions.

3. AXIS BANK ASKS MORE THAN 50 OF ITS MID-LEVEL MANAGERS TO LEAVE: Axis Bank, headed by its new CEO has reviewed the business and has decided to terminate more than 50 mid-level Managers in view of restructuring its business and cut costs. These affected officials held important posts and had led various supervisory functions in corporate and retail banking. This decision has rattled many old timers in the bank. The bank said that changes are afoot at the bank to raise productivity and efficiency.

4. BANKS AND OTHER OPERATIONAL CREDITORS SET TO LOSE OVER Rs 90,000 CRORE AS VIDEOCON GROUP SINKS: The two main Videocon group companies, Videocon Industries Ltd (VIL) and Videocon Telecommunication Ltd (VTL) owe Rs 59,451 crore and Rs 26,673 crore respectively to Indian Banks, led by Consortium leader SBI. Besides this, 731 other Operational Creditors have made separate claims. The total amounting to over Rs 90,000 crore makes it the biggest corporate bankruptcy case in Indian banking industry. Interestingly the group promoters-Venugopal Dhoot, Pradipkumar Dhoot and Rajkumar Dhoot have also claimed Rs 57,823 crore on the basis of personal guarantees provided by them for various facilities availed by the VIL.

5. NEARLY ALL ASSETS OWNED BY IL&FS LENDING ARM HAVE TURNED BAD: According to the government appointed board of the lender, 90% of the Rs 18,800 crore assets of I-Fin, the firm’s lending arm, have turned bad. The situation is so bad that it was impossible for the board to give a timeline to the creditors of the group firms on when they could expect a court-imposed moratorium to be lifted.

6. GST REVENUE COLLECTION TOUCHES NEW HIGH: The GST collections touched a record high of Rs 1.06 trillion in March 2019, up from Rs 97,247 crore in February 2019. This is the result of improved compliance and increased number of returns filed. The collection in March 2019 has been highest since introduction of GST and also reflects a 15.6% growth over March 2018.

7. RBI NORMS ON BANK EXPOSURE COME INTO EFFECT FROM APRIL 1 st : New guidelines on bank exposure on large borrowers take effect from April 1 ST. The new guidelines cap a bank’s exposure to a group of companies at 25% of its core capital and to an individual company at 15%. It is three years since RBI came out with these guidelines but many banks are still struggling to comply with this because of capital constraints. These banks may look at cancelling the existing sanctioned limit of borrowers to meet the cut-off date.

8. MUMBAI TOPS IN TAX COLLECTION FOR FINANCIAL YEAR 2019: Mumbai has emerged as top contributor to the exchequer and accounted for 32% of overall tax collection in financial year ending March 2019.

1. GOOGLE TO ISSUE CREDIT CARDS : Google is about to start issuing credit cards to its select users of its own AdWords advertising program. This card will help small and medium sized businesses that are cash-strapped as this card will give them ample credit on affordable terms. The Google card is actually a store card which can be used for payment at specific merchant establishments. The card comes with no annual fee and a very low 8.99% annual percentage rate.

2. SBI PLANS TO BRING MORE HIGH NET WORTH CUSTOMERS INTO ITS FOLD: State Bank of India is opening 55 Wealth Management Centres across the country by 2020 to attract High Networth Customers. So far SBI has opened 44 such centres with a network of 121 wealth hubs which has about 52,000 customers and is managing their assets worth 30,000 crore. SBI is offering wealth management service to existing customers with minimum of Rs 30 lakh manageable assets. For new customers the entry threshold is Rs 10 lakh.

3. FIVE PSU BANKS GET CAPITAL INFUSION OF Rs. 21,428 CRORE FROM GOVERNMENT: Five state owned banks, including Punjab National Bank, Bank of Baroda and Union Bank received capital infusion to the tune of Rs. 21,438 crore from the government. The capital infusion is for the current fiscal ending March 31, 2019. The capital infusion will be by way of preferential allotment of equity shares of the bank during 2018-19 as government’s investment.

4. BANKS’ CONSUMER DURABLE LOAN BUSINESS SHRINKS BY 75%: The volume of banking sector’s consumer durable loan share has shrunk by 75% year-on-year. According to RBI data, banks outstanding consumer durable loans stood at Rs. 4,600 crore at the end of January 2019, as against Rs. 19,700 crore a year back. This is in spite of HDFC bank’s recent thrust in this segment. Zero-cost Financing schemes and cash-backs offered by many NBFCs has taken away this business from the banks.

5. SBI MAY ASK SENIOR RETIRED BANKER TO HEAD JET AIRWAYS: As lenders moved in to take charge of the cash-strapped Jet Airways, State bank of India, the lead banker may ask one of its senior retired bankers to head the airline and guide it out of the present financial mess. As per the plan, approved by the government, the lenders are set to take over the airline and run it for a few months before selling it.

6. BANKS MAY INCREASE DEPOIST RATES: With credit growth outstripping the deposit growth so far in the present financial year, banks may be forced to increase their deposit rates to attract more deposits. In the present financial year banks have so far witnessed credit growth of 14.33% while the deposit growth has seen only 9.97 % increase.

7. CHARTERED ACCOUNTANTS COMPLAIN AGAINST INCOME TAX OFFICERS TO THE GOVERNMENT: Various Chartered Accountant bodies across the country have written to the Finance Ministry asking them to hold back tax officials instructed to take all possible measures to recover tax. The instructions given by the Central Board of Direct Taxes (CBDT) to all principal Chief Income Tax Commissioners to take all possible measures to achieve the shortfall of 14.9% in the targeted tax collection has created fear in the minds of the tax payers. The complaint also mentions that the government must follow the process of law if at all the recovery measures are to be adopted.

8. GOVERNMENT TO PUSH PSBs TO TAP MARKET FOR FRESH CAPITAL IN NEXT FISCAL: The government will push large Public Sector Banks (PSBs) to tap the market for fresh capital in the next fiscal year as it is not inclined to give them more capital infusion as it has already infused sufficient funds in this fiscal. It is also seeking details from these banks on action taken in cases of bad loans above Rs 50 crore. The government also expects the remaining 5 banks to come out of PCA by the end of next year.

1. SBI UNLIKELY TO MEET FULL YEAR TARGET OF NBFC LOAN PURCHASE: State Bank of India is unlikely to meet its full year target of NBFC loan purchase as it is selectively buying portfolios in the Housing, Agriculture and MSME categories. It feels there are not many good and quality assets worth buying. This fiscal, SBI has so far bought loans worth only Rs.17,000 crore from Non-Banking Finance Companies as against the set target of Rs. 45,000 crore.

2. INDIA’S BAD LOANS RATIO IS THE WORST IN THE WORLD: India holds the dubious distinction of having the worst Non-Performing (Bad loans) loan ratio among the world’s major economies. Reserve Bank of India in its latest report states that the bad loans ratio of banks fell for the first time since the year 2015. It has surpassed Italy’s bad loan ratio. Italy has successfully mana ged to reduce its bad loan ratio.

3. REALTY COMPANIES CAN OPT FOR OLD OR NEW RATES OF GST FOR THEIR ONGOING RESIDENTIAL PROJECTS: Real Estate Firms will have the option of adopting a lower rate of Goods & Services Tax (GST) without Input Tax Credit (ITC) or go for the existing rate with ITC. This applies only to the on-going projects where the construction and actual bookings have started before 1 ST April 2019 but are yet to be completed. Projects beginning on or after 1ST April 2019 will invariably fall into lower GST rate regime. In our opinion if the developer opts for GST with ITC benefit then he has to offer the flats at higher GST rates and customers may not be willing to purchase at higher GST rate.

4. RBI SAYS NO TO IDBI BANK NAME CHANGE PROPOSAL: The Reserve Bank of India has turned down IDBI Bank’s proposal to change its name from IDBI Bank to LIC IDBI Bank or LIC Bank following acquisition of its major stake by LIC. Earlier this month, RBI changed the categorisation of IDBI Bank to a private Sector lender.

5. SBI CUSTOMERS CAN NOW WITHDRAW CASH FROM ATM WITHOUT THE USE OF DEBIT CARD: Customers of State Bank of India will no longer require debit cards to withdraw money from ATM. State Bank of India has announced that the customer can generate a One-Time-Pin (OTP) through their mobile application and use the PIN to draw money from the ATM. The service is currently made available at 16,500 ATMs. And very soon it will be available in more than 60,000 ATMs across the country.

6. BANK OF BARODA LAUNCHES CRECHE/DAYCARE FACILTY FOR CHILDREN OF EMPLOYEES: Bank of Baroda has become one of the first Public Sector Banks to launch a crèche/child day care facility for children of its employees. It has launched the facility at its Mumbai Corporate Office which houses more than 1,500 employees. The bank intends to launch more of such day care centres in the near future. This initiative is designed to help its employees to save time and reduce stress of finding right day care centres for their children. The bank will bear 60% of the cost with the 40% to be borne by the respective employee.

7. DEUTSCHE BANK IS PLANNING TO SET UP A BAD LOAN BUYING UNIT IN INDIA: Deutsche Bank is planning to set up a unit in India to buy and reorganise bad loans in India. It seeks to make profit from an unprecedented bad-loan clean-up in India with one of the worst Non-Performing loan ratios. The Bank felt the need to have its own Asset Reconstruction Company (ARC) to buy and r eorganise Non- Performing Loans as current Indian rules restrict overseas investorsfrom buying soured loans directly from investors in India.

8. PRIVATE BANKS MAINTAIN CREDIT GROWTH OF 20%: The credit growth of private banks in the third quarter of the present financial year touched 22% year-on year. This is for the fifth consecutive quarter that the private banks have maintained the growth rate at 20% or more. On the other hand the growth rate of Public sector banks remained subdued at 8.4%.

1. RBI CATEGORISES IDBI BANK AS PRIVATE SECTOR LENDER: Subsequent to the of the majority stake in IDBI Bank by LIC of India, Reserve Bank of India has categorised IDBI Bank as a private sector lender. LIC of India completed the process of picking up a controlling 51% stake in IDBI Bank. IDBI Bank has been categorised as Private Sector bank for regulatory purposes with effect from 1 ST February 2019. For December 2018 quarter IDBI Bank reported a loss of Rs. 4,185.48. The Bank’s Non-Performing Assets (NPAs) as on December 2018 were 29.67% of the gross advances.

2. GOVERNMENT’S “MUDRA YOJANA” SPELLS TROUBLE FOR BANKS: Government’s small loans scheme- Micro Units Development & Refinance Agency (MUDRA) has seen bad loans soaring in its entire three segments—Shishu, Kishore & Tarun. NPAs under MUDRA scheme in the first nine months of the current fiscal have increased by 53% to Rs. 14,930 crore from Rs. 9,769 crore last year. The total disbursement this year from April to February is Rs. 2.12 lakh crore as compared to Rs. 2.46 Lakh crore for the full fiscal year 2017-18. This is according to the data received by Indian Express through RTI (Right To Information).

3. SBI LINKS INTEREST RATE ON MOST SAVINGS ACCOUNT DEPOSITS TO REPO RATE: State Bank of India became the first domestic bank to link the interest rate it offers on savings account to the Reserve Bank of India’s Repo rate. Savings accounts with deposits above 1 lakh would be now priced at 2.75% below the Repo rate of 6.25%, which at present works out to be 3.25%. Accordingly all Cash Credit and Overdraft facilities over Rs 1 lakh would be priced at 2.25% over the Repo rate, this would mean at the present Repo rate of 6.25% the floor price would be 8.5%. The bank would be charging “risk premium” over the floor rate, depending on the credit rating of the respective borrower. This method of linking interest rate to Repo rate is an attempt to speed up the transmission of any changes in the benchmark monetary policy rate to depositors and borrowers.

4. NOW YOU CAN DEPOSIT CASH, PAY UTILITY BILLS THROUGH NON BRANDED WHITE LABEL ATMs: White label ATMs (WLAs) are those ATMs which are owned and operated by Non-Bank entities. A customer from any bank will be able to withdraw money from these WLAs but needs to pay a fee for the services. After review of the existing norms for these WLAs, RBI has decided to allow them to offer services like cash deposit and payment of utility bills. These WLAs can now buy wholesale cash above Rs 1 lakh directly from RBI, currency chests and from any scheduled bank including Regional Rural Banks.

5. TIGHTER HOUSING FINANCE NORMS ON THE CARDS: National Housing Bank (NHB) is considering tightening the Asset- Liability Management (ALM) norms for Housing Finance Companies (HFCs) to help detect their solvency concerns early. This will be the latest in a series of steps, including tougher capital and borrowing norms. These tough steps are being taken by NHB after defaults by IL & FS entities and concerns about DHFL’s repayment ability.

6. MANAPPURAM FINANCE KICK-STARTS ITS DOORSTEP GOLD LOAN DELIVERY IN DELHI, MUMBAI: Manappuram Finance has decided to offer doorstep delivery of gold loan to customers in Delhi and Mumbai. The Company will initially offer doorstep gold loan facility across 50 branches each in Delhi and Mumbai. It has successfully launched this facility in Chennai and Bangaluru. With this launch the company intends to address the convenience and security factors in one go as the customers don’t have to commute with gold or cash as the money would get transferred directly to their accounts.

7. BANKS COMING OUT OF PCA FRAMEWORK MAY NOT SEE SUDDEN GROWTH IN CREDIT: Recently 6 banks are out of Prompt Corrective action (PCA) framework of RBI. But these banks may not be able to show a robust growth in their credit portfolio immediately. If these banks become very much aggressive in loan disbursements which are still not strong enough, may exert pressure on asset quality, thereby raising a risk of slipping back in to PCA.

8. SMALL FINANCE BANKS NEED ADDITIONAL CAPITAL TO GROW: Small Finance Banks (SFBs) are likely to grow at 25- 30% on yearly basis if they can arrange additional capital of Rs 4,000 to 6,000 crore till financial year 2023. In the nine months in the present fiscal these banks have reported an annualised growth of 33%. These banks have witnessed growth under asset, deposit and better return on their equities.

1. SBI TO JOIN SWIFT’S GLOBAL PAYMENT SYSTEM: State Bank of India (SBI) will soon join the Society for Worldwide Interbank Financial Transactions (SWIFT). Eleven Indian Banks have already subscribed to SWIFT’s new payment interface- Global Payment Interface (GPI) which is set to make cross-border transactions much more secure and transparent. The GPI enabled banks can also opt for an additional feature called Payment Control Service (PCS) where if any irregularities are found in the payment transaction such as higher than usual fund size or uncommon transaction timeframe, the channel can block the transaction and notify the bank.

2. PRIVATE BANKS CONTINUE TO TAKE AWAY PSB MARKET SHARE: As per a report by Kotak Institutional Equities based on RBI data, private banks have continued to wrest away both deposit and credit market share from Public Sector Banks. Private Sector Banks have increased their Deposit market share by 24% year-on year. Their growth rate is more in urban areas as compared to semi urban and rural areas. In credit also they have continued to grow at a rate of 40% in rural areas and 20% in urban areas year-on-year.

3. NBFCs WITH Rs 1,000 CRORE ASSETS WANT PUBLIC DEPOSIT ACCESS: Non-Banking Finance Companies (NBFCs) with assets exceeding Rs. 1,000 crore want the RBI to allow them to accept deposits from the public. For large NBFCs the industry wants a separate classification. The sector leaders want “Systemically Large” NBFCs to be treated differently than the other 10,000 NBFCs that are there in the sector.

4. RBI FINES 19 BANKS FOR NON-COMPIANCE ON SWIFT SYSTEM USE: The Reserve Bank of India (RBI) has fined as many as 19 banks, including ICICI Bank and State Bank of India for failing to comply with its guidelines on the use of global payments network SWIFT. Most notable among those guidelines was requirement for banks to connect the SWIFT interbank messaging system with their core banking software. The penalties totalled to more than Rs. 40 crore and ranged from Rs 1 crore to Rs 4 crore for each bank. The series of fines imposed is a stern warning from RBI to banks to strengthen their internal systems and minimise frauds after the PNB fraud case last year.

5. PAN NUMBER TO BE LINKED TO BANK ACCOUNT FOR GETTING INCOME TAX REFUNDS: From March 1, 2019 the Income Tax Department has started issuing refunds via e-mode in to the bank accounts of the tax payers. For this, linking PAN number to the bank account is mandatory to get the tax refund directly to the bank account.

6. BANKS SEEK EXTENSION FOR THE ROLL-OUT OF INDIAN ACCOUNTING STANDARDS: Banks are seeking extension for the roll-out of the Indian Accounting Standards (IndAS) which will come in to effect from April 1st 2019. Banks are citing higher capital for bad-loans provisioning, pending legislative amendments and delay in finalising rules as some of the reasons for deferring the implementation of IndAS. Banks are in great pressure to improve their financials but implementation of IndAS will further add to banks’ compliance burden.

7. BANKS RECOVER ALMOST HALF OF 1.43 LAKH DEFAULTING ADVANCES THROUGH IBC: Banks have so far recovered almost half of 1.44 lakh crore defaulting advances stuck in 82 cases that have been resolved in the past two years through Insolvency & Bankruptcy Code (IBC). IBC has become increasingly effective in recovering bad loans as it has injected an element of fear in to the minds of defaulting promoters. IBC is yielding definite results but there is still vast scope for further evolving and improvement.

8. GOVERNMENT TO ROLL OUT Rs.20 COIN FOR THE FIRST TIME: The Finance Ministry has announced in a gazette notification about the roll-out of Rs. 20 coin for the first time in the country. The new Rs 20 coin will be shaped like a “dodecagon” (12 edged polygon) just to differentiate it from the Rs 10 coin which is in circulation.

1. RBI EXTENDS KYC DEADLINE FOR e-WALLETS BY 6 MONTHS: Reserve Bank of India has extended the deadline of Know Your Customer (KYC) compliance for e-Wallet companies by 6 months. Earlier the deadline was supposed to end on 28TH February. The extension comes after intense follow-up and requests by mobile wallet companies and domestic internet groups over the past few months. This comes as a big relief to consumers as well as mobile wallet companies.

2. PSU BANKS STEP UP TAKEOVER OF MORTGAGE LOANS FROM NBFCs: Public sector banks are launching new schemes to takeover housing loans from Non-Banking Finance Companies (NBFCs) and home finance companies that are facing liquidity crunch. State Bank of India and Bank of Baroda have already initiated these special schemes to attract takeover of loans. Bank of Baroda has initiated a special scheme “ Switch Karo, Save Karo” which allows customers to switch their home loans without any income proof provided a minimum of 12 monthly instalments have been paid regularly and their credit score is at or above 725. The rate of interest offered by Bank of Baroda for such takeover loans is 9% which is much lower than the rates offered by NBFCs and Home Finance Companies. In our opinion more PSU banks should come out with such schemes to garner more business.

3. CANARA BANK TO GIVE LOAN TO BANK OF INDIA AND UNION BANK EMPLOYEES: Bank of India and Union Bank of India have made arrangements with Canara Bank to provide Collateral-free loans to their respective employees to fund purchase of shares of their respective banks under Employee Stock Purchase Scheme ( ESPS). Canara Bank loan is priced at 8.7% and the size of the loan will be 10 months gross salary of respective employee subject to a maximum of Rs 5 lakh. Regulations do not allow banks to offer loans to their own employees for purchasing shares under ESPS. Bank of India is looking to raise up to Rs 800 crore while Union Bank looks to raise Rs. 600 crore.

4. BANK LOCKER PROTECTION POLICY LAUNCHED: IFFCO Tokio General Insurance Company has announced the launch of Bank Locker Protection policy to protect the contents of a Bank locker. The policy offers a cover against various risks including fire, earthquake, burglary, holdup, infidelity by bank staff or act of terrorism. Apart from jewellery and valuables one can insure important documents as an add-on cover. The bank locker hire agreement does not cover compensation in case of such untoward incidents.

5. LOANS TO NBFCs BECOME COSTLIER AS RBI TIGHTENS NORMS: Reserve Bank of India has stepped in to slow down the flow of credit to Non-Banking Finance Companies (NBFCs) by making it more expensive for banks to lend to these NBFCs. A loan to an NBFC which owes banks Rs 200 crore or more and is un-rated, will now attract a risk weight of 150%. Any NBFC to which banks have an exposure of 100 crore and more which was rated earlier but subsequently un-rated then it will attract 150% risk weight.

6. MERGER OF REGIONAL RURAL BANKS WITHIN THE SAME STATE LIKELY: The government is looking at the possibility of merging Regional Rural Banks (RRBs) operating within the same state and has urged the Public Sector Banks to explore such options, as it wants further consolidation among RRBs. At present the central government holds 50% stake in RRBs while the Sponsor Bank holds 35% and rest 15% is held by respective state governments. The government eventually wants to bring them down to a more manageable number of 10 to 15 RRBs. Presently there are 56 RRBs functioning in the country.

7. GOVERNMENT TO CREATE GLOBALLY COMPETITIVE LARGE BANKS VIA MERGERS: Finance Minister Mr Arun Jaitley has said that the situation of bad loan scenario in Public Sector Banks has improved in the last three quarters and now the government will amalgamate banks to create healthy large lenders that are globally competitive. In order to make the banks sound and globally competitive, the government is gradually following the policy of amalgamation. Mr Jaitley further said that the government has lived up to its promise by funding the troubled banks in terms of capital.

8. SBI HAS FOUND FRAUD WORTH Rs 7,951 CRORE DURING APRIL-DECEMBER 2018 PERIOD: In an RTI reply, State Bank of India has revealed that there were frauds amounting to Rs 7,951 crore during the first nine months of the current fiscal. The first quarter reported 669 cases of fraudulent activities amounting to Rs 723.06 crore, the second quarter saw 660 cases involving an amount of Rs 4,832.42 crore and the third quarter reported 556 cases amounting to Rs 2,395.81 crore.

1. SBI TO WAIVE LOANS TAKEN BY MARTYRED CRPF PERSONNEL, ALSO TO RELEASE INSURANCE PAYMENTS: State Bank of India has said that it would waive all outstanding loans availed by the 23 CRPF personnel who were killed in the Pulwama terror attack. All the 44 CRPF personnel were customers of State Bank of India under Defence Salary Package where the bank provides insurance of Rs. 30 lakh to each of the defence personnel. Bank is taking steps to expedite release of insurance amount to the next of kin of the martyred soldiers.

2. RBI SEEKS INFORMATION FROM NBFCs ON MORATORIUM GIVEN TO BORROWERS: Amid the recent controversy on loans against shares, Reserve Bank of India has asked Non-Banking Finance Companies (NBFCs) to disclose the moratorium (grace period for repayment) given to borrowers. Besides Mutual Funds, NBFCs are large lenders against pledge of shares. If the borrowers pledging the shares to raise money fail to bring in additional collateral when the stocks fall, lenders should sell the stock to protect their exposure. And if the shares are not sold then the credit rating agencies should downgrade the instruments issued by the borrower to raise funds. RBI may look in to the rules on loans against shares for NBFCs and banks and this would include raising the risk weightage on loans against stocks.

3. GOVERNMENT TO INFUSE Rs. 48,239 CRORE IN 12 PSU BANKS: The Finance Ministry on Wednesday announced that it would pump in Rs. 48,239 Crore in 12 Public Sector banks (PSBs) in this fiscal to help them maintain regulatory capital requirements and finance growth plans. The biggest gainers in this are Corporation Bank (Rs. 9,086 crore) and Allahabad Bank (Rs. 6,896 Crore). With this funding, the total amount of capital infusion to all the PSBs would increase to Rs. 1,00,958 crore out of the planned recapitalisation of Rs. 1.06 lakh crore in the current fiscal.

4. ONLY 6 BANKS CROSS DESIRABLE LEVEL OF 70% PROVISION COVERAGE RATIO: Provision Coverage Ratio (PCR) is the ratio of provisioning to gross Non-Performing Asset which indicates the extent of funds a bank has earmarked or kept aside to cover loan losses. The Public Sector Banks (PSBs) have substantially increased their Loan-loss provision and have strengthened their respective balance sheets in the first 9 months of the current fiscal but only 6 out of 21 PSBs have crossed the desirable level of 70% of PCR.

5. SBI TAKES WORK-LIFE BALANCE TO A NEW HEIGHT: State Bank of India has taken a new initiative to ensure Work-Life balance of its massive employee workforce. The programme called “Nayi Disha”, focuses on work-life balance and also involves the staffs’ immediate family members, also gives them the ability to inform the bank if an employee is not able to leave work on time. The programme is evolved in such a way that its 2.6 lakh strong work force does not work mechanically and is sufficiently motivated to take on newer challenges that the future will throw up. The programme will also boost the morale of its staff which will have a positive impact on customer service. The bank has hired external hand to design the programme.

6. SOON BANKS WILL TAKE BACK HEFTY PAYOUTS FROM ERRANTS CEOs: The Reserve bank of India is tightening the CEO compensation norms in the wake of instances of large Non-Performing Assets and sharp practices adopted by the top executives to dodge the regulators. RBI is working on a set of rules that would link remuneration of banks CEOs to parameters like balance sheet size of the bank, loan delinquencies, profit and governance. The proposed framework is expected to provide a broad template to the Board of Directors while approving increase in salary, performance bonus and stock options.

7. GOVERNMENT PASSES UNREGULATED DEPOSIT SCHEME ORDINANCE: The President Mr Ram Nath Kovind promulgated the Banning of Unregulated Deposit Scheme Ordinance. This will help to put a check on illicit deposit-taking activities that dupe the poor and financially illiterate of their hard-earned savings. The Ordinance makes it mandatory for everyone to register before taking a deposit. This ordinance will also help create a central repository of all the registered entities that can take deposits.

1. FINANCE MINISTRY ASKS 6 PSU BANKS TO PERFORM BETTER TO COME OUT OF PCA: The Finance Ministry has asked six banks who are under Prompt Corrective Action (PCA) to improve on seven parameters to get the government’s support for coming out of PCA framework. These six banks have been told to improve upon Net Interest Margins (NIMs), CASA (Current & Savings Accounts) Risk Weighted Assets (RWAs), NPA Recognition, Divergence (disparity in loan recognition), Operating Profit and Non-Core asset selling to be able to come out of PCA framework.

2. FINNACE MINISTRY IS WITHIN REACH OF ACHIEVING NPA RECOVERY TARGET: The Finance Ministry is on course to meet the NPA recovery target of Rs 1.80 Lakh crore by March 31, 2019 with the recoveries already touching Rs. 1.08 lakh crore. The bigger ticket loan recoveries are due and will be recovered by March end from Essar Steel and Bhushan Power Steel which together may fetch Rs. 60,000/- crore.

3. INDIVIDUAL INSOLVENCY CODE MAY SOON COME IN TO FORCE: The Chairman of The Insolvency & Bankruptcy Board of India Mr. M S Sahoo has said that individual insolvency code will be introduced soon. Three sets of individuals will fall under the Individual Insolvency Code. They would include personal guarantor to corporate debtors, proprietary firms and individual borrowers. The government is in the process of putting in place a broad framework on individual insolvency code and once this is introduced, failure to repay home loans might drag future defaulters to dedicated bankruptcy courts in future.

4. GOVERNMENT RAISES LIMIT FOR DISCLOSURE OF STOCK/MUTUAL FUND INVESTMENTS FOR EMPLOYEES: Group A and B government officers were to disclose such details if the total investments in shares and mutual funds etc exceeded Rs. 50,000/- during a calendar year. This limit has been increased to six months of their basic pay. This is in accordance with an order issued by Personnel Ministry.

5. REAL ESTATE SECTOR IS LIKELY TO GET MUCH AWAITED GST RELIEF: A group of State Finance Ministers have decided to recommend a GST rate cut for under-construction projects to 5% from the current 12% and slashing of GST rate to 3% from the present 8% for affordable Housing Projects. However the proposed change in GST rates structure would be accompanied by denial of Input Tax Credit (ITC) to the builders.

6. IICA LAUNCHES GRADUATE PROGRAMME FOR INSOLVENCY PROFESSIONALS: The Indian Institute of Corporate Affairs (IICA) has launched the Graduate Insolvency Programme (GIP) for individuals aspiring to join the insolvency profession in India and abroad. This is among the first of its courses in the world for professionals dealing with insolvent companies and helping them achieve debt resolution. This programme is approved by the Insolvency Bankruptcy Board of India. It is a two year programme comprising of one year of residential classroom and another year of internship. An individual is eligible to do the programme if he has 10 years of post-membership experience as a Chartered Accountant, Company Secretary, Cost Accountant, Advocate or 15 years of management experience after completion of his graduation.

7. PUNJAB NATIONAL BANK TO e-AUCTION 4,000 PROPERTIES TO RECOVER BAD LOANS: Punjab National Bank said that it has decided to place more than 4,000 properties all over India on e-auction as part of its loan recovery effort. According to the bank, the e-auction under the Securitisation and Reconstruction of Financial Assets & Enforcement of Securities Interest Act (SARFAESI) will help achieving the recovery of Rs 26,000 crore during the current Financial Year.

1. CRITERIA FOR BULK DEPOSIT FOR BANKS RAISED TO 2 CRORE: The Reserve Bank of India in its latest monetary policy has decided to raise the criteria of bulk deposits for banks from the existing Rs. 1 crore to Rs. 2 crore. This is done to provide more operational freedom to lenders to raise funds. Banks have been given discretion to offer differential rate of interest on the bulk deposits as per their requirements and Asset Liability Management (ALM) projections. Interest rates on bulk deposits are marginally higher than the smaller amount of deposits for similar maturity period.

2. RBI RAISES THE LIMIT FOR COLLATERAL-FREE FARM LOANS: The Reserve Bank of India has raised the loan limit for collateral-free farm loans to Rs. 1,60,000/- from the existing limit of Rs. 1,00,000/- in view of the overall inflation and also considering the rise in agricultural input costs. RBI also said that it would set up an internal working group to examine issues pertaining to agricultural loans.

3. SEBI COMES OUT WITH RULES TO REVIEW PERFORMANCE OF PUBLIC INTEREST DIRECTORS: Securities and Exchange Board of India (SEBI) has come out with a strict framework for Public Interest Directors (PIDs) serving at Stock exchanges, Clearing Corporations and Depositories. Now the PIDs will be nominated for a period of three years to be extendable by another term of three years. This will be subject to a performance review.

4. BANKS NEED Rs 20 LAKH CRORE DEPOSITS FOR HEALTHY CREDIT GROWTH: As per a report by credit rating agency CRISIL, banks need to raise an amount of nearly 20 lakh crore in deposits by March 2020 for a healthy credit growth. The report further says that the healthier private sector banks will account for about 60% of the incremental deposit mobilisation. In the last few years the deposit growth rate has dropped due to lower rate of interest offered by the banks as compared to other financial avenues. This additional deposit mobilisation drive will put pressure on the interest rates and as a result the interest rates may go up.

5. RBI PLANS “UMBRELLA ORGANISATION” FOR URBAN COOPERATIVE BANKS: The Reserve Bank of India plans to set up an “Umbrella Organisation” for Urban Cooperative Banks (UCBs) to improve their operational and financial health as per best global practices. Reserve Bank of India further said that to make UCB sector financially stronger and to enhance depositors’ confidence, it is decided to set up the Umbrella Organisation as prevalent in many countries. The Umbrella Organisation thus formed will extend liquidity and capital support besides setting up an information and technology infrastructure to enable these UCBs to widen their services at a relatively lower cost.

6. RBI TO REGULATE PAYMENT GATEWAY PROVIDERS: Reserve Bank of India proposes to regulate payment gateway service providers and payment aggregators. This is another move to make digital payments safer. This would mean that payment gateways such as Paytm, Mobikwik etc would have to adhere to RBI guidelines just as any other financial entities. Consequently these gateways will become more transparent, accountable in their workings, thereby benefitting the common man using these digital payments.

7. RBI TO ASSIGN RISK WEIGHTS FOR BANK EXPOSURES TO NBFCs: The Reserve Bank of India will now assign risk weighted rating exposures of banks to all Non-Banking Finance Companies. RBI said that the guidelines for this would be issued by the end of February. With a view to facilitate flow of credit to well-rated NBFCs, it has now been decided that rated exposures of banks to all NBFCs would be risk weighted. This will be as per the rating assigned by the accredited rating agencies, in a manner similar to that for Corporates which is being followed now by all banks.

8. PUBLIC SECTOR BANKS TO BE RANKED ON THE BASIS OF PERFORMANCE: The government will start surveying Public Sector banks annually to rank them on their performance parameters ranging from profitability to customer satisfaction. The parameters include customer responsiveness, financial inclusion, digital platforms and security. Further financial performance will be assessed on the basis of recoveries made, return on asset and differentiated banking strategy.

DIRECT TAX

** 99.54% of Income tax Returns thus filed have been accepted as having been filed without any scrutiny.
** Standard Deduction limit raised to Rs. 50,000/- from the existing Rs. 40,000/- {Section 16(IA)}
** Tax on deemed rent from 2ND house abolished. This means that the benefit of self-occupied property has been increased from one house property to two house properties. The income tax on notional rental income will not be taxed on the second house property {section 23(4)}.
** The limit for tax rebate under section 87A increased from Rs. 3,50,000/- to Rs. 5,00,000/- , thereby the tax savings would be Rs 12,500/- instead of earlier Rs. 2,500/-. This means that for a taxable income up to Rs. 5,00,000/- there would be “ZERO” tax. Around 3 crore Tax Payers would be benefitted by this ** TDS on bank deposits/Post office Savings deposit increased to Rs 40,000/- from Rs. 10,000/- {Section 194A}.
** TDS limit for rent from properties has been increased to Rs. 2,40,000/- from Rs. 1,80,000/- {Section 194I}.
** Within next 2 years almost all verification/assessments of the tax returns selected for scrutiny will be done electronically manned by tax experts/officials without any manual intervention and without any interface between tax payers and tax officials
** It is proposed that within next 2 years income tax returns will be processed in 24 hours and refund will be issued simultaneously.
** Exemption under Section 54 will be available on the purchase of two house properties provided the capital gain is up to Rs 2.00 crore. The benefit can be availed only once in a lifetime.

AGRICULTURE

** Farmers owning land up to 2 hectares to get Rs. 6,000/- per anum under Pradhan Mantri Kissan Yojna 12 crore Farmers to be benefitted under the scheme.
** Farmers affected by natural calamities to get 2% interest subvention and additional 3% interest subvention for timely repayment of loan
** Farmers pursuing the activities of animal husbandry and fisheries, who avail loan through Kisan Credit Card to get 2% interest subvention and further 3% interest subvention in case of timely repayment.

OTHERS

**Proposed Pension scheme under Pradhan Mantri Shram-Yogi Maandhan. Pradhan Mantri Shram-Yogi Maandhan that offers a pension of Rs. 3000/- per month after the age of 60 to unorganised sector workers with monthly income of up to Rs. 15000/-. Under the scheme, an unorganised sector worker joining pension Yojana at the age of 29 years will contribute Rs 100/- per month till the age of 60 while a worker joining at the age of 18 will have to contribute Rs. 55/- per month. This would be matched by an equal contribution by the government to the pension account. This is being termed as the World’s biggest pension scheme. Around 42 Crore unorganised sector workers would be benefitted by this.
**Time limit for attachment of property under Prevention of Money Laundering Act 2002, to be hiked from 90 days to 365 days.
**To promote “ Make in India” concept , the Customs duty to be abolished on 36 capital goods.

MSME SECTOR

**GST registered SME enterprises will get 2% rebate on interest charged to them on their loans up to Rs. 1 crore.
**SME with a turnover of up to Rs. 5 crore to file GST returns on quarterly basis as against the monthly returns as of now.

DEFENCE

** Defence Budget to cross Rs. 3,00,000 lakh crore for the first time ever.
In our opinion this interim budget is populist and election oriented budget for the benefit of lower and lower middle class. These provisions will put a stress on the fiscal deficit of the country.

1. DIRECT TAX COLLECTION EXCEEDS THE TARGET IN FINANCIAL YEAR 2019: The government had originally budgeted the Direct Tax collections at Rs 11.50 Lakh crore in current financial year 2018-19 which includes Corporate Tax and Personal Income Tax. The government has estimated to collect Rs 12.00 lakh crore this fiscal which is Rs. 50,000 crore more than the estimated target. Out of this, Rs. 6.71 Lakh crore is from corporate tax and Rs. 5.29 Lakh crore is from Personal Income Tax. For the Financial year 2019-20 the budget estimated target is Rs 13.80 lakh crore.

2. GOVERNMENT ANNOUNCES PENSION SCHEME IN BUDGET 2019: Interim Finance Minister Mr. Piyush Goyal has announced Pradhan Mantri Shram-Yogi Maandhan that offers a pension of Rs. 3000/- per month after the age of 60 to unorganised sector workers with monthly income of up to Rs. 15000/-. Under the scheme, an unorganised sector worker joining pension Yojana at the age of 29 years will contribute Rs 100/- per month till the age of 60 while a worker joining at the age of 18 will have to contribute Rs. 55/- per month. This would be matched by an equal contribution by the government to the pension account. This is being termed as the World’s biggest pension scheme.

3. GST COLLECTIONS TO MISS THE BUDGETED TARGET FOR FINANCIAL YEAR 2018-19: GST collections by the Centre will miss the budgeted target set for current financial year by Rs 1 lakh crore. The government had estimated to collect over Rs. 7.43 lakh crore from GST in the current financial year but however the collections would be Rs 6.43 lakh crore. The total indirect tax collection for financial year 2019-20 has been estimated at Rs 7.61 lakh crore.

4. THREE PSU BANKS COME OUT OF PCA: As per Reserve Bank of India statement, Bank of India, Bank of Maharashtra and Oriental Bank of Commerce are out of the Prompt Corrective Action (PCA). Reserve Bank of India has eased operational curbs on these three banks on account of the marked improvements in the capital positions and asset quality. Now these banks would be allowed to open branches and extend loans freely.

5. IRDAI ASKS INSURERS TO MAKE PROVISIONS FOR IL&FS EXPOSURE: Industry Regulator IRDAI has instructed Insurance Companies to make provisions for their exposure to the crippled infra lender IL&FS. The IL&FS group with a debt of over Rs. 94,000 crore has been defaulting on its financial obligations since August 2018 and has also borrowed from insurance companies but the exact amount of exposure to the industry is not yet immediately known. These exposures cannot be written off and these insurance companies will have to make provisions for the said exposures.

6. SENIOR MANAGEMENT AT ICICI BANK TO HAVE NO TITLES: ICICI Bank has decided to scrap designations at senior management level to inspire more efficient teamwork by making processes less hierarchical. Designations at the bank will now be indicative of the function or the job that a person is expected to perform. Executives at the senior management level will now have the job title of “Head” followed by their function or department as it will be a role based designation aligned with appropriate decision-making powers so that the bank can respond to market opportunities in a faster manner.

7. ICICI BANK ASKS CHANDA KOCHHAR TO RETURN BACK ALL PERFORMANCE BONUSES: ICICI Bank’s internal inquiry has found that former Chief Executive Chanda Kochhar violated disclosure norms on conflict of interest and her exit from the bank will not be treated as normal resignation but as dismissal. Now the bank has asked her to return back all the bonuses awarded to her during her tenure and she stands to lose all dues along with all the stock options that would have accrued to her.

1. COMPANIES TOLD TO DISCLOSE DUES TO MSME SECTOR: In its latest attempt to improve the liquidity crunch faced by Micro, Small & Medium Enterprises (MSMEs) and to bring in more transparency, the government is mandating all companies to disclose arrears (payables) of more than 45 days to MSMEs. Corporate Affairs Ministry is expected to notify the rules within a few days. In future every company will have to make half yearly disclosures regarding the unpaid bills to MSMEs. The government has clarified that the rules are in line with what is prescribed in the law governing MSME sector and the same is being implemented now.

2. YES BANK PARTNERS WITH MAHARASHTRA GOVERNMENT FOR ELECTRONIC PDS: Yes Bank has partnered with Maharashtra Government for the state government’s e-PDS State Programme to enrol Fair Price Shops as Business Correspondent Agents. Yes bank will enrol around 40% Fair Price Shops across the state and this will cover more than 20,000 ration shops and over 70 lakh citizen. This facility will enable Fair Price Shops to provide banking services such as small value deposits and withdrawals from any bank account via Aadhaar-enabled payment system. These shops will also be able to collect digital payments through Aadhaar enabled payment for ration and also will provide value added services like bill payments and mobile recharge.

3. NON-ITR FILERS TO SUBMIT INCOME TAX RETURN OR REPLY TO TAX QUERY WITHIN 21 DAYS: The Finance Ministry has identified several individuals as potential non-filers who have carried out high value transactions in the Financial Year 2017-18 (Assessment Year 2018-19) but have still not filed their Income Tax Returns (ITRs)for FY 2017-18. These Non-Filers have been asked to assess their tax liability for F Y 2017-18 and file their tax returns or submit online response within 21 days.

4. GOVERNMENT TO SEEK SPECIAL DISPENSATION FROM RBI FOR IL&FS CRISIS: Following the crisis at IL&FS late last year, some of the companies of the diversified IL&FS group, which has a debt of over Rs. 91,000 crore, have failed to repay loans. This has raised concerns over liquidity in the system and hence the Corporate Affairs Ministry has superseded its board by deciding to approach the RBI for seeking a special dispensation for deferment of provisioning requirements for bank loans extended to IL&FS since the group is expected to come out of the trouble as it is planning to monetise some of its assets.

5. NO e-WAY BILLS FOR NON-FILERS OF GST RETURNS: Non-filers of GST returns for consecutive six months will be barred from generating e-way bills for movement of goods. The Service Tax Network is developing a new IT system wherein such businesses that have not filed GST Returns for consecutive six months will not be able to generate e-way bills. The new rules will be notified and will bring in to force once the new IT system is ready.

6. RBI ANNOUNCES Rs. 10,000 CRORE BOND BUYBACK TO IMPROVE LIQUIDITY POSITION: The Reserve Bank of India has announced a Rs. 10,000 crore bond buyback under its Open Market Operations (OMO). RBI has committed to purchase an aggregate amount of Rs. 50,000 crore government securities under OMO and so far has purchased Rs. 30,000. The latest purchase of Rs. 10,000 crore is based on the assessment of prevailing liquidity conditions and it is a continuing effort by RBI to provide adequate liquidity.

7. CANARA BANK PROPOSES TO SELL ITS STAKE IN SIDBI AND NSDL: Canara Bank proposes to sell one crore shares in Small Industries Development Bank of India (SIDBI). It has invited bids at a floor price of Rs. 225/- per share. The bank also proposes to sell 4 lakh shares in NSDL at a floor price of Rs.850/- per share.

8. GOVERNMENT SACKS TWO PUNJAB NATIONAL BANK EXECUTIVES: The government has removed Mr. K Veera Brahmaji and Mr. Sanjeev Saran, two senior executives of Punjab National Bank from the office of Executive Director with immediate effect for failing to prevent the $2 billion Nirav Modi fraud.

1. DEPOSITORS READY TO TAKE HAIRCUT TO SAVE KAPOL BANK: For the first of its kind in the history of Indian Banking, the Depositors of the troubled Kapol Co-operative Bank Ltd have drawn up a plan to revive the stressed bank. Around 2.5 lakh depositors, under the banner of Kapol Trustee (Public Interest Efforts), have submitted an 5 point plan to RBI which offers to convert 35% of their deposits in to Bank’s share capital, conversion of 25% of their deposits in to 3 year FDs, conversion of 37% of their deposits to reducing balance accounts and straight forfeiture of 3% of all savings. However this seems to be a long drawn process as the administrator appointed by RBI must approve the plan. This will be followed by the RBI physically scrutinizing whether the consent given by each depositor is valid or not.

2. EDELWEISS PRIVATE CREDIT FUND RAISES Rs. 9,200 CRORE FOR INVESTMENT IN STRESSED ASSETS: Edelweiss Alternative Asset Advisors Ltd, a unit of Edelweiss Financial Services Ltd has raised Rs. 9,200 crore ( $ 1.3 billion) for investments in stressed assets through its India fund. The private credit fund is looking at making investments in stressed assets with an aim to turn around the Non-Performing Asset. These investments could be a combination of last- minute financing, financial restructuring and operational turnaround assistance.

3. GOVERNMENT TO INFUSE Rs. 6,000 CRORE IN EXIM BANK: The government is infusing a sum of Rs. 6,000 crore in Exim Bank thereby doubling its share capital to Rs. 20,000 crore. The equity will be infused in two instalments. Rs. 4,500 crore in 2018-19 and Rs. 1,500 crore in 2019-20. The Cabinet has already approved the infusion of the said funds. The said infusion would help the bank to expand its business.

4. GET INCOME TAX REFUND WITHIN A DAY FROM 2020: From the year 2020, the e-filing tax payers will get their refund orders within a day through a pre-filled tax return form. Currently the average time taken for tax return processing and giving a refund is 63 days and this will be reduced to just one day. The Cabinet has cleared this ambitious project of Rs. 4,242 crore for e-filing and centralised processing of income tax returns.

5. NEW e-COMMERCE RULES MAY BOOST PROFITS OF SMALL RETAIL STORES: Tighter norms for e-Commerce players may be a boon for small retail businesses as their profits are bound to grow by around Rs. 10,000-12,000 crores in 2020. This is as per a report by CRISIL. In December 2018 the government has introduced new regulations for e-Commerce players that would bar on-line marketplaces with foreign investments from selling products of companies where they have a stake and ban exclusive marketing arrangements.

6. GOVERNMENT PLANS TO PREVENT COMPOSITION DEALERS FROM CHARGING GST FROM ITS BUYERS: The Revenue Department is planning to introduce a mandatory rule for Composition Dealers and Service Providers to declare their GST Registration Status in invoices to ensure that they do not charge GST from the buyers. The measure when implemented would check the practice of Composition Dealers of collecting GST from the buyers and not depositing the same with the government.

7. PSU BANKS WITHDRAW AID TO GRAFT ACCUSED’S LEGAL BATTLE: In a setback to hundreds of bankers facing corruption related charges, the government has advised PSU Banks to withdraw any legal or financial support to fight cases, especially when the bank itself is a complainant. At present a committee within the bank decides the cases in which financial and legal support is provided. Now the Finance Ministry has said there is no question of providing support to bankers in cases that are filed by the lender itself. In the second category, where the case is filed by the investigating agency, the government has left it to lenders to take decisions based on the merits of the case.

1. RBI’S KYC DEADLINE MAY HAMPER WALLET COMPANIES PLANS: Prepaid Payment Instruments (PPIs) or Mobile Wallets were mandated by Reserve Bank of India in October 2017 to capture all information of its users as required under Know-Your-customer (KYC) guidelines. So far Wallet Companies have been able to verify only a fraction of their total user base, and are yet to complete the biometric or physical verification of majority of users. This means more than 95% of mobile wallets in the country could stop operating by March 2019 if they do not comply with the RBI mandate.

2. AROUND 16% OF ASSESSEES DO NOT FILE MONTHLY GST RETURNS: The latest government data reveals that on an average 16% of GST return assessees are not filing their monthly GST returns. And under Composition scheme the percentage of non-filers as on November 2018 was 28.7%. As per the GST law every GST registered person will have to file GST returns in one form or the other. A registered person will have to file monthly returns (if he is a normal supplier) or on quarterly basis (supplier opting for composition scheme).

3. CREDIT GROWTH OF PRIVATE AND COMMERCIAL BANKS SURGES: Credit growth of Scheduled Commercial banks (SCBs) improved across all bank groups between March and September 2018. According to the Reserve Bank of India’s latest Financial Stability Report the credit extended by all SCBs increased by 13.1% as on September 2018 and that of private sector banks grew by 22.5% during the same period.

4. NO e-WAY BILL IF GST RETURNS NOT FILED FOR TWO MONTHS: The GST council has formulated a new rule according to which the Finance Ministry has barred e-way bill generation for transporting consignment if the supplier or the recipient of the cargo has not furnished returns for two consecutive tax periods under GST. The e-way bill is required to be generated from a common portal by a business unit for movement of consignment worth Rs. 50,000/-

5. RBI LIKELY TO PAY INTERIM DIVIDEND OF Rs. 40,000 TO THE GOVDERNMENT: The Reserve Bank of India is likely to transfer an interim dividend of up to Rs. 30,000 crore to Rs. 40,000 crore to the government by March 2019. The said amount could help the government to bridge the widening gap in the budget deficit following a drop in tax collections.

6. NBFCs AND HFCs RAISE FUNDS THROUGH SECURITISATION OF SME AND RETAIL LOANS: The cash starved Non-Banking Finance Companies (NBFCs) and Housing Finance Companies (HFCs) have sold their retail and SME portfolios worth Rs. 73,000 crore during October-December 2018 to banks through securitisation mode. These NBFCs and HFCs are facing lot of liquidity crunch in the aftermath of defaults by IL&FS and its group companies in the second quarter of this fiscal and have forced them to liquidate part of their loan portfolio to generate funds to meet redemption requirements and also to maintain their credit flow.

7. NO LIABILTY IF e-WALLET USERS REPORT FRAUD WITHIN 3 DAYS: Prepaid instruments comprise of Mobile wallets, Prepaid Payment Cards and paper vouchers like Sodexo. Now the Reserve bank of India has absolved customers using these prepaid instruments, of liabilities arising out of a fraud if the same is reported within 3 days. This is now on par with the rules that are prevailing for banks.

8. GST RELIEF TO MSMEs: The Micro Small and Medium Enterprises (MSMEs) who are registered under GST have now got the option of moving out of the GST ambit as the GST council has raised the aggregate turnover threshold for GST exemption to Rs. 40 lakh from the present Rs. 20 Lakh. Under the Composition Scheme the limit is increased to Rs.1.5 crore from present Rs.1 crore. The composition tax payer will pay tax quarterly but file the returns annually. Composition scheme is also newly started for services with a turnover up to Rs.50 lakhs and that will attract 6 % tax. These measures will come in to effect from 1st April 2019.

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